Re: [OPE-L] Articles on Adam's Fallacy

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Feb 09 2007 - 22:11:02 EST

>---------------------- Original Message ----------------------------
>Subject: Articles on Adam's Fallacy
>From:    "Dipankar Basu" <>
>Date:    Fri, February 9, 2007 10:18 am
>Hi Jerry,
>Right after its publication, two mainstream economists (Robert Solow and
>Brad Delong) commented critically on Duncan Foley's recent book "Adam's
>Fallacy: A Guide to Economic Theology". I have written detailed rebuttals of
>both Solow and Delong. I wanted to share these with the members of OPE-L but
>I could not post them because I am not a member of OPE-L; so I am sending
>them to you. If you see it fit do circulate these in OPE-L. I think Adam's
>Fallacy needs to be read much more widely by radicals than is currently the
>case. Here are the links:
>1) A rebuttal of Solow: <>
>2) A rebuttal of Delong: <>

These are very helpful reviews as is the interview.

Foley of course underlines possible problems in the financial system.

The pecuniary losses could be so great in an environment of rapid
technological change that old capital values would become unavailable
for further investment and employment-generation

New jobs could pay prohibitively low wages as they are filled by
single immigrant workers whose wages do not have to be sufficient to
reproduce the entire family in the more expensive Northern countries;
the new plants constructed after old capital is scrapped in a
recession may be set up abroad.

There is no reason to assume that those who have lost their jobs will
be the ones to gain the new employment--new workers resulting from
population growth could win the new jobs, leaving the displaced to
languish in unemployment or to suffer disguised unemployment, say, as
servants for the wealthy (this was one of Marx's major criticisms of
the compensation theory).

There is also simply no reason to assume that new employment will in
fact be forthcoming: there could insufficient accumulation after a
shock of mechanization or trade as production becomes more
capital-intensive and returns decline.

I still think one of the best introductions to the whole problem of
technological unemployment is Alexander Gourvitch's survey from the
late 1930s.

>Dipankar Basu

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