Q. Are the current high levels of unemployment being caused by advances in Artificial Intelligence automating away human jobs?
A. Conventional economic theory says this shouldn’t happen. Suppose it costs 2 units of labor to produce a hot dog and 1 unit of labor to produce a bun, and that 30 units of labor are producing 10 hot dogs in 10 buns. If automation makes it possible to produce a hot dog using 1 unit of labor instead, conventional economics says that some people should shift from making hot dogs to buns, and the new equilibrium should be 15 hot dogs in 15 buns. On standard economic theory, improved productivity—including from automating away some jobs—should produce increased standards of living, not long-term unemployment.
You need to include inputs other than labour, and I think conventional economics allows for doing that.
Then the people who are less efficient than machines at converting the other inputs into products may become unemployed, if the machines are cheap enough.
You need to include inputs other than labour, and I think conventional economics allows for doing that.
Then the people who are less efficient than machines at converting the other inputs into products may become unemployed, if the machines are cheap enough.