Technological unemployment, then and now


In “Promise and Peril of Automation,” an article in the New York Times, David Morse writes:

The key area of social change stimulated by automation is employment. Everywhere one finds two things: a positive emphasis on opportunity and a keen sensitivity to change, often translated more concretely into fear.

The emphasis on opportunity is welcome and indicative of the climate in which automation will come to maturity. The sensitivity to change is equally significant. If fears about the future, especially job worries, are dismissed as “unreal” or “unimportant,” human resistance to change will be a major impediment to deriving full social benefit from automation.

What is the basis for these fears? Partly, a natural human uneasiness in the face of the unknown. Partly, the fact that few things are more serious to a worker than unemployment. Partly, too, the fear that automation undercuts the whole employment structure on which society as we know it is based. If, for example, automation cuts direct labor, often by 50 percent or more, and if this goes on from one industry to another, what happens? Even with shorter hours and new opportunities, will not a saturation point be reached, with old jobs disappearing faster than new ones are created, and unemployment on a wide scale raising its ugly head and creeping from one undertaking and industry to another?

Morse’s article was published on June 9, 1957.

Today, nearly sixty years later, the Times is running a new article on the specter of technological unemployment, by Eduardo Porter. He writes:

[Lawrence Summers] reminisced about his undergraduate days at M.I.T. in the 1970s, when the debate over the idea of technological unemployment pitted “smart people,” exemplified by the great economist Robert Solow, and “stupid people,” “exemplified by a bunch of sociologists.”

It was stupid to think technological progress would reduce employment. If technology increased productivity — allowing companies and their workers to make more stuff in less time — people would have more money to spend on more things that would have to be made, creating jobs for other people.

But at some point Mr. Summers experienced an epiphany. “It sort of occurred to me,” he said. “Suppose the stupid people were right. What would it look like?” And what it looked like fits pretty well with what the world looks like today.

The fears about automation’s job-killing potential that erupted in the 1950s didn’t pan out. That’s one reason why smart economists — no, it’s not an oxymoron — became so convinced that technological unemployment, as a broad rather than a local phenomenon, was mythical. But yesterday’s automation is not today’s automation. What if a new wave of computer-generated automation, rather than putting more money into the hands of masses of consumers, ended up concentrating that wealth, in the form of greater profits, into the hands of a rather small group of plutocrats who owned and controlled the means of automation? And what if automation’s reach extended so far into the human skill set that the range of jobs immune to automation was no longer sufficient to absorb displaced workers? There may not be a “lump of labor,” but we may discover that there is a “lump of skills.”

Henry Ford increased the hourly wage of workers beyond what was economically necessary because he knew that the workers would use the money to buy Ford cars. He saw that he had an interest in broadening prosperity. It seems telling that it has now become popular among the Silicon Valley elite to argue that the government should step in and start paying people a universal basic income. With a universal basic income, even the unemployed would still be able to afford their smartphone data plans.

Image: detail of “Friend or Foe?” by Leslie Illingworth.