Question

Should the government do anything to mitigate the adverse effects of technological progress? If so, what?

Answer 1

I think the government must do whatever it can to mitigate the adverse effects of technological progress. The adverse effects of technological progress are examples of negative externalities and they denote market failure. In the case of market failure, the government must take sufficient measures to ensure that output is socially optimum. In case of these negative externalities, private cost is lower than the social costs. Therefore, the government can impose a certain amount of taxes so that private cost equals social costs and socially optimum quantity is produced. This can mitigate the negative effects of technologies.