[Pen-l] Re: Claim that innovation should mean more jobs

[Michael Nuwer <nuwermj@xxxxxxxxx>]

Eugene Coyle wrote:
> “If you invest in a technology that makes something more efficient, the 
> fear is that people will be put out of work,” says Kevin Efrusy, the 
> venture capitalist whose firm Accel Partners is the lead funder of 
> several important Silicon Valley start-ups, including Facebook 
> “But it’s just the opposite. When anything becomes cheaper, we consume a 
> lot more of it. The overall economic effect is, you create and expand 
> entire new industries and employment goes up.”

This sounds to me like standard stuff from a university level labor economics 
textbook (like, for example, Ehrenberg and Smith "Modern Labor Economics"). In 
Neoclassical terms the Efrsy statement is about the so-called substitution and 
scale (or output) effects that are derived from their production functions. 
Ehrenberg and Smith note that the overall effect of technological change on 
employment is ultimately an empirical question, not a theoretical one.



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