When Humanoid Robots Come to a Small-Town Factory

Two-legged robots have taken over a job in a South Carolina auto parts plant. That’s just the start.

By John Keilman of The WSJ. 

Right after this post I repost a blog entry from 2016 called Automation Can Actually Create More Jobs. Then after that are links to other posts on jobs, robots & automation.   

Excerpts:

[A robot carries] "a 25-pound basket of bearing components . . . and walks it over to a conveyor that will send it through an industrial washing machine."

"A year ago, a person did this job.  Now it belongs to a humanoid robot called Digit that was built for grunt work."

"Schaeffler, a global manufacturer that makes parts for cars and airplanes, said it plans to deploy more of the robots in the coming months."

"Agility [an Oregon-based startup] wouldn’t give Digit’s price tag, but over the life of a robot, the costs work out to $10 to $25 an hour, depending on whether a company buys or rents it. Damion Shelton, Agility’s co-founder, has said it could eventually fall to $2 or $3 an hour. Entry-level positions at Schaeffler’s Cheraw plant, which isn’t unionized, start at $20 an hour." 

Automation Can Actually Create More Jobs

Evidence shows increased productivity leads to more wealth, cheaper goods, greater spending power and ultimately, more jobs

By Christopher Mims of the WSJ.

There are four types of unemployment: seasonal, structural, frictional and cyclical.

Structural unemployment is unemployment caused by a mismatch between the skills of job seekers and the requirements of available jobs.

One example of this is when you are replaced by a machine, like bank tellers who were replaced by ATMs. Another example is when there is a fall in demand for your product, so you get laid off, like with typewriters since people now use computers. A third example is geographical, when the jobs are not in your region of the country.

But automation may not be a problem, even in the case of ATMs. Excerpts from the article:

"Since the 1970s, when automated teller machines arrived, the number of bank tellers in America has more than doubled. James Bessen, an economist who teaches at Boston University School of Law, points to that seeming paradox amid new concerns that automation is “stealing” human jobs. To the contrary, he says, jobs and automation often grow hand in hand."

"Sometimes, of course, machines really do replace humans, as in agriculture and manufacturing"

"a long trail of empirical evidence shows that the increased productivity brought about by automation and invention ultimately leads to more wealth, cheaper goods, increased consumer spending power and ultimately, more jobs.

In the case of bank tellers, the spread of ATMs meant bank branches could be smaller, and therefore, cheaper. Banks opened more branches, and in total employed more tellers, Mr. Bessen says.

Some individuals are uprooted and suffer. In 1900, 40% of U.S. workers toiled in agriculture; today, that figure is less than 2%. Manufacturing employment in industrialized countries has declined in recent decades, as fewer people make more goods. But society, on the whole, has come out ahead.

It’s true that technology alters the quality, as well as the quantity, of jobs"

[a study] "found big increases in both low-paying and high-paying jobs. There are more barbers and barkeepers. But there also are more accountants and nurses, reflecting the rising complexity of the modern economy.

Paradoxically, says Mr. Stewart, many of the fields most transformed by technology have produced the biggest increases in employment, from medicine to management consulting. “What we saw was that machines and people were highly complementary,” he says.

Such bifurcated labor markets have ill effects. Disappearing factory jobs have largely been replaced by jobs in the service sector, where highly skilled workers, like doctors and computer programmers, are paid more, while many others see to the comfort and health of the affluent. In the middle, wages have stagnated, helping spawn our current age of populism.

“The era of mass manufacturing employment in the 1960s and 1970s was a good thing,” says Dr. Autor. “It created a lot of good jobs, it needed a lot of hands and eyes, and required some skills but not an enormous skill set. The work was relatively high value added.” But, he adds, that era is for the most part behind us."

"For all the recent advances in artificial intelligence, such techniques are largely applied to narrow areas, such as recognizing images and processing speech. Humans can do all these things and more, which allows us to transition to new kinds of work."

"the problem is not “mass unemployment, it’s transitioning people from one job to another.”"

"Near the end of the 19th century, America’s agricultural states faced the prospect of mass unemployment as farms automated.

In response, they created the “high school movement,” which required everyone to stay in school until age 16. It was hugely expensive, both because of the new schools and teachers, but also because these young people could no longer work on the farm. But it better prepared workers for 20th century factory jobs" 

Related posts:

AI startups are literally paying people to fold their laundry (or perform similar chores) (2025)

"Companies such as Encord, Micro1, and Scale AI have launched paid “data collection” programs aimed at generating real-world video datasets for robotic learning." 

