An increase in efficiency only leads to an economic benefit if the aggregate demand can go up...freed resources would be a balancing act in this case. Is the m

An increase in efficiency only leads to an economic benefit if the aggregate demand can go up...freed resources would be a balancing act in this case. Is the marginal reduction in cost of a taxi worth the loss of all the earnings and expenditure of that person? Probably not, since not every dollar saved ever gets spent, while a person has a necessary level of consumption. Things have to be significantly more efficient to offset the loss of jobs. The worker after all is suddenly saddled with being negatively valuable, in that he has to continue to meet his living expenses, and has to be retrained, either at the cost of his employer, himself, or the government OR he can go on welfare.