Personal
I am a consultant working in the field of environmental impact of power
development in the developing world. I am a subscriber to this list
because I think the problem of our times (in respect to the tramendous
knowledge that we have collected) is not that we don't know what to do but
how to get there.
In reply to Dan Warfield from Jan 24
Quote:"We humans will continue to introduce labor-displacing technology
(...). We do it because technology is a defining attribute of the human
being."
My thought on this crosses the border to another field of human creations
and that is the tax system. The value addition created by human labor is
taxed. The result is that one unit of value addition from human labor is
more expensive than one unit of value addition from technology. What does
this do to the decision-making process of the store owner? Of course he
substitutes human labour with technology until the marginal cost/benefit
ratio of additional labour is equivalent to that ratio for the technology.
Assume that the tax rate for personal income is 30%. In most countries
there is no tax on the value addition of machines. There is a tax for the
initial investment (sales tax) and of course the capital costs which sums
up to maybe 15% of the investment. The share of these costs put in
relation to the turnover resulting from the use of these machines is in
general much less than that. The result is that the input factor human
labor compared to a technology with the same productivity has a cost
disadvantage of let's say at least 25%.
In addition to this is the store owner not the one who is paying more then
everybody else for the external effects for the unemployed as was pointed
out by Dan. But the result can not be that personal income taxes are
raised to let government pay for them. This would increase the competitive
advantage of technology over human labour.
My point is that the use of technology is not something intrinsic to human
beings, but something that can be traced down to an incentive structure
that is created by the tax system.
Ingo Puhl
Washington, D.C.
74217.360@compuserve.com