
Luddites have been getting a bad rap for 200 years but turns out they were right - gyre007
https://qz.com/968692/luddites-have-been-getting-a-bad-rap-for-200-years-but-turns-out-they-were-right/
======
bko
>“The lesson you get from the end of the Luddites is: Do the people that are
profiting off automation today want to participate in distributing their
profits more widely around the population, or are they going to fight just as
hard as they did back then?”... [Luddites] just thought if you’re going to
make more money because you’re more productive, you need to kick some of that
money back down to the workers.

In actuality, what happens is as expenses decrease through automation, either
capital is bid up or prices are reduced so that the profit margin (net income
over revenue) is in line with the amount of risk, along with other things. So,
true, a market economy does not "kick some of that money down to the workers",
but rather spreads the benefits and lower costs to everyone through lower
prices or higher quality.

Were all the benefits of automation going to the bottom line of the business
owners, you would see a steady increase in corporate profit margin [0]. Right
now they're near historic highs but that is only very recent and the trend is
not in line with the trend of automation in the US. Furthermore, if you look
at the top 1%, much of their income came from wages and self-employment
business income:

> The richest 1% earn roughly half their income from wages and salaries, a
> quarter from self-employment and business income, and the remainder from
> interest, dividends, capital gains and rent. According to an analysis of tax
> returns by Jon Bakija of Williams College and two others, 16% of the top 1%
> were in medical professions and 8% were lawyers: shares that have changed
> little between 1979 and 2005, the latest year the authors examined (see
> chart). The most striking shift has been the growth of financial
> occupations, from just under 8% of the wealthy in 1979 to 13.9% in 2005.
> Their representation within the top 0.1% is even more pronounced: 18%, up
> from 11% in 1979. [1]

[0] [https://si.wsj.net/public/resources/images/ON-
BL063_StWise_G...](https://si.wsj.net/public/resources/images/ON-
BL063_StWise_G_20150612191313.jpg)

[1]
[http://www.economist.com/node/21543178](http://www.economist.com/node/21543178)

~~~
marcosdumay
> Were all the benefits of automation going to the bottom line of the business
> owners, you would see a steady increase in corporate profit margin.

It's no coincidence that "corporation" was something that only became viable
on that time.

Really, you got a very selective symptom, got a positive result, and are just
dismissing it. Why?

> The richest 1% earn roughly half their income from wages and salaries

That's only because 1% is too big a number. Square it and look again.

~~~
bko
> That's only because 1% is too big a number. Square it and look again.

Sure. Not exactly 0.01% but you can look at Forbes 400 and where they got
their wealth and any trends.

> This year, we gave each member of The Forbes 400 a score on a scale from 1
> to 10 -- a 1 indicating the fortune was completely inherited, while a 10 was
> for a Horatio Alger-esque journey. We also did the analysis for every 10
> years going back to 1984. Looking at the numbers over time, the data lead us
> to an interesting insight: in 1984, less than half of people on The Forbes
> 400 were self-made; today, 69% of the 400 created their own fortunes.[0]

[0] [https://www.forbes.com/sites/afontevecchia/2014/10/02/the-
ne...](https://www.forbes.com/sites/afontevecchia/2014/10/02/the-new-
forbes-400-self-made-score-from-silver-spooners-to-boostrappers/#3e573e5b2aff)

~~~
coldtea
> _Looking at the numbers over time, the data lead us to an interesting
> insight: in 1984, less than half of people on The Forbes 400 were self-made;
> today, 69% of the 400 created their own fortunes._

They make it sound like some triumph of the American dream, when it's at best
a humble change. After 3 decades of what has been a huge change in economy,
moving to the "information economy" and the "digital age", and with all the
celebrated tech moguls being added to the world's richest people, there's only
~20-25% more self-made rather than inherited fortunes. As if the digital age
just impacted/disrupted 1/4 of the established wealth.

Meanwhile, the part they've missed, is that the American dream is not about
getting to the "Forbes Top 400", but in general to moving up from poor/working
class/lower middle class, and this has been problematic for decades, with
increasingly less people making more than their parents.

