Blog Post

AEIdeas

In a piece on automation and technological unemployment for Reason, Deirdre McCloskey (not surprisingly) makes many, many good points. Like these:

In 1800, four out of five Americans worked on farms. Now one in 50 do, but the advent of mechanical harvesting and hybrid corn did not disemploy the other 78 percent. In 1910, one out of 20 of the American workforce was on the railways. In the late 1940s, 350,000 manual telephone operators worked for AT&T alone. In the 1950s, elevator operators by the hundreds of thousands lost their jobs to passengers pushing buttons. Typists have vanished from offices. But if blacksmiths unemployed by cars or TV repairmen unemployed by printed circuits never got another job, unemployment would not be 5 percent, or 10 percent in a bad year. It would be 50 percent and climbing. . . . We could “save people’s jobs” by stopping all innovation. You would do next year exactly what you did this year. Capital as well as labor would perpetually be employed the same way. But then we would perpetually have the same income. That’s nice if you’re doing well now. It’s not so nice if you’re poor or young.

Yet does the historical record require one wave away the possibility technological unemployment and/or underemployment? Indeed, McCloskey seems to say just that: “If the nightmare of technological unemployment were true, it would already have happened, repeatedly and massively.” Maybe this time is different, or at least different enough that things like wage subsidies or a more serious effort at retraining will be required. Or perhaps there will be a very difficult transition period as we get from here to our AI-powered future of abundance. Let me quote my AEI colleague Michael Strain: