Can We Escape the Technology Trap?

It’s hard to imagine New York City ever going dark — save, maybe, for a once-or-twice-in-a-generation blackout.

But go dark it did, a little more than a century ago, on an April evening in 1907 — at the hands of humans who feared being displaced by technology.

The specific humans in question happened to hold the job of lighting street lamps. It was the dawn of the electrical era, and the group of workers, whose profession had existed for 500 years, went on strike. Little good that did. Electricity was a technological wave no band of humans could stop. And lamplighters — an entire professional class, as it were — were soon phased out for good.

As this week’s guest reminds us, history tends to repeat itself. Oxford economist Carl Frey is the author of the book The Technology Trap: Capital, Labor, and Power in the Age of Automation. And he says that even though technology has advanced incredible amounts, the debates about how technology affects people haven’t really changed all that much.

With each major wave of technological advancement in industrial times, humans have reacted with fear and resistance. And each time, technology has not only prevailed but proved to be a boon to society. The problem is that it takes time — think decades, not years — for a major new technology to fully demonstrate its value. And, in the meantime, the disruption many people experience is real.

So if history shows that the advancement of technology is not only unstoppable but (at least so far) ultimately a positive influence, our focus needs to move away from resistance, Frey says, and toward managing its shorter-term effects.

In this episode, Frey helps us understand the implications of these three big points:

1. Over time, societies benefit enormously from technology.
2. However, new technologies haven’t always been equally beneficial for everyone, especially in the short term.
3. Resistance is futile. Mitigating the pain is worthwhile.

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Transcript

Carl Frey: If you go back to the 1960s to the first sort of computers, there was a lot of anxiety about those computers taking over the workforce. Nobody at the time thought that in 40 years, most people or billions of people would walk around with the world’s knowledge in their pockets.

One of the most striking findings to me researching this book is how much technology has progressed over the centuries but how little the debate surrounding its effects on people’s jobs and lives in general has progressed over the same period of time. We’ve been worrying about the same issues for over 200 years.

If technological progress was something natural, the industrial revolution would have happened a bit earlier in the history of mankind.

Paul Michelman: I’m Paul Michelman, and this is MIT Sloan Management Review’s Three Big Points. Each week, we take on one topic that leaders need to be on top of right now and leave you with three key takeaways for you and your organization.

It’s hard to imagine New York City ever going dark — save, maybe, for a once-or-twice-in-a-generation blackout. But go dark it did, a little more than a century ago, on an April evening in 1907 — at the hands of humans who feared being displaced by technology. The specific humans in question happened to hold the job of lighting street lamps. It was the dawn of the electrical era, and the group of workers — whose profession had existed 500 years — went on strike. Little good that did. Electricity was a wave no band of humans could stop. And lamplighters — an entire professional class, as it were — were soon phased out for good.

Today’s guest says history — well, it tends to repeat itself.

Carl Frey: If you go back to the early 19th century in Britain, you see that the labor share of income was falling, middle-income jobs were being hollowed out, productivity growth was sluggish initially. And that is indeed very much what we are seeing across economies in the industrial West. This time, as back then, it has to do with technology.

Paul Michelman: That’s right — productivity slowing, middle class left behind — the patterns we hear about today, we’ve experienced in the past. Which means, we hope, we can learn from them.

You’re hearing the voice of Oxford economist Carl Frey, author of the book The Technology Trap: Capital, Labor, and Power in the Age of Automation. And he says that while technology has advanced incredible amounts, the debates about how technology affects people really haven’t changed all that much.

Carl Frey: We’ve been worrying about the same issues for over 200 years. Back in the 19th century, social reformers [like] Peter Gaskell worried that mechanization would dehumanize people, put them sort of in the repetitive motions — the repetitive work of machines — and would impede on their moral and intellectual capabilities.

Paul Michelman: And flash forward to the conversation today.

Carl Frey: Artificial intelligence is the general-purpose technology of our time, not computers, electricity, or steam. But what is quite similar, at least to the first industrial revolution, are some of the economic trends.

Paul Michelman: Just as we have worried about numerous waves of technologies in the past, today people are anxious about what artificial intelligence and other forms of automation will do to human jobs — and human lives. Frey says we can look to the past to do better this time around. Importantly, we must not be blind to the short-term pain of technological advancement.

Carl Frey: What we should have learned is that technological progress has been enormously beneficial over the long run. People work in much better jobs today — in air-conditioned offices instead of factories, coal mines, and farms. People earn much higher incomes. We have access to an abundance of new goods and services. But we always live in the moment in which we are. And the short-run effects of new technologies can be devastating for a large part of the population.

