Job Creation and Job Destruction are Both Relentless, and the Small Difference Between Them is What We Call Prosperity

Andrew McAfee just posted about a live discussion he had at SXSW with TIm O’Reilly:

The huge question is whether enough labor-making technical innovation will take place to offset the labor-saving innovation that’s also going on, and that is (according to me and Erik) only going to accelerate in the near future. Creative destruction is the central dynanic of capitalism —  simultaneous creation and destruction of industries, companies, and jobs.

There is no economic law, however, that says that job creation has to stay slightly ahead of job destruction. As the Wall St. Journal’s Holman W. Jenkins, Jrsays, “Job creation and destruction are both relentless… The small difference between the two is what we call prosperity.” If that small difference turns negative instead of positive, due to technological progress and other factors, we will experience something quite different than prosperity.

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