America’s Newest Auto Plant Is Full of Robots. It Still Needs the Human Touch: Hyundai’s sprawling complex in Georgia illustrates advanced manufacturing’s balance between people and machines (2025) 

No, AI Robots Won’t Take All Our Jobs: Instead, they will boost productivity, lower prices and spur the evolution of the labor market (2025) (it also has links to 14 other related posts from before 2024)

IBM CEO Says AI Has Replaced Hundreds of Workers but Created New Programming, Sales Jobs: The tech company promises higher total employment as it reinvests resources toward roles like software development (2025)

Technological Disruption in the Labor Market (2025)

Why AI Might Not Take All Our Jobs—if We Act Quickly (2025)

Some good news on productivity (2025) (AI is mentioned)

Some economics of A.I. (2025) 

The AI-Generated Population Is Here, and They’re Ready to Work (2024)

Two recent articles on robots and human workers (2024)

Self-service kiosks at McDonald’s are not reducing employment (2024) 

Robots writing science fiction (2024)

Amazon’s New Robotic Warehouse Will Rely Heavily on Human Workers (2024) 

Will AI data centers cause economies of scale in the power industry?

See The Electric Grid Needs Huge Upgrades. No One Knows Who Will Pay for Them: Utilities around the U.S. are set to spend tens of billions of dollars on high-voltage lines, largely to meet demand from data centers by Katherine Blunt and Jennifer Hiller of The WSJ.

Economies of scale is when more capital is built (like a larger factory for more extensive grid system) that allows for more output (see related post below on the Model-T). The increase in quantity is larger than the increase in total cost (in percentage terms). So the average cost falls.

Excerpts:

"The AI build-out is driving up electricity costs in some places, an issue that has angered politicians and spurred intervention by the Trump administration. The White House this month announced that seven of the nation’s largest tech companies had agreed to pay for all the costs associated with powering new data centers."

"the prices utilities charge to customers. That is overseen by state regulators, who have in recent years approved rate increases as utilities make investments not only to support data centers but also to upgrade the grid to withstand more extreme weather and replace parts that are decades old."

"Transmission spending, though, poses challenges for utilities and regulators in determining how costs should be divided. In many places, some transmission costs will be shared among customers other than tech companies because the upgrades may benefit the broader system.

“Data center developers have said they want to pay their fair share, but the question is, what does fair mean?” said Timothy Fox, managing director at ClearView Energy Partners. “Cost allocation for transmission has always been a very complex and difficult question. It’s an imperfect science.”

The utility industry argues that adding data centers has the potential to lower costs for other customers, as they could spread shared costs over a greater volume of electricity sales. That has been the case in some places such as North Dakota." (this is where the economies of scales comes in)

"Brent Bennett, a director at the conservative Texas Public Policy Foundation, said the costs could fall more heavily on residential customers than on the companies that are creating the new demand. His organization has estimated that the average ratepayer will pay somewhere between about $150 and $225 a year for the transmission projects that have been recently approved."

Related post:

Jeopardy and the inflation adjusted price of a 1908 Ford Model T (2023)

This site, Ford Model T Original Prices, from FordModelT.net run by Mitchell Taylor shows all the prices of the different body styles for the Model T from 1909 to 1927 (as well as drawings of some them).

The cheapest in 1909 was the Runabout with a price of $825. The price generally kept falling and by 1925 a buyer only paid $260. That is a drop of about 68%.

But, adjusting for inflation, what would you have to pay in 1925 for something that cost $825 in 1909? Prices were 93% higher in 1925 than in 1909. So if the price of the Runabout had just kept up with inflation, it would have been $1,592 in 1925. Yet it was only $260. That means the price actually fell about 84%, adjusted for inflation.

How Odysseus Started The Industrial Revolution

Factory work may have been a commitment device to get everyone to work hard. Odysseus tying himself to the mast was also a commitment device. Dean Karlan, Yale economics professor explains how commitment devices work:

"This idea of forcing one’s own future behavior dates back in our culture at least to Odysseus, who had his crew tie him to the ship’s mast so he wouldn’t be tempted by the sirens; and Cortes, who burned his ships to show his army that there would be no going back.

Economists call this method of pushing your future self into some behavior a “commitment device.” [Related: a Freakonomics podcast on the topic is called "Save Me From Myself."] From my WSJ op-ed:

Most of us don’t have crews and soldiers at our disposal, but many people still find ways to influence their future selves. Some compulsive shoppers will freeze their credit cards in blocks of ice to make sure they can’t get at them too readily when tempted. Some who are particularly prone to the siren song of their pillows in the morning place their alarm clock far from their bed, on the other side of the room, forcing their future self out of bed to shut it off. When MIT graduate student Guri Nanda developed an alarm clock, Clocky, that rolls off a night stand and hides when it goes off, the market beat a path to her door."

 See What Can We Learn From Congress and African Farmers About Losing Weight?

