Technological unemployment

[citation needed] In the 18th century fears over the impact of machinery on jobs intensified with the growth of mass unemployment, especially in Great Britain which was then at the forefront of the Industrial Revolution.

[12][13][14] A report in Wired in 2017 quotes knowledgeable people such as economist Gene Sperling and management professor Andrew McAfee on the idea that handling existing and impending job loss to automation is a "significant issue".[why?

[21] Perhaps the earliest example of a scholar discussing the phenomenon of technological unemployment occurs with Aristotle, who speculated in Book One of Politics that if machines could become sufficiently advanced, there would be no more need for human labour.

[23][24] In one instance, the introduction of a labor-saving invention was blocked, when Emperor Vespasian refused to allow a new method of low-cost transportation of heavy goods, saying "You must allow my poor hauliers to earn their bread.

"[25] Labour shortages began to develop in the Roman empire towards the end of the second century AD, and from this point mass unemployment in Europe appears to have largely receded for over a millennium.

Joseph Schumpeter notes that as the 18th century progressed, thinkers would raise the alarm about technological unemployment with increasing frequency, with von Justi being a prominent example.

The first major economist to respond was Jean-Baptiste Say, who argued that no one would introduce machinery if they were going to reduce the amount of product,[note 2] and that as Say's law states that supply creates its own demand, any displaced workers would automatically find work elsewhere once the market had had time to adjust.

While the Marxist school and a few other thinkers continued to challenge the optimistic view, technological unemployment was not a significant concern for mainstream economic thinking until the mid to late 1920s.

In the 1960s, belief in compensation effects was less strong, but the mainstream Keynesian economists of the time largely believed government intervention would be able to counter any persistent technological unemployment that was not cleared by market forces.

[60][31][65][66][67][68] Former U.S. Treasury Secretary and Professor of Economics at Harvard University Lawrence Summers stated in 2014 that he no longer believed automation would always create new jobs and that "This isn't some hypothetical future possibility.

[77] In 2019, computer scientist and artificial intelligence expert Stuart J. Russell stated that "in the long run nearly all current jobs will go away, so we need fairly radical policy changes to prepare for a very different future economy."

[79] Economics professor Bruce Chapman from Australian National University has advised that studies such as Frey and Osborne's tend to overstate the probability of future job losses, as they don't account for new employment likely to be created, due to technology, in what are currently unknown areas.

Research by Carl Benedikt Frey and Michael Osborne of the Oxford Martin School showed that employees engaged in "tasks following well-defined procedures that can easily be performed by sophisticated algorithms" are at risk of displacement.

[31] In 2014, the economic think tank Bruegel released a study, based on the Frey and Osborne approach, claiming that across the European Union's 28 member states, 54% of jobs were at risk of automation.

Premature deindustrialization adds to concern over technological unemployment for developing countries – as traditional compensation effects that advanced economy workers enjoyed, such being able to get well paid work in the service sector after losing their factory jobs – may not be available.

[113] Commentators including Calum Chace and Daniel Hulme have warned that if unchecked, AI threatens to cause an "economic singularity", with job churn too rapid for humans to adapt to, leading to widespread technological unemployment.

Finland has aimed to help the citizens of other EU nations acquire the skills they need to compete in the post-AI jobs market, making a free course on "The Elements of AI" available in multiple European languages.

[citation needed] Others claim a chief cause of the lasting increase in unemployment has been the reluctance of governments to pursue expansionary policies since the displacement of Keynesianism that occurred in the 1970s and early 80s.

[101] A 2015 report by Carl Benedikt Frey, Michael Osborne and Citi Research agreed that innovation had been disruptive mostly to middle-skilled jobs, yet predicted that in the next ten years the impact of automation would fall most heavily on those with low skills.

[148] The issue of redundant job places is elaborated by the 2019 paper by Natalya Kozlova, according to which over 50% of workers in Russia perform work that requires low levels of education and can be replaced by applying digital technologies.

[150] This result is supported by evidence in the United States as well, which shows that manufacturing firm innovations have a positive effect on the total number of jobs, not just limited to firm-specific behavior.

[133] Gandhian economics called for a delay in the uptake of labour saving machines until unemployment was alleviated, however this advice was largely rejected by Nehru who was to become prime minister once India achieved its independence.

[171] Improved availability to quality education, including skills training for adults, is a solution that in principle at least is not opposed by any side of the political spectrum, and welcomed even by those who are optimistic about long-term technological employment.

[133] Several commentators have argued that traditional forms of welfare payment may be inadequate as a response to the future challenges posed by technological unemployment, and have suggested a basic income as an alternative.

[174] People advocating some form of basic income as a solution to technological unemployment include Martin Ford, [175] Erik Brynjolfsson,[63] Robert Reich, Andrew Yang, Elon Musk, Zoltan Istvan, and Guy Standing.

While new revenue-raising ideas have been proposed such as Martin Ford's wage recapture tax, how to fund a generous basic income remains a debated question, and skeptics have dismissed it as utopian.

[186] Jaron Lanier has proposed a somewhat similar solution: a mechanism where ordinary people receive "nano payments" for the big data they generate by their regular surfing and other aspects of their online presence.

In the system proposed by TZM all jobs are either automated, abolished for bringing no true value for society (such as ordinary advertising), rationalized by more efficient, sustainable and open processes and collaboration or carried out based on altruism and social relevance, opposed to compulsion or monetary gain.

[188] The threat of technological unemployment has occasionally been used by free market economists as a justification for supply side reforms, to make it easier for employers to hire and fire workers.

Summers suggested more vigorous enforcement of anti-monopoly laws; reductions in "excessive" protection for intellectual property; greater encouragement of profit-sharing schemes that may benefit workers and give them a stake in wealth accumulation; strengthening of collective bargaining arrangements; improvements in corporate governance; strengthening of financial regulation to eliminate subsidies to financial activity; easing of land-use restrictions that may cause estates to keep rising in value; better training for young people and retraining for displaced workers; and increased public and private investment in infrastructure development, such as energy production and transportation.