How Technology Creates Wealth

November 18, 2021 by No Comments

Today, in our world of 24-hour news, outrage has replaced information.

Inevitably in today’s world, any conversation about economics or government policy is bound to turn political at some point; this article seems like it will be no different. However, the author’s intention is not to force their opinion, but rather provide others with an informative overview of how technology creates wealth.

         More specifically the aim of this article is to clarify that automation does indeed create jobs by explaining how technology works within society and why automation cannot exist without people to support it. This topic has come under scrutiny recently as many fear the increasing encroachment of automated systems into human workforces. These fears are not unfounded, however, as it appears that many positions are at risk due to advances in technology. While this is true, the author believes that the job market will not be blown to bits by automation; rather, new jobs will appear as necessary for automation to function.

         Furthermore, there needs to be a distinction between artificial intelligence and whether these changes are bad depends on how we approach and understand them.

         Alongside the more specific goal of discussing how technology creates wealth, this article also aims to clarify some common misconceptions about economics that many people find fallacious or unhelpful in understanding the world we live in.

         This article will also position itself as a counter-argument to the political left who refuse automation despite its inevitability by disputing their assertions on it being an inherently exploitative system.

         Lastly, while there is no intent of bias within this piece, there may be implicit assumptions made based on the author’s own views; if so these will be clarified when they occur and ideally extrapolated upon for clarity.

         The presence and application of technology has been increasing exponentially over the past few decades.

         As technology advances, more and more jobs are becoming scarce, especially in developed nations such as America.

         According to a report by the World Bank, every industrial robot takes up to six jobs (Economist).

         This implies that not only manufacturing but also service sector jobs may be at risk due to automation.

         Furthermore, many of these advancements in technology have led to what’s known as “superstar effects”.

         A superstar effect occurs when an individual or group is able to capitalize on their own work far better than anyone else due the fact that they have competitive advantages afforded by new technologies no one else has access too.

         An example of this is shown in the music industry.

         Digital technology enables people to make near professional quality tracks on their phones or by buying inexpensive equipment that can be found online for less than $100.

         Back in the day, you had to spend at least $1,000 to achieve similar results with a synthesizer and related equipment, even without factoring in studio costs.

        A further example would be Google Books’ digitization initiatives which have allowed it to offer books free of charge online while still making money off of them through advertisements (Economist). This has caused bookstores to struggle as they are forced to compete with free goods. It should also be noted that Google has recently purchased an American phone manufacturer, Motorola Mobility, which makes them a major competitor in the mobile sphere.

         In all of these cases above technology has given individuals or companies a way to get ahead of everyone else by using technology that others do not have access to.

         This is important because while getting rid of jobs may seem bad on the surface it actually creates more opportunities for lower classes and frees up some employees’ time to work on other projects. People who benefited from this technological advancement will be able to create new products or start their own businesses.

         Furthermore, there needs to be a distinction between artificial intelligence and whether these changes are bad depends on how we approach and understand them.

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