The New Industrial Revolution

By Nash Wills, Co-Editor

At the beginning of the 19th century, the future must have looked pretty bleak for artisan weavers in Great Britain. Rapid industrialization had finally caught up with them, and automated textile equipment started producing more for less. Faced with the looming inevitability of replacement by their robot counterparts, these laborers found themselves stuck between a rock and a hard place. A decision had to be made: fight or flight? Turning their rage against the machines, they chose the latter and declared war. During the anti-industrialization movement that would follow, known as the Luddite uprising, these weavers and textile workers stormed factories, burned mills, made death threats, and destroyed industrial equipment. Their battle against progress would rage for 5 years until the British military’s brutal suppression finally quelled it in 1816. In the aftermath, dozens of workers would be either executed or exiled to Australia. Time moved on; industrialization had prevailed.

The Luddite uprising; courtesy of ludditelink.org

The Luddite uprising; courtesy of ludditelink.org

It’s been a little over two centuries since the Luddite uprising, and yet, it still seems as though many of the same forces are at play in our modernized world. Technological advancement continues to cruise by those who can’t keep up, leaving political and social unrest in its wake.

Politicians like to use free trade deals as scapegoats for the continuously disappearing jobs and closing factories. A 2015 study published by Ball State University points to something different though: it’s those dastardly machines again. Between 2000 and 2010, the study concludes, 88% of lost manufacturing jobs were taken by robots, while trade was responsible for only 13.4% of lost jobs. And with the impending arrival of things like automated vehicles and cashier-less grocery stores, all signs seem to indicate that we are on the precipice of something big: a new industrial revolution.

The Industrial Revolution

Beginning in about 1760 and lasting until somewhere around 1830 or 1840, the original Industrial Revolution was arguably the most important event in human history. It was a true turning point, essentially influencing changes in daily life in almost every conceivable way. As the economy shifted away from agriculture, countless factory jobs replaced traditional artisan trades, and a rural exodus from farms to cities ensued. Out of this dramatic economic disruption grew capitalist and socialist ideologies. In the long run, humanity, in general, began to experience a consistent rise in standards of living. While hindsight makes it easy to understand the Industrial Revolution as smooth change that benefited all, history tells a different story, one wrought with significant hardships experienced by those who lived through it.

Although tons of new wealth was created by technological advancement during the Revolution, it took a long time for the bulk of the population to feel those gains. From 1760-1831 private per capita consumption in Great Britain only rose about 22%, which isn’t that much for a period of 71 years. Worse yet, UC Davis economic historian Gregory Clark estimates that British real wages actually dropped 10% over the 40-year period from 1770-1810. For average folk to see sustained real wage gains, it took nearly 70 years after the onset of industrialization.

With the dramatic changes in economic conditions came equally dramatic shifts in social ideology. Karl Marx once wrote: “The instrument of labor, when it takes the form of a machine, immediately becomes a competitor of the workman himself.” His keen observations of the Revolution paved the way for modern variants of the social welfare state as well as more radical and destructive experiments like the Soviet Union, communist China, and the Khmer Rouge. One could also make the argument that fascism was partly a response to the disruptive reverberations set off by industrialization. The point of all this is that, although major technological advancements eventually lead to positive change, they tend to produce harsh transition costs and economic volatility in the short term.

What are the positive effects?

Mechanization has always been a feature of modern economies. During the 20th century, the portion of farm jobs making up the US economy fell from 40% to 2%, and yet farm productivity grew exponentially. While the American steel industry dropped close to 75% of its workforce (400,000 employees) between 1962 and 2005, output remained consistent. US factories now produce twice as much as they did in 1984, but with a third of the workforce. Since 1990 alone, the country lost 30% (5.5 million) of its manufacturing jobs while simultaneously increasing production by 148%.

Courtesy of rackcdn.com

Courtesy of rackcdn.com

There is some positive news, though. Economic history tells us that even when jobs are lost to industrialization, new ones are created. For example, since the technical revolution in the late 20th century, workers have been able to move from factories to service industry jobs. The total non-farm workforce has grown by 33% since 1990, which more than makes up for lost manufacturing work.

How will things play out this time around?

It’s tough to say. According to a 2016 White House report, anywhere between 9% and 47% of US jobs could be replaced by machines over the course of the next 20 years. The report predicts that 2-3 million American truckers, bus drivers, and cab drivers will be made irrelevant by autonomous vehicles. If you throw cashiers, insurance underwriters, and tax preparers, who are at risk of replacement by computer programs, into that same category, the potential unemployment numbers start to become a bit staggering. In 2015 nearly 2.3% of the entire US workforce was made up of cashiers.

A separate report, published by Oxford University in 2013, ranked 702 jobs based on the probability of being computerized. The lessons to takeaway from the paper? Don’t plan on becoming a telemarketer, title examiner, or hand sewer anytime soon, because they have a 99% chance of being replaced. Loading machine operators, court reporters, construction workers responsible for installation, maintenance, and repair aren’t safe either, with a 50% chance of replacement. Instead, become a doctor or therapist, which are the two jobs least likely to be made irrelevant.

Under a worst-case scenario, millions of people around the world would lose their jobs to automation, ultimately resulting in mass social unrest. For this to happen, the thinking goes, advancements in the abilities of AI and mobile robotics to perform non-routine tasks would create so many job losses that modern capitalism wouldn’t be able to keep up. As unemployment rates reach unprecedented levels, the only jobs that will remain will be those that cannot be performed without an algorithm. Usually new technologies save time and actually help to create jobs and speed up development, but what’s happening now is seemingly unusual.

There are more positive outlooks on the future, though. Arguing that machines both substitute for and complement workers, some believe that automation will increase production in a way that leads to higher demand for labor. This would lead to a rise in the overall value of the tasks that workers are able to uniquely perform. Basically, this pending industrial revolution wouldn’t be too much different than ones that occurred in the past.

I tend to find myself agreeing with the latter outlook for the future, but that’s not necessarily a positive thing. History has proven time and again that major economic changes result in significant societal upheaval. Hopefully we will all be a bit more moderate this time around, but it wouldn’t surprise me if we saw cashiers and truck drivers going Luddite on the news 10 years from now.

Feature photo courtesy of: amazonaws.com

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