Something like this came up recently in the New York Times, in reference to factory work and the Industrial Revolution. See Looking at Productivity as a State of Mind. From the NY Times, 9-27-2014. By SENDHIL MULLAINATHAN, a professor of economics at Harvard. Excerpts:

"Greg Clark, a professor of economics at the University of California, Davis, has gone so far as to argue that the Industrial Revolution was in part a self-control revolution. Many economists, beginning with Adam Smith, have argued that factories — an important innovation of the Industrial Revolution — blossomed because they allowed workers to specialize and be more productive.

Professor Clark argues that work rules truly differentiated the factory. People working at home could start and finish when they wanted, a very appealing sort of flexibility, but it had a major drawback, he said. People ended up doing less work that way.

Factories imposed discipline. They enforced strict work hours. There were rules for when you could go home and for when you had to show up at the beginning of your shift. If you arrived late you could be locked out for the day. For workers being paid piece rates, this certainly got them up and at work on time. You can even see something similar with the assembly line. Those operations dictate a certain pace of work. Like a running partner, an assembly line enforces a certain speed.

As Professor Clark provocatively puts it: “Workers effectively hired capitalists to make them work harder. They lacked the self-control to achieve higher earnings on their own.”

The data entry workers in our study, centuries later, might have agreed with that statement. In fact, 73 percent of them did agree to this statement: “It would be good if there were rules against being absent because it would help me come to work more often.”"

The workers, like Odyssues, tied themselves to the mast to resist the temptation of slacking. This made it possible for factories to generate the large output of the Industrial Revolution.

Here is the link to the Journal of Economic History article by Professor Clark

Factory Discipline

Here is the abstract 

Related posts:  

Would you pay someone to make you work hard? (2022)

Can You Mix Economics With Religion? (The ancient Greeks a god of commerce and a god of wealth) (2022)

Are payday-routine videos a commitment device? (2023)

An Economic Approach to Homer's Odyssey by Tyler Cowen (2025) 

How are higher energy prices impacting the economy?

See How Americans Are Navigating Higher Energy Costs on Every Front: Borrowed Costco memberships, fewer nights out and skipped road trips. ‘You better watch your account to the penny’ by Rachel Wolfe of The WSJ. Excerpts:

"Consumers around the country say they are rejiggering their routines in efforts to cut their energy usage at home and on the road. They are also starting to cut back on discretionary purchases to make up for rising costs elsewhere. For an economy driven by consumer spending, such changes in behavior matter.

High prices for electricity and natural gas used for heating and cooking already have alarmed consumers and played into local elections. For the past year, falling gasoline prices acted as a shock absorber, offsetting an 11% year-over-year increase in the price of natural gas and 5% rise in electricity. That reprieve ended this month, and could last as the war with Iran drags into its fourth week.

The national average for a gallon of regular has just about reached $4—climbing more than $1 in the past 30 days."

"Although $4 today, adjusted for inflation, is less than in previous price spikes, the last time gas hit a national average of $4 a gallon in 2022, it helped trigger a broader pullback in discretionary spending."

"California has some of the nation’s highest gas prices because of taxes, environmental requirements and a lack of refinery infrastructure in the state, which has helped push the state’s residents toward electric vehicles."

"The U.S. has become less energy dependent, and Americans consume less gasoline relative to their inflation-adjusted incomes than during previous price spikes, thanks to increased energy efficiency and generally rising incomes."

"consumers expect the bump at the pump to precipitate broader inflation, as has happened in the past."

Next see The Low Cost of High Gasoline Prices by Mitch Zimmer. Excerpts:

"In May 2018 . . . gasoline prices were up roughly 50 cents from the previous year."

"My family routinely drives 600 miles round trip to a house in the mountains for Memorial Day."  

Just how much was that 50 cents a gallon going to cost everyones?

"My car gets 30 miles per gallon, so it would require 20 gallons of gasoline for a 600-mile trip. The more expensive gasoline would add $10 to the cost of the trip."

His point was that the price increase was not all that costly. Even if gas was up a $1, it would only increase the price of the trip by $20.

Then see Postal Service to Impose Its First-Ever Fuel Surcharge on Packages: The 8% fee, to cover rising fuel and transportation costs, will be applied to packages but not the mail, as the agency looks to stabilize its finances by Esther Fung of The WSJ. Excerpts:

"The U.S. Postal Service plans to impose its first-ever surcharge on packages to cover the rising cost of fuel"

"The 8% surcharge will begin on April 26"

"Other parcel carriers, including FedEx and United Parcel Service, have imposed fuel surcharges for years"

"Diesel prices reached $5.38 a gallon this week, up 51% from a year earlier."

"Amazon.com is planning to sharply cut the number of packages it ships" 

When the price of a resource rises, supply shifts to the left. The price of the good or service rises and quantity falls. We see this in the article. 

