From the time Karl Marx made his gloomy forecast of the dynamics of capitalism in Das Kapital 1, the specter of massive displacement of the workforce by technology has been part of intellectual history. From its beginnings in the 18th century until very recently, the process of applying technology to production could be described as mechanization. In most mechanized production processes man acted as a intelligent, flexible control device for dumb, powerful, and inflexible machines. In some mass production plants mechanization led to hard automation in which human skills were incorporated into the machinery. Except for sporadic depressions, massive unemployment never materialized as mechanization advanced, since job creation in the labor intensive services was much greater than job destruction from mechanization in both agriculture and manufacturing. With a continual rise in productivity real wages increased accordingly.


Expert System Income Distribution Automatic Teller Machine Physical Manipulation Phone Company 
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Notes and References 4

  1. 1.
    Marx, Karl, 1867, Das Kapital: Kritik der politishchen Oekonomie, (Verlag von Ott Meissner: Hamburg)Google Scholar
  2. 2.
    See the October 1987 and September 1991 issues of Scientific American for a forecast of hardware, software and networks.Google Scholar
  3. 3.
    Two of the Bell operating companies plan to have ISDN 90% installed by 1994 and the other five 50% installed by then. See: Bell, T., 1992, Telecommunications, IEEE Spectrum, Jan, pp 36–38Google Scholar
  4. 4.
    Timms, S., 1989, Broadband Communications: The Commercial Impact, IEEE Network Magazine, JulyGoogle Scholar
  5. 5.
    Lubliner, O., 1989, ISDN Development in France, Telecommunications, Jul, pp 19–24Google Scholar
  6. 6.
    Seghers, F., 1989, A Search-and-Destroy Mission-Against Paper, Business Week, Feb 6, pp 91–95Google Scholar
  7. 7.
    Interestingly enough the legal profession is slowly creating precedents for contracts without paper even in the absence of a secure one-time write device. See: Wright, B., 1992, Contracts Without Paper, Technology Review, Jul, pp 57–61Google Scholar
  8. 8.
    Rothfeder, J, 1989, Neither Rain, nor Sleet, nor Computer Glitches.., Business Week, May 8, pp 135–139Google Scholar
  9. 9.
    Mitchell, R., 1985, Detroit Tries to Level a Mountain of Paperwork, Business Week, Aug 26, pp 94–96 The growth of EDI to drastically reduce paperwork costs in such applications as ordering parts depends on the advance of the social nervous system. See: Cerf, V., 1991, Prospects for Electronic data interchange: the full value of EDI will be realized when certain information infrastructure are in place, Telecommunications, Jan, pp 57–61Google Scholar
  10. 10.
    Woodworth, J., 1988, 1988: The Year of the Debit Card?, The Bankers Magazine, Jul/Aug, pp 34–38. In time real-time microbinic money will replace the current payment mechanisms for most purposes. For a discussion of the electronic money revolution see: Solomon, E. H.(ed), 1991, Electronic Money Flows: The Molding of a New Financial Order, (Kluwer Academic Publishers: Boston)Google Scholar
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    Some examples of current advances towards the complete microbinic library, see: Motley, S. A. 1989, Optical Disc Technology and Libraries: A Review of the 1988 Literature, CD-ROM Librarian, May, pp 8–24 and Hearty J. A. and V. K. Rohrbaugh, 1989, Current State of Full Text Primary Information Online with Recommendations for the Future, Online Review, Vol 13 No. 2, pp 135–140. Carnegie-Mellon University is in the process of creating an electronic library network through which students and faculty can obtain articles at their computer terminals. In the future they will be able to obtain books. See: Alexander, M., 1992, University library enters in formation age. Computerworld, Mar 2, pp 31. As libraries shift to the social nervous system books will become hypertext. See: Reynolds, L. and S. Derose, 1992, Electronic Books, Byte, Jun, pp 263–268.Google Scholar
  12. 12.
    Schwartz, E., 1991, Adventures in the on-line universe. (Compuserve, GEnie and Prodigy), Business Week, Jun 17, pp 112–113. Short term public acceptance of these services has been dampened by allegations of censorship and invasion of privacy by the Prodigy management. See: Staff, 1991, Big brother or big brother? (Users accused Prodigy, an information network linking computers of invading their privacy, Time, May 13, pp47 and Lewis, P., 1990, On electronic bulletin boards, what rights are at stake? (Prodigy’s policy of screening electronic mail seen as censorship), New York Times, Dec 23. Interactive video communications will probably to necessary before such services saturate the potential market of every household.Google Scholar
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    See reference 4.Google Scholar
  14. 14.
    The phone companies are ready to deliver such services once the restrictions of the 1984 Cable Act are lifted. See: Cole, A., 1992, Telcos poised for video delivery, TV Technology, May. Allowing the phone companies to deliver video services to homes would vastly accelerate the shift from a copper wire to an optical fiber local communication system. This would would have externalities. The downside is that such a move would create a conflict of interests for the phone companies as common carriers providing service for all and sellers of services with incentives to stifle the competition. In July of 1992 the FCC allowed the phone companies to use visual signals.Google Scholar
