Joel Mokyr, Chris Vickers, Nicolas L. Ziebarth. 2015. The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different? In Journal of Economic Perspectives, 29(3): 31-50. DOI:10.1257/jep.29.3.31. landing.
Joel Mokyr is Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History, Northwestern University, Evanston, Illinois.
Chris Vickers is Assistant Professor of Economics, Auburn University, Auburn, Alabama.
Nicolas L. Ziebarth is Assistant Professor of Economics, University of Iowa, Iowa City, Iowa.
tl/dr → No, it is not different this time.
<quote>From our perspective, the more extreme of modern anxieties about long-term, ineradicable technological unemployment, or a widespread lack of meaning because of changes in work patterns seem highly unlikely to come to pass. As has been true now for more than two centuries, technological advance will continue to improve the standard of living in many dramatic and unforeseeable ways. However, fundamental economic principles will continue to operate. Scarcities will still be with us, most notably of time itself. The law of comparative advantage strongly suggests that most workers will still have useful tasks to perform even in an economy where the capacities of robots and automation have increased considerably. </quote>
Technology is widely considered the main source of economic progress, but it has also generated cultural anxiety throughout history. The developed world is now suffering from another bout of such angst. Anxieties over technology can take on several forms, and we focus on three of the most prominent concerns. First, there is the concern that technological progress will cause widespread substitution of machines for labor, which in turn could lead to technological unemployment and a further increase in inequality in the short run, even if the long-run effects are beneficial. Second, there has been anxiety over the moral implications of technological process for human welfare, broadly defined. While, during the Industrial Revolution, the worry was about the dehumanizing effects of work, in modern times, perhaps the greater fear is a world where the elimination of work itself is the source of dehumanization. A third concern cuts in the opposite direction, suggesting that the epoch of major technological progress is behind us. Understanding the history of technological anxiety provides perspective on whether this time is truly different. We consider the role of these three anxieties among economists, primarily focusing on the historical period from the late 18th to the early 20th century, and then compare the historical and current manifestations of these three concerns.
Technology is widely considered the main source of economic progress, but it has also generated cultural anxiety throughout history. From generation to generation, literature has often portrayed technology as alien, incomprehensible, increasingly powerful and threatening, and possibly uncontrollable (Ellul 1967; Winner 1977). The myth of Prometheus is nothing if not a cautionary tale of these uncontrollable effects of technology. In Civilization and its Discontents, Sigmund Freud (1930 , pp. 38–39) assessed what technology has done to homo sapiens, making him into a kind of God with artificial limbs, “a prosthetic God. When he puts on all his auxiliary organs he is truly magnificent; but those organs have not grown onto him and they still give him much trouble at times.”
So it is surely not without precedent that the developed world is now suffering from another bout of such angst. In fact, these worries about technological change have often appeared at times of flagging economic growth. For example, the Great Depression brought the first models of secular stagnation in Alvin Hansen’s 1938 book Full Recovery or Stagnation? Hansen drew on the macroeconomic ideas of John Maynard Keynes in fearing that economic growth was over, with population growth and technological innovation exhausted. Keynes was also drawn into the debate and offered a meditation on the future of technology and unemployment in his well-known essay, “Economic Possibilities for our Grandchildren.”
This was originally written as a set of lectures in 1928 after a decade of dismal economic performance in the United Kingdom and then revised in 1930 to incorporate remarks about the Great Depression (Pecchi and Piga 2008, p. 2). Keynes (1930) remained optimistic about the future in the face of staggering unemployment, writing: “We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another. The increase of technical efficiency has been taking place faster than we can deal with the problem of labour absorption; the improvement in the standard of life has been a little too quick.” More recently, Winner’s (1977) “Autonomous Technology: Technics-out-of-Control as a Theme in Political Thought” was published during the economic doldrums of the mid and late 1970s. Today, distinguished economists such as Lawrence Summers (2014), in a speech to the National Association of Business Economists, can be heard publicly musing about the possibility of secular stagnation. In his Martin Feldstein lecture, Summers (2013b) discussed a downright “neo-Luddite” (that famous protest movement against technological innovation in nineteenth century England) position on the effects of technology for long-term trends in employment.
