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The Technology Trap


It seems that barely a week goes by without some scare story being published in the press about how AI and automation are going to lead to mass unemployment and a world without work. The Technology Trap by Carl Benedikt Frey is a refreshing corrective to some of this doom-mongering.

Frey, an academic at the University of Oxford’s Martin School, starts by providing a thorough examination of how new technologies have influenced the power of labour and capital throughout history. He then moves on to look at how new technologies and AI may impact the future of work and society more broadly.

Most works on automation either ignore the past or, if they deal with it at all, merely focus on the Luddites, casting a with a superficial glance at the Industrial Revolution and how bad it was in the factories and the slums. However, as the historian T. S. Ashton shown, although people worked in grim conditions, things were rather more complicated than that. For many, factory work was a significant step up from a life of subsistence, squalor and back-breaking agricultural labour.

Where some authors give the impression that technological change only began in early 19th century Britain, Frey reaches further back in history for his examples. The book opens with Aristotle (‘When looms weave by themselves, man’s slavery will end’) and then moves to Ancient Rome to explain how they held back on industrialisation due to their suspicions of the private sector and the fact that their economy was reliant on slavery. We also get a fascinating snapshot of the Middle Ages and some of the technological innovations from that period such as improvements in horsepower and windmills.

Perhaps more striking is his argument that many of the key innovations of the Industrial Revolution could have been invented earlier. It was the power of guilds that hamstrung human progress. Frey draws parallels with the modern context, and expresses concerns that workers will again attempt to hold back innovation in order to protect jobs.

So, what lessons can Frey’s book teach us, and what are the implications for public policy?

First, it is a helpful reminder that fears over automation and new technologies are nothing new. They have persisted throughout history, and the concern has always been the same: new technologies will destroy jobs. Of course, new technologies do render some jobs obsolete, but they lead to new, better jobs and help to increase productivity and contribute to higher economic growth.

A related point is the distinction Frey draws between technologies which replace human labour and those which augment it. This is a subtle point which is often overlooked. It is more accurate to talk of roles being automated and not jobs. Although some of the tasks performed by humans might be at risk of being automated, this might actually free them up to focus on more enjoyable and challenging work.

Then there is the fact that automation and AI will bring huge benefits to humanity. This has always been the case throughout history and will be the same in the future. As such, we should embrace AI and automation for the many benefits it will bring. Whether it’s improving public services and freeing up civil servants to perform more worthwhile tasks, augmenting and refining health and social care, or the massive potential for improved productivity and higher economic growth, we should champion the role of AI.

What is more, we should be wary of those who try to hold back progress. Just as the guilds and the Luddites attempted to thwart technological innovation in the past, so too do trade unions and politicians today. Excessive regulation and calls for a tax on robots will stifle progress and prevent humanity from enjoying the many benefits of AI and automation.

However, as Frey reminds us, there are also downsides, especially in the short term. For example, often the benefits of increased productivity resulting from new technologies are not always immediately enjoyed by workers. This is known as an Engels Pause, and refers to the period during the industrial revolution in which profits and wealth increased dramatically, while wages stagnated for many workers. This does not always happen, but we should be prepared for the fact that the benefits of any major disruption may not be enjoyed by everybody, that inequality could increase and that many people might find themselves out of work, at least for a little while.

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