Related post:

Stagflation, Recession? Probably Not (2026)

"The economy has grown more resilient to oil shocks, and a productivity renaissance is under way, helped by artificial intelligence. Both should help sustain growth and cushion cost pressures."

"The U.S. consumed 4% less gasoline in 2025 than in 2007, while producing 42% more goods and services (as measured by gross domestic product, adjusted for inflation). The share of households’ consumption of energy, including electricity, natural gas and gasoline, fell from 5.7% in 2007 to 3.7% last year."

"the shale revolution has turned the U.S. into a net exporter of petroleum and major exporter of liquefied natural gas. That means the hit to consumers is offset by a boost to producers."

Enhanced workforce participation and college attainment among women has transformed the marriage market with the trend toward preferences for similarity, particularly concerning income, education, and skills

See Marriage Market Sorting in the U.S. by Anton Cheremukhin, Paulina Restrepo-Echavarria and Antonella Tutino.

Abstract 

"We examine shifts in the U.S. marriage market, assessing how online dating, demographic changes, and evolving societal norms influence mate choice and broader sorting trends. Using a targeted search model, we analyze mate selection based on factors such as education, age, race, income, and skill. Intriguingly, despite the rise of online dating, preferences, mate choice, and overall sorting patterns showed negligible change from 2008 to 2021. However, a longer historical view from 1960 to 2020 reveals a trend toward preferences for similarity, particularly concerning income, education, and skills. Our findings refute two out of three potential explanations – reduced search costs and growing spatial segregation – as potential causes of these long-term shifts. In particular, we conclude that people’s capacity to process and evaluate information hasn’t improved despite technological advancements. Among the remaining demographic factors, we identify enhanced workforce participation and college attainment among women as the primary drivers of the U.S. marriage market transformation. Furthermore, we find that the corresponding changes in mate preferences and increased assortativeness by skill and education over this timeframe account for about half of the increased income inequality among households."

Related posts:

Why Marriage Is Increasingly for the Affluent: The economic contract of marriage has shifted, and now young people are looking for financial stability before the wedding (2025) 

Jane Austen was wrong: women don’t marry up for money and status: A new study debunks the myth of the gold-digging wife, finding that women are no more likely to marry above their social class than men (2025)

When It Comes to Marriage and Money, Opposites Attract (2023)

As more people choose to marry someone with a similar income, inequality increases (2020) 

The preference for partners of the same education has significantly increased for white individuals (2017)

"Among students in the bottom socioeconomic quartile, 15 percent had earned a bachelor’s degree within eight years of their expected high school graduation, compared with 22 percent in the second quartile, 37 percent in the third quartile, and 60 percent in the top quartile."

"Data from the United States Census Bureau suggests there has been a rise in assortative mating....[I]f matching in 2005 between husbands and wives had been random, instead of the pattern observed in the data, then the Gini coefficient would have fallen from the observed 0.43 to 0.34, so that income inequality would be smaller""  

Rising brideprice—money or gifts provided to a woman’s family by the groom and his family as part of marriage arrangements—is a common if overlooked catalyst of violent conflict (2017)

What Do Men In China Need To Get A Bride? (2011)

There really is a marriage market in many countries (2011)

Do Women Really Value Income over Looks in a Mate? by Marina Adshade (2010) 

Do Opposites Attract? Not Usually, Except Maybe When It Comes To Money (2009)

When Women Earn More Than Men, Is Dating Affected? (2007) 

Does working from home raise lifetime fertility?

See Work from Home and Fertility by Steven J. Davis, Cevat Giray Aksoy, Jose Maria Barrero, Nicholas Bloom, Katelyn Cranney, Mathias Dolls & Pablo Zarate. 

Abstract

"We investigate how fertility relates to work from home (WFH) in the post-pandemic era, drawing on original data from our Global Survey of Working Arrangements and U.S. Survey of Working Arrangements and Attitudes. Realized fertility from 2023 to 2025 and future planned fertility are higher among adults who WFH at least one day a week and, for couples, higher yet when both partners do so. Estimated lifetime fertility is greater by 0.32 children per woman when both partners WFH one or more days per week as compared to the case where neither does. The implications for national fertility rates differ across countries due mainly to large differences in WFH rates. In a complementary analysis using other U.S. data before and after the pandemic, one-year fertility rates rise with WFH opportunities in one's own occupation and, for couples, in the partner's occupation."

