An ancient conflict

Over at his new , as well as , Ian Leitch asks:

There must be many, many developers out there working on software that will replace the job of a human being; how do they feel about it?

Fortunately, the economic effects of technological advances can make you feel good about it. Unemployment has a variety of causes (notably statist interventions) but a new machine (or software) that can perform automatically a job previously done manually does not necessarily reduce the demand for labour (which derives from the intention to produce for consumption, and ), it merely increases the output, the product, of human labour ("productivity") and this is in fact where "growth" (rising nominal wages that are inextricably linked to productivity) happens.

Ian continues:

I am firm believer in survival-of-the-fittest and I'm not about to give up my own job so someone can keep theirs, but at the same time I still have a sense of morality.

Quoting : Contradictions do not exist—check your premises, you will find at least one of them to be wrong.

Whoever claims that economic competition represents 'survival of the fittest' in the sense of the law of the jungle, provides the clearest possible evidence of his lack of knowledge of economics. The truth is that economic competition is the very opposite of competition in the animal kingdom. It is not a competition in the grabbing off of scarce nature-given supplies, as it is in the animal kingdom. Rather, it is a competition in the positive creation of new and additional wealth.
~ George Reisman

The morality of capitalism is based on volitional trade of value for value, voluntary exchange. The labourer your software might be replacing has no claim on what you choose to do, as long as you do not violate his right to his own life and property. Such a claim would violate your own rights. You are acting morally because of this, but also because the demand for the labourer does not actually, necessarily disappear, speaking economically, as I have outlined above. The best description of this process I have read so far has been written in 1848 in French by in his wonderful essay series :

James Goodfellow had two francs that he let two workers earn.

But now suppose that he devises an arrangement of ropes and weights that will shorten the work by half.

Then he obtains the same satisfaction, saves a franc, and discharges a worker.

He discharges a worker: that is what is seen.

Seeing only this, people say: "See how misery follows civilization! See how freedom is fatal to equality! The human mind has made a conquest, and immediately another worker has forever fallen into the abyss of poverty. Perhaps James Goodfellow can still continue to have both men work for him, but he cannot give them more than ten sous each, for they will compete with one another and will offer their services at a lower rate. This is how the rich get richer and the poor become poorer. We must remake society."

A fine conclusion, and one worthy of the initial premise!

Fortunately, both premise and conclusion are false, because behind the half of the phenomenon that is seen is the other half that is not seen.

The franc saved by James Goodfellow and the necessary effects of this saving are not seen.

Since, as a result of his own invention, James Goodfellow no longer spends more than one franc for manual labor in the pursuit of a given satisfaction, he has another franc left over.

If, then, there is somewhere an idle worker who offers his labor on the market, there is also somewhere a capitalist who offers his idle franc. These two elements meet and combine.

And it is clear as day that between the supply of and the demand for labor, between the supply of and the demand for wages, the relationship has in no way changed.

The invention and the worker, paid with the first franc, now do the work previously accomplished by two workers.

The second worker, paid with the second franc, performs some new work.

What has then been changed in the world? There is one national satisfaction the more; in other words, the invention is a gratuitous conquest, a gratuitous profit for mankind.

From the form in which I have given my demonstration we could draw this conclusion:

"It is the capitalist who derives all the benefits flowing from the invention of machines. The laboring class, even though it suffers from them only temporarily, never profits from them, since, according to what you yourself say, they reallocate a portion of the nation's industry without diminishing it, it is true, but also without increasing it."

It is not within the province of this essay to answer all objections. Its only object is to combat an ignorant prejudice, very dangerous and extremely widespread. I wished to prove that a new machine, in making a certain number of workers available for jobs, necessarily makes available at the same time the money that pays them. These workers and this money get together eventually to produce something that was impossible to produce before the invention; from which it follows that the final result of the invention is an increase in satisfactions with the same amount of labor.

Who reaps this excess of satisfactions?

Yes, at first it is the capitalist, the inventor, the first one who uses the machine successfully, and this is the reward for his genius and daring. In this case, as we have just seen, he realizes a saving on the costs of production, which, no matter how it is spent (and it always is), gives employment to just as many hands as the machine has made idle.

But soon competition forces him to lower his selling price by the amount of this saving itself.

And then it is no longer the inventor who reaps the benefits of the invention; it is the buyer of the product, the consumer, the public, including the workers—in a word, it is mankind.

And what is not seen is that the saving, thus procured for all the consumers, forms a fund from which wages can be drawn, replacing what the machine has drained off.

Thus (taking up again the foregoing example), James Goodfellow obtains a product by spending two francs for wages.

Thanks to his invention, the manual labor now costs him only one franc.

As long as he sells the product at the same price, there is one worker the fewer employed in making this special product: that is what is seen; but there is one worker the more employed by the franc James Goodfellow has saved: that is what is not seen.

When, in the natural course of events, James Goodfellow is reduced to lowering by one franc the price of the product, he no longer realizes a saving; then he no longer releases a franc for national employment in new production. But whoever acquires it, i.e., mankind, takes his place. Whoever buys the product pays one franc less, saves a franc, and necessarily hands over this saving to the fund for wages; this is again what is not seen.