Technological unemployment
Technological unemployment is the loss of jobs due to technological change. It is a key type of structural unemployment. Technological change typically includes the introduction of labour-saving "mechanical-muscle" machines or more efficient "mechanical-mind" processes and, in doing so, humans' role in these processes are minimized. Historical examples include artisan weavers losing work due to the introduction of mechanized looms, leading to protests by the Luddites. A contemporary example of technological unemployment is the displacement of retail cashiers by self-service tills and cashierless stores.
Technological change can cause short-term job losses in a specific profession or industry. Whether it leads to lasting increases in unemployment has been debated. The phrase "technological unemployment" was popularised by John Maynard Keynes in the 1930s, who said it was "only a temporary phase of maladjustment".
Advances in artificial intelligence have reignited debates about the possibility of mass unemployment, or even the end of employment altogether. Some experts, such as Geoffrey Hinton, believe that the development of artificial general intelligence and advanced robotics will eventually enable the automation of all intellectual and physical tasks, suggesting the need for a basic income for non-workers to subsist. Others, like Daron Acemoğlu, argue that humans will remain necessary for certain tasks, or complementary to AI, disrupting the labor market without necessarily causing mass unemployment. The World Bank's 2019 World Development Report argues that while automation displaces workers, technological innovation creates more new industries and jobs on balance.
History
Classical era
The issue of machines displacing human labour has been discussed since at least Aristotle's time.According to author Gregory Woirol, the phenomenon of technological unemployment is likely to have existed since at least the invention of the wheel. Ancient societies had various methods for relieving the poverty of those unable to support themselves with their own labour. Ancient China and ancient Egypt may have had various centrally run relief programmes in response to technological unemployment dating back to at least the second millennium BC. Ancient Hebrews and adherents of the ancient Vedic religion had decentralised responses where aiding the poor was encouraged by their faiths. In ancient Greece, free labourers could find themselves unemployed due to both the effects of ancient labour saving technology and to competition from slaves. Sometimes, these unemployed workers would starve to death or were forced into slavery themselves although in other cases they were supported by handouts. Pericles responded to perceived technological unemployment by launching public works programmes to provide paid work to the jobless. Pericle's programmes were criticized for wasting public money but these criticisms were defeated.
Perhaps the earliest example of a scholar discussing the phenomenon of technological unemployment occurs with Aristotle, who speculated in Book One of Politics that if machines could become sufficiently advanced, there would be no more need for human labour. Similar to the Greeks, ancient Romans responded to the problem of technological unemployment by relieving poverty with handouts. Several hundred thousand families were sometimes supported like this at once. Less often, jobs were directly created with public works programmes, such as those launched by the Gracchi. Various emperors even went as far as to refuse or ban labour saving innovations. In one instance, the introduction of a labor-saving invention was blocked, when Emperor Vespasian refused to allow a new method of low-cost transportation of heavy goods, saying "You must allow my poor hauliers to earn their bread." Labour shortages began to develop in the Roman empire towards the end of the second century AD, and from this point mass unemployment in Europe appears to have largely receded for over a millennium.
Post-classical era
The medieval and early renaissance period saw the widespread adoption of newly invented technologies, as well as older ones which had been conceived yet barely used in the Classical era. Some were invented in Europe while others were invented in more Eastern countries like China, India, Arabia and Persia. The Black Death left fewer workers across Europe. Mass unemployment began to reappear in Europe, especially in Western, Central and Southern Europe in the 15th century, partly as a result of population growth, and partly due to changes in the availability of land for subsistence farming caused by early enclosures. As a result of the threat of unemployment, there was less tolerance for disruptive new technologies. European authorities would often side with groups representing subsections of the working population, such as Guilds, banning new technologies and sometimes even executing those who tried to promote or trade in them.16th to 18th century
In Great Britain, the ruling elite began to take a less restrictive approach to innovation somewhat earlier than in much of continental Europe, which has been cited as a possible reason for Britain's early lead in driving the Industrial Revolution. Yet concern over the impact of innovation on employment remained strong through the 16th and early 17th century. A famous example of new technology being refused occurred when the inventor William Lee invited Queen Elizabeth I to view a labour saving knitting machine. The Queen declined to issue a patent on the grounds that the technology might cause unemployment among textile workers. After moving to France and also failing to achieve success in promoting his invention, Lee returned to England but was again refused by Elizabeth's successor James I for the same reason.After the Glorious Revolution, authorities became less sympathetic to workers concerns about losing their jobs due to innovation. An increasingly influential strand of Mercantilist thought held that introducing labour saving technology would actually reduce unemployment, as it would allow British firms to increase their market share against foreign competition. From the early 18th century workers could no longer rely on support from the authorities against the perceived threat of technological unemployment. They would sometimes take direct action, such as machine breaking, in attempts to protect themselves from disruptive innovation. Joseph Schumpeter notes that as the 18th century progressed, thinkers would raise the alarm about technological unemployment with increasing frequency, with von Justi being a prominent example. Yet Schumpeter also notes that the prevailing view among the elite solidified on the position that technological unemployment would not be a long-term problem.
