automated technology explains today ' s high unemployment and low hiring rates . If theyYe

by Alan S. Brown WO hundred years ago, back when the Luddites revolted against industrialization by sabotaging mechanical looms, David Ricardo tackled the problem of automation. Ricardo was one of the founders of modern economic theory. Like most of his contemporaries, he believed technological advances would raise living standards for everyone. Yet when he revisited the topic, he concluded that machines might one day make goods so cheaply that factories could not remain competitive if they paid laborers a living wage. Manufacturers would have to invest in machines. The result would be technological unemployment. And ever since Ricardo's day, theorists have predicted that it was just around the corner. Their ranks have included such distinguished economists as John Maynard Keynes and Nobel Prize winner Wassily Leontief, and groundbreaking management consultant Peter Drucker. Yet despite massive mechanization and automation, the U.S. economy kept creating jobs. Automation eliminated some positions, but new technologies as well as rising prosperity created others. Now, two Massachusetts Institute of Technology professors believe the economy has