What neo-Luddites get right – and wrong – about Big Tech

22nd June, 2023

Say what you like about Lord Byron, he knew how to turn a phrase. Here he is, speaking in the House of Lords in 1812. His topic is the foolishness of the factory-storming, machine-breaking Luddites: “The rejected workmen, in the blindness of their ignorance, instead of rejoicing at these improvements in arts so beneficial to mankind, conceived themselves to be sacrificed to improvements in mechanism.”

The term “Luddite” is an insult today, a label you’d slap on a boomer who hasn’t figured out how podcasts work. But it would have been obvious to Byron’s contemporaries that his words dripped with sarcasm. Byron supported the Luddites. They had indeed been sacrificed on the altar of productivity improvements. There was nothing ignorant about their violent resistance.

Alongside the “Luddite” label is “the Luddite fallacy”, which refers to the belief that technological progress causes mass unemployment. We call it a fallacy because two centuries of experience have contradicted it; there have always been new jobs, and over time and on average those new jobs have been more productive and better paid than the old ones.

But Luddism, it seems, is back. A forthcoming book, Blood in the Machine, argues that “the origins of the rebellion against Big Tech” are in the Luddite uprising. And for at least a decade, pundits have been fretting about the prospect of mass unemployment.

First there was the notorious “The Future of Employment” study from Oxford academics Carl Frey and Michael Osborne in 2013, with the headline finding that 47 per cent of jobs were susceptible to automation. Then it was all the taxi and truck drivers whose jobs would be gobbled up by self-driving vehicles.

Now it’s “generative” artificial intelligence, which has struck fear into the hearts of creatives everywhere: Dall-E and Midjourney will destroy the jobs of illustrators, ChatGPT and Bard will come for the journalists and technical writers. Will our jobs really be destroyed this time? Or should we relax and look forward to another couple of centuries of productivity-driven prosperity?

I think neither view is satisfactory. Instead, what about the view that technology does not create mass unemployment, but is nevertheless quite capable of destroying livelihoods, creating unintended consequences and concentrating power in the hands of a few? (I once suggested “neo-Luddite” as a label for this view, but alas, true technophobes made that label their own long ago.)

Consider the ATM: it did not make bank tellers redundant. Instead, it freed them to cross-sell subprime mortgages. Or the digital spreadsheet, which unshackled humble accounting clerks from the need to do rows and columns of arithmetic, and allowed accountancy to become (ahem) a more creative profession. Such technologies did not destroy jobs, but remade them. Some became more fulfilling and enjoyable, others more grim and grinding.

In their new book Power and Progress, economists Daron Acemoglu and Simon Johnson argue that while technological progress can produce broad-based prosperity, there is no guarantee that this will happen quickly — and in some cases, no guarantee that it will happen at all.

“Textile factories of the early British industrial revolution generated great wealth for a few but did not raise worker incomes for almost a hundred years,” they write. Too late for the textile workers who lost good jobs.

There are starker examples, such as the ocean-going ships that enabled the transatlantic slave trade. There are subtler ones too. The barcode gave us shorter checkout queues and lower prices, but it also changed the balance of power between retailers and suppliers, between corner shops and major retailers, and eventually between bricks-and-mortar retailers and their online competitors.

Neo-Luddites can take inspiration from John Booth, a 19-year-old apprentice who joined a Luddite attack on a textile mill in April 1812. He was injured, detained and died after being allegedly tortured to give up the identity of his fellow Luddites.

Booth’s last words became a legend: “Can you keep a secret?” he whispered to the local priest, who attested that he could.

The dying Booth replied, “So can I.”

But it was Booth’s earlier words which deserve our attention. The new machinery, he argued, “might be man’s chief blessing instead of his curse if society were differently constituted”. In other words, whether new technology helps ordinary citizens depends not just on the nature of the technology but on the nature of the society in which that technology is developed and deployed.

Acemoglu and Johnson argue that broad-based flourishing is currently eluding us, just as it eluded the workers of the early industrial revolution. What’s needed? Better policies, of course: taxes and subsidies to favour the right kind of technology; smart regulations to protect the rights of workers; antitrust action to break up monopolies; all this, of course, done deftly and with a minimum of red tape and distortion. To state the task plainly is to see how hard it is likely to be.

And as Acemoglu and Johnson explain, such policies will fall on stony ground without countervailing sources of political power capable of standing up to monopolists and billionaires. Absent such conditions, Luddism resorted to what one historian called “collective bargaining by riot”, to arson and even to murder. The state fought back, and in the words of another historian, “Luddism ended on the scaffold”.

It was a shameful business, and a squandered opportunity to reform society and deliver “man’s chief blessing”, as Booth had hoped. If the latest technologies truly are transformative, we’ll have such an opportunity again. Will we do better this time?

Written for and first published in the Financial Times on 26 May 2023.

The paperback of “The Next 50 Things That Made The Modern Economy” is now out in the UK.

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