I realise that employment is just a means, in the end we want high production.
Say machines replaced many jobs, if many people became jobless, how would they acquire this new wealth
without an income?
They would gravitate to other professions. I forget who makes this hypothetical situation, and if I remember I will give due credit, but say I make a drink that eliminates tooth decay, thus no one would ever have to go to a dentist ever again…
Am I a friend to the market or am I an enemy of the market?
To an Austrian I am a friend because I have just cleared up a whole sector of individuals who can now become doctors, lawyers, astronauts, whatever else there is that is still productive. I have eliminated a ‘wish list’ so to speak of the average individual [ not having to utilize dentists ]
To a Keynesian, I am an enemy of the market because I have ‘destroyed’ an aggregate. An those doctors will be unemployed and the nurses will be unemployed and the people who supply the dentists will go out of business and the loss of incomes of the doctors and nurses will now cause other businesses to fail etc etc. almost to ad infinitum.
Society always need more, as desires and wants are infinite. They will be working for lower nominal wages, but in fact, they will be high, because of the increase in productivity and the competition it brings (prices down).
Production requires capital and labor; they are co-dependent factors of production. More machinery means more jobs; labor is always a scarce commodity. There may be a situation where technological progression may eliminate jobs in a sector, but this would open up more jobs in other sectors, or even in that sector (see creative destruction). The computer replaced the typewriter.
Machinery do not create unemployment. It looks merely at the first glance like a clear loss of employment.
Firstly, many peope became jobless, because they were replaced by a machine that can produce 5000 times more gummi bears. The production is increased. That’s right so far.
Though, subsequently, the machine itself requires labor to produce it. So here are jobs that would otherwise have not existed. But the mashine does not require the same amount of labor as the owner hoped to save, otherwise he would not have adopted it because there would not have been any profit. So there is still a loss of employment.
The owner of that machine, moreover, adopted the machine because he hopes to save a special amount of labor in the long run. By achieving this time he will make some profit. And now there are several ways the owner can use these extra profits. In every case he will create employment (except he will put it aside).
But by now there is no increased welfare, but an existing purchasing-power that can now profit from the adoption of machinery. The owner is now able to produce his gummi bears to a cheaper price than before. Considering the rules of supply and demand, he has to sell this gummi bears cheaper, say, now for 10 peanuts instead of 15 as presiously. And here the new wealth takes place. Because human beings can buy his gummi bears only for 10 peanuts, they have 5 peanuts left to spend for other things that will also create employment. And more people are now able to get gummi bears because they are now cheaper. More gummi bears mean more wealth.
Not trying to be rude, but did you even read the chapter? I read it a few days ago and he provides lots of examples of what actually happened (using England’s sewing industry or something) and plenty of theory.
He explains very nicely how 1) it takes labor to produce those machines 2) people who formerly did what machines now do are freed up for other productive jobs 3) prices will ultimately go down for consumers, who now have more money to spend on other products.
There is a infinite number of jobs.
Machines replace human labor at a particular job in order to free up those human laborer for other, more important jobs.
The only way to increase consumption per capita is to increase production per capita. The only way to increase production per capita is an increase in capital.
What few people realize is that if everyone was unemployed yet had intelligent robotic devices fulfilling their every desire, this represents a utopia, not hell. as mentioned above, only those who measure economy in terms of employment figures and aggregate statistics would prophecy such as a doomsday nightmare.