Shifting From Labor to Capital Reduces Demands

Finally, it’s easy to see how a shift in income from labor to capital would lead to a similar reduction in overall demand. Capitalists tend to save more of each marginal dollar than laborers. In the short run, a transfer from laborers to capitalists reduces total consumption, and thus total GDP. This phenomenon is summarized in a classic though possibly apocryphal story: Ford CEO Henry Ford II and United Automobile Workers president Walter Reuther are jointly touring a modern auto plant. Ford jokingly jabs at Reuther: “Walter, how are you going to get these robots to pay UAW dues?” Not missing a beat, Reuther responds: “Henry, how are you going to get them to buy your cars?”


Because the workers automated out of jobs can't buy things.

Folksonomies: employment automation

/society/work/unemployment (0.437916)
/society/work/unions (0.411294)
/automotive and vehicles/vehicle brands/ford (0.140040)

president Walter Reuther (0.974217 (positive:0.217372)), Capital Reduces Demands (0.936426 (negative:-0.797040)), Ford jokingly jabs (0.842841 (negative:-0.546077)), reduces total consumption (0.806079 (neutral:0.000000)), Ford CEO Henry (0.781498 (positive:0.217372)), modern auto plant (0.676019 (positive:0.217372)), marginal dollar (0.511965 (negative:-0.783955)), total GDP (0.479058 (negative:-0.327561)), overall demand (0.470035 (positive:0.643859)), similar reduction (0.456066 (positive:0.643859)), apocryphal story (0.455902 (neutral:0.000000)), UAW dues (0.452259 (neutral:0.000000)), short run (0.429794 (negative:-0.461643)), capitalists (0.344059 (negative:-0.783955)), laborers (0.339134 (negative:-0.783955)), labor (0.209490 (negative:-0.153181)), workers (0.204205 (negative:-0.579668))

Walter Reuther:Person (0.791763 (positive:0.217372)), Henry Ford:Person (0.557307 (negative:-0.164352)), United Automobile Workers:Organization (0.426595 (neutral:0.000000)), Ford:Company (0.405240 (neutral:0.000000)), CEO:JobTitle (0.257953 (neutral:0.000000)), president:JobTitle (0.239900 (positive:0.217372))

United Auto Workers (0.960688): website | dbpedia | freebase | opencyc | yago
Henry Ford (0.608759): dbpedia | freebase | opencyc | yago
Henry Ford II (0.567919): dbpedia | freebase | opencyc | yago
Harry Bennett (0.543433): dbpedia | freebase | yago
Congress of Industrial Organizations (0.527714): dbpedia | freebase | yago
Walter Reuther (0.493063): dbpedia | freebase | yago
Michigan (0.485980): website | dbpedia | freebase | yago
Automobile (0.481490): dbpedia | freebase | opencyc

 Race Against the Machine
Books, Brochures, and Chapters>Book:  Brynjolfsson , Erik and McAfee , Andrew (2011), Race Against the Machine, Digital Frontier Press, Lexington, Massachusetts, Retrieved on 2012-01-04
  • Source Material []
  • Folksonomies: culture technology change employment


    25 MAR 2013

     Automating Ourselves Out of Employment

    As we automate people out of work, how will will deal with the unemployment? The science fiction utopia of a post-scarcity society can't work in a Capitalist system. How will we deal with the fact that fewer and fewer monopolists will control all the resources and have less and less need for employees? Alternative Titles: The Post-Scarcity Distopia
    Folksonomies: employment automation
    Folksonomies: employment automation