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    For example, see the special report, Multimedia, in the Mar 31 issue of PC Magazine Google Scholar
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    Research in teleconferencing computer terminals is discussed in Brittan, D., 1992, Being there: The Promise of Multimedia Communications, Technology Review, May/Jun pp 42–50.Google Scholar
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    Bureau of Labor Statistics, 1988, Employment and Earnings, Vol 35No 6. JunGoogle Scholar
  18. 18.
    The saga of GM’s attempt to endrun its Japanese rivals has received extensive media coverage. For example, see: Poe, R., 1988, American Automobile Makers Bet on CIM to Defend Against Japanese Inroads, Datamation, Mar 1, pp 43–51 and Hampton, W.J. and J.R. Norman, 1987, General Motors: What Went Wrong, Business Week, Mar 10, pp 102–110 Since realizing that the investment in technology would, at best, reap long term benefits, GM has been struggling to create a much leaner, dynamic organization with a strong emphasis on reducing costs to world standards. See: Treece, J., 1992, The board revolt: Business as usual won’t cut it anymore at a humbled GM, Business Week, Apr 20, pp 30–36; Shiller, Z., 1992, GM tightens the screws: Only the fittest of its suppliers will survive,Business Week, Jun 22, pp30–31; and Moskak, B., 1992, GM’s new-found religion, Industry Week, May 18, pp 46–52Google Scholar
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    Bylinsky, G., 1987, Invasion of the Service Robots, Fortune, Sep 14, pp 81–88; Myers, Frederick S., 1990, Play it again, WABOT; Japan’s robots aspire to service-sector jobs, Scientific American,May, pp 84–85; and Stix, G., 1992, No tipping, Please, Scientific American, Jan, pp 141Google Scholar
  20. 20.
    For an example of the effort to automate the preparation of fast food, see: Roboburger, 1988, Discover, p 6Google Scholar
  21. 21.
    See reference 16.Google Scholar
  22. 22.
    See reference 16.Google Scholar
  23. 23.
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    Rennels, G. D. and K. W. Nevew, 1987, Advanced Computing for Medicine, Scientific American, Oct, pp 154–161Google Scholar
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    Dreyfus, H. & S., 1986, Why computers may never think like people, Technology Review, Jan, pp 43–61Google Scholar
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    Importing information workers via teleconferencing may become one of the major trade issues of the next century. See: Pelton, J. N., 1989, Telepower, The Futurist, Sep–Oct, pp 9–14Google Scholar
  27. 28.
    Over the past 20 years the workweek for many workers has increased. For example, see: Schor, J., 1991, Workers of the World, Unwind, Technology Review, Nov/Dec, pp 25–32. In this book it is assumed that the failure of the workweek to decline is a temporary phenomenon due to the low increase in productivity in the US during this period and increasing world competition.Google Scholar
  28. 29.
    Quinn, J.B., J. Baruch and P. Paquette, 1987, Technology in Services, Scientific American, Dec, pp 50–58Google Scholar
  29. 30.
    Friedman, M, 1962, Capitalism and Freedom, (University of Chicago Press: Chicago). His ideas have been subjected to an experimental test. For a summary see: Stafford, F. P., 1985, Income-Maintenance Policy and Work Effort: Leaning from Experiments and Labor Market Studies in Hausman, J. A. and D. A. Wise (ed) Social Experimentation, (The University of Chicago Press: Chicago)Google Scholar
  30. 31.
    The need for a device such as social inheritance may not materialize for some time because forecasting the income distribution is a perilous task. For example, the media and most liberal economists believe that the poor have become worse off under the Reagan and Bush administrations. However, my colleague, Dan Slesnick, has shown this is not so. See: Slesnick, D., (forthcoming), Gaining Ground: Poverty in the Postwar United States, Journal of Political Economy. Because the concept of social inheritance is peripheral to the main themes of the book, it could be deleted with few changes.Google Scholar
  31. 32.
    Carnegie, Andrew, 1962, The Gospel of Wealth, (The Belknap Press of Harvard University: Cambridge). Of course, Carnegie argues that the successful should devote themselves to philanthropy after acquiring great fortunes. The approach taken in this book is that value of the created empire should pass to social inheritanceGoogle Scholar
  32. 33.
    The advocacy of shifting taxes to consumption has a long history. For a recent example, see: Mieszkowski, P., 1980, The Admissibility and Feasibility of an Expenditure Tax System in Aaron, H.J. and M. J. Boskin (ed), The Economics of Taxation, (The Brookings Institution: Washington)Google Scholar

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© Kluwer Academic Publishers 1993

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