Below is my essay for ECON103: Unit 3 Essay - Value of Labor. As indicated here ([this forum]t/econ103-austrian-economics-course-program-issues/45882/18 - real links disallowed) the link where this is supposed to be posted doesn’t work, so I’ve saved it here. Thanks in advance to any fellow student who wants to comment on it.
All animals must employ labor to survive. In that regard, man is no different. Hunter-gatherers had to hunt their food or go out and find it. Modern man doesn’t only use labor to survive. Unlike other animals, humans employ additional tools. Technology allows us to do more within the same amount of time. The concept of money and how it lets us exchange goods and services makes it easier to divide labor, which in turns allows us to specialize and become better at smaller areas. At this point we don’t all need to know how to hunt or farm, but we have become much better at specific areas than someone who needs to hunt and gather for their living could ever be. Since money can also be used to store wealth, we can store excess labor to retrieve in the future to exchange with other people for goods and services.
These factors combined allow us to move forward as a society. Our technology keeps improving and allows us to do more within less time, and more tasks become dominated by applied technology. If we can produce the same result with less labor, this labor becomes relatively more valuable. For example, instead of needing lots of people in a factory to produce automobiles, nowadays relatively few people are required to monitor and service the robots that assemble those cars. Since the value of labor goes up, this means that people can work less and spend more time elsewhere; either in leisure or in other productive tasks.
This application of technology is likely to keep growing exponentially. First, technology simply improved men’s physical abilities (a sword is more efficient at killing than a fist), then replaced it (the aforementioned robot in the automobile factory). More and more physical work is assisted or replaced by technology. But apart from physical abilities, humans also have cognitive abilities, and here technology is also making great strides. Developments in cognitive technology (artificial intelligence)are likely to proceed even faster than in physical technology, because here the technology can even be used to improve upon itself - machines can now learn. This is both promising and scary. It’s promising because it means we can let technology do more for us, freeing up even more time. It’s scary because with technology being able to replicate or improve on more and more of our abilities, requiring human operators becomes less of an issue, and the human operators that are required need more and more specific skillsets. For taxi drivers and truck drivers this must be a scary development indeed.
However, it seems that time has taught us that technology eventually leads to improved conditions for all. It must have been hard for a Luddite to see how technology eventually benefitted even him because his specific way of living disappeared, but the standard of living for the average person has gone up significantly since. Logically speaking that will apply to newer technology as well, even if it upsets or even obsoletes existing trades. Humans will likely adapt - as we’ve always done.