Learning from Ricardo and Thompson: Machinery and Labor in the Early Industrial Revolution, and in the Age of AI

Daron Acemoglu and Simon Johnson

No 32416, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: David Ricardo initially believed machinery would help workers but revised his opinion, likely based on the impact of automation in the textile industry. Despite cotton textiles becoming one of the largest sectors in the British economy, real wages for cotton weavers did not rise for decades. As E.P. Thompson emphasized, automation forced workers into unhealthy factories with close surveillance and little autonomy. Automation can increase wages, but only when accompanied by new tasks that raise the marginal productivity of labor and/or when there is sufficient additional hiring in complementary sectors. Wages are unlikely to rise when workers cannot push for their share of productivity growth. Today, artificial intelligence may boost average productivity, but it also may replace many workers while degrading job quality for those who remain employed. As in Ricardo’s time, the impact of automation on workers today is more complex than an automatic linkage from higher productivity to better wages.

JEL-codes: B12 J23 O14 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-ain, nep-eff, nep-his, nep-lma, nep-ltv and nep-tid
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