Is economics still the dismal science?

[Tenacious Z]

Economics as described by the classical growth model is the dismal science due to the law of diminishing marginal productivity, which says productivity eventually declines because essentially too many inputs reduce productivity. However under the new growth model technology is supposed supersede the law of diminishing marginal productivity and allow humanity to produce as much as our technology will allow. Is this an accurate description of the two growth models, and is it realistic that technology can really supersede the law of diminishing marginal productivity? It seems to me that even with technology, too many technological inputs whether computers or tractors will eventually reduce productivity in the company. Am I missing something here?

 

[Navin]

Consider under conditions of a constant labour supply, that the technologies produced will require labour for their production. If this is the case, than they will continue taking labour away from traditional markets. This should improve the marginal productivity of existing industries if they were at a point of zero or negative marginal productivity.

Meanwhile the new industry would continue to absorb labour until there was no excess labour remaining. So as technology continues to advance, it continues to demand more labour for itself. This means that marginal productivity is increased for workers through two factors: increased demand for labour and increased capital levels.