Your argument is the common objection to this idea and it's all well and good up to the part where you say that technology only creates frictional unemployment "as people re-train". Here's the problem as I see it. Technology is advancing, rapidly, to the point that humans are not able to compete in a general sense and in a number of fields.
If you're edged out of a job as a human it's getting more and more difficult to re-train. If it were easy to re-train in a lot of cases it would be automated already.
Ok let's say they don't re-train. Let's say they just go out and try to find a job as phone sales people (yes, every single person replaced by technology decides to become a sales rep. Bare with me.)
What would that do?
It would drive down the salaries of sales reps by 2%. That's it. That's the magic of the market economy. That money saved by replacing people with software goes back into the economy and creates demand for more goods (which needs to be pushed by sales reps, for example.)
And by the way, I would argue that electrification and the industrial revolution were far more disruptive (and happened damn fast) than online shopping and bookkeeping software.
>> Technology is advancing, rapidly, to the point that humans are not able to compete in a general sense and in a number of fields. If you're edged out of a job as a human it's getting more and more difficult to re-train.
> Ok let's say they don't re-train. Let's say they just go out and try to find a job as
No, the point is what if: 1) The easy to do and train for jobs are all automated away. 2) The available jobs require PhD level expertise to do.
If I've studied for 8 years to get my quantum physics PhD to get my job as a technician at Quantum World, then it's going to be damn hard to retrain for 8 more years to get a PhD in Natural Language Processing to work phone support at AutonomaTech.
People are becoming increasingly specialized. If automation eliminates the easy to learn jobs, it gets harder to jump from one specialization to another.
That just moves the problem into the future. What happens when we can build a machine with the mental abilities of a human being for the price of a supercomputer? Then what happens when it falls to the price of a smartphone?
But a lot of companies don't need phone sales representatives anymore. They can do nearly the same thing with Adwords account and a decent landing page. Both of which can be setup for less than a days pay of a phone representative.
Pick another position that scales with production or demand and you'll invariably find similar automation that has been introduced in the past ten years.
If you're edged out of a job as a human it's getting more and more difficult to re-train. If it were easy to re-train in a lot of cases it would be automated already.