Sumner Slichter and Emil Lederer on technological unemployment

Abstract

Purpose

This paper aims to analyze Emil Lederer's and Sumner Slichter's theses on the concept of technological unemployment.

Design/methodology/approach

Given the presence of core elements of both economists' visions in the famous Debate on Technological Unemployment (1928‐1933), it is surprising that so little attention has been paid to their works. This paper makes an attempt to interpret certain parts of Emil Lederer's oeuvre in association with the writings of Sumner Slichter based on a careful examination of their writings and their theoretical investigations.

Findings

The writings of both economists seem to converge to similar views. Analytically, they both attempted to explain the inability of the economic system to readjust and absorb the unemployed workers. Moreover, both economists disputed the assertion of Say's law that full equilibrium would be assured by the functioning of market forces. In contrast to other economists, they both attached increased significance to the supply side of the economy and in particular to the role of technical change. Furthermore, it seems that both authors were in favor of restrained technological change, which would be absorbed smoothly from the economic system. Another interesting aspect of both economists' investigations is their respective theoretical shift around 1930, which could be attributed to the disastrous consequences of the Great Depression. The paper concludes that, despite some differences between Lederer and Slichter, the parallels are impressive.

Originality/value

Most aspects of Slichter and Lederer's works remain unexplored. Thus, the connection between them may be very useful for promoting dialogue between different schools or strands of thought.

Citation

Katselidis, I., Vouldis, A. and Michaelides, P.G. (2011), "Sumner Slichter and Emil Lederer on technological unemployment", International Journal of Social Economics, Vol. 38 No. 6, pp. 537-556. https://doi.org/10.1108/03068291111131391