🛣 Can we steer technological change? Do we need to?

I'm skeptical of our ability to turn the policy dials so we get just the level of automation we want. And we need more progress of all sorts.

“On what principle is it that with nothing but improvement behind us, we are to expect nothing but deterioration before us?” - Thomas Babington Macaulay

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The Essay

🛣 Can we steer technological change?

What is the serious and scholarly — and center-leftish — approach to analyzing the subject of technological progress and economic growth? Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity by Daron Acemoglu and Simon Johnson is as comprehensive and thoughtful an elucidation as we’re liable to get for some time. (In a previous essay about Power and Progress, I outlined my disagreement with the authors’ notion that the United States is a tech-optimist country. I also podcast chatted with Johnson) The big thing the two economists are concerned about is how to build the foundation of widespread prosperity amid technological change. Tech progress and faster productivity growth simply aren’t enough. From the book (bold by me):

[The] broad-based prosperity of the past was not the result of any automatic, guaranteed gains of technological progress. Rather, shared prosperity emerged because, and only when, the direction of technological advances and society’s approach to dividing the gains were pushed away from arrangements that primarily served a narrow elite. … Most people around the globe today are better off than our ancestors because citizens and workers in early industrial societies organized, challenged elite-dominated choices about technology and work conditions, and forced ways of sharing the gains from technical improvements more equitably.

Acemoglu and Johnson argue that while there was lots of innovation across Europe during the Middle Ages — in areas such as agriculture (better use of crop rotation, the use of legumes as fertilizer, heavier plows, wheelbarrows), transportation (better harnesses and stirrups, better sailing ships), machinery (the spinning wheel, better looms, mechanical clock), health ( better air quality from early fireplaces and chimneys, the first eye glasses, and metallurgy (improved iron and steel — the institutions and societal arrangements of the time meant that almost all the resulting productivity-driven wealth went to the nobles not the peasants. In the Industrial Age of the past quarter millennium, however, those institutions and arrangements changed to the advantage of workers:

Electoral competition, the rise of trade unions, and legislation to protect workers’ rights changed how production was organized and wages were set in nineteenth-century Britain. … Most people around the globe today are better off than our ancestors because citizens and workers in early industrial societies organized, challenged elite-dominated choices about technology and work conditions, and forced ways of sharing the gains from technical improvements more equitably. Today we need to do the same again.

What do we need to do, exactly? According to the two economists: reinvigorate worker rights and power so government can institute policies to “redirect” and “rechart” technological progress and innovation so that it makes workers more productive in what they do and creates new things for them to do rather than “just automating work, making workers redundant, or intensifying surveillance.” A classic example of this phenomenon:

There was plenty of automation in car manufacturing during the momentous reorganization of the industry led by Henry Ford starting in the 1910s. But mass-production methods and assembly lines simultaneously introduced a range of new design, technical, machine-operation, and clerical tasks, boosting the industry’s demand for workers. When new machines create new uses for human labor, this expands the ways in which workers can contribute to production and increases their marginal productivity.

What can policymakers do to guide tech progress in a more widely beneficial way? Among the policy suggestions by Acemoglu and Johnson: “ … subsidies and support for more worker-friendly technologies, tax reform, worker-training programs, data-ownership and data-protection schemes, breaking up of tech giants, and digital advertisement taxes.”

A few initial thoughts: