In addressing the Bank of England, the institution’s Chief Economist Andrew G Haldane tries to answer if it’s different this time in regard to technological unemployment. Haldane argues that even successful long-term technological transitions have been visited by “hollowing out” effects which have exacerbated wage gaps. As for the Second Machine Age, a time when AI may become highly competent at cognitive processing, the economist sees job value shifting from IQ to EQ, with emotional intelligence becoming the supreme skill. He further thinks wealth distribution of some sort may become necessary.

An excerpt that provides a thumbnail account of the tech job threat through history:

Certainly, the Ancient Civilisations of Greece and Rome wrestled with the problem of how to deal with the consequences of workers displaced by technological advance. The responses then included large-scale public work programmes and income support policies for the needy. Indeed, they have an eerie echo in many of today’s public policy debates.

The debate about technological unemployment really picked up pace in the 19th century, with the blossoming of the Industrial Revolution in Britain. Then, it spilt over into the streets with worker protests and machine breaking, most notably by the Luddite movement. These fears about technological displacement gathered intellectual support from no less a figure than the classical economist, David Ricardo (Ricardo (1821)).

Yet the intellectual tide was by no means in one direction. It was accepted that technological advance could damage some workers in the short run. But its benefits to most workers in the longer-run were felt likely to dominate. In the middle of the 19th century, that view came to prominence through such figures as John Stuart Mill (Mill (1848)) and Karl Marx (Marx (1867)), two unlikely intellectual bedfellows.

The technology debate was re-stirred in the 1930s, at the time of mass unemployment during the Great Depression. In his essay, “Economic Possibilities for our Grandchildren”, Keynes predicted on-going technological advance and workers being replaced by machines (Keynes (1930)). Yet far from being a threat, Keynes viewed this as a huge opportunity. He predicted that, by 2030, the average working week would have shrunk to 15 hours. Technology would give birth to a new “leisure class”.

Debates on the relationship between jobs and technology stirred again during the 1960s in the US, during the 1970s in advanced economies, and again in the 1980s and 1990s in the UK and parts of Europe. In each case, the prompt was rising rates of unemployment. And in each case, this debate subsided as unemployment rates fell.

Moving into the 21st century, this debate has once again been re-kindled.•