Technological unemployment is the loss of jobs due to technological change. It is a key type of structural unemployment. Technological change typically includes the introduction of labour-saving "mechanical-muscle" machines or more efficient "mechanical-mind" processes (automation) and, in doing so, humans' role in these processes are minimized. Historical examples include artisan weavers losing work due to the introduction of mechanized looms, leading to protests by the Luddites. A contemporary example of technological unemployment is the displacement of retail cashiers by self-service tills and cashierless stores.
Technological change can cause short-term job losses in a specific profession or industry. Whether it leads to lasting increases in unemployment has been debated. The phrase "technological unemployment" was popularised by John Maynard Keynes in the 1930s, who said it was "only a temporary phase of maladjustment".The Economic Possibilities of our Grandchildren (1930). E McGaughey, 'Will Robots Automate Your Job Away? Full Employment, Basic Income, and Economic Democracy' (2022) 51(3) Industrial Law Journal 511, part 2(2)
Advances in artificial intelligence (AI) have reignited debates about the possibility of mass unemployment, or even the end of employment altogether. Some experts, such as Geoffrey Hinton, believe that the development of artificial general intelligence and advanced robotics will eventually enable the automation of all intellectual and physical tasks, suggesting the need for a basic income for non-workers to subsist. Others, like Daron Acemoğlu, argue that humans will remain necessary for certain tasks, or complementary to AI, disrupting the labor market without necessarily causing mass unemployment. The World Bank's 2019 World Development Report argues that while automation displaces workers, technological innovation creates more new industries and jobs on balance.
History
Classical era
The issue of machines displacing human labour has been discussed since at least Aristotle's time.
According to author Gregory Woirol, the phenomenon of technological unemployment is likely to have existed since at least the invention of the wheel. Ancient societies had various methods for relieving the poverty of those unable to support themselves with their own labour. Ancient China and ancient Egypt may have had various centrally run relief programmes in response to technological unemployment dating back to at least the second millennium BC. Ancient Hebrews and adherents of the ancient Vedic religion had decentralised responses where aiding the poor was encouraged by their faiths. In ancient Greece, free labourers could find themselves unemployed due to both the effects of ancient labour saving technology and to competition from slaves ("machines of flesh and blood"). Sometimes, these unemployed workers would starve to death or were forced into slavery themselves although in other cases they were supported by handouts. Pericles responded to perceived technological unemployment by launching public works programmes to provide paid work to the jobless. Pericle's programmes were criticized for wasting public money but these criticisms were defeated.
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. Similar to the Greeks, ancient Romans responded to the problem of technological unemployment by relieving poverty with handouts (such as the ). Several hundred thousand families were sometimes supported like this at once. Less often, jobs were directly created with public works programmes, such as those launched by the Gracchi. Various emperors even went as far as to refuse or ban labour saving innovations. 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."See book eight, chapt XVIII of Suetonius's The Twelve Caesars. 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.
Post-classical era
The medieval and early renaissance period saw the widespread adoption of newly invented technologies, as well as older ones which had been conceived yet barely used in the Classical era. Some were invented in Europe while others were invented in more Eastern countries like China, India, Arabia and Persia. The Black Death left fewer workers across Europe. Mass unemployment began to reappear in Europe, especially in Western, Central and Southern Europe in the 15th century, partly as a result of population growth, and partly due to changes in the availability of land for subsistence farming caused by early enclosures. As a result of the threat of unemployment, there was less tolerance for disruptive new technologies. European authorities would often side with groups representing subsections of the working population, such as Guilds, banning new technologies and sometimes even executing those who tried to promote or trade in them.On occasion these executions were carried out with methods normally reserved for only the worst criminals, for example on a single occasion in the south of France, 58 people were broken on the Catherine wheel for selling forbidden goods. See Chpt 1 of The Worldly Philosophers.
