Book Review: The Technology Trap

In The Technology Trap: Capital, Labor, and Power in the Age of Automation (Amazon,) Carl Benedikt Frey gives us a brief history of technology’s impact on society and how we can better prepare ourselves for the coming AI revolution.

Historically, new technologies got adopted only when it didn’t threaten the status quo of the elites.

For most of history, the politics of progress were such that the ruling classes had little to gain and much to lose from the introduction of labor-replacing technology. They rightly feared that angry workers might rebel against the government.
One reason economic growth was stagnant for millennia is that the world was caught in a technology trap, in which labor-replacing technology was consistently and vigorously resisted for fear of its destabilizing force.

The Technology Trap

Artisans formed guilds and openly lobbied to prevent guild members and outsiders from producing things in new ways. However, as trade increased, competition between trading blocs eroded the power of protectionists. Areas that became more exposed to outside competition invested more in the invention of new technologies.

New technologies can be either labor saving or labor displacing. The problem with the latter is that displaced works see a rapid erosion in their income. So even though technological innovation boosts aggregate incomes over the long term, it is not cost-less at the individual level.

The simple existence of better technology does not inevitably translate into faster economic growth. For that, widespread adoption is required. If you want society to be open to new technologies, you absolutely must have a social safety net and a plan to make sure the displaced workers have the wherewithal to up-skill themselves.

Recommendation: Skim.

Comments are closed, but trackbacks and pingbacks are open.