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November, 2011

Luddite Falacy or New Age?

Examining the impact of technology on job creation and destruction, and questioning the long-term effects of a move to a software world.
Back in August I wondered about the long-term effect of the move to a software world:
Software companies optimize themselves to operate with as few humans as possible and many of them seek to replace functions that humans once performed. The net loss seems irreplaceable to me, even if everyone in the world knew how to write code. I’m no economist and I hope I’m wrong for lots of reasons, but I’ve been unable to find an answer in my head or in my conversations with others that satisfies me.
Since that time we haven't seen much of an improvement as far as the economy or jobs numbers go and it looks like some other folks are asking the same questions I am (or, more likely, I'm asking the same questions they are). TechCrunch has a nice roundup of the conversation (via Henrik), including a link to an Economist blog post that argues the rate of jobs being destroyed by software is simply faster than the rate of jobs being created:
Another implication is that technology is no longer creating new jobs at a rate that replaces old ones made obsolete elsewhere in the economy. All told, Mr Ford has identified over 50m jobs in America—nearly 40% of all employment—which, to a greater or lesser extent, could be performed by a piece of software running on a computer. Within a decade, many of them are likely to vanish. “The bar which technology needs to hurdle in order to displace many of us in the workplace,” the author notes, “is much lower than we really imagine.”
Again, I'm not an economist and certainly hate to think I might be on the side of the luddite fallacy, but what if this time is different?
November 13, 2011
Noah Brier | Thanks for reading. | Don't fake the funk on a nasty dunk.