Anxieties over technology can take on several forms, and we focus on what we view as three of the most prominent concerns. The first two worries are based on an “optimistic” view that technology will continue to grow and perhaps accelerate. First, one of the most common concerns is that technological progress will cause widespread substitution of machines for labor, which in turn could lead to technological unemployment and a further increase in inequality in the short run, even if the long-run effects are beneficial. Second, there has been anxiety over the moral implications of technological process for human welfare, broadly defined. In the case of the Industrial Revolution, the worry was about the dehumanizing effects of work, particularly the routinized nature of factory labor. In modern times, perhaps the greater fear is a world like that in Kurt Vonnegut’s 1952 novel Player Piano, where the elimination of work itself is the source of dehumanization (for example, Rifkin 1995). As Summers said (as quoted “not perfectly verbatim” in Kaminska 2014), while “[t]he premise of essentially all economics . . . is that leisure is good and work is bad. . . . economics is going to have to find a way to recognize the fundamental human satisfactions that come from making a contribution . . .” A third concern cuts in the opposite direction, suggesting that the epoch of major technological progress is behind us. In recent years, even in the face of seemingly dizzying changes in information technology, pessimists such as Gordon (2012), Vijg (2011), and Cowen (2010) have argued that our greatest worry should be economic and productivity growth that will be too slow because of, for example, insufficient technological progress in the face of “headwinds” facing western economies. Some of these so-called “headwinds,” including slow productivity and population growth, formed the basis of Hansen’s (1939) secular stagnation hypothesis. The argument of this paper is that these worries are not new to the modern era and that understanding the history provides perspective on whether this time is truly different. The next section of the paper considers the role of these three anxieties among economists, primarily focusing on the historical period from the late 18th to the early 20th century, while the final section offers some comparisons between the historical and current manifestations of these three concerns.
- in the Rawlsian sense
- “headwinds” which is apparently a colorful metaphor in the argot.
- Short-Term Disruption, Long-Term Benefits
- Technology and the Alienation of Labor
- Historical Perspectives on a Horizon for Technological Progress
- Technology and the End of Work?
- Technology and the Characteristics of Work
- The Technological Horizon
- Amara’s Law
- <quote>We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.</quote>
- Roy Amara,
- systems engineer
- president, Institute for the Future:
- an idea shop
- John Maynard Keynes; Economic Possibilities for our Grandchildren; an essay; 1930.
- Allen, Robert C. 1992. Enclosure and the Yeoman: The Agricultural Development of the South Midlands, 1450–1850. Oxford: Clarendon Press.
- Allen, Robert C. 2005. “Capital Accumulation, Technological Change, and the Distribution of Income during the British Industrial Revolution.” Department of Economics Discussion Paper 239, Oxford University.
- Aguiar, Mark, Erik Hurst. 2007. “Measuring Trends in Leisure: The Allocation of Time over Five Decades.” In Quarterly Journal of Economics 122(3): 969–1006.
- Aguiar, Mark, Erik Hurst, Loukas Karabarbounis. 2013. “Time Use during the Great Recession.” In American Economic Review 103(5): 1664–96.
- Autor, David H. 2001. “Wiring the Labor Market.” In Journal of Economic Perspectives 15(1): 25–40.
- Bardasi, Elena, Janet C. Gornick. 2008. “Working for Less: Women’s Part-time Wage Penalties across Countries.” In Feminist Economics 14(1): 37–72.
- Beaudry, Paul, David A. Green, Benjamin M. Sand. 2013. “The Great Reversal in the Demand for Skill and Cognitive Tasks.” NBER Working Paper 18901.
