On anxieties over technology and the future of labor. Credits to DOI: 10.1257/jep.29.3.31.

1. THE HISTORY OFTECHNOLOGICAL ANXIETY
ANDTHE FUTURE OF ECONOMIC GROWTH:
ISTHISTIME DIFFERENT?
Boescu, Caviglia, Gentili, Picone, Reale - Apr 2017

2. Technological Progress...
■ Is widely considered the main source of economic progress
■ Has been described as: alien, incomprehensible, increasingly powerful and threatening and
possibly uncontrollable
Can understanding history provide a perspective on whether this time around
will be different?
The Myth of Prometheus and Fire:
The uncontrollable effects of
technology advances
Prometheus with the firebrand,
1611-1612 Artist: Pieter Paul
Rubens

3. Anxiety overTechnology from the Industrial
Revolution to the Great Depression
■ Analysis of the role of these three forms of anxiety during two major periods of
Technological Progress:
– Industrial Revolution, 9th century
– Great Depression, early 20th century
■ Anxieties overTechnology can take different forms:

4. Short-Term Disruption, Long-Term
Benefits
■ Short run: Displacement of Labor
“substitution of machinery for human labour is often very injurious to the interests of the class of labourers
. . . [It] may render the population redundant"
(Ricardo, 1821)
From the late 18th and early 19th century: the beginning of the Industrial Revolution…
■ Long run: Increased productivity and prosperity
Technological improvements as part of a social and political process that would lead eventually to
widespread prosperity.
(Marx)

5. What did really happen?
■ The technological progress also took the form of product innovation and it created entirely new
sectors for the economy which required new job categories.
■ Similar theories reappeared during the Great Depression over the effects of labor-saving changes,
(particularly in agricultural sector)
“We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes”
(Keynes, 1930)
Early 20th century:The Great Depression…

6. Technology and the Alienation of Labor
■ Technological innovations bring worries about the
nature of work and alienation of labour
– Performing the same simple operations bring
the human being to degradation (Smith, 1776)
– and the capitalist system alienates
individuals from others and themselves (Marx,
1844)
■ Physical separation of the place-of-work from
place-of-leisure
■ The disappearance of “moral economy”, making
room for “market economy”
Hulton Archive/Getty Images

7. Historical Perspectives on a Horizon
for Technological Progress
■ The idea of progress as an enabler of moral and economic life improvement is not new
■ During the Enlightenment: Progress included material progress, or what we would think of
today as economic growth
… Have we already picked all the low-hanging fruit?
Mill’s stationary state of development

8. Technology and the End ofWork?
■ During the Industrial Revolution, technology acted as a substitute for human/animal strength
■ Nowadays, machine are becoming capable of carrying tasks which require higher capabilities;
they can compute, compare, reason, make decisions (Artificial Intelligence)
Recurrent concerns
■ Large sections of the labor market to be hollowed out
(Katz and Margo, 2013)
■ The robotic productivity as a complete substitute for
labor (Sachs, Benzell, and LaGarda, 2015)
■ How to occupy leisure time (Keynes, 1930)
Thinkstock

9. Tech and the Characteristics of Work
Changes in the job market
■ Greater flexibility in when and where work takes place
■ More fragile separation between work and home life
■ More and more non-employer businesses
■ A growing sharing economy (Uber, AirBnb, …)
Reuters
A mixed blessing
■ Greater gender equality (Goldin, 2014)
■ Penalty for part-time work
■ Employees are expected to be always accessible

10. TheTechnological Horizon
Making predictions about the future of technology or the economy is difficult
■ New problems as an outgrowth of previous
technological advances (clean energy, new
antibiotics, …)
■ And competition between firms/nations will
stimulate technological efforts
■ Huge cross-fertilization of ideas
nightman1965/istock
Economic principles will continue to operate
■ Scarcity of resources, comparative advantages
■ Path of transition may be disruptive and painful
■ Public policies will be required to ameliorate the harshest effects of dislocation

11. Words ofWisdom
“We tend to overestimate the effect of a technology in the short run and underestimate the
effect in the long run.”
(RoyAmara)
“Meanwhile there will be no harm in making mild preparations for our destiny, in
encouraging, and experimenting in, the arts of life as well as the activities of purpose.”
(Keynes, 1930)

12. The technological progress is an engine
of development
World average GDP per capita 1500 to 2003.
Data from Angus Maddison's "World
Population, GDP and Per Capita GDP, 1-2003
AD"

13. Today: a newTechnological Revolution
■ New industrial revolution: the revolution of the Artificial Intelligence (A.I. / machine learning)
■ In the First Industrial Revolution -> the power of the human had been substituted with the
machines
■ In the Modern technological revolution -> the Artificial Intelligence is catching up and possibly
replacing human cognitive skills

14. Technology as the next job killer?
Employment shares, estimated proportion and total number of employees at potential high risk of automation for all UK industry sectors - PwC estimates
for last two columns using PIAAC data
Will robots steal our jobs? (PwC UK, 2017)
■ Impact of robots on the US job market in next 50
years (PwC, 2017)
■ Amazon Go, fast-food restaurants, autonomous
driving, etc.

15. Is this time different?
Robots and Jobs: Evidence from US Labor Markets - (D. Acemoglu, P. Restrepo – MIT and BU, March 2017)
■ Between 1990 and 2007, each robot per thousand workers:
• Decreased employment by 6.2 workers
• Decreased wages by 0.7%
■ Loss of work places concentrated on:
• Routine manual workers, Assemblers, Bluecollars etc.
• Education level ≤ college
We are facing the same short run effect we suffered during the first Industrial
Revolution
Countermeasures suggested by tech entrepreneurs:
■ “Robot taxation” (BillGates, 2017)
■ Universal Basic Income (Elon Musk, 2017)

16. How to make it possible?
EU: Rejected proposal to regulate the rise of robots (February, 2017)
US: Steven Mnuchin, the US Secretary ofTreasury, stated [On A.I. supplanting human jobs] "It is
not even on our radar screen […] 50-100 more years" away. "I'm not worried at all [about] robots
displacing humans in the near future” (24th March 2017)
■ International Collaborations
■ Role of the Governments