Related posts:

 

The Depopulation Bomb: As global fertility rates drop, two economists make the case for humans (2025)  

 

China’s New Plan to Encourage More Births: $500 a Year: Beijing plans to pay the amount per child until the age of 3, as falling birthrates reverberate through economy (2025) 

 

Babies and the Macroeconomy (2025) 

 

There’s little evidence that subsidies and protections have substantially raised the number of children women have over their lifetime (2025) 

 

Would you and your significant other get married if the government paid you $14,000? What if they paid the two of you to have children? (2025)

 

Worldwide Efforts to Reverse the Baby Shortage Are Falling Flat: Subsidized minivans, no income taxes: Countries have rolled out a range of benefits to encourage bigger families, with no luck (2024) 

 

Can you choose when to have your baby born if it brings you some money? (2024)

 

Births in U.S. Drop to Levels Not Seen Since 1979: Millennials fuel continued downward trend in fertility rates (2021)

 

U.S. Population Growth, an Economic Driver, Grinds to a Halt: Covid-19 pandemic compounds years of birth-rate decline, puts America’s demographic health at risk (2021) 

 

A number of women who put off having babies after the 2007-09 recession are forgoing them altogether; more educated women and student debt also contribute to decline in birth rates (2018)

 

U.S. Fertility Rate Hits Lowest Level on Record (2012) 

 

Did The Recession Help Lower The Birth Rate? (2011)

The Economy Affects The Birth Rate (2010)

Should the Government Pay People to Have Sex? (2007) 

Elites moved toward democrats more than nonelites moved away: Income, education, and occupational class in US presidential elections, 1980–2020

By Karyn Vilbig & Paula England. 

"Recent work on partisan realignment has often highlighted shifts among the White working class. Examining elections from 1980 to 2020, we show that the partisan realignment of White voters has been primarily driven by higher status Whites—those with the highest decile household incomes, college degrees, and white-collar jobs—making large moves toward the Democratic Party. Working-class Whites, however, show no clear long-term trend. They have indeed become less Democratic since 2012, but these levels remain within historically observed bounds.

Recent discussion of voting in US elections claims a strong movement of White working-class voters away from voting for Democrats, with much discussion focusing only on elections between 2012 and the present. We examine longer-term trends from 1980 to 2020 in how more and less privileged White voters—measured by household income, education, and occupational class—moved toward or away from voting Democratic. We also explore how these movements changed the shape of the relationships between these three socioeconomic indicators and voting Democratic. We find little evidence of a long-term movement away from Democrats among voters with lower income, less education, or working-class jobs, although there is some evidence of this after 2012. The clearest long-term trend is that voters in the highest decile of income, college graduates, and white-collar workers moved steadily toward voting Democratic across the 40 y. Thus, the change from negative to flat for income’s relationship to voting Democratic, and from negative to positive for education’s relationship to voting Democratic comes less from a movement of less privileged voters away from Democratic voting and more from a long-term movement of those in the top decile of income, college graduates, and white-collar workers toward voting Democratic. Whether the post-2012 movement away from voting Democratic among voters without a high school degree and in working-class jobs becomes an enduring trend or is idiosyncratic to Trump’s candidacy is an important question for future research."

Related posts:

People gave up a chance to win money in order to avoid hearing from those with opposing political views (2017) 

People say the president can control gas prices if the president belongs to the other party (2017)

Are some blue jeans really Democratic and others Republican? (2019)

Why Are Americans So Distrustful of Each Other? (2021)

"In 2017, around 70% of Democrats said that Donald Trump voters couldn't be trusted, and around 70% of Republicans said the same of Hillary Clinton voters" 

More and more, executives at major corporations belong to the same politcal party and tend to leave their companies if they are in the minority party there (2022) 

Adam Smith Meets Jonathan Haidt (on political polarization and the animosity of hostile factions)  (2023)

Why Tribalism Took Over Our Politics: Social science gives an uncomfortable explanation: Our brains were made for conflict (2023) 

Democrats and Republicans say economy is improving, but mostly only when someone from their party is president (2024) 

Did Fracking in Pennsylvania Turn Democrats Into Republicans and Republicans Into Democrats? (2024)

Are fewer Democrats buying Teslas because of Elon Musk's political views? (2024)

Partisanship deeply colors how Americans think about trade policy, especially tariffs (2024) 

Would you give up some income in order to get a job at a firm whose workers share your political opinions? (2024)

Republicans Are Feeling Good Again, Driving Up Consumer Sentiment: Democrats’ sentiment slips, but overall index ticks higher (2024)

Causes and Extent of Increasing Partisan Segregation in the U.S. – Evidence from Migration Patterns of 212 Million Voters (2025)

Red vs. Blue Is Dividing Stock Portfolios Like Never Before: A political gap in optimism about markets is translating into trading decisions (2025)

Can testosterone shift political preferences? (2025)

What does conservatism mean? Fewer taxes & regulations or preserving traditional values and communities? A Republican county in Tennessee faces this question when farmers go against land developers (2025)

Poor whites used to vote for Democratic presidential candidates while rich whites voted Repulican. This has now reversed (2026) 

See also Americans start caring more about deficits and the national debt when the party they oppose runs them up by John V. Kane of New York University and Ian G. Anson of The University of Maryland. Excerpt:

"In the past two decades, US budget deficits have skyrocketed, and the national debt is now over $22 trillion. But do Americans care about the size of deficits and the national debt? In new research, John V. Kane and Ian G. Anson find that people tend to care more about the deficits and debts when they are increased by presidents from the party that they oppose. Both Republicans and Democrats, they write, become less concerned about governments running deficits when their President is in charge." 

