The debate over what technology does to work, jobs, and wages is as old as the industrial era itself. In the second decade of the nineteenth century, a group of English textile workers called the Luddites protested the introduction of spinning frames and power looms, machines of the nascent Industrial Revolution that threatened to leave them without jobs. Since then, each new burst of technological progress has brought with it another wave of concern about a possible mass displacement of labor.
On one side of the debate are those who believe that new technologies are likely to replace workers. Karl Marx, writing during the age of steam, described the automation of the proletariat as a necessary feature of capitalism. In 1930, after electrification and the internal combustion engine had taken off, John Maynard Keynes predicted that such innovations would lead to an increase in material prosperity but also to widespread “technological unemployment.” At the dawn of the computer era, in 1964, a group of scientists and social theorists sent an open letter to U.S. President Lyndon Johnson warning that cybernation “results in a system of almost unlimited productive capacity, which requires progressively less human labor.” Recently, we and others have argued that as digital technologies race ahead, they have the potential to leave many workers behind.
On the other side are those who say that workers will be just fine. They have history on their side: real wages and the number of jobs have increased relatively steadily throughout the industrialized world since the middle of the nineteenth century, even as technology advanced like never before. A 1987 National Academy of Sciences report explained why:
By reducing the costs of production and thereby lowering the price of a particular good in a competitive market, technological change frequently leads to increases in output demand: greater output demand results in increased production, which requires more labor.
This view has gained enough traction in mainstream economics that the contrary belief—that technological progress might reduce human employment—