There is fear that computerization will produce mass unemployment over the next 30 years. The computers will do the work of hundreds of millions of workers, leaving no jobs for these displaced workers.
One implication is this, we are told: the federal government will have to put them on welfare. Otherwise, they will starve. They will not be able to compete with robots and software.
I am curious. Who will pay the taxes to do this? Robots?
No, no, no: we must tax the rich.
I am curious. How will they be rich if there is no one able to afford to buy their products?
It was well over 60 years ago that a friend of mine told me about the following exchange.
CIO President Walter Reuther was being shown through the Ford Motor plant in Cleveland recently.A company official proudly pointed to some new automatically controlled machines and asked Reuther: “How are you going to collect union dues from these guys?”
Reuther replied: “How are you going to get them to buy Fords?”
Reuther said it really did take place.
At the time, I thought Reuther’s remark was pretty good as a quick response. I didn’t think it was applicable to the situation at hand. I still don’t. There is nothing that says that a worker should be able to afford to buy the output of a particular factory. There are highly skilled craftsmen who know how to cut fine diamonds, but they cannot afford to buy them.
THE VALUE OF YOUR OUTPUT
Free market economics teaches that the value of a worker’s contribution to the overall production process will be paid according to this value. The reason is clear: competition. Employers do not want a competitor to be able to profit from the output of his employees, if they can offer a little more money and attract these employees. A competitive bidding process, comparable to an auction, is constantly in operation. Businessmen do not want to let their competitors retain permanent advantages, if these advantages can be taken away from them simply by offering to pay a little more for the resource that is giving the competitor his advantage. This is what competition is all about.
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