Full text: Accumulation and Technology

This compensation, it seems, must come from two sources: 
A.."Assuming that the technical progress involves the use 
of new and improved machinery, the amount of employment 
generated in the investment goods industries must be set 
against the loss of employment in the industries which 
introduce the new methods. 
B. As Marx rightly argues, the total labour employed 
(including that used in the investment goods industry ) 
must be smaller with the new methods than with the old - 
and the difference represents the gain in productivity. 
This gain, in principle, represents a potential increase 
in standard of life, made possible by using the labour 
set free for the production of more consumer goods. 
The compensation argument says that by the technical 
progress new real income has been createdand this will 
automatically provide the demand for the additional output 
and therefore for the displaced labour. 
Each o these points gives rise to a long series of consideration 
ad A. ) 
1. We have first to exclude the case in which the technical 
improvement accurs on the occasion of the replacement 
of an old machinery which would have had to be undertaken 
anyhow. There need be no new employment here, unless the 
new machine is more costly ( in terms of manpower ) than 
the old one. 
It must be admitted, however, that most replacement in 
industry is motivated by technical obsolescence, so that 
the argument looses some of its force. 
2.1r the investment goods industry islocated far away - 
in the extreme case, if it is in another country - 
the compensation becomes problematic or fails.

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