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Climate of Confusion

This meeting takes place in a climate of confusion. Our society is confused about issues that were once clear. In the last century and the first half of this one, the concept of progress was clearly understood and widely supported. Progress meant the raising of living standards, the improving of opportunities, usually by the use of mechanical or scientific innovations. Thus innovation in technical or scientific matters was regarded as good in itself. But now, in 1979, innovation is not universally equated with good. There are, of course, still many people who believe that if a machine or a procedure is more complex, more rapid, affects more people and is generally bigger and brighter than what has gone before, then it is, for those reasons, good. For such people, innovation represents progress, and must not be resisted.

But some of us, observing the disruption wrought by bright new machines on our natural environment, on our human relations, on our ability to control what happens to our society, now question the equation of progress with good. We are not only confused about progress. There are other areas of confusion. There was a time when all Australians believed in full employment as a realistic objective for our society. Now that belief seems to be confined to the Labor movement. Loud voices outside the Labor movement repeatedly predict that many of us will remain permanently jobless.

Most people in our society used to hold the goals of increasing leisure and improving the quality of life. Now the employment situation presents the opportunity of reducing the working week, and indeed the span of the working life, but there is confusion, even within the Labor movement, as to whether this opportunity should be accepted.

As a society, we are confused about our relations with the rest of the world, and particularly our Asian neighbours; about our need for foreign investment, the structure of our economy, how to redistribute wealth and power.

All of these confusions are part of the public debate and discussion about one of the major issues of our time, technological change.

Technological change means to most of us the influx of new electronic machinery into manufacturing, mining, office procedures and communications. We all recognise that this change has taken place; but there are many unanswered questions about its effects.

Has it created jobs or destroyed them?

Does it enhance our lives, or alienate us from our work and our community?

Does it make Australia independent, or increase our dependence on foreign capital?

Effective Action Through Traditional Policies

My examination of these questions tonight will be from the perspective of the Australian Labor Party. It is my belief that the historic objectives of the Labor Party provide a useful way of coming to grips with the many confusing aspects of technological change. If we are to encourage change, then we ought to know why and what it is for.

The Labor Party is based on a coherent political philosophy. From its inception at the end of the last century, it has offered a strong, clear vision of the society we want. Our concerns for equality, justice, peace and independence have always been apparent. Early Labor Governments, as much as recent ones, enacted policy upon policy designed to assist all citizens to live in security and dignity.

The occasion of this lecture tonight is to commemorate the life and work of one of the great Labor leaders, John Curtin, Prime Minister of Australia from 1941-1945.

There was no confusion in the mind of John Curtin regarding the aims of the Labor movement. In a speech he gave soon after his election as leader he said:

My aim is to revive the spirit and unity of the Labor movement, to renew and to vitalize its sobriety and common sense so that it may once again serve the needs of Australia in an era in which the portents of evil are grave and numerous.

Australia is face-to-face with a grave international instability, a disordered economic situation, and conflict between the Commonwealth and States in regard to constitutional powers and functions. There is the absence of opportunity and training for employment of youth, and vast numbers of our population are on part-time or the dole. Secondary industries are menaced by decadence in world standards, and primary producers are harassed by depression debts, accumulated inside burdens and market derangements.

To face this challenge the Labor Party had to be rallied and strengthened, its disputes solved, its confidence restored. Curtin was able to do all of these things and more in his period of leadership.

But where do we stand today? The impression is abroad in this country that the Labor Party, since its defeat in 1975, is undergoing an identity crisis, that it is suffering from the confusion I have attributed to the general society. Certainly, we have experienced major setbacks, the most damaging being our rejection by the electorate on a massive scale, twice.

In the face of the expressed will of the electorate, we have had to re-examine our policies and our party structures. But we are not, at heart, confused. In times of national crisis in our past--World War II and the postwar reconstruction--Federal Labor Governments gave effective, even inspired leadership.

It is possible for us to do this again. But we cannot remain in a position where we only react to past changes. We must get into a position where we can plan for the future.

The confusions thrown up by the scope and speed of the introduction into our economy of sophisticated technology can be countered in a positive way by a political movement which knows where it is going.

There is no need for us to dream up new and fashionable responses to new and fashionable problems. There is no need for us to regard the new technology as magic, beyond our understanding and our control.