16th to 18th century
In Great Britain, the ruling elite began to take a less restrictive approach to innovation somewhat earlier than in much of continental Europe, which has been cited as a possible reason for Britain's early lead in driving the Industrial Revolution.E.g by Sir John Habakkuk in American and British Technology in the Nineteenth Century (1962), Cambridge University Press – Habakkuk also went on to say that due to labour shortages, compared with their British counterparts there was far less resistance from U.S. workers to the introduction of technology, leading to more update of innovation, and hence to the more efficient American system of manufacturing Yet concern over the impact of innovation on employment remained strong through the 16th and early 17th century. A famous example of new technology being refused occurred when the inventor William Lee invited Queen Elizabeth I to view a labour saving knitting machine. The Queen declined to issue a patent on the grounds that the technology might cause unemployment among textile workers. After moving to France and also failing to achieve success in promoting his invention, Lee returned to England but was again refused by Elizabeth's successor James I for the same reason.
After the Glorious Revolution, authorities became less sympathetic to workers concerns about losing their jobs due to innovation. An increasingly influential strand of Mercantilist thought held that introducing labour saving technology would actually reduce unemployment, as it would allow British firms to increase their market share against foreign competition. From the early 18th century workers could no longer rely on support from the authorities against the perceived threat of technological unemployment. They would sometimes take direct action, such as machine breaking, in attempts to protect themselves from disruptive innovation. 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. Yet Schumpeter also notes that the prevailing view among the elite solidified on the position that technological unemployment would not be a long-term problem.
19th century It was only in the 19th century that debates over technological unemployment became intense, especially in Great Britain where many economic thinkers of the time were concentrated. Building on the work of Dean Tucker and Adam Smith, political economists began to create what would become the modern discipline of economics.Smith did not directly address the problem of technological unemployment, but the Dean had, saying in 1757 that in the long term, the introduction of machinery would allow more employment than would have been possible without them. While rejecting much of mercantilism, members of the new discipline largely agreed that technological unemployment would not be an enduring problem. In the first few decades of the 19th century, several prominent political economists did, however, argue against the optimistic view, claiming that innovation could cause long-term unemployment. These included Sismondi, Malthus, J S Mill, and from 1821, David Ricardo himself.While initially of the view that innovation benefited the whole population, Ricardo was persuaded by Malthus that technology could both push down wages for the working class, and cause long-term unemployment. He famously expressed these views in a chapter called "on Machinery", added to the third and final (1821) edition of On the Principles of Political Economy and Taxation As arguably the most respected political economist of his age, Ricardo's view was challenging to others in the discipline. 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,Typically the introduction of machinery would both increase output and lower cost per unit. 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. Ramsey McCulloch expanded and formalised Say's optimistic views on technological unemployment, and was supported by others such as Charles Babbage, Nassau Senior and many other lesser known political economists. Towards the middle of the 19th century, Karl Marx joined the debates. Building on the work of Ricardo and Mill, Marx went much further, presenting a deeply pessimistic view of technological unemployment; his views attracted many followers and founded an enduring school of thought but mainstream economics was not dramatically changed. By the 1870s, at least in Great Britain, technological unemployment faded both as a popular concern and as an issue for academic debate. It had become increasingly apparent that innovation was increasing prosperity for all sections of British society, including the working class. As the classical school of thought gave way to neoclassical economics, mainstream thinking was tightened to take into account and refute the pessimistic arguments of Mill and Ricardo.
20th century
For the first two decades of the 20th century, mass unemployment was not the major problem it had been in the first half of the 19th. 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 1920s mass unemployment re-emerged as a pressing issue within Europe. At this time the U.S. was generally more prosperous, but even there urban unemployment had begun to increase from 1927. Rural American workers had been suffering job losses from the start of the 1920s; many had been displaced by improved agricultural technology, such as the tractor. The centre of gravity for economic debates had by this time moved from Great Britain to the United States, and it was here that the 20th century's two great periods of debate over technological unemployment largely occurred.