How growth and prosperity developed, is quite simple economic theory. Give it to the three options:
➡ through more use of labor
➡ by more capital
➡ by technical progress
The former occurs when more people are working and / or those who work, do so for longer. The capital stock increases by reduced consumption, ie by saving (extends to the view of an open economy, can also accrue to capital from abroad – or desisted abroad). Thirdly created growth and wealth of new ideas, which, for example, better machines be built, which at the same time can be produced more.
Growth has therefore essentially three reasons. Whether growth creates jobs or not rather increase new jobs growth is only at first glance a chicken or the egg. Both causalities are in fact possible, depending on which growth parameters change.
Rises through reforms in the labor market, the incentive to take a job, the resulting increase in economic performance will lead to more growth. Here, then, create jobs growth.
Resulting growth on the other hand from a rise in capital stock (as is saving approximately more), then the associated growth spurt increases the number of jobs (prerequisite is that previously there unemployment, alternatively incomes rise). Here growth creates jobs.
The employment effect in the growth Bringer “technical progress” is less clear. Technological progress is by definition first of all job-saving, it is to do it with existing resources to produce more or to produce the same amount with less use. If there were technical progress not, we would still gather each fall on the fields harvesting.
So technological progress destroys jobs. The conclusion, however, that this will reduce the total number of jobs is wrong. Famous economists have succumbed to the so-called liberation theory, David Ricardo, for example, even Karl Marx.
What they have not thought of: technological progress makes products cheaper. Who can produce twice as many paper clips at the same price with the new machine, which is the paperclips sell much cheaper (in competition) also. In other words, increase declining paperclip prices real income, people can buy more. This growing demand will create new jobs tend to be, but tend in other industries. The Erntehelfer must look for a new job after the introduction of the combine.
The problem of technological progress is thus not the job losses, but the induced structural change. Will people unemployed by technical progress in an industry that they can indeed be found in another employment, but requires that they are qualified for the new posts. This also shows: Lifelong learning combats unemployment.
Structural change can thus be uncomfortable. But if it prevents the leaves dry up the source of prosperity. Only where more is produced per capita, can be spread over time more per capita.