Arnold Kling  

Growth and Displacement

Rent Control's Sad History... The Internet and Productivity...

Glenn (Instapundit) Reynolds links to a pessimistic treatment of economic growth by Michael Rogers.

In my little part of the world that sample has included advertising agency people, a television executive, two doctors, a lawyer, a retail stockbroker, a building contractor and several business and editorial folks in magazine publishing.

None of them was predicting doom, but they all saw tougher times ahead in their respective fields...

If he really wanted a pessimistic outlook, he could have interviewed horse-and-buggy makers.
My point is that progress always leads to displacement. The fields of advertising, medicine, law, finance, construction, and magazine publishing all are in the process of being re-shaped by technological change. People who do not adapt their skills to these changes will indeed find that their value has depreciated. However, people who do adapt, along with new entrants, will find opportunity.

In fact, I think that it is possible to be optimistic about overall economic growth and yet pessimistic about almost every existing industry! Over the next thirty years, many of the jobs created are likely to be for positions that do not exist today (just as "web designer" did not exist ten years ago) in industries that have not yet been born.

Comments and Sharing

CATEGORIES: Growth: Consequences

COMMENTS (2 to date)
John Nye writes:

Progress should mean more jobs of all kinds in the future. So displacement doesn't destroy all opportunities to work.

BUT the number of prestige jobs may not increase or increase very little. It is the increasing competition for popular fields with limited high status that will grow worse with increased education and prosperity.

Think of it this way. So long as there are benefits to being in the top 20 universities (regardless of how close to them the other 20 are) we should expect to see it become harder for people to get into Caltech or Princeton over time. The better educated people are in general and the richer the general population becomes, the worse will be the problem. Ditto for entry into certain professions.

David Thomson writes:

“The better educated people are in general and the richer the general population becomes, the worse will be the problem.”

The problem of inequality that overly concerned John Rawls is something we can live with. Moreover, I actually believe it is unavoidable if we are to have a robust economy. Our only real worry is whether those lower on the financial totem pole still get to live in a decent manner. And the evidence suggests that this is exactly what is occurring! We rarely worry about getting enough to eat. Instead, it’s often merely a question of how expensive is the wine chosen for our dinner. Mickey Kaus splendidly deals with this theme in his brilliant “The End Of Equality.”

PS: This is probably not the appropriate place to rant extensively against the late Harvard philosopher. Nonetheless, I’m convinced that the well meaning John Rawls unwittingly caused enormous damage.

Comments for this entry have been closed
Return to top