In our traditional policies, exemplified in the work of leaders like Curtin and Chifley, we can find the basis for an effective way of dealing with technology; that is, of ensuring that technology brings benefits to all and not just those who make and sell and buy it.

Let us consider the challenges facing John Curtin when leader.

Even the most cursory consideration of Labor's period in office under the leadership of John Curtin reveals an impressive record of achievement. Called upon to lead Australia in the most difficult and dangerous of situations, Curtin adhered to the basic principles of reform and equality which are at the heart of the Australian Labor movement.

In August 1941, following the collapse of the Menzies Government, he took office, leading the first Labor Government since 1908 that did not have a clear majority. His resolve to form a Labor Government rather than accept the expedient and possibly attractive offer of a national Government with the Conservative parties, underlined his commitment to those basic Labor principles of reform.

That resolve also demonstrated his belief that democracy is best served by the Government being challenged in Parliament by a strong opposition. He saw little value in the ideological accommodation that his party would have to make in any alliance with the Conservatives. That principled stand was fully vindicated by the massive victory of August 1943 which saw the Curtin Government returned with commanding majorities in the Senate and House of Representatives.

The mobilization of the Australian economy and people for the war effort was Curtin's prime concern, a difficult task compounded by the experience of the previous decade.

During the 1930s, Australia had suffered massive and continued unemployment. Its results included widespread resignation, lack of self respect, apathy. The bitter experience of Depression was, to Curtin, one that must not be repeated. His war program was built on a forward vision of an Australia in which both its people and resources would be fully employed. It was that commitment to full employment which is perhaps the most significant legacy of the Curtin period.

When one surveys the reforms of his administration--the introduction of widow's pensions, a national unemployment and sickness benefit scheme, the proposal for free medicines, banking reform, all have been significant in postwar Australia. However, it is the commitment to full employment that has had the most lasting impact. In his John Curtin Memorial Lecture of 1977 Gough Whitlam identified the Curtin commitment to full employment as a central guideline for our national life.

Full Employment and the Challenge of Technology

I make no apology for returning to what was a major theme in the 1977 lecture, the question of full employment--it has a particular relevance to my major concern, the challenge which technological change presents to the Labor movement. Full employment, a policy first articulated in the Curtin Government's White Paper of May 1945 has been a tenet of the Labor Party, a policy central to the party' s goals of equality and reform.

Following the stimulus to employment that the Curtin and Chifley Governments gave through their reorientation of government aims and programs, and the radical policy changes which they pioneered, Australia enjoyed nearly three decades of full employment. In that period, the opportunity for employment became an inalienable right for all Australians. That right is now threatened not only by a major world recession, but by the repressive policies of a Conservative Government which trades fractions off the inflation rate for the misery of spiralling unemployment.

The Labor movement responds by advocating full employment. But if full employment is to be a realistic goal, and not just a catchcry, we must come to terms with technological change. Let us consider my first question--does the new technology create jobs or destroy them? The answer is that it does both. Is it possible for Government policies to influence these changes so that the sum total of jobs is increased and not reduced? I believe that it is possible, although difficult. Such Government policies must be based on a recognition of what has actually happened to employment to date. Until we have such policies, union fears over unemployment and de-skilling will continue to contribute to a tense industrial situation.

Formation of such policy is not easy. The problems already induced by technological change are serious. We simply do not know how much of the current unemployment is due to it. While we do not know, suspicions and fears in the workforce increase. The empty assurances on the impact of new technology offered by Conservative Ministers are not borne out by facts. Messrs Viner, MacPhee and Lynch have been the most forceful advocates of the philosophy that the new technology will result in a net gain and not a loss of employment.

This argument was put most emphatically by Mr Lynch who said last year: "Technological advance will be one of the keys in the future to creation of new industries, to non-inflationary wage gains and to improved conditions of work." The proposition has been restated many times since, but it is not supported by the experience of new technology in such key areas of the Australian economy as Telecom. Telecom is Australia's largest enterprise employing over 80,000 people, with capital assets of $6,500 million and an annual turnover approaching $2,000 million.

Telecom is a case study in what ill-planned new technology has already done to employment in Australia.

Three clear effects of technological advance are evident in Telecom. First, the displacement of women from the workforce; second, the denial of job opportunities to young people; and third, the de-skilling of those who remain in the workforce.

