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A Historical Perspective on Technological Unemployment: Real Fears or Luddit Fallacy?

  This is a transformation in which new technologies are rapidly replacing manpower: a large number of busy employees have quietly disappeared from telephones and bank counters from unknown times; even those who do not seem to be replaced by machines and rely on Artists who thrive on talent and creativity also gathered in the streets in embarrassment to protest against machines taking away their jobs.
  These two scenes seem to take place in the current era of AI (artificial intelligence). Intelligent voice customer service and ChatGPT are already capable of handling jobs that previously required a lot of manpower support. Hollywood actors and screenwriters held up signs and staged a massive strike demanding restrictions on the use of generative artificial intelligence.
  However, these scenes actually took place about 100 years ago. In the 1920s and 1930s, when “machinery” was used on a large scale as a new technology, automatic telephone switchboards replaced thousands of operators; talkies replaced black-and-white silent films, allowing many musicians responsible for live soundtracks to Jobs were lost, sparking a massive protest against talkies.
  In his book “A Brief History of Robots,” University of California professor Dustin Abnett takes us back to the scene in the United States at that time with vivid and sophisticated writing.
  However, that period has a name that is more familiar to us – the “Great Depression Era”. During that period, the peak unemployment rate in the United States was close to 25%, which caused people at the time to panic and attribute it to the emergence of new technologies. They cry out about “technological unemployment”, which they believe has become the driving force behind putting people out of work. President Hoover received a warning letter asking him to regulate the “Frankenstein monster” of industrial technology, otherwise, manufacturing and even American civilization would be swallowed up. During the term of his successor, President Roosevelt, government bureaucrats and even the president himself focused their attention on solving the unemployment problem on “machines,” the “dangerous force” in modern life. Ultimately, however, the focus of Roosevelt’s New Deal was on public works that created re-employment opportunities.
  In fact, people’s fear of “technological unemployment” has a longer history. Whenever a revolutionary technology is applied on a large scale in society, its name will appear in the minds of people who are worried about being left behind. In a more distant era, that is, during the first industrial revolution, textile workers in Britain, known as Luddites, who were also worried about being displaced by machines, destroyed a large number of machines in groups, which was recorded in textbooks.
  In the long history of mankind, the panic of the times caused by “technological unemployment” has shaken so many times, but is it a true proposition?
  Today, in most mainstream economics, technological progress is excluded as a factor in the Great Depression. Going one step further, economists have generally accepted a basic fact: technological progress will never lead to massive long-term unemployment. At the same time, they coined the term “Luddite fallacy.” Technological progress saves a lot of labor, which will inevitably cause some workers to lose their jobs in the short term, but it makes the overall work efficiency higher, the prices of goods and services produced by factories will be reduced, and the purchasing power of consumers will be enhanced. , which drives demand for more industries – meaning more jobs. On the other hand, if “technological unemployment” is really true, after successive technological revolutions, the employment rate of human beings should have infinitely tended to zero.
  In May 2023, a data analysis report by Deutsche Bank Research stated that “unemployment fluctuates according to the economic cycle rather than any technological wave.” The year 1755 was the starting point of their study. Although many of the jobs at that time no longer exist, the uninterrupted spiral of unemployment did not occur. Today, the median unemployment rate in the G7 (Group of Seven) countries is 3.8%, which is much lower than the 5% unemployment rate in the UK at that time. Moreover, it must be taken into account that compared with hundreds of years ago, people’s working environment and quality of life have improved. A tremendous improvement.
  ”Technology has always created wealth and saved time, freed up labor for alternative, more productive employment, and created industries and jobs that people didn’t realize they needed yet.” This is Deutsche Bank economists the final conclusion of the report.
  History also seems to tell us that the reason why the term “technological unemployment” was invented is not really to be in tit-for-tat with “technological progress”, but in the historical cycle, whenever people feel the fear and confusion of their jobs being impacted. , technology and machines will be chosen as the source of concrete attribution that is easy to understand.
  Regarding this point, in “A Brief History of Robots”, Abnett salvaged another piece of history that seems to be quite meaningful now, but has been forgotten by people. In the 1960s, when 22 “Universal Guys” (General Automation Devices, which can be understood as early robots) were installed on the assembly line of General Motors’ Lordstown, Ohio, plant, although General Motors removed those being automated The workers replaced by robotic arms were transferred to other departments, but the company required those who were left to produce 100 cars an hour instead of the past 60.
  The workers at Lordstown stopped working, partly because of dissatisfaction with the new workload, but also, more importantly, because they believed that working with robots meant being “relegated to the ranks of machines.” The workers’ request to reduce robots on the assembly line was finally met.
  Of course, “technological unemployment” is not simply an unfounded fear. In the long run, the economic development results and a large number of new job opportunities created by technological leaps promote long-term employment. However, from a short-term and individual perspective, the cancellation of jobs and the employment overhang of new positions that cannot meet the requirements of past skills will indeed cause short-term unemployment. When “a grain of sand of the times” falls on a family, it will drag the fate of several people into the abyss of pain, especially when the working-age workforce in the family cannot quickly grasp the skills required for the new jobs created by artificial intelligence. Skill time.
  Many industry commentators believe that as long as policymakers, enterprises and society take the correct response measures, such as training By actively helping people with education and education, they can get through the difficult period of skill transformation. Economists from Deutsche Bank also pointed out in the report that even in the face of a painful short-term decline in the labor market, we should still urgently promote artificial intelligence, the largest technological leap at the moment, to tap the potential of human society’s productivity and provide Society creates more jobs and wealth. After all, in the long term, AI “will ultimately create more jobs than it destroys.”

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