Quote Originally Posted by maladroit
efficiency via automation doesn't just make things cheaper (while reducing employment), it makes retooling to adjust for product changes more expensive too...the benefits of efficiency on a production line are limited if they are making something that isn't in demand
That really is the trick you see. The demand of a product is essentially reliant on two factors. The first being the availability of the product (supply), and the second is price.

Say's Law: "Supply creates its own demand"

Regardless of whether it is a machine producing, or human labor producing; it is extremely inefficient to produce a good or service that lacks overall utility.

Take the auto industry for example:thumbsup:... Auto's are in demand, even though it is slumping at the moment. The only rational thing to do is lay off workers and curb production until real demand increases. Lowering the price would definitely increase the demand for any car or truck on the market.