Chapter 5 Advances in technology: magic and black magic
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Chapter 5 explores the topic of how advances in technology (especially computers and robots) affect employment. Traditional thinking on this is microeconomicin nature and it focuses on the fact that machines in general and computers in particular can be substitutes for, or complements with, labor. Contrastingly, a macroeconomic approach considers all the jobs associated with producing, distributing, and maintaining machines, and developing new ones. The former includes employment in industries that provide intermediate products for machines, and those that dig up the natural resources associated with these. There is little doubt that advances in technology, in general, have generated more jobs in the long run than jobs that were lost in the short run. However, if technology occurs too rapidly, then it becomes a cause of economic black magic by displacing workers faster than society can absorb them elsewhere. This can create a large class of people who feel left behind. In addition, computers have polarized our economy by generating relatively more high skill and very low skill jobs, while reducing the importance of middle-skill jobs. All of this has contributed to extreme political factions that threaten the existence of democracy.

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