Professional Hagglers (creative destruction and how the economy just keeps creating new types of occupations & professions)

See He Earns $1,000 a Job—and He’s a Car Dealer’s Worst Nightmare: With car prices soaring, one man deploys dealer speak to talk down the sticker price on behalf of buyers by Imani Moise of The WSJ.

What if you don't like haggling over the price of a car? Would you hire someone to do the haggling for you? You might if the price of the haggler is less than how much he was able to save you on the car. This makes sense since specialization is what raises output and our standard of living.

Excerpts:

"On this last business day of the month, he [Tomi Mikula] set a goal of closing 30 car purchases for the clients who had hired his firm as their professional negotiator." 

Mikula "spent more than a decade selling cars and auto financing at dealerships. Now he deploys his fluency in car-dealer speak and his encyclopedic knowledge of dealer inventory to try to talk down the sticker prices."

"“You’re hiring a middleman to deal with the middleman to make the middleman more efficient,” he said."

"There are also high borrowing costs"

"Then there are add-ons like extended warranties, tire protection and GAP insurance that can inflate the final price by as much as 30%."

"Buyers who spend hours at a showroom start to feel like they have invested too much time to walk away."

"When a salesperson told him [Payam Amiri who studied Mikula’s videos] discounts would be slim because the model was popular, Amiri pulled up local inventory on his phone and pointed out that dozens of similar vehicles sat on lots within 50 miles. The discount got bigger."  

"Mikula  . . . approaches several dealerships to get quotes on the same car even if he gets a bargain on his first call. Pitting dealers against each other forces them to cut into their own margins to win business"

Related posts: 

Who wrote your potential love's online dating profile? (maybe they outsourced it to a professional who specializes in that) (2016)

New Profession Of "Wedding Hashtag Helper" Might Be An Example Of Creative Destruction At Work (2022)

Are dating coaches who help you with texting modern Cyrano de Bergeracs? (2023)

Do You Need a Fixer for Your Disney Vacation? Third-party companies tout advanced knowledge for private tours of complex amusement parks that can cost $1,000 and up (2023)

Parents Hire $4,000 Sorority Consultants to Help Daughters Dress and Impress During Rush (creative destruction and how the economy just keeps creating new types of occupations & professions) (2023)

Prompt engineers chat with generative-AI chatbots (creative destruction and how the economy just keeps creating new types of occupations & professions) (2023)

"Wedding content creators" curate the perfect social-media-ready images of the nuptials and celebration (creative destruction and how the economy just keeps creating new types of occupations & professions) (2023)

 

"Independent education consultants" help high school students and their parents navigate the competitive college-admissions process (creative destruction and how the economy just keeps creating new types of occupations & professions) (2024)

"Robot Wranglers" help lost and confused automatons (creative destruction and how the economy just keeps creating new types of occupations & professions) (2024)

Professional Bridesmaids (creative destruction and how the economy just keeps creating new types of occupations & professions) (2024)

 

Handbag authenticators (creative destruction and how the economy just keeps creating new types of occupations & professions) (2024)

 

App reviewers (creative destruction and how the economy just keeps creating new types of occupations & professions) (2025)

 

Video Clippers (creative destruction and how the economy just keeps creating new types of occupations & professions) (2025) 

 

Creative destruction and mysterious new types of occupations & professions (2026) 

 

Creative Destruction

See Creative Destruction by Richard Alm and W. Michael Cox. Excerpt:

"Joseph Schumpeter
(1883–1950) coined the seemingly paradoxical term “creative destruction,” and generations of economists have adopted it as a shorthand description of the free market’s messy way of delivering progress. In Capitalism, Socialism, and Democracy (1942), the Austrian economist wrote:

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. (p. 83)

Although Schumpeter devoted a mere six-page chapter to “The Process of Creative Destruction,” in which he described capitalism as “the perennial gale of creative destruction,” it has become the centerpiece for modern thinking on how economies evolve."

But also see this link which suggests that the idea goes back even before Schumpeter to other scholars: Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter by Hugo Reinert and Erik S. Reinert.

