The Attack on Automation

The Industrial Revolution was a period of rapid economic growth and technological change. Eighteenth-century onlookers saw a wave of new manufacturing processes that were more efficient than prior methods, as well as the expansion of the factory system, which replaced the putting-out (workshop) system. The new era for technology began in Britain in the late-eighteenth century and eventually spread throughout continental Europe. More importantly, a key characteristic of these innovations were their effect on the labor market. Automation of once-labor-intensive processes, such as power looms or automated flour mills, became more prevalent. In effect, the Industrial Revolution forced laborers to learn new skills and adapt to a changing job market, one in which their areas of expertise had to readjust.

During the Industrial Revolution, automation did, in effect, reduce the number of jobs in the agricultural sector. In 1794, one individual complained of the loss jobs within the wool spinning industry: “To tell a poor woman… no Wool [work] is to be had is a mockery of misery, and if it is in a neighborhood distant from Machines, where some hand-work is still put out, the low price that is paid for her unwearied labour… disheartens her.” Moreover, fewer people lived in the countryside and were often forced to move into larger cities to find work. Population data on the male labor force in Britain indicates that in 1700, around 18.5% worked in industry and 61.2% in agriculture. By 1840, these numbers shifted to 47.3% and 28.6%, respectively. The availability of agricultural occupations rapidly declined with the onset of new machinery.

Workers who were forced out of the agricultural sector had to make a living in other industries where jobs became more available. For example, within the textile industry, workers were needed for operating spinning jennies, using weaving equipment, maintaining water frames for power, and feeding mules. Economic historians have noted the opportunity for increased productivity within the manufacturing industry and how these changes had a positive spillover effect for workers. A group of economists investigated this transition from the agricultural sector to the manufacturing sector. Using the Heckscher–Ohlin model of international trade, their article, “Globalization and the Industrial Revolution,” identified the opportunities for Britain, and eventually Western Europe, to begin experiencing economic growth through the effects of new technology. Their research indicated that technological innovation in an open economy like that of Europe resulted in an “escape from Malthusian constraints” and the transition to “modern growth.”

Shifting to the historical viewpoints, Joel Mokyr, one of the most internationally renowned scholars of the Industrial Revolution, described the importance of technology in spurring economic growth and increasing living standards. The Lever of Riches: Technological Creativity and Economic Progress has become the historical manifesto for understanding the Industrial Revolution. Among his main arguments is the central tenet that technology has the ability to produce “an increase in output that is not commensurate with the increase in effort and cost necessary to bring it about.” In effect, efficiency in production of goods and services led to economies of scale whereby living standards increased without necessarily forcing workers to increase their amount of labor. Also reiterated in A Culture of Growth: The Origins of the Modern Economy, the causal relationship, or at least a strong connection, between technological progress and living standards has frequently repeated itself over the past several centuries.

Along with Mokyr, most scholars believed that the Industrial Revolution increased the standard of living for workers. As Peter H. Lindert and Jeffrey G. Williamson argued workers experienced “impressive net gains in the standard of life: over 60 per cent for farm labourers, over 86 per cent for blue-collar workers, and over 140 per cent for all workers.” Factoring in both workers’ wages and skill premiums, Gregory Clark concluded that real wages increased by 82% from the 1770s to the 1860s. Even those who hold the “pessimistic” view, such as Charles H. Feinstein, maintained that “[m]ost British workers and their families did not experience an actual deterioration in their standard of living during and after the Industrial Revolution. But neither did they enjoy the rapid progress which the super-optimists have discerned.” At the very least, the Industrial Revolution brought about new technology and innovation without negatively affecting workers.

In this regard, lamenting the role of automation in taking away jobs is nothing new. In recent months, there has been a rise in the number of theories surrounding the role of robots, artificial intelligence, and machine learning in the job market. Certain individuals (albeit some more than others) are concerned that this era of technological breakthroughs, in what historians have coined the Fourth Industrial Revolution, will portend the demise of the manufacturing industry. Estimates vary, but the general consensus of jobs loss between 2000 and 2010 is around 5.6 million. But at the same time, one article maintained that job gains will appear through industrialization. According to a study by James E. Bessen, automation allowed businesses to cut costs, thereby hiring more workers to operate and fix those machines. (And since 2000, the employment of bank tellers, which allegedly should have been replaced by ATMs, has grown 2% per year, faster than the entire labor force). While many jobs have disappeared due to automation over the past several decades, a plethora of new positions and opportunities will be available.

Another more recent Mokyr article addressed the “cultural anxiety” associated with new technology. Individuals often see technological advancements as an omen, and they may denounce the automation processes which threaten the job market. Mokyr and two other economists dismissed the prevailing “[t]echnophobic predictions about the future of the labor market,” as historic precedent has shown such worries to be over-inflated. While one cannot simply ignore the differences between the First and the Fourth Industrial Revolutions, there are several similarities between these periods of evolving possibilities and fears of high automation. These anxieties about the future of technology have materialized beforehand, and such arguments should also take into account both the jobs lost and the jobs gained from automation. The individuals who fear the onset of automated processes within the manufacturing industry need only to look to the long-term effects of the Industrial Revolution.

Image Credit: Wikimedia Commons / University of Strathclyde

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