~~~
bko
The point that I was trying to make is that most of the inequality and wealth
concentration we're seeing is due to entrepreneurship rather than passive
growth of wealth. I'm hopeful that the trend continues and leads to a more
equitable distribution of opportunity

------
bmh_ca
Supply side economics - against which the Luddites railed - is predicated upon
the notion that it is better for the individual to adapt to hardship in an age
of plenty than to create scarcity by imposing hardship on production.

~~~
datashovel
Does this philosophy also assume the wealthiest won't try to manipulate
scarcity in order to gain more wealth?

~~~
golergka
All sides manipulate everything they can to gain more wealth. But as the
parent comment says, not every possible manipulation is rational.

~~~
datashovel
Is the only rational manipulation that which makes me more wealthy?

~~~
tomrod
Yes, if that manipulation is driven by you, and if "wealth" satisfies your
subjective preferences. So it could be money and assets, or accomplishments,
or relationships, and so on.

------
jtraffic
For an illuminating perspective about different paths automation may take,
which also uses history as a guide, see this:
[http://www.economist.com/news/leaders/21701119-what-
history-...](http://www.economist.com/news/leaders/21701119-what-history-
tells-us-about-future-artificial-intelligenceand-how-society-should)

My key takeaway is that, often automation can drive prices down, which
increases demand, which in turn increases employment. This counterbalancing
effect can eventually increase total employment, although the new jobs may go
to different people.

AI replacing services is a bit different than robots replacing workers in
manufacturing, in my view, because often the entire job is not replaced. It
can have the effect of allowing the human to focus on (currently) non-
automated portions of the job. Accounting is ripe for automation, for example,
but I predict it will be a good thing for most accountants. Well, predictions
are dangerous, but, there, I've said it.

As far as manual labor is concerned, it seems to me that ship has sailed.

------
Kenji
People who disregard other people's property and cause vast destruction
because of their ideology are never right. I have no respect for them. There
are non-destructive ways to bring your message across in this situation.

A society with automation will always be richer than one without it. The fight
against automation is really baffling me. People are actively fighting against
progress. Automation eliminates boring stupid jobs and replaces them with
great, interesting ones. I am extremely happy to live in a country that
embraces science & technology.

~~~
ntsplnkv2
Why should anyone care about their society if they reap no benefit from it?

~~~
Kenji
Can you also justify murder with that or only destruction of property?

~~~
Qwertious
You absolutely can - the basic argument for jobs is essentially "you can't
reap the gains of society, if you aren't willing to contribute to it [in the
form of doing your job]" \- the underpinning argument being that there _are_
jobs you can do. If there aren't any (paid) jobs, then you're stuck in a
situation where people are taking away your rights to the gains of society,
for their own benefit.

At which point, you need to fix the system - either make it so that jobs
aren't necessary to get the gains (i.e. the money), or create "jobs" that
aren't strictly necessary, or, if you _cannot_ fix the system, rip it down
with violent revolution and make sure the replacement system isn't broken in
the same way as the predecessor.

Basically, it's outrage against a double-abstraction suckerpunch - either
there's too much work or there's not enough work, you can't have both.

------
dalbasal
I think it might be worth pointing out that catastrophic "technological
unemployment" is far from a sure thing at this point. We're still speculating
that this is a thing which may happen in the future.

So far, labour force participation rates in developed economies is still in
the same 60%-70% band that it's ranged in since women joined the workforce en
masse in the 60s.

I'm not saying it's impossible, just that we're not in any better a position
to judge than 19th century people were. These things are pretty hard to
predict. Ultimately "AI" is not unique economically (short of Kurzweil-esque
machine consciousness). The industrial revolution massively reduced labour
needed to produce spoons or cars but actually increased employment rates in
manufacturing. It was trade that reduced manufacturing employment rates. The
communications revolution replaced the need for secretaries, typists, errand
boys and many other clerical roles. There might be more people employed in
"administration" today than at any point in history^. The relationship between
labour saving technology and the demand for labour is complex, difficult to
speculate about.

^The administration boom (pointed out by David Graeber) is baffling to me. I'd
love to hear some theories on it.