"Abstract

This paper argues that the idea of ‘creative destruction’ enters the social sciences by way of Friedrich Nietzsche. The term itself is first used by German economist Werner Sombart, who openly acknowledges the influence of Nietzsche on his own economic theory. The roots of creative destruction are traced back to Indian philosophy, from where the idea entered the German literary and philosophical tradition. Understanding the origins and evolution of this key concept in evolutionary economics helps clarifying the contrasts between today’s standard mainstream economics and the Schumpeterian and evolutionary alternative." 

Does grade inflation cost students $213,872 in lifetime earnings?

By Jeffrey T. Denning, Rachel L. Nesbit, Nolan G. Pope & Merrill Warnick.

"Average grades continue to rise in the United States, raising the question of how grade inflation impacts students. We provide comprehensive evidence on how teacher grading practices affect students' long-run success. Using administrative high school data from Los Angeles and from Maryland that is linked to postsecondary and earnings records, we develop and validate two teacher-level measures of grade inflation: one measuring average grade inflation and another measuring a teacher's propensity to give a passing grade. These measures of grade inflation are distinct from teacher value-added, with grade inflating teachers having moderately lower cognitive value-added and slightly higher noncognitive value-added. These two measures also differentially impact students' long-term outcomes. Being assigned a higher average grade inflating teacher reduces a student's future test scores, the likelihood of graduating from high school, college enrollment, and ultimately earnings. In contrast, passing grade inflation reduces the likelihood of being held back and increases high school graduation, with limited long-run effects. The cumulative impact is economically significant: a teacher with one standard deviation higher average grade inflation reduces the present discounted value of lifetime earnings of their students by $213,872 per year."

This reminds me of another study. See Does Professor Quality Matter? Evidence from Random Assignment of Students to Professors by Scott E. Carrell & James E. West. It was published in Journal of Political Economy in 2010. 

 

One thing I remember about this study is that more experienced calculus teachers at the Air Force academy gave out lower grades and got lower student evaluations in Calculus I than the less experienced teachers. But when the students who had the tougher teachers took Calculus II, they did better than the students who had the easier teachers who got better evaluations.

Pride and Profit: The Intersection of Jane Austen and Adam Smith

That is the title of a book by Cecil E. Bohanon and Michelle Albert Vachris. 

Click here to read the review by Carlos Rodríguez Braun. He is a professor of History of Economic Thought at the Universidad Complutense in Madrid.

"That Jane Austen can be associated with moralists, Adam Smith in particular, has been well known for many years. Although the English novelist does not quote the Scottish philosopher and economist or any other intellectual authority, for that matter, there are reasons to suspect that she had read Smith. Half a century ago Kenneth Moler showed that the distinction between vanity and pride drawn by Mary Bennet in Pride and Prejudice is remarkably similar to the one made by Smith in The Theory of Moral Sentiments (“The Bennet Girls and Adam Smith on Vanity and Pride,” Philological Quarterly 46 [October 1967]: 255–62). And other authors have followed this line of research down to the present.

This fine book by the professors of economics Cecil E. Bohanon and Michelle Albert Vachris is a step forward because they present the full picture of the problem in the following sense: they go over all the novels by Austen and indicate what they call the “intersections” of her ideas and Smith’s in order to prove that she “embellishes, refines, and explains Adam Smith” (p. 4).

The book is divided into three parts, and there is also an appendix at the end of the book with a synopsis of Austen’s six completed and published novels. The title of the first part is “Adam Smith’s Theory of Moral Sentiments: A User’s Guide for Jane Austen Readers,” presenting Smith’s ideas in chapters 2 and 3.

Part II, “Austen Reflects and Illuminates Smith,” is the core of the book: from chapter 4 to 9 it links each novel by Austen to a particular Smithian concept. Chapter 4, “Self-Command in Sense and Sensibility,” presents Elinor Dashwood as “a model of Smithian virtue” (p. 46). Chapter 5, “Prudence, Benevolence, and Justice in Mansfield Park,” deals with this “virtue Trinity” highlighted by both Smith and Austen. Chapter 6, “Vanity in Persuasion,” studies vanity in both Persuasion and Mansfield Park. Chapter 7 analyzes “pride in Pride and Prejudice.” Chapter 8, “Greed and Promises in Northanger Abbey,” distinguishes greed and ambition, as Adam Smith did, and includes reflections on greed in Mansfield Park, Persuasion, and Sense and Sensibility. Chapter 9, “Man of System and Impartial Spectator in Emma,” studies the character of Emma Wodehouse and takes a look at Mrs. Morris, Lady Catherine de Bourgh, and Lady Russell as “men” of system in Mansfield Park, Pride and Prejudice, and Persuasion, respectively. It also focuses on impartial spectators in Emma’s enlightenment as well as in Sense and Sensibility, Northanger Abbey, and Mansfield Park.

