History shows why robots won’t destroy our jobs

Economics is often described as the dismal science, but it often contains cheerful material. A paper by the leading American economic historian Joel Mokyr made for exuberant holiday reading. Written for the top Journal of Economic Perspectives, it is entirely in English and contains not a single mathematical symbol. Mokyr examines the history of anxieties about the economic impact of technology since the late 18th century.

We are living through precisely such a phase of worry at present, as fears abound that robots will destroy our jobs and take over the world. There is nothing new under the sun. The same concern was widespread two centuries ago. The machinery installed in new-fangled factories would create mass unemployment. Mokyr points out neatly that people get anxious at the same time about a problem which has completely opposite implications. Namely, that we are running out of ideas, and the progress of technology will grind to a halt. The great English economist David Ricardo addressed exactly this question in the early 19th century in his Principles of Political Economy. Many leading economists in the United States share the concern today.

The most famous group objecting to machinery two hundred years ago were the Luddites, who went round smashing it up, along with any unfortunate mill owner they could get their hands on. But the slightly later Captain Swing riots were also widespread, particularly in rural areas, and were often even more dangerous. Mokyr notes that the modern equivalent is the Occupy Wall Street movement, an altogether tamer creature. It turns out that the Swing riots were mainly directed not against the new threshing machines used by farmers, but against the use of cheap immigrant labour from Ireland. Hello? And in any event, the main complaint made by the working class in the first half of the 19th century was about the exceptionally long hours they were required to work, an observation difficult to square with claims that jobs were being eliminated on a large scale.

In the end, the fears of the Luddites that machinery would impoverish workers were not realized, and the main reasons are well understood. Technological change increased the demand for other types of labour that were complementary to the new technologies. So, for example, large numbers of supervisors and managers were needed for the vast new factories and companies. Product innovation created completely new markets which demanded completely new types of job. And the process has continued. As Mokyr says ‘Nineteenth-century political economists lacked an ability to predict new job categories like the personal fashion consultants, cyber security experts, and online-reputation managers of the twenty-first century’.

In fact, the demand for labour has held up far more than was expected. Between 1900 and 1930, for example, weekly hours in American manufacturing fell from 59.6 to 50.6. A simple extrapolation, beloved of doom merchants, would imply only 25.4 hours would be worked by 2015. Of course, innovation is disruptive. But over the 250 years history of capitalism, its positive effects have greatly outweighed the negatives ones of job destruction.

Paul Ormerod

As published in City AM on Wednesday 26th August 2015

Image: Mr Robot has some RAM by Chris Isherwood is licensed under CC -BY-2.0.

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