: How were job losses tackled after industrial revolution.

Question

Recent AI discussions makes it almost certain that jobs would be affected. It makes me wonder what happened when suddenly humans were replaced by machines. Assuming a lot of jobs were lost was it that lots of people suddenly found it difficult to afford meals or was it not disastrous at all and was a smoot h transition? Can we compare it to today’s AI revolution in terms of adjustment with jobs?

In: 34

Answer 1

This is the most common misconception about how technology changes the workplace.
Industrialisation by definition is the expansion of development within a country, so in Britain for example was the development of rail, of industry, manufacturing sector boomed for example in steel or textiles, consumption increased due to the increase in wealth and so does production, which then has an indirect and direct benefit for other sectors.
This lead to the development of new skills as well as an expansion of the workforce to due the increased demand for goods and services.

So, you would expect job losses in something like a recession, or crash rather than economic development.
The introduction of mechanised farming or advanced manufacturing process, or even today when people talk about AI or automation, actually leads to creation of jobs, although of a different kind. One could argue that it creates higher skilled workforce and therefore adds value to the economy.

So, if we look at farming as a prime example, mechanisation meant that those people were more efficient, and could utilise their land much more effectively, which means they could shift those roles into operations such as running the actual equipment or focusing those labour inputs into other more manual areas where mechanisation was not possible. And with advanced you get an increase in your yields, increase in consumption etc.
Whereas in a depression, that’s when people loose their jobs. But this also depends on the kinds of monetary policies that a country adapts. Things like austerity for example were just a bad idea and have actually hindered most countries ability to recover after the 2008 global financial crisis.
But that’s a bigger discussion. Good start.