Because of automation and computerisation, Telecom is significantly reducing the number of women it employs. Besides normal clerical and unskilled technical jobs, the traditional Telecom occupation for women has been as telephonists. In 1970, the number of telephonists employed was 11,500. In 1979, there were 8,900. As the subscriber trunk dialling and international subscriber dialling networks are completed, the number of telephonists employed will shrink further.

Computerised information and assistance services now provided by telephonists will further erode these jobs. There are no other employment opportunities for these women--for the main impact of these new technologies is in country towns where alternative employment does not exist.

The Effects of Computerisation on the Workforce

Computerisation is also causing a reduction in job opportunities for school leavers. Telecom has been traditionally a large employer of apprentices and trainees, but this role, which again is of particular importance in country areas, is contracting rapidly.

In the mid 1970s, Telecom employed on average over 1,500 trainees each year. In 1978-79 the intake was a little over 1,200 and it will continue to decline as Telecom implements its ten year corporate plan, a plan which, quite simply, means a doubling of output by the late 1980s without growth in the workforce. Computerisation of the telecommunications network does not require continued intake of apprentices and trainees.

This computerisation program also effects de-skilling and redundancy among the existing workforce.

Computerised exchanges require far less labour for maintenance than the system they will replace. Telecom's own estimate is that by 1985, with completion of the first stage of computerisation, there will be 600 less positions in exchange maintenance, despite a 60% to 70% increase in the size of the network. Nor is redundancy the sole impact. Much of the maintenance work will become simple and automated, no longer requiring the skills and experience of trained workers. Although Telecom can claim improved efficiency and greater profits, the declining growth in its workforce cannot be dismissed.

Telecom represents a case study in the public sector. Let us also consider a case from the private sector. Late 1976 saw a prolonged and bitter dispute at the Sydney Morning Herald over the introduction of computerised typesetting and related newspaper production techniques. The dispute had the same elements as those central to the later Telecom disputes. They were redundancy, de-skilling and the reduction in job opportunities for school leavers.

At the heart of the dispute lay the printers' attempt, through their union the PKIU, to get an agreement over redundancy, redeployment, training, manning of the new technologies, wage increases and better conditions in recognition of the increased productivity that would flow from the new technology.

Whether all that the printers sought was achieved is, I understand, a matter for debate within their ranks. The net result has been the implementation of a plan which will see a reduction in the number of printers employed at the Fairfax plant in Sydney from 1,200 to 800, and the de-skilling of many of those who remain.

Computerisation of newspaper production has had the same effects upon a skilled workforce as computerisation of the Telecom network has had--denial of employment opportunities for young people, de-skilling of many in the industry and redundancy. We must judge the benefits, improved efficiency, increased production, higher profits against those facts.

Word processing is in its infancy yet even the first stages threaten thousands of jobs. At present typists represent 10-11% of the total female workforce which now exceeds 2.1 million. If we accept the estimate of one word processing operator displacing four typists (a factor established by Dr Thornton and Mr Stanley of the NSW Institute of Technology) then 150,000 of those jobs are at risk. They will not all disappear and some new jobs will be created. But where are the new industries to absorb the redundant typists, where are the retraining programs?

Another local example is the stevedoring industry. Containerisation, materials handling equipment, bulk loading, ships design and other innovations have eroded the labour force required at Australian ports for many years. Reports of the Australian Stevedoring Industry Authority show quite clearly that, in spite of increases in tonnages handled through the various ports there has been a significant decrease in the labour force required. In 1967 there were 20,000 employed. In 1971 there were less than 17,000; by 1977 there were less than 11,000.

An example of an industry where employment has been affected, but not as yet to a great extent in Australia, is steel-making. BHP follows a policy of introducing the most modern technology which is economically sound. It improves its processes as the opportunity occurs. Since 1970, BHP's workforce in iron and steel plants has decreased from 37,597 to 34,350. At the same time, annual production has increased from 6.9 to 7.4 million tonnes. Generally speaking, 3,000 fewer workers are now making 10% more steel.

The manufacturing industry has been radically changed by technology and the changes continue. According to the Manufacturer Monthly Journal, the 6,300 computers installed in 1978 eliminated 150,000 jobs.

