On a recent episode of PBS Newshour, economist Richard Freeman and futurist Ray Kurzweil argued the significance of technological progress. Freeman warned “We don’t want it to be that there’ll 20 or 30 billionaires controlling everything, and the rest of us struggling for the one or two jobs that are out there.” Kurzweil disagreed, arguing that the normal pattern has been rapid cheapening of technology and diffusion of its benefits to ordinary people.
To put this in perspective, let’s consider the example of a subsistence farm family who own their land and the tools they work with, and freely appropriate and use the entire product of their
labour. Under these circumstances, if a farmer figures out a way of producing the same amount of food with half the amount of labour, it would be silly to worry “there won’t be enough work” as a result. That’s because the same person controls the labour process and internalizes all the costs and benefits from technological change. Hence, any improvement in the ratio of output to labour is anunambiguous benefit for labour.
Contrast this with the classic model of technological unemployment - the dire scenario Freeman outlines above. What makes the difference between the two scenarios? Clearly it’s that in the latter case, someone else besides the labourer appropriates the benefits of technological change.
Which model the distribution of benefits from technological change follows depends, therefore, on who owns the machinery and the technology. And in the present environment, if the distribution of benefits follows the second, unequal model, it’s not the result of any purely technological imperative. Far from it.
The more affordable the means of production are to the individual labourer or to small groups of labourers, and the greater the ease of adoption of new technology, the greater the share of total benefits will be appropriated by labour. And the general tendency of the past thirty years has been a cost implosion in production technology.
Thanks to the desktop revolution in the information industries, an individual computer costing $1000 or less can produce the quality of work in software, music and desktop publishing that once required million-dollar facilities. The revolution in cheap digitally controlled machine tools is having a similar effect on physical production. A garage shop with $10 or $20 thousand in open-source hardware can produce the kinds of goods that previously required a million-dollar factory.
In purely technological terms, the conventional technological unemployment scenario depends on extremely expensive machinery owned by an employer who controls workers’ access to opportunities for employment.