By Daron Acemoglu and Simon Johnson for Principus on Sept 2023
What Is Progress
It was self-evident that technology improvements enabled better functioning schools, factories, prisons, and hospitals, and this was beneficial for everyone. New technologies, according to this view of the world, expand human capabilities and, when applied throughout the economy, greatly increase efficiency and productivity.
We are beneficiaries of progress, mainly because our predecessors made that progress work for more people. A new, more inclusive version of technology can emerge only if the basis of social power changes.
Control over Technology
The word technology comes from the Greek tekhne (skilled craft) and legis (speaking or telling), implying systematic study of a technique. In 1930 John Maynard Keynes coined a term technological unemployment. He was not the first to voice such fears. David Ricardo was also concerned.
Three foundational questions:
*What determines when new machines and production techniques increase wages?
*What would it take to redirect technology toward building a better future?
*Why is current thinking among tech entrepreneurs and visionaries pushing in a different, more worrying direction, especially with the new enthusiasm around artificial intelligence?
Optimism regarding shared benefits from technological progress is founded on a simple and powerful idea: the “productivity badwagon”. The theory behind the productivity badwagon is straightforward: when businesses become more productive, they want to expand their outputs. For this, they need more workers, so they get busy with hiring. And when many firms attempt to do so at the same time, they collectively bid up wages.
Automation raises average productivity but does not increase, and in fact may reduce, worker marginal productivity. Automation and offshoring have raised productivity and multiplied corporate profits.
More important for raising workers marginal productivity is the creation of new tasks. There will be few new jobs created, however, when the productivity gains from automation are small – what we call “so-so automation”. There is no productivity bandwagon from so-so automation and worker surveillance.
Ricardo and Keynes correctly understood that productivity growth does not necessarily automatically deliver broad-based prosperity. Outcomes depend on economic, social and political choices.
Digital technologies already changed science. How we use knowledge and science depends on vision – the way that humans understand how they can turn knowledge into techniques and methods targeted at solving specific problems. Vision shapes our choices. And power defines whose vision will prevail.
Although general-purpose technologies can be developed in many different ways, once shared vision locks in a specific direction, it becomes difficult for people to break out of its hold and explore different trajectories that might be socially more beneficial. Most people affected by those decisions are not consulted.
Shared prosperity is more likely when countervailing powers hold entrepreneurs and technology leaders accountable – and push production methods and innovation in a more worker-friendly direction.
Is AI next big thing with fire-like impact?
AI appears set on a trajectory that will multiply inequalities, not just in industrialized countries but everywhere around the world. Fueled by massive data collection by tech companies and authoritarian governments, it is stifling democracy and strengthening autocracy.
What we are witnessing today is based on shared vision among the most powerful technology leaders. This vision is focused on automation, surveillance, and mass-scale data collection, undermining shared prosperity and weakening democracies.
A cautionary tale for any history of technology: great disasters often have its roots in powerful visions, which in turn are based on past success.
Canal vision
Ferdinand de Lesseps, the builder of Suez canal, was also working on securing a bid for Panama canal. He was guided by three strongly held tenets:
- A nineteenth-century version of technology optimism.
- A belief in markets, that even the largest projects could be financed with private capital.
- He was focused on European priorities and non-Europeans mattered little.
To understand Lesseps’s vision, we must turn to the ideas of the French social reformer Henri de Saint-Simon. He maintained that human progress is driven by scientific invention and the application of new ideas to industry. It was a group of smart young engineers from Ecole Polytechnique around Barthelemy Prosper Enfantin that brought his ideas to life. Mainly in the field of canals and railways.
In 1848 Mahammed Said, the fourth son of Mahammed Ali, became the ruler of Egypt. In 1854 Lesseps went to Egypt. He received concession for building a canal. By early 1857, he had a well-honed pitch about how canal would reduce travel time and transform global commerce. In 1858 he sold stocks and get the financing for the canal
The idea of a canal across Central America had long been a European dream, dating back at least to 1513. The Spanish government tried something in 1819, but the canal was back on agenda in 1879. An American group strongly preferred a route through Nicaragua. The alternative route was through Panama, and for this location the supposed parallels with Suez appealed to Lesseps. In 1878 Lesseps’s agent received a concession from the government of Colombia, which controlled the relevant territory at that time.
In December 1880 Lesseps’s company issued shares. But the canal needed at least four or five times as much capital as was raised in this first round. From 1881 to 1889 a lot of people died due to diseases. People building a canal. Lesseps changed his approach from sea-level canal to the lock-based canal in 1887. But the canal was not built by Lesseps but by Americans in 1904.
What you do with technology depends on the direction of progress you are trying to chart and what your regard as an acceptable cost. Technology is nothing without vision. But vision also implies distorted lenses, limiting what people can see.
Power to Persuade
Power is about the ability of an individual or group to achieve explicit or implicit objectives. Modern society turns on persuasion power. Like coercion and political power, economic power also relies being able to persuade others.
The two sources of persuasion are: the power of ideas and agenda setting. An idea is more likely to spread if it is simple, is backed by a nice story, and has a ring of truth to it.
Even charisma depends on institutions and conditions. It is not just something you are born with; it depends on self-confidence and on your social networks. The marketplace for ideas is an imperfect frame for technology choices, which are at the heart of this book. To many people, the word market implies a level playing field in which different ideas try to outcompete each other primarily on their merits. This is not how it happens most of the time.
Lord Acton in 1887: “Power tends to corrupt and absolute power corrupts absolutely.”
Social power matters in every aspect of our lives. Often, it is those whose vision dominates the trajectory of innovation who benefit most. We need to reshape the future by creating countervailing forces, particularly by ensuring that there is a diverse set of voices, interests, and perspectives as a counterweight to the dominant vision. It is about the pressure that ordinary people can put on elites and visionaries, and it is about willingness to have their own opinions rather than be entrapped by dominant visions.
Progress has a way of leaving many people behind unless its direction is charted in a more inclusive way.
Cultivating Misery
Perhaps the most defining technology of the Middle Ages was the mill, whose rising importance is well illustrated by the English experience after the Norman Conquest of 1066.
From 1000 to 1300, water mills and windmills and other advances in agricultural technology roughly doubled yields per hectare. For most people, better agricultural technology during the Middle Ages deepened their poverty.
Most of the surplus was eaten up not by urban centers but by the large religious hierarchy. The church’s construction boom was truly spectacular. Estimates from France suggest that as much as 20 percent of total output may have been spent on religious building construction between 1100 and 1250.
Medieval society is often described as a “society of orders”. Those who prayed were crucial in persuading those who labored to accept the hierarchy. After the mills were introduced in medieval England. As new machines were deployed and productivity rose, feudal lords exploited the peasantry more intensively.
The higher wages in medieval times rose after the Black Death, when lords were facing a shortage of labor and untilled fields. Just as in the medieval period, technological and organizational choices in early civilizations favored the elite and impoverished most people.
By the mid-1700s, English agriculture had changed a great deal. Serfdom and most of the vestiges of feudalism had faded away. Henry VIII had dissolved the monasteries and sold off their land in the mid-1500s. The process of agricultural transformation had been ongoing for centuries. From around 1600, we see real wages creeping upward more steadily.
In 1773 Parliament passed the Enclosure Act, making it easier for large landowners to push through the reorganization of land they desired. Arthur Young had a distinctive voice in these arguments. The history of the enclosure movement is a granular illustration of the way that persuasion and economic self-interest shape who benefits from technological change and who does not.
Eli Whitney invented improved cotton gin in 1793. Cotton production in America South increased dramatically. Improved productivity most definitely did not mean higher wages or better treatment of Black workers.
The doctrine of “positive good” was made famous by James Henry Hammond. Slavery was a southern issue, in which others should not interfere. It was essential to the prosperity of White people.
In Russia Stalin pushed for collectivization and that caused death of many. Whether the elite were feudal lords in medieval Europe, plantation owners in the US, or Communist Party bosses in Russia, technology was socially biased, and its application in the name of progress left devastation on its way.
The first phase of industrialization was even more biased and created more inequalities than agricultural modernization.
A Middling Sort of Revolution
The steam engine allowed a leap forward in human control over nature. The modern demographic history of our species can be divided into three phases:
- The first is gradual population increase from about 100 million in 400 BC to 610 million in 1700 BC.
- The second phase witnessed an acceleration with world population increasing to 900 million in 1800.
- The third phased, started already in 1820, brought increase in output per person more than doubling in the following century across Western Europe.
It was cooperation of science and industry that propel industrialization. In England Daniel Defoe called this Projecting Age. And it was embodied of new class of entrepreneurs and inventors. George Stephenson was one of them.
Stephenson’s view, that steam engines with metal wheels would easily generate enough traction on iron rails, was quite different from the established wisdom. Stephenson and his success epitomize what happened with railways and more broadly across other sectors. Practical men, born to scant resources, were able to propose, fund, and implement useful innovations. Railways revolutionize transport.
This was time when upward mobility was possible even for middling sort. Scientific advances, by themselves, cannot explain why the Industrial Revolution was British. It was a thoroughly pan-Europe affair. Not to mention China and its development.
What sets apart Britain from its peers was the outcome of a long process of social change that had created a nation of upstarts. By the mid-nineteenth century; tens of thousands of middle-status Britons had formed the idea that they could rise substantially above their station through entrepreneurship and command of technologies.
But all these changes started already with Magna Carta, then Henrik VIII who cut down majority of medieval institutions. Elizabeta continued with his work. Constant fight for power between the parliament and king (Civil War 1642-1651) and the social movements like the Levellers are also signs of these changes. Not to mention The Glorious Revolution in 1688.
If you wanted to move up socially, you needed to acquire wealth. Conversely, if you could acquire wealth, there was no limit of how high you could rise. And wealth was not tied just to land ownership. But in eighteenth-century and early nineteenth Britain the working poor had no political representation.
Posted by gandatmadi46@yahoo.com