Australian findings coincide with overseas studies quoted in the Crawford Report:

A French report commissioned by President Giscard de'Estaing and written by senior French Ministry Advisor, Simon Nora, has predicted that about 30% of all employees in the French banking sector will become redundant within ten years as computerisation progresses.

A German study by the giant Siemens organisation predicted that by 1990, around 40% of office work will be carried out directly by computerised equipment. This could threaten as many as 40% of all typing and secretarial jobs in West Germany.

The disappearance of jobs in the areas I have referred to has been justified in terms of improved efficiency. However we cannot assume that the introduction of new technology inevitably achieves greater efficiency. A recent report by the Public Accounts Committee of the Parliament on the introduction of the computer system MANDATA into the Commonwealth Public Service revealed that lack of planning and experience led to more inefficiency following the introduction of the system. We have probably all experienced by now, in a bank, an airline office, an insurance office or other computerised office, the frustration and waste of time that have to be endured when the system breaks down. Time lost and stress created by technological failures have not yet been documented.

Technological Change

In making recommendations whereby governments can balance the benefits of new technology against the responsibility to maintain employment, it is important to note that there are two kinds of technological change. First there is the technology that creates new or improved products. It leads to new industries and the expansion of markets, and thus creates jobs. There are a variety of ways in which a Labor Government could encourage such change--priority research and development funding, tax incentives, investment allowances. Australia need not be at a loss to identify such job-creating, market-expanding technology. In such areas as agricultural science, medical science and medical technology Australia has been a world leader. All such developments have application to our Asian neighbours as well as to our local economy. Yet Government research funding has been minimal.

A Government intent on encouraging such innovation ought to fund its developmental stages more generously. The ARGC and the CSIRO are appropriate recipients for increased research funding, allocated according to Government priorities. Australian technology has much to contribute to a solution to the world energy crisis. University research has already been successful in the development of solar energy technology and fuel substitution.

It makes sense in a society like ours where we have a relatively highly educated population, and where there is already a substantial public investment in an extensive university system, that we ought to develop those technologies requiring high level research and a highly trained workforce. Textiles, electrical goods, shoes can be made cheaper and better in other places.

Then there is the second kind of change that provides new, improved processes for making existing products or performing existing tasks. Such process innovations, though they may create some new jobs, are labour-saving and thus destroy jobs. Labour-saving technology can improve efficiency, profits and working conditions. But because of its employment displacing effects, it ought not to be introduced without some measures to mitigate those effects.

Governments can control the introduction of this second kind of technology by selective application of tax incentives and investment allowances and by policies requiring that such change be accompanied by measures to compensate for the social cost. A requirement to offer redundancy payments or retraining would make such change less immediately attractive, and discourage ad hoc decisions.

It seems reasonable that capital should bear some of the social costs as well as the private costs of new technology.

The second question I have asked is--does technology enhance the quality of life, or does it alienate us from our work and our community?

In advocating a balanced approach to new technology, we are subjected to much criticism. At one extreme, we are accused of being Luddites, or "just trying to save jobs", as if unemployment were some trivial nuisance, that could easily be endured by the truly progressive.

Perhaps the time has come to remind those critics who the Luddites were. They were skilled craftsmen employed in economically and socially productive labour.

They were opposed to machines that would destroy not only their jobs but their way of life, their communities, their families. Their resistance was unsuccessful and the skilled work of craftsmen was replaced by child-labour and the associated degradation of humanity of the early stages of the industrial revolution.

Certainly, a new class of capitalists was created and trade flourished, but at the cost of a whole generation of working class children who scarcely saw the light of day. Perhaps the benefits of industrial development could have been achieved without such human suffering. There is a lesson to be learnt from that period of history. The lesson is not that change can be prevented, but that planning for the effects makes sense.

It is true that in the past, workers have eventually adjusted to waves of innovation and invention. The Industrial Revolution, although at first marked by a deterioration in living standards for working people, was followed by significant gains for them with better housing, cheap transport and better diet.

In response to the massive dislocation of traditional society brought by industrialisation, workers came together in combinations and associations to secure a fairer return for their labour from industrial capital.

The Labor movement was a response to this new form of capital. In the long term, it established a reciprocal relationship with it--in Australia, this relationship was institutionalised in the system of wage-fixing by arbitration. Such a system has led to improved living standards for workers, but has not yet led to a planned economy.

The Trade Union movement, confronted by the need to maintain the welfare of its members, has traditionally only been able to respond to the initiatives of capital. Capital, and not the representatives of Labor, has made the investment decisions that have determined the technological development of this country. The division of national wealth between labour and capital has remained relatively fixed for 70 years.

The one obvious exception to that was the so-called wages explosion of 1973-74 which saw the first significant shifts in income distribution in Australian society in the 20th century. This happened at the same time as an international collapse of investment and an Australian strike of capital which contributed to the events of 1975. The incoming Fraser Government set about redistributing in favour of profits rather than wages and continues to maintain this movement as one of its central economic objectives. While pressing its traditional objective of wage rises, the union movement can only effect the most minor changes.

But partly in response to new technology there has been significant progress within the Labor movement. Recent developments in such unions as the AMWSU and the ATEA are evidence of a willlingness to go beyond the narrow concerns of wage rises and confront the problems posed by industrial restructuring and by technological change.

In taking up a responsibility to inform and educate not only their own members but the general public about such issues as the role of foreign capital in our economy, the distribution of wealth and income in Australia, and, in the case of the Telecom union, the social costs of new technology and the threat to privacy it brings with it, the union movement is moving towards a broader role in our society.

It must be acknowledged that in some areas the new technology presents a lot of opportunities to improve the quality of life.

The introduction of FM radio is one example. Satellite technology, properly planned, is capable of bringing broadcasting and telephone services to people deprived of them, and opening up the airwaves for diversity and experimentation. Computerised typesetting of newspapers and portable video cameras could improve the range and immediacy of newspapers and television.

The vast capacity of new data storing technology poses dangers for civil liberties, particularly the right to privacy. As more and more information about each and everyone of us is collected and stored electronically, the problems of restricting access to this information increase.

The democratic freedoms at the heart of labour philosophy will require new forms of protection against this massive accumulation of information. On the other hand, freedom of information laws become all the more feasible because of modern information storage methods. Such methods if developed for their social use, could bring better and more accessible education opportunities, particularly to regional and outback Australia.

If technological change is to increase Australia's independence rather than to lead to a total takeover by foreign capital, governments must be prepared to plan for this change with the objective of developing our national resources, including the resources of knowledge and skills.

To date, the Labor Party in office has not been able to plan technological change. So often when in Government, as in the Whitlam years, it has been absorbed in the task of introducting social reforms long delayed by previous Conservative governments.

Technological Planning

The need for such technological planning was recognised by the Curtin, Chifley and Whitlam Governments. Curtin's Ministry of Postwar Reconstruction allowed optimal use to be made of capital and technology in the postwar period. The Whitlam Government initiated and tabled the report of the Jackson Committee on Policies for Development of Manufacturing Industries. But to those Governments, the problem of planning for such change was not as pressing as it now is. The realities of a small, often outdated and inefficient manufacturing sector were hidden until recently, by comforting protection and tariffs. That comfort is now largely gone, with the emergence of intensified competition from other industrialised and Asian countries' manufacturing industries.

New technology has greatly improved manufacturing efficiency. Greater efficiency and productivity in the manufacturing sector in a relatively high wage economy means the displacement of labour with equipment. This should be followed by the redeployment of that labour in new areas of growth.

The alternative to that redeployment entails both a massive rise in unemployment and a significant reduction in wage levels to restore Australian competitiveness. It is that policy which is at the heart of Conservative economic strategy.

To the Conservatives any change that brings a lower wages bill and increased efficiency is justified.

To the Labor Party, the massive unemployment that accompanies such change is unacceptable. The Labor Party cannot abrogate its traditional responsibilities.

The answer is not to resist technological change. Neither is it to sit back and let it occur where, when and how foreign capital determines. The answer for the Labor movement is planning.

We are now faced with a challenge, the availability of new technology to the Australian economy that will either displace, de-skill and erode the value of labour, or properly applied will result in greater productivity, more pleasant work and, ultimately, a more just and equitable distribution of income.

The Parliamentary Labor Party is fully aware of the need for a planned economic and manpower policy which can realistically embrace the changes that must come within the Australian economy.

Yet we remain confused and perhaps a little daunted by the challenge that technology presents. I believe that challenge is less daunting, and the tasks which face a future Labor Government would be more manageable if we stop allowing ourselves to be dazzled by the processes of new technology and take a sober, considered look at the social and economic consequences.

