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Comment by phkahler | Hacker News Reader

>> every time you make a job redundant you create other new jobs

That is false on its face. If you buy a robot to replace a welder, you indirectly employ the people who design, build, and maintain that robot. True, and those are higher paid jobs than the welder. But at the end of the day, the person running the factory where said robot is used did an analysis and concluded that it was cheaper to buy the robot than to employ the guy it replaced. That means fewer total man-hours in the workforce, since those man hours are billed at a higher rate and are still lower TCO.

TL;DR - if your TCO goes down by employing higher paid people you have caused a net-loss in jobs. TCO ~= rate*man_hours so if TCO goes down while rate goes up...

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The part you are missing is:

TCO goes way down -> price of product goes way down -> sales go up because price is lower.

It doesn't always happen that way, but sometimes it does. uber is a good example. By reducing cost of car rides, I pay someone to ride in their car 10X the amount I used to.

If Americans wanted to live a 1916 lifestyle, not many of us would have at work. But we buy a lot more stuff and use a lot more services.

We've automated away nearly every job people did in 1875's America. But we all still have jobs.

I don't think anyone claimed that the new jobs would be replaced one to one with jobs maintaining the new technology, just that some of the new jobs would be in maintaining the new technology and some would be in new industries that we haven't even thought of. For a big historical example of this, look at the decrease in labor usage for farming over the last couple centuries. Where did all the people who used to work in agriculture go to? Like 1% of them now remain on the farms, maintaining the technology that displaced the other 99%, who are now dispersed across whatever other modern industry that we didn't used to have (and, we'll note, the pundits at the time highly doubted that most of the 99% being displaced on farms would find be able to find alternative positions).

Anecdote: My brother-in-law has worked at the same factory for 20 years now. Their efficiency has probably increased 10x in that time. They are producing more than they used to, with a lot less workers.

I disagree, if the displaced labor uses platforms on top of internet to build a business than its somewhat a true statement..

BUT, that is where we are at now with our FUNDS miss-allocated to some other task rather than the encouragement of small business growth

It is not false on its face. The goods produced by the now robot welder reduce their cost; freeing up capital to flow to some other industry either as profits or lower prices. That factory isn't a closed system.

Yes, but now lower prices for welded goods mean some combination of people can afford to buy more stuff, and more capital is available for ventures that previously wouldn't have been funded.

That assumes that it would be profitable to fund those ventures. But as supply increases and prices are driven down by automation, it becomes less profitable to fund ventures in general. It becomes relatively more profitable to charge rent on things that can be monopolized. Therefore, fewer ventures get funded, leading to even fewer jobs. As the demand for rentable capital increases, its prices increase, and therefore the rents. Fewer jobs means that labor rates decrease, resulting in lower pay for those remaining.

With higher rents and lower pay rates for fewer jobs, people cannot afford the consumer goods even though they have become cheaper with the increased supply. That decrease in demand further drives down the prices such that even with maximum automation, that business is no longer profitable. The people maintaining the robots get laid off. What happens then?

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