19th century
It was only in the 19th century that debates over technological unemployment became intense, especially in Great Britain where many economic thinkers of the time were concentrated. Building on the work of Dean Tucker and Adam Smith, political economists began to create what would become the modern discipline of economics. While rejecting much of mercantilism, members of the new discipline largely agreed that technological unemployment would not be an enduring problem. In the first few decades of the 19th century, several prominent political economists did, however, argue against the optimistic view, claiming that innovation could cause long-term unemployment. These included Sismondi, Malthus, J S Mill, and from 1821, David Ricardo himself. As arguably the most respected political economist of his age, Ricardo's view was challenging to others in the discipline. The first major economist to respond was Jean-Baptiste Say, who argued that no one would introduce machinery if they were going to reduce the amount of product, and that as Say's law states that supply creates its own demand, any displaced workers would automatically find work elsewhere once the market had had time to adjust. Ramsey McCulloch expanded and formalised Say's optimistic views on technological unemployment, and was supported by others such as Charles Babbage, Nassau Senior and many other lesser known political economists. Towards the middle of the 19th century, Karl Marx joined the debates. Building on the work of Ricardo and Mill, Marx went much further, presenting a deeply pessimistic view of technological unemployment; his views attracted many followers and founded an enduring school of thought but mainstream economics was not dramatically changed. By the 1870s, at least in Great Britain, technological unemployment faded both as a popular concern and as an issue for academic debate. It had become increasingly apparent that innovation was increasing prosperity for all sections of British society, including the working class. As the classical school of thought gave way to neoclassical economics, mainstream thinking was tightened to take into account and refute the pessimistic arguments of Mill and Ricardo.20th century
For the first two decades of the 20th century, mass unemployment was not the major problem it had been in the first half of the 19th. While the Marxist school and a few other thinkers continued to challenge the optimistic view, technological unemployment was not a significant concern for mainstream economic thinking until the mid to late 1920s. In the 1920s mass unemployment re-emerged as a pressing issue within Europe. At this time the U.S. was generally more prosperous, but even there urban unemployment had begun to increase from 1927. Rural American workers had been suffering job losses from the start of the 1920s; many had been displaced by improved agricultural technology, such as the tractor. The centre of gravity for economic debates had by this time moved from Great Britain to the United States, and it was here that the 20th century's two great periods of debate over technological unemployment largely occurred.The peak periods for the two debates were in the 1930s and the 1960s. According to economic historian Gregory R Woirol, the two episodes share several similarities. In both cases academic debates were preceded by an outbreak of popular concern, sparked by recent rises in unemployment. In both cases the debates were not conclusively settled, but faded away as unemployment was reduced by an outbreak of war – World War II for the debate of the 1930s, and the Vietnam War for the 1960s episodes. In both cases, the debates were conducted within the prevailing paradigm at the time, with little reference to earlier thought. In the 1930s, optimists based their arguments largely on neo-classical beliefs in the self-correcting power of markets to reduce any short-term unemployment via compensation effects. In the 1960s, belief in compensation effects was less strong, but the mainstream Keynesian economists of the time largely believed government intervention would be able to counter any persistent technological unemployment that was not cleared by market forces. Another similarity was the publication of a major Federal study towards the end of each episode, which broadly found that long-term technological unemployment was not occurring.
As the golden age of capitalism came to a close in the 1970s, unemployment once again rose, and this time generally remained relatively high for the rest of the century, across most advanced economies. Several economists once again argued that this may be due to innovation, with perhaps the most prominent being Paul Samuelson. Overall, the closing decades of the 20th century saw most concern expressed over technological unemployment in Europe, though there were several examples in the U.S. A number of popular works warning of technological unemployment were also published. These included James S. Albus's 1976 book titled Peoples' Capitalism: The Economics of the Robot Revolution; David F. Noble with works published in 1984 and 1993; Jeremy Rifkin and his 1995 book The End of Work; and the 1996 book The Global Trap. Yet for the most part, other than during the periods of intense debate in the 1930s and 60s, the consensus in the 20th century among both professional economists and the general public remained that technology does not cause long-term joblessness.