Gains from Automation Create Path to Greater Prosperity

Ryan Khurana – June 4, 2018

Automation has become somewhat of a dirty word recently. Fear of mass unemployment and widening inequality has led to calls for greater regulations of technology companies, expanded programs of redistribution, and even a “robot tax” to discourage adoption of labor-saving technologies. These fears, however, focus too much on the short-term disruption that creative destruction brings, ignoring the long-term opportunities for human advancement that comes along with it. Throughout history, technologies that automate labor have been crucial to emancipating people from grueling work and giving them more opportunity to pursue fulfilling careers. While inventions like the printing press reduced the demand for calligraphers, it simultaneously increased the opportunity to write and spread one’s message, leading to far greater social opportunity.

Thomas Davenport of MIT and Julia Kirby of Harvard University Press, who have worked on the implications of automation, argue that there have been three broad eras of automation starting with the industrial revolutions, then the computer age, and now the age of Artificial Intelligence that we are living through.

The first of these automated those tasks that were dirty and dangerous. As the industrial revolution urbanized the United States and Europe, people were able to move from uncertain and low-productivity agricultural work to stable and high-productivity factory employment. Innovations in agriculture enabled more food to be produced with less work, much of which was extremely strenuous. Those looking for work went to urban factories, where as a result of steam engines, increased iron production, and power looms, textiles could be produced by unskilled laborers at fantastic speeds, as opposed to slowly by the hands of a skilled artisan. While this adaptation caused social unrest among the artisanal classes who lost their high status, it enabled people to afford luxuries that were once restricted, and enter lines of work they could not previously have dreamed of.

As cities grew with the migration of people seeking quality work, ideas also bounced around. Edward Glaeser, a Harvard economist, notes that when cities double in size, productivity per capita goes up 15%. People who share more time with each other, and work in close proximity, share more ideas, and are able to more easily turn them into reality. This is why the First Industrial Revolution led, after a brief pause of adaptation, into the second or technological revolution, which introduced railroads, petroleum products, mass-produced steel, electricity, and the car, among a whole host of other significant inventions. It’s hard to imagine this explosion in innovation being possible in 1790, when 90% of the labor force were farmers.

Automation of this kind, known as skill-unbiased, when new technologies make things easier to make than before, characterized the era of the Industrial Revolutions. They enabled greater opportunity for otherwise low-productivity workers to earn a living and enjoy leisure, which in turn spurred massive social movements. The high school movement, which wanted greater human capital investment at the turn of the 20th Century, is hard to imagine being brought about without the reduced need for demanding physical work.

The impacts of these new technologies were impossible to predict as they were introduced, but human ingenuity harnessed their creative potential. Take for example the automobile, the introduction of which into all spheres of life threatened the jobs of those who had made a living off the massive horse industry. In 1890 there were 13,800 companies that built horse-drawn carriages. Combined with the industry surrounding raising of horses, maintenance, food, cleaning the streets of their urine and feces, and all the other associated tasks, the horse seemed vital to American industry. Henry Ford’s assembly line in 1913 did not, however, destroy the American economy by reducing the demand for horses.

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