In part III, “Economic Life in Smith’s and Austen’s Times,” Bohanon and Vachris study land rents, income, and entails (chapter 10); representations of business in Smith and Austen as well as the adoption of what Deirdre McCloskey calls the bourgeois virtues (chapter 11) (see McCloskey’s book The Bourgeois Virtues: Ethics for an Age of Commerce [Chicago: University of Chicago Press, 2006]); and social rank in Smith and Austen (chapter 12). This part ends with some reflections on the intersection between Austen and Smith and its relevance for today (chapter 13).

There has been a certain tendency from the Left in recent years to revitalize the old thesis that questions Adam Smith’s sympathies for capitalism and the free market, a thesis originally defended in 1927 by Jacob Viner in his famous article “Adam Smith and Laissez Faire,” published in the Journal of Political Economy (35, no. 2: 198–232). And this tendency has used the example of Jane Austen to prove the rigors of poverty and inequality in nineteenth-century England. (I have criticized this approach recently in “Piketty Misreads Austen,” The Independent Review 21, no. 3 [Winter 2017]: 465–76). However, Austen and Smith in general terms saw eye to eye in the acknowledgment of economic growth and the appreciation of how the liberalmarket and liberal institutions produce “that universal opulence which extends itself to the lowest ranks of the people” (Adam Smith, Wealth of Nations, [Indianapolis, Ind.: Liberty Fund, 1981], vol. 1, p. 22). Bohanon and Vachris point out: “In Austen’s work, we start to see the emergence of respect for business” (p. 143).

Adam Smith, in spite of his celebrated remarks against businessmen who conspire to obtain privileges from the state at the expense of consumers, underlines the usefulness of commerce; in his lessons, he recalls that Ulysses was asked “by way of affront, whether he be a pirate or a merchant. At that time a merchant was reckoned odious and despicable. But a pirate or robber, as he was a man of military bravery, was treated with honour” (Lectures on Jurisprudence [Indianapolis, Ind.: Liberty Fund, 1982], p. 527). And in the Wealth of Nations, he states: “The prejudices of some political writers against shopkeepers and tradesmen, are altogether without foundation” (vol. 1, p. 361).

Smith criticizes anticapitalist positions, and as Bohanon and Vachris say, “The attitudes of most of the landed gentry of Jane Austen’s novels reflect this pre-commercial way of thinking” (p. 10). There is no “das Adam Smith Problem” here, and Bohanon and Vachris emphasize that markets and ethics are not contradictory: “markets need morality to work and markets make us moral at the same time” (p. 140). For Austen, as for Smith, contra the likes of Gordon Gekko, greed is not good (p. 159).

Just as self-interest can be a useful but also an excessive universal drive, much the same is true of inequality, which in itself does not conspire against social order, because of the moral sentiment that impels us to admire our betters, because we would like to be admired. But the distinction of ranks as well as the effort to better our own condition can corrupt, according to both Smith and Austen. This is why Austen’s novels do not applaud the aristocracy but rather the rising middle class of merchants, manufacturers, and professionals who progress by virtue of merit and not of birth. In the case of landowners, Austen prefers landed before titled gentry (pp. 148–50); she acknowledges and salutes social mobility and shares in the movement that changed the treatment of the commercial class from disdain to respect (p. 153).

Pride and Profit (a good title, by the way) convincingly argues that there are, in fact, numerous intersections between Adam Smith and Jane Austen; their lives might have overlapped by only fifteen years, but they had ideas in common with each other and with the Enlightenment atmosphere that surrounded them. It should be remembered that if a novelist can learn from a moralist, the opposite can also be true: Smith uses literary references in The Theory of Moral Sentiments and was a great admirer of writers such as Voltaire and Racine, whose tragic drama Phèdra was for him “the finest tragedy, perhaps, that is extant in any language” ([Indianapolis: Liberty Fund, 1984], p. 123).

According to Bohanon and Vachris, the final lessons we can learn from the professor of moral philosophy and the novelist are the following: “Develop self command over our passions so we can live a life that balances both sense and sensibility. Be prudent in our affairs but not to the extent of miserliness. Show benevolence toward those we care about, and justice to all. Have pride in our true accomplishments, but do not become too vain or greedy. Show respect to those who earn it. Finally, take those Enlightenment themes to heart by thinking for ourselves, tolerating others, and always striving for improvement” (p. 161). Some philosophers, economists, or novelists would perhaps disagree. Adam Smith and Jane Austen most certainly would not."

Related posts:

 

A ChatGPT story: What if Jane Austen and Adam Smith met to discuss his book The Theory of Moral Sentiments? (2025) 

Adam Smith's influence on three Jane Austen Novels (2025)