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Notes -
Sorry to pile on here, as I'm already engaging with you in a different thread; wouldn't your theories only make sense in a hypothetical world where we had an extremely high labour force engagement? Like, if we only have around 65% of the population of working aged individuals engaging in the labour market, doesn't that imply that adding a marginal person does not generate a marginal job (but rather, 65% of one)?
I don't think so? I don't quite understand which theory specifically you mean, my immediately preceding post contains two. On the first one: The marginal person generates demand for labor and adds supply of labor. The 65% figure would be about the supply of labor. If you want to draw conclusions about the demand for labor — which can be entirely different from that figure — you need additional data. For example, you could try to argue that it's a closed system, where labor supply and demand are equal; but with exports, imports, and profit margins, this is not a closed system.
The second theory is about the utilization of the supply of labor. Labor works for some company, which takes a cut of the produced value and pays out the rest as wage. The company could choose to pay higher wages — but they don't.
Perhaps the following calculations illustrates what I mean: A marginal person of working age offers 1 person of labor, but the labor that they demand in order to stay fed and bedded may only be, say, 0.5 persons due to automation. If this single person were a closed loop, there is no good reason for this person to work more than 0.5 persons worth of labor — that will be enough to feed themselves.
If human labor goes extinct, this means that this person would only demand ~0 people worth of labor — nobody has to lift a finger to keep this person well-fed, it's all taken care of by AI growing corn and mowing the lawn.
The trouble is that this person is not a closed loop — they don't have access to that AI growing corn, they have to pay an exorbitant fee. That's the issue about "work saved" that I mean, and the thing that Henry George pointed out in "Progress and Poverty".
The math doesn't pan out exactly in this way, because automation changes what constitutes human labor, so you can get the work of 90 people from year 856 for the price of 1 crane driver and 1 crane in the year 2025. Work saved means that each person can do more, but that in turn may lead to demanding more.
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