- Bentham, Jeremy. 1825. The Rationale of Reward. London, England: John and H. L. Hunt.
- Berg, Maxine. 1980. The Machinery Question and the Making of Political Economy, 1815–1848. Cambridge University Press.
- Bloom, Nicholas, James Liang, John Roberts, Zhichun Jenny Ying. 2013 “Does Working from Home Work? Evidence from a Chinese Experiment.” NBER Working Paper 18871.
- Bythell, Duncan. 1969. The Handloom Weavers: A Study in the English Cotton Industry during the Industrial Revolution. Cambridge University Press.
- Calhoun, John C. 1837. “The ‘Positive Good’ of Slavery in 1837.” Speech in the U.S. Senate, February 6th.
- Charles, Kerwin Kofi, Erik Hurst, Matthew J. Notowidigdo. 2014. “Housing Booms, Labor Market Outcomes, and Educational Attainment”
- Clague, Ewan. 1935. “The Problem of Unemployment and the Changing Structure of Industry.” Journal of the American Statistical Association 30(189): 209–214.
- Council of Economic Advisors. 2010. Work-
- Life Balance and the Economics of Workplace Flexibility. March.
- Cowen, Tyler. 2010. The Great Stagnation. New York: Dutton.
- Clark, Andrew E. 2003. “Unemployment as a Social Norm: Psychological Evidence from Panel Data.” In Journal of Labor Economics 21(2): 323–51.
- Clark, John Bates. 1907. Essentials of Economic Theory. London: MacMillan.
- The Economist, staff. 2014. “Why is Everyone So Busy?” In The Economist. December 20.
- The Economist, staff. 2015. “The Future of Work: There’s an App for That.” In The Economist. January 3.
- Ellul, Jacques. 1967. The Technological Society. Vintage Books.
- Elster, Jon (ed.) 1986. Karl Marx: A Reader. Cambridge University Press.
- Feinstein, Charles H. 1998. “Pessimism Perpetuated: Real Wages and the Standard of Living in Britain during and after the Industrial Revolution.” In Journal of Economic History 58(3): 625–58.
- Fogel, Robert W. 2009. “Forecasting the Cost of U.S. Health Care in 2040.” In Journal of Policy Modeling 31(4): 482–88.
- Freeman, Richard B. 2008. “Why Do We Work More than Keynes Expected?” Chap. 9 in Revisiting Keynes: Economic Possibilities for our Grandchildren, edited by Lorenzo Pecchi, Gustavo Piga. MIT Press.
- Freud, Sigmund.  1961. Civilization and Its Discontents. New York: W.W. Norton.
- Freudenberger, Herman, Gaylord Cummins. 1976. “Health, Work, and Leisure before the Industrial Revolution.” In Explorations in Economic History 13(1): 1–12.
- Genovese, Eugene D. 1992. The Slaveholders’ Dilemma: Freedom and Progress in Southern Conservative Thought, 1820–1860. Columbia, SC: University of South Carolina Press.
- Goldin, Claudia. 2014 “A Grand Gender Convergence: Its Last Chapter.” American Economic Review 104(4): 1091–1119.
- Goldin, Claudia, Lawrence F. Katz. 1998. “The Origins of Technology-Skill Complementarity.” In Quarterly Journal of Economics 113(3): 693–732.
- Gordon, Robert J. 2012. “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds.” NBER Working Paper 18315.
- Greenhouse, Steven. 2014 “A Push to Give Steadier Shifts to Part-Timers.” In New York Times, July 15.
- Greif, Avner. 1993. “Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders’ Coalition.” In American Economic Review 83(3): 525–48.
- Hadley, Arthur T. 1896. Economics. New York: Putnam’s Sons.
- Hamermesh, Daniel S, Daiji Kawaguchi, Jungmin Lee. 2014. “Does Labor Legislation Benefit Workers? Well-Being after an Hours Reduction.” IZA Discussion Paper 8077.
