Since the budding days of the Industrial Revolution, technology has exponentially improved the lives of humans. Across the globe, wages, the quality of living, and life expectancy have all skyrocketed.
Thanks to the efforts of countless men more ingenious and clever than myself, I currently have the capability to effortlessly view, in high-definition, events as they are live-streamed on the other side of the world and read a library-full of books on a device smaller than my hand.
I can also look at a lot of photos of cats. Like a lot.
Regardless, these feats, which would be hailed as nearly miraculous achievements to our ancestors only 100 years ago, have spawned detractors ever since John Kay first invented his flying shuttle centuries ago.
Luddites and the Lump of Labor
Initially, opponents of the switch to machination came in the form of 19th century Luddites, followers of the possibly fictitious folk hero Ned Ludd who actively destroyed the machines they believed to be stealing their jobs.
Today, there are a number of acolytes who adhere to the belief that technological innovation will somehow this time be different and destroy jobs.
Perhaps none is more popular than CGP Grey and his famous “Humans Need Not Apply” video. In the video, CGP Grey supposes because technology decreased the demand for the labor of horses and the 20th century observed a massive decrease in the working horse population, there is reason to believe the 21st century will observe a similar effect from its rapid technological improvement – except this time, humans will be the horses.
Unfortunately, for CGP Grey’s arguments, last time I checked, humans are not in fact horses. To be sure, I shall check again…yep, we are still not horses.
Critics of technological improvement suffer from the same logical (and perhaps initially intuitively appealing) error, what economists dub the ‘lump of labor’ fallacy. This is the belief there is a finite number of jobs/work to be done, therefore, when an increase in labor productivity occurs (such as the invention of cars), there is necessarily an uptick in unemployment.
Historically, unemployment has been relatively constant, with noticeable increases only largely during busts and recovery periods in the business cycle. However, in the event the lump of labor fallacy is true, there would surely be noticeable permanent increases in the unemployment rate not only from technological innovation, but also from mass increases in immigration or when women entered the workforce.
Clearly, this has not been the case. In fact, the employment-to-population ratio increased dramatically during the 20th century, precisely because women changed from working in their homes to working in the market.
Shockingly, economists of all political backgrounds are in unanimous agreement that yes, robots have not historically stolen our jobs in the U.S.
This is because machines and technology vastly increase our ability to create things and interact with one another, generating a multiplier for our productivity. In turn, this results in higher wages, greater output and lower prices. Everyone is better in the long-run as a result.
Now that we are dealing with reality, it is important to note machines do have an effect upon unemployment. Technology did destroy some jobs during industrialization in the United States. It just happened to create and transmogrify far, far more, all of which are more productive and higher paying.
Where there once were horse-drawn for-hire hackney carriages and hansom cabs, there are now taxicabs and thriving ride-sharing services such as Uber.
Therefore, there is debatably a role for the government to play in ensuring this retraining and reeducation in the workforce occurs, ensuring carriage drivers are able to transition to taxi drivers (or another service that may employ their skills) as smoothly as possible. However, little case exists for any other policies.
Even economists who are concerned with automation in the future seem to be having an entirely different conversation than the technologists and technophobes.
In a recent Pew survey, experts from a large number of fields in technology were asked whether they believe technology will create more jobs than it destroys by 2025. Although a slim 52 percent majority of respondents said this would be true, it should be noted economists who expressed any concerns at all did so under grounds of temporary job disruption, while those less economically literate expressed concerns over permanent job displacement.
As responder Agustin Rossi, a PhD candidate at the European University Institute, noted, “Disruption is not the same as displacement of aggregate jobs, as history since the Industrial revolution has shown us. It is safe to assume that technology will change how we produce goods and services, and that will probably mean that some people will lose their jobs in some sectors, but the economy will be able to create new jobs in different sectors that we cannot predict or imagine today.”
I personally do not believe the coming technological revolutions are anything about which to be concerned. Whatever notable issues may occur can be solved relatively painlessly through policy. All of this I will be further explaining in the coming weeks.
Fundamentally, humans are not horses. Any Battlestar Galactica inspired ban on A.I. development or government restriction on generating new technologies is as plainly silly now as it will be in the days to come.