Would the problem of technological unemployment be eased if we allowed the competitive market system to function more completely?
It is possible that this would happen, but it would not necessarily happen in the short term.
“Technological unemployment” is a type of structural unemployment. It is unemployment that happens when people’s jobs are replaced by machines. A person becomes technologically unemployed, for example, if he used to attach doors to cars and his firm has now developed a machine that can attach the doors automatically.
In one way, the market system actually drives this kind of unemployment. Firms have to develop things like machinery so that they can remain competitive and profitable in a market environment. If there were no market-based competition, it would not be necessary for firms to develop the machines that put people out of work.
However, it is at least arguable that the free market can solve the problem that it has created. The free market should be able to create new jobs that would use the skills of these people whose jobs have been destroyed by technology. This is why, even though technology has grown by leaps and bounds, we still have many jobs in our economy. The problem is that this takes a long time and not every person who is thrown out of work by a machine ends up being able to get a new job in a timely manner.