- Hansen, Alvin Harvey. 1938. Full Recovery or Stagnation? W.W. Norton.
- Hansen, Alvin H. 1939. “Economic Progress and Declining Population Growth.” In American Economic Review 29(1): 1–15.
- Hayden, Erika Check. 2014. “Technology: The $1000 Genome.” In Nature, March 19, 507(7492): 294–95.
- Illinois, State of. 1895. Report of the Factory Inspectors of Illinois for the Year Ending Dec. 15, 1894. Springfield: Ed. F. Hartman, State Printer.
- Jaimovich, Nir, Henry E. Siu. 2014. “The Trend is the Cycle: Job Polarization and Jobless Recoveries.” NBER Working Paper 18334, version revised March 20, 2014.
- Jefferson, Thomas. 1787. Notes on the State of Virginia. University of Virginia American Studies.
- Kaminska, Izabella. 2014. “Larry Summers on Forwarding the Doozer Economy.” In Financial Times. FT Alphaville blog, April 17.
- Katz, Lawrence F., Margo, Robert A. 2013. “Technical Change and the Relative Demand for Skilled Labor: The United States in Historical Perspective.” NBER Working Paper 18752.
- Keynes, John Maynard. 1930. “Economic Possibilities for Our Grandchildren.” In Essays in Persuasion , pp. 358–73. New York: W.W. Norton.
- Kuznets, Simon. 1934. National Income, 1929–1932. Senate Document no. 124, 73rd US Congress, 2nd session.
- Lindert, Peter H. 2000. “When Did Inequality Rise in Britain and America?” In Journal of Income Distribution 9(1): 11–25.
- Lonigan, Edna. 1939. “The Effect of Modern Technological Conditions upon the Employment of Labor.” In American Economic Review 29(2): 246–59.
- Lyons, John S. 1989. “Family Response to Economic Decline: Handloom Weavers in Early Nineteenth-Century Lancashire.” In Research in Economic History, Vol.12, pp. 45–91.
- Maddison, Angus. 2001. The World Economy: A Millennial Perspective. Paris: OECD.
- Margo, Robert A. 2000. Wages and Labor Markets in the United States, 1820–1860. University of Chicago Press.
- Marx, Karl. 1844 . The Economic and Philosophic Manuscripts of 1844. Translated by Martin Milligan. Amherst, NY: Prometheus Books.
- Matos, Kenneth, Ellen Galinsky. 2014. 2014 National Study of Employers. Families and Work Institute.
- Michelson, Albert A. 1903. Light Waves and Their Uses. University of Chicago Press.
- Mildmay, William. 1765. The Laws and Policy of England, Relating to Trade, Examined by the Maxims and Principles of Trade in General. London: T. Harrison.
- Mill, John Stuart. 1848 . Principles of Political Economy, edited by W. J. Ashley. London: Longmans, Green and Co.
- Mokyr, Joel. 1988. “Is There Still Life in the Pessimistic Case? Consumption during the Industrial Revolution, 1790–1850.” In Journal of Economic History 48(1): 69–92.
- Mokyr, Joel. 2002. The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton University Press.
- Mokyr, Joel. 2010. The Enlightened Economy: An Economic History of Britain, 1700–1850. Yale University Press.
- Mortimer, Thomas. 1772. The Elements of Commerce, Politics and Finances. London: Hooper.
- Nisbet, Robert. 1980. History of the Idea of Progress. Basic Books.
- Pecchi, Lorenzo, Gustavo Piga (eds). 2008. Revisiting Keynes: Economic Possibilities for our Grandchildren. MIT Press.
- Phelps, Edmund S. 2008. “Corporatism and Keynes: His Philosophy of Growth.” In Revisiting Keynes: Economic Possibilities for our Grandchildren, edited by Lorenzo Pecchi, Gustavo Piga. MIT Press.
