Friday, December 23, 2011
Wednesday, December 7, 2011
Why Adam Smith is Wrong this Time. Economics has changed.
In Adam Smith's time economic structures were essentially local and any technological improvements were often limited to one country or locale and remained stagnant long through multiple economic cycles. Their labor saving and labor killing attributes were spread over a longer period in smaller areas.
Today thanks to the internet and high speed travel and communications, technological innovation is married to globalization affecting the entire world population almost simultaneously.
While 18th Century economic communities had decades to absorb new technologies and any flux in local population growth or decline, (ie the availability of labor), our modern society doesn't have the luxury.
In the long term maybe Adam Smith's idea that new technology adds to job growth would be correct if we had the time to sit and wait out the inevitability of globalization. Unfortunately we don't have the necessary decades to wait.
President Obama is correct to say that the internet and automation has caused tremendous job dishevel and Adam Smith is simple wrong this time.
Today thanks to the internet and high speed travel and communications, technological innovation is married to globalization affecting the entire world population almost simultaneously.
While 18th Century economic communities had decades to absorb new technologies and any flux in local population growth or decline, (ie the availability of labor), our modern society doesn't have the luxury.
In the long term maybe Adam Smith's idea that new technology adds to job growth would be correct if we had the time to sit and wait out the inevitability of globalization. Unfortunately we don't have the necessary decades to wait.
President Obama is correct to say that the internet and automation has caused tremendous job dishevel and Adam Smith is simple wrong this time.
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