~~~
RobertoG
Of course, as they say, making prediction is always difficult, specially about
the future. But we can make educated guesses.

We know from the past that new jobs are created in activities for what there
are not machines able to do it. We are running out of things inside that
category. It's not so bad an idea to stop and think about what could happen
when we arrive there.

"short of Kurzweil-esque machine consciousness"

I have never received a dime for being conscious, but I have been paid for
making inferences that machines can't do. That they can't do yet.

------
padobson
My profile[0] has a quote about Marx and Smith hitting on the same idea, and
this piece is a good illustration of that.

We have two competing sentiments - that workers are exploited by capitalists
for the value they provide via their labor, and that the overall efficiency of
an economy is dependent on people working in their own self interest.

I think the problem we face is not how best to redistribute wealth, but how to
align these two sentiments instead of creating an adversarial relationship
between labor and entrepreneur.

And I think Marx was right - workers _should_ own the means of production.
However, the historical methods to achieve this have been overwhelmingly
inefficient and usually enforced at the point of a gun. That's a mistake.

Meanwhile, in capitalist economies, joint ownership enterprises rose up and
the cost of automation came down. Anyone can now buy a share of Apple stock
for a day's wage[1], and carry around one of their super computers for a
week's wage[2].

The real problem is one of culture. The Luddites had enough organization to
mount frontal assaults on the textile mills that threatened them, so why
couldn't they pool their resources and start their own mills?

Today, we encourage young people to take on loads of debt to go to college,
ensuring they leave college subject to the whims of capitalists. The sentiment
is right: it makes sense to encourage young people to carve out a living for
themselves early in life. But the cultural method of achieving this makes no
sense. It would make more sense to encourage young people to take minimum wage
jobs when they turn 15 and investing every spare dime that they have - thus
giving themselves a basic income early in life.

The article suggests minimum wages, public pension funds, and higher taxes on
business is the answer. I think it's absurd to penalize the most efficient,
most product parts of an economy for being more efficient and more productive.

If coercive redistribution is something we deem necessary as a society, then
we should be redistributing ownership of our most profitable corporations to
those who are least able to fend for themselves. An equity tax that takes
shares of APPL from Tim Cook and gives them to people on food stamps.

That way, marginal increases in productivity are not disincentivized by tax
policy, and laborers who now own the means of production are no longer
exploited, but rather rewarded in tandem with the entrepreneur.

[0][https://news.ycombinator.com/user?id=padobson](https://news.ycombinator.com/user?id=padobson)

[1][https://finance.yahoo.com/quote/AAPL?ltr=1](https://finance.yahoo.com/quote/AAPL?ltr=1)

[2][https://www.apple.com/shop/buy-
iphone/iphone-7](https://www.apple.com/shop/buy-iphone/iphone-7)

~~~
goalieca
I came across this theory the other day
[https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease](https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease)

It seems to me to nicely explain the rise in incomes for, ironically, the
least "productive" professions such as Health care, professorship, etc
relative to anything that can be automated for high productivity.

~~~
EGreg
Why should increased worker productivity increase wages?

Over a significant length of time, it does the opposite. If one worker can do
the job of 100, then demand for human workers will go down in that industry.
For any "Amazon warehouse slave" who demands $15 an hour there will be plenty
willing to take the job.

------
awinter-py
it sounds like this article is asking 'when you replace many good jobs with
fewer worse jobs + more automation, do you then redistribute the proceeds of
that automation?' (i.e. make it illegal to make a profit selling textiles).

Even if they did redistribute the new income to the whole country, it wouldn't
bring back the weaving jobs. Those jobs are gone forever.