- Pollard, Sidney. 1963. “Factory Discipline in the Industrial Revolution.” In Economic History Review 16(2): 254–71.
- Rawls, John. 1971. A Theory of Justice. Belknap/Harvard University Press.
- Ricardo, David. 1821 . Principles of Political Economy, 3rd edition, edited by R.M. Hartwell. Harmondsworth: Pelican Classics.
- Ridley, Matt. 2010. When Ideas Have Sex.
- Rifkin, Jeremy. 1995. The End of Work. New York: J.B. Putnam.
- Rifkin, Jeremy. 2014. The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism. Palgrave Macmillan.
- Rodgers, Daniel T. 1978. The Work Ethic in Industrial America, 1850–1920. Second edition. University of Chicago Press.
- Sachs, Jeffrey D, Seth G. Benzell, Guillermo LaGarda. 2015. “Robots: Curse or Blessing? A Basic Framework.” NBER Working Paper 21091.
- Smith, Adam. 1776 . An Inquiry into the Nature and Causes of the Wealth of Nations. New Rochelle: Arlington House.
- Sobek, Matthew. 2001. “New Statistics on the U.S. Labor Force, 1850–1990.” In Historical Methods 34(2): 71–81.
- Steuart, James. 1767. An Inquiry into the Principles of Political Economy. London: Printed for A. Millar, T. Cadell.
- Stevenson, John. 1979. Popular Disturbances in England, 1700–1870. New York: Longman.
- Summers, Lawrence. 2013a. “Why Stagnation Might Prove to Be the New Normal.” In Financial Times, December 15.
- Summers, Lawrence H. 2013b. “Economic Possibilities for Our Children.” The 2013 Martin Feldstein Lecture. NBER Reporter no. 4, pp. 1–6.
- Summers, Lawrence H. 2014. “U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound.” In Business Economics 49(2): 65–73.
- Thomas, Keith. 1964. “Work and Leisure in Pre-Industrial Society.” In Past & Present no. 29, pp. 50–66.
- Thomis, Malcolm. 1970. The Luddites. New York: Schocken.
- Thompson, E. P. 1963. The Making of the English Working Class. Victor Gollancz Ltd.
- Vickers, Chris, Nicolas L. Ziebarth. 2012. “Economic Development and the Demographics of Criminals in Victorian England.” Unpublished paper, Auburn University and University of Iowa.
- Vijg, Jan. 2011. The American Technological Challenge: Stagnation and Decline in the 21st Century. New York: Algora Publishing.
- Voth, Hans-Joachim. 2004. “Living Standards and the Urban Environment.” Chap. 10 in The Cambridge Economic History of Modern Britain: Volume I. Edited by Roderick Floud, Paul Johnson. Cambridge University Press.
- Wells, David A. 1889. Recent Economic Changes: And Their Effect on the Production and Distribution of Wealth and the Well-Being of Society. New York: D. Appleton and Company.
- Whaples, Robert. 2001. “Hours of Work in U.S. History.” In EH.Net Encyclopedia, edited by Robert Whaples.
- Wicksell, Knut. 1901 . Lectures on Political Economy, Vol. I: General Theory<e/m>. Translated by E. Classen. London: George Routledge.
- Williamson, Jeffrey G. 1981. “Urban Disamenities, Dark Satanic Mills, and the British Standard of Living Debate.” In Journal of Economic History 41(1): 75–83.
- Wing, Charles. 1837 . Evils of the Factory System Demonstrated by Parliamentary Evidence. London: Frank Cass reprints.
- Winner, Langdon. 1977. Autonomous Technology: Technics-out-of-Control as a Theme in Political Thought. MIT Press.
- Woirol, Gregory R. 1996. The Technological Unemployment and Structural Unemployment Debates. Westport, CT: Greenwood.
- Zucker, Lynne G. 1986. “Production of Trust: Institutional Sources of Economic Structure, 1840–1920.” In Research in Organizational Behavior 8: 53–111.