The Reverse Luddite Fallacy

Economists can be surprsingly dangerous


Most economists are convinced that automation will not lead to lasting unemployment. They point out – rightly – that it has not happened in the past. Instead, it has made products and services cheaper, which raises demand and creates new jobs. They say that the Luddites, who went round smashing weaving machines in the early nineteenth century, simply mis-understood what was happening, and this mis-understanding has become known as the Luddite Fallacy.

einstein-with-brawnBut in the coming decades, automation may have a very different effect. Past rounds of automation replaced human and animal muscle power. That was fine for the humans who were displaced, as they could go on to do jobs which were often more interesting and less dangerous, using their cognitive faculties instead of their muscle power.

It didn’t work out so well for the horse, which only had muscle power to offer. In 1900 there were around 25 million working horses on farms in America; now there are none. 1900 was “peak horse” in the American workplace. Are we heading towards “peak human” in the workplace?

Intelligent machines are replicating and in many cases improving on our cognitive abilities. What most of us do at work these days is to ingest information, process it, and pass it on to someone else. Intelligent machines are getting better at all of this than us. They are already better than us at image recognition; they are overtaking us in speech recognition, and they are catching up in natural language processing. Unlike us, they are improving fast: thanks to Moore’s Law (which is morphing, not dying) they get twice as good every eighteen months or so.

Self-driving cars are the obvious example: there are news stories every day about the plans of the tech giants and the big car makers, and Uber is running a live experiment with self-driving taxis in Pittsburgh.

Self-driving cars are just the start. The early