If you don’t think the transformation we’re embarked upon is a profound one, consider this: Within two decades, half the jobs in this country may be performed by robots. What then of our unemployment rate and social safety net? Opinion is divided: Will the next technological wave further skew the wealth distribution toward the uber-rich, or will it ultimately create more entrepreneurial and job opportunities than it destroys?
There is an interesting historical precedent for our situation, an era during which the technological firmament shifted just as abruptly as it is here and now. In the United Kingdom in the year 1800, the textile industry dominated economic life, particularly in Northern England and Scotland. Cotton-spinners, weavers (mostly of stockings), and croppers (who trimmed large sheets of woven wool) worked from home, were well compensated, and enjoyed ample leisure time.
Ten years later, that had all changed. Clive Thompson, the author of today’s Outside the Box, tells us what happened:
(I)n the first decade of the 1800s, the textile economy went into a tailspin. A decade of war with Napoleon had halted trade and driven up the cost of food and everyday goods. Fashions changed, too: Men began wearing ‘trowsers,’ so the demand for stockings plummeted. The merchant class – the overlords who paid hosiers and croppers and weavers for the work – began looking for ways to shrink their costs.
That meant reducing wages – and bringing in more technology to improve efficiency. A new form of shearer and ‘gig mill’ let one person crop wool much more quickly. An innovative, ‘wide’ stocking frame allowed weavers to produce stockings six times faster than before: Instead of weaving the entire stocking around, they’d produce a big sheet of hosiery and cut it up into several stockings. ‘Cut-ups’ were shoddy and fell apart quickly, and could be made by untrained workers who hadn’t done apprenticeships, but the merchants didn’t care. They also began to build huge factories where coal-burning engines would propel dozens of automated cotton-weaving machines….
This post was published at Mauldin Economics on MAY 3, 2017.