[Southack]

"but will surely result at first in a recession or depression."

Nonsense. You will not find that recessions always follow productivity gains.

In fact, productivity gains do not always even result in lost jobs/livelihoods. The biggest example of that point was probably the INCREASE in jobs/hiring/slavery that followed the invention of the cotton gin.

Likewise, more shipping jobs were created by the invention of the steamship, even though numerous "sailors" on the old wind-powered sailing ships got laid off in the process.

[sourcery]

You will not find that recessions always follow productivity gains.

I nowhere said that recessions always follow productivity gains. I contend that the productivity gains we have recently experienced are a) occurring at the wrong time, when the last thing we need is greater production capacity, and b) being achieved largely by tactical means that don't actually result in strategically-significant improvements to the health of the economy (unlike the example you gave.)

Here's a counterexample: The 1920's saw very significant increases in productivity as the result of electrification, but the result was the Great Depression. I contend that the productivity increases due to computerization and the internet will have a similar result--in spite of the fact that we will be better off "in the long run" because of our investments in these productivity-enhancing technologies.

Finally, please consider the argument in The Collapse of Wall Street and the Lessons of History.

[sourcery]

Postscript: During the years 1929-1932, output per man-hour in the U.S. increased by 20%.