Technological unemployment

In 1929, the National Bureau of Economic Research (NBER), an American private non-profit research organization founded in 1920 whose main work at the time was on business cycles and national income, published Recent Economic Changes in the United States (NBER, 1929). The report, the Committee responsible for which was chaired by engineer Herbert Hoover- Secretary of Commerce from 1921 to 1928 and President of the United States from 1929 to 1933 - was one of the outgrowths of the President’s Conference on Unemployment in 1921. The NBER study found that there were no fundamental or structural changes in the economy during the decade of the 1920s. There had been an acceleration of old trends, but this was an “accumulation of forces which have long been at work†. However, there was one phenomenon that attracted attention over this period: “technological unemployment†, “resulting from the introduction of new machines and processes†or “technological advance†. “The time has come†, stated the report, “to devote continuing attention . . . to this newer problem†(NBER, 1929: xvii). The report was one of the first documents to use the term “technological unemployment†. To be sure, technological unemployment, under whatever name, is an old topic of discussion, going back to classical economists. But before the 1930s, technological unemployment as a term did not exist. Yet many of the concepts and terms that the classical economists used remained in vogue in the twentieth-century debate on technological unemployment, terms like “labor-saving†machines. Similarly, Jean- Baptiste Say’s (1767-1832) theory of the market was converted into a law of compensation for unemployment.