Paul Michelman: What’s critical at the leadership level, Frey says, is to obsess less about what the technology can do — for better or for worse — and focus more on developing policy that helps mitigate short-term disruptions to humans. In his native Sweden, for instance, Frey sees less anxiety about automation stealing jobs than the tone of the conversation in the U.S., because, simply, there is more of a safety net.

Carl Frey: Institutions matter in dealing with this. Going back to the first industrial revolution, some places saw less resistance to mechanization than others. There was less resistance in places, in particular, where poor relief was more generous, where the losers to mechanization were compensated.

Paul Michelman: Now, this isn’t to say that automation and artificial intelligence can’t have devastating effects. Whatever effects they do have will be hard to predict. In fact, the breadth of technology-driven change is likely only to increase going forward as AI continues to improve and takes over more sophisticated job tasks, be that writing a short story or diagnosing a complex medical issue.

Carl Frey: If you go back to the 1960s, as the first sort of computers entered offices, there was a lot of anxiety about those computers taking over the workforce. But nobody at the time thought that in 40 years, most people or billions of people would walk around with the world’s knowledge in their pockets. So I’m absolutely certain that AI is probably going to be more transformative and that many of the sort of second- and third-order effects that are much harder to predict, in particular, are going to be underestimated.

Paul Michelman: Whatever we may fear about the potential reach of intelligent automation, Frey argues that it’s a mistake to think we can control how these technologies develop.

Carl Frey: The way technology works is that it tends to solve one problem and often creates another one along the way. And we are always going to be reacting to those challenges. What I don’t think, though, is that governments are capable of really sort of planning how the technology should be implemented or devising grand industrial strategies for the adoption of artificial intelligence, because we’ve just been so bad at it in the past. And even government-funded projects like the internet — nobody imagined at the time how it would and could be used.

Paul Michelman: So if government can’t contain technology or what it does to the economy and jobs, what is the role that government should play? We alluded to it earlier: It can play a huge role in helping soften the blows of short-term disruption and to help prepare people for the next technological age.

Carl Frey: I think governments have a responsibility of making sure that the transition is made reasonably smooth for most people — people who lose out to technological progress and need some sort of compensation — otherwise, they may opt against it, as they have in the past. I think they need to devise social systems that help people to adjust. That is not just welfare. You can do things like introducing relocation vouchers to help people to move to regions where the new jobs are emerging. We need to invest more in skills and training, because that is how people have adapted in the past. We need to build a lot more.

Paul Michelman: That’s Oxford’s Carl Frey, author of the book The Technology Trap.

OK, kids. You know what time it is — three big points about technological progress.

Number one: Over time, societies benefit enormously from technology.

Carl Frey: People today in the industrial West earn roughly 30 times more than they did at the onset of the first industrial revolution. Today, most people have access to the electric servant in terms of washing machines, refrigerators, vacuum cleaners, and so on. Rather than working in coal mines, where people didn’t see daylight sometimes for a week, where cave-ins and explosions were part of everyday working life, [and] lung disease [was] sometimes part of the work package, most people today work in air-conditioned offices, so it’s actually quite extraordinary how much better off people are today in large part because of technology and automation.

Paul Michelman: Number two: New technologies haven’t always been equally beneficial for everyone, especially in the short term.

Carl Frey: We need to recognize that technology can also be devastating for some people [who] experience replacement in the short term, and what economists regard as the short term can be a long time. During the first industrial revolution, for example, it took seven decades for wages to begin to rise. People who lost their jobs to automation naturally rioted against the mechanized factories as it threatened their jobs. More recently, in the United States, since the computer revolution of the 1980s and as robots have entered the factories, the wages of men with no more than a high school degree has fallen by 30% over the past four decades.

Paul Michelman: And, number three … resistance is futile.

Carl Frey: Because of those short-run and adverse impacts, resistance to technology and mechanization has been the historical norm rather than the exception. If technological progress was something natural, the industrial revolution would have happened a bit earlier in the history of mankind. Every country would have adopted the same technologies to the same extent and would be rich as a consequence. And that hasn’t happened. The reason for that is that governments have a very important role to play in mitigating the adverse short-term impacts on people by creating a functioning welfare system [and] an education system that helps people adjust and acquire new skills, and also makes it feasible for people to move between locations.

Paul Michelman: That’s this week’s Three Big Points. You can find us on Spotify, Apple Podcasts, Google Podcasts, Stitcher, and wherever fine podcasts are streamed. If you’d like to support the show, please post a rating or a review on whatever podcast platform you prefer.

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Until next time.