Separately, legislating low margins in an industry sounds like trouble.

~~~
codingdave
It is going to be easy to simply argue the details, but the broader question
is more important -- For any specific use of technology, is it making our
society a better place? Or a worse one?

~~~
twelve40
In Luddites' case the tech was clearly making our society a better place, it's
(apparently) the transition that was not handled gracefully.

~~~
ntsplnkv2
That's a strong claim to make without an argument. How has automation and
technology made society a better place?

~~~
adrianN
Look at the machine you're writing your comments on. That thing wouldn't be
possible without automation and technology.

Fewer people than ever are working mind-numbing, dangerous factory or
agriculture jobs. That is a good thing.

~~~
ntsplnkv2
Neither would the millions of deaths from new advances in military technology
be possible without automation and technology.

Neither would the perpetuation of fake information and news on a global scale
be possible.

For every bit of good the internet has done, it has also allowed bad things to
occur too.

I'm not saying there is no good, but to say that it is only beneficial is a
strong claim, I would argue it is more neutral.

~~~
julianmarq
I read the comment you replied to several times and couldn't find where it
said that technology was _only_ beneficial.

Now your claim that is neutral is the strong one, but also one very easy to
test: Don't use or consume anything made possible by technology, if your life
isn't impacted in any way then you're correct... In this isolated, anecdotal
case.

~~~
ntsplnkv2
> In Luddites' case the tech was clearly making our society a better place,

Is what OP said-that is subjective. How is our world, better? Is it truly
better? Sure-I have benefited from use of computers, but many people have been
killed from use of computers (drones, for example).

It is very possible that all of this technology eventually wipes out humanity,
which would not be beneficial, would it? The claim that technology has made
society better is a very strong one, which no argument was made as for why.

Your test isn't a proper test. Technology is neutral in the sense that all of
the good it has brought, has also brought upon lots of bad. For every piece of
technology used for good(missiles for space travel) there is an equivalent use
that has done harm. (Cruise missiles, which have killed scores of people.)

I'm not debating that technology had impact-but to say it is all beneficial,
is a huge stretch.

~~~
adrianN
Nobody forces the development and adoption of new technology. So any
successful technology is "better" for the people buying it.

How far back would you go to claim that technology is not beneficial? Pre-
industrial? Pre-agriculture? Pre-tool use? Technology made humans the most
successful multicellular species we know.

~~~
ntsplnkv2
Actually new technology IS forced on others-see the countless peoples killed
by weapons of war. They didn't choose to get bombed out by a GPS guided
missile, did they?

What about the people killed after the atomic bomb killings? Technology is
forced on everyone. Things we thought were convenient (cars, ships, the ICE,
fossil fuels) may now plunge the planet into chaos and cause immense damage to
our environment. Many people who have never had the choice of owning a car are
now suffering from droughts and famine because of fossil fuel burning. It's
naive to say technology isn't forced. It is, and always will be.

Again, easy for us to say in the west, especially the US. We've seen a lot of
the good, but we too have seen the bad. It's typically neutral.

Technology is not universally beneficial. You can go back maybe to the first
group of humans who used a fire to survive a cold spell but since then, there
has been destructive and constructive technology.

~~~
julianmarq
> Again, easy for us to say in the west, especially the US. We've seen a lot
> of the good, but we too have seen the bad.

I, for one, am not in the US, pal; I'm in a third world country riddled with
conflict and crime. Stop the sad regionalism.

Your morality babble still doesn't change the fact that automation and
technology _have_ made us the most successful species. Even your ludicrous
"for every good some bad has come" is false on its face. If it were true, the
population would forever stay the same.

> Technology is not universally beneficial.

Again, nobody claimed it was, what was claimed was the net effect, and that
_has_ been positive.

I don't even know why I'm wasting my time having a discussion with someone who
thinks technology isn't "good" (and you do think that, you think it's
"neutral", not "good")... _over the internet_.

In other words: If it weren't for technology, you couldn't be whining about
how awful it is from your iPhone, buddy.

