The Technology Trap

Attitudes toward technological progress are shaped by how people's incomes are affected by it.

Attitudes toward technological progress are shaped by how people's incomes are affected by it. Progress is not inevitable. Throughout history, new technologies have often been resisted by those whose livelihoods they threatened. In preindustrial times, rulers frequently blocked labor-saving inventions to avoid social unrest. The adoption of technology depends on whether those affected stand to gain from it. Enabling vs. replacing technologies. Economists distinguish between: Enabling technologies: Create new tasks/jobs, increase productivity (e.g. telescope) Replacing technologies: Substitute for human labor (e.g. power loom) Replacing technologies tend to face more opposition, as they can reduce demand for labor and wages in the short-term. However, they can also lead to long-term productivity gains that benefit society broadly if the transition is managed well.

The gains of the Industrial Revolution overwhelmingly went to industrialists, who saw their rate of profit double. Engels's pause. The early Industrial Revolution (1760-1840) saw stagnant or declining living standards for many workers, despite rapid economic growth. This period is known as "Engels's pause" after Friedrich Engels who observed it. Key impacts included: Displacement of skilled craftsmen by machines and unskilled factory workers Longer working hours in poor conditions Child labor in factories Rising inequality as profits soared but wages stagnated Worker resistance. Many workers violently opposed mechanization, exemplified by the Luddite movement which destroyed textile machinery. However, the British government forcefully put down these rebellions to protect industrial progress.

For the most part, as late as 1970, middle-income jobs had been taken over by machines, forcing many people into lower-paying jobs or causing them to drop out of the workforce altogether. Enabling technologies created new jobs. The Second Industrial Revolution (1870-1914) brought technologies like electricity and the internal combustion engine that created many new jobs and industries. This continued through much of the 20th century as technology augmented rather than replaced human skills. Key developments: Rise of manufacturing and clerical jobs accessible to high school graduates Increasing wages across skill levels as productivity rose Expansion of the middle class and reduced inequality Less worker resistance to technology as benefits were broadly shared This era saw the "great leveling" as economic gains were distributed more equally, supporting a stable democracy and social cohesion.

The age of automation was not a continuation of twentieth-century mechanization. On the contrary, it was a complete reversal of it. Job polarization. Since the 1980s, computer technology has been replacing many middle-skill routine jobs while creating high-skill jobs. This has led to: Declining employment and wages for workers without college degrees Growth in both high-skill, high-wage jobs and low-skill, low-wage jobs A "hollowing out" of the middle class Skill-biased technological change.…