What to fear from automation

The pundits talk a lot about the threat of automation. But they don’t look at historical examples and so they mis-estimate the consequences.

Farm work

In the late 1800s, inventors started building what we now know as “farm machinery”. Between then and the 1940s, the fraction of people employed on farms plummeted, to the point that less than 2% of the population now does farm work.

The former farm workers didn’t become unemployed, but rather moved to cities to work in offices and factories. The time when workers couldn’t move to the cities — the 1930s — the progress of farm automation stalled: the pay of farm workers decreased to essentially subsistence, but they remained generally employed, and farmers didn’t buy any additional machinery to replace them with.

Factory work

The invention of the modern factory around 1900 was a remarkable change. Not only was a lot of work automated, what remained was radically “de-skilled”. What used to take a number of trained artisans now could be done with a building full of unskilled laborers. In many cases, they didn’t even need to know English.

This may not have been good for the employment of artisans, but it was really good for the employment of unskilled laborers, to the point that the U.S. imported them by the millions.

(Note this is an example where automation improved the job prospects of low-skilled workers.)

Household work

During the first half of the 1900s, household work was automated dramatically. The result was that domestic servants essentially vanished as an employment category, and that a tremendous fraction of the lives of adult women was freed.

The result was not mass idleness of adult women, but a huge movement of them into the job market. This made possible, or was, the modern feminist movement.

The observed pattern is that large-scale automation of an area of work doesn’t cause mass unemployment. Automation will often push down wages in a sector, but if there isn’t alternative employment for those workers, the result will be not unemployment, but that their wages go down to the point that automation isn’t profitable.

On the other hand, automation is always good for the customers, as they get the goods for less. From the point of view of the populace as a whole, it’s like a universal basic income — they can suddenly get additional stuff for no extra money.

Automation isn’t a threat to society, but it is a threat to those whose jobs are being automated.

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