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Bronx Teacher

The last two columns that Friedman has written have shown that he does not get it, or is just a shill. Unfortunately I think he has become a shill and I have lost a great deal of respect for him.

twitter.com/bob_calder

Tom needs to go back and re-read The Lexus and the Olive Tree. The outpouring of conservative FUD hasn't changed the rest of the world.

To quote School Finance 101, Freidman's statistics are like those of charter school proponents in that the "best charter schools outperform the average public schools.'

An indictment of American character as the basis for criticism is at best, silly.

Manoel Galdino

I liked your text and usually like uyour blog.

However, I do think you are wrong in point number 7. New tech will not reduce employment in the long run, and maybe not even in the short run.

The increase in productivity will boost the economy, creating more employments in other sectors. Besides that, new technology increase output per worker.

For example, let's say we live in a one-sector economy at time t0. We produce y0 per worker. Total output is L*y0 (L is the total number of workers). Technology, here is equal to 1. So, our GDP = L*y0. Now, suppose we have a new technology at time t1 that enhance productivity per worker. Now we poduce 1.1y0 per worker. If the economy doesn't grow, we will have unemployment. The total employment will be L/1.1, and a few people are unemployed (10%).
Now, if the GDP grows by the same amount as productivity, we will have zero unemployment!

best regards,
Manoel

of before, we'll have: Ly0 =

Kaiser

Manoel: thanks for the comment. I stated Point 7 as a question in the hope that some readers like yourself would help explain the thinking. Of your explanation, I understand that if we assume increasing productivity in one sector "creates jobs in other sectors", then overall employment will increase. I have difficulty grasping how this assumption is actualized.

In Friedman's example, the function of "receptionist" is made more productive with less labor by the use of computers and it generates more jobs in the high-tech sector; however, as per Friedman's argument, many of the new jobs are outsourced to other countries (at least the manufacturing jobs and increasingly also design jobs) so it's not clear to me that net jobs in the U.S. must increase.

As I think about it more, in the short run, one can use an argument of market inefficiency to claim that there will be more net jobs. What I mean is stickiness: it seems to me that many jobs take time to eliminate whether it is due to unions, contracts or decency; and computer systems and technologies are even harder to decommission. Of the former, I can point to the baffling longevity of the yellow-pages business; of the latter, the fact that Bank of America has not integrated its California systems with the East Coast systems more than five years after the merger is one of many examples. Thus, I can make an argument that there could be a short-term net increase in jobs but that wouldn't be due to market efficiency but rather the lack of it.

Any further thoughts?

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@Kaiser Friedman's thinking requires a tacit assumption that the nation-state is no longer relevant. If you disregard the notion that "this" piece of land is "the United States" and "that" piece of land is "India" and think of both pieces of land as "planet Earth", his argument that the function of a "receptionist" being automated generating more high-tech jobs does hold true.

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I agree with Manoel. New technology doesn't necessarily mean that there's no more work for the good old man-powered production. Even if this is the case, I don't see why anyone would replace an employee with new technology; since unlike microchips and computers, human employees have no limits to their potential. Even someone who doesn't have a college diploma can perform well at work with the right training and good seminars. Like for example, TPM presentations can increase a machine/tool operator's capabilities significantly, being briefed with the tool/machine's basic troubleshooting and proper usage! Or increase your employee's production via a SMED presentation or seminar! I really think that no matter how much you upgrade your new tech, it can never replace a working, LEARNING human.

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