In the development of European Australia, unique in that it is entirely a post-industrial society, invention and innovation led to social and economic gains.

By the 20th century it had become a society in which the working class enjoyed the highest standard of living in the industrial world and a society that brought to power in Queensland, the world's first Labor Government. Technological change was an integral part of growth, readily accepted and generally utilised for social welfare gains. But there was a drawback. The technology of development was largely imported, with little domestic research and development other than that necessary to adapt British, American or Western European equipment to Australian conditions.

That pattern of technological dependence has continued and is clearly evident today. Much of our technology is now imported.

Scientific research and development, with some notable exceptions in agriculture and medicine, mirrors that being undertaken in other advanced industrial countries.

Industry is significantly owned by foreign capital and the products of Australian industry bear the stamp of standardised international production that has come with the internationalisation of capital and the growth of the multinational corporations.

The problem that internationalisation of capital and technology presents to Australia is simple but grave--international capital will go where the profits are greatest. For traditional manufacturing it will go to areas of low labour costs. In terms of labour costs, we cannot compete with our Asian neighbours. Hence the trend to offshore manufacture, by multinational companies and even by Australian companies. That leaves Australia with an ageing and contracting manufacturing sector denied significant investment. Can that disadvantage be redressed without resort to what would be unacceptable to the Labor Party, a massive cut in wages?

I would suggest that the answer is not to pretend that we can or should reduce wages to the pittance that South Korean or Malaysian workers earn, but to restructure. This will require Government action, and the object of Government action ought to be to encourage in both the public and the private sector, the development of sophisticated manufacturing and development.

Such developments will require high technology and a highly skilled workforce, both of which are available in Australia. As I have pointed out, there are clearly appropriate areas for such development--agricultural and medical science, solar energy equipment and new fuels. With the establishment of Australia's ownership of the 200-mile off shore zone, I should add marine science with all its possibilities.

Telecom, our largest enterprise in terms of capital, earnings and employment, has given a world lead in the use of solar-powered relays in the trunk telecommunications network and is a world leader in the advanced technology of optic fibre cables. But far from encouraging such appropriate initiatives, the present Government seems dazzled by overseas technology, regardless of its suitability. In considering change we, the Labor movement, really are faced with a challenge, or a series of challenges, rather than a series of dire inevitabilities.

The general challenge is to establish a planned economy in which technological change can be managed in the interests of the entire community. I have indicated the sorts of financial and policy measures that could be used to this end.

In particular, we can encourage those innovations that create new markets, improve public health, industrial safety, public access to information and entertainment. We can discourage technology associated with physical or psychological disease, disruption of the natural environment, alienation of workers, or the concentration of information and power in the hands of those with no commitment to the public good.

Even with a restructured, planned economy, we will continue to face a situation where more people are looking for less jobs. Instead of punishing the unsuccessful in this competition, we should be contemplating the reduction of the hours and years of work required from the successful.

In order to do this, we need cooperation between capital and labour, cooperation--which our historically adversary system of fixing wages and conditions discourages. If we recognise that conventional jobs are not available to all workers, perhaps we can grow more tolerant and imaginative and provide more scope for work in the arts and community service, areas not vulnerable to erosion by technology.

We have, at present in Australia, a serious inequality in the distribution of wealth. A revised relationship between capital and labour should aim at redistributing the income created by new technology more equitably.

We have, in Australia, a level of education and a network of well-established tertiary institutions that should enable us to achieve a great many things in research and development of socially useful and economically productive technology.

But, to date, we have kept local research and development on a shoe-string budget and allowed ourselves to become dependent on foreign capital and technology to an extent that endangers national security and certainly militates against the election and survival of Labor Governments.

Finally, I want to return to full employment. Prime Minister Curtin's statement is based on principles that are as relevant in 1979 as they were in 1945. Only the technology has changed. People's aspirations have not, nor has the determination of the Australian Labor Party to form Governments that realise those aspirations. We do not know how many jobs the new technology has destroyed, or created, but we can address ourselves to the facts we do have and make sensible judgements. We do know that responsible competent Governments can use new technology for social ends.

Labor in Opposition must learn how to do this, so that the next Labor Government can, like the Curtin Government, develop an effective plan for full employment. That is the best response we can make to the challenge of new technology.

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