{"id":148184,"date":"2025-09-16T20:22:07","date_gmt":"2025-09-16T20:22:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/148184\/"},"modified":"2025-09-16T20:22:07","modified_gmt":"2025-09-16T20:22:07","slug":"much-ado-about-something-that-one-day-may-be-important","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/148184\/","title":{"rendered":"Much ado about something that one day may be important"},"content":{"rendered":"

I remember the \u201cdot-com bubble<\/a>\u201d in the late 1990s. Investors were greatly excited by the advent of the internet and all the opportunities it presented to make a buck. Many people put their money in website start-ups they hoped would make a killing.<\/p>\n

Soon enough, people realised that these weren\u2019t going anywhere. The bubble burst and the \u201cventure capitalists\u201d did their dough. But this, of course, didn\u2019t stop the internet being the great change we now know it was, with a few tech giants \u2013 Google, Facebook\/Meta etc \u2013 making a fortune.<\/p>\n

In the present sharemarket boom, speculators have bought shares in those tech giants, hoping to make a motser from the development of AI. The companies probably will do well, but not as massively well \u2013 or as immediately \u2013 as the get-rich-quick brigade imagined.<\/p>\n

So it\u2019s safe to assume the present boom is a bubble that will burst. You can never tell when, but my guess is it won\u2019t be long. When it happens, many smarties will do their dough, but it won\u2019t be a great disaster for the economy. As I never tire of explaining, the sharemarket and the economy are two different animals. The sharemarket will take a hit; the boring \u201creal\u201d economy of production and consumption will steam on.<\/p>\n

What the bursting of the AI sharemarket bubble will do, however, is kill off most of the hype. What I\u2019ve concluded from years of watching these excitements wax and wane, is that they\u2019re never as wonderful as the marketing department claimed, nor as terrible are their critics feared.<\/p>\n

My third conclusion is that these world-changing technologies always take a lot longer to materialise that the advertising led us to expect. Often, the big firms jump onto the new technology, but the smaller firms take their time. This protracted dissemination stops the change being so overwhelming, giving firms and workers notice of what\u2019s coming and time to adjust.<\/p>\n

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So, I\u2019m not saying there\u2019s no substance beneath all the hype \u2013 there is. A significant change in the way businesses and other organisations use workers to do whatever it is the outfit does is coming. This will involve numerous workers losing their jobs and having to find other ones.<\/p>\n

What I don\u2019t believe are the predictions that AI will spread through the nation\u2019s employers like a bushfire, making many thousands of people jobless at much the same time, so that the economy\u2019s hit for six and new jobs are impossible to find.<\/p>\n

So you can forget the fear that we\u2019ll soon be beset by mass unemployment and depression. I say this with great confidence because people have been predicting that some new technology or other would cause mass unemployment on and off for at least the past five decades, without it coming to pass.<\/p>\n

Last time I looked, the rate of unemployment was only up to 4 per cent of available workers. Add to that the 6 per cent of workers who have part-time jobs but would prefer to work more hours, and you\u2019re only up to 10 per cent.<\/p>\n

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Remember, businesses have been investing in labour-saving equipment \u2013 that is, using machines to get rid of workers \u2013 continuously since the Industrial Revolution. So why didn\u2019t we hit an unemployment rate of 90 per cent decades ago?<\/p>\n

Short answer: because having employers use better machines to cut the resources needed to produce all the goods and services we consume improves the nation\u2019s productivity \u2013 the efficiency of the economic machine \u2013 and so leaves us better off.<\/p>\n

Our higher real income \u2013 we\u2019ve had to spend fewer resources to acquire the same quantity of the goods and services we want \u2013 means we can afford to pay the now unemployed workers to produce more, and often different, goods and services.<\/p>\n

It\u2019s because there\u2019s no limit to our appetite for goods and services that the workers \u201cdisplaced\u201d by labour-saving technology shouldn\u2019t have too much trouble finding other jobs to do. Some individuals may find themselves unsuited to the new jobs but, with a bit of retraining, most jobless workers won\u2019t.<\/p>\n

Find that hard to believe? Just look at the history of capitalist economies using machines to replace workers for the past two centuries. It\u2019s worked pretty well so far.<\/p>\n

Ross Gittins is the economics editor.<\/p>\n

Ross Gittins unpacks the economy in an exclusive subscriber-only newsletter. Sign up to receive it every Tuesday evening<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"I remember the \u201cdot-com bubble\u201d in the late 1990s. Investors were greatly excited by the advent of the…\n","protected":false},"author":2,"featured_media":148185,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":{"0":"post-148184","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/148184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=148184"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/148184\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/148185"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=148184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=148184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=148184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}