Maxwell Wessel explains the policy dilemma:
If we adopt the perspective that productivity will continue to increase exponentially, we should be looking to fix the long-term employment problem through non-traditional avenues. Perhaps that means investing more in the arts, an area very difficult to automate. Perhaps that means providing subsidies for domestic business operations. But one thing is certain, if the paradox of productivity holds, we can't just talk about free-market solutions to the employment problem.
More on the economy's "bright spot" here. I suspect that the hipster, foodie, neo-arts-and-crafts movement alternative – bringing employment back to local produce, services and skills – may turn out to be the right one. But anyone not currently aware of the contradictions of capitalism is asleep. The innovations and globalization of capitalism may well be accelerating unemployment in the West (while transforming much of the rest of the world), and the only way to get back to full employment here may be by accepting a new and relative poverty, in which we recover the skills that cannot be out-sourced, the needs that require personal contact, the skills that require long and difficult practice: nursing, car repair, baking, restaurants, carpentry, construction, teaching, to name a few off the top of my head.
I don't know how an individual baker in a town can compete with a Safeway. But I'm not sure we should confidently predict a return to "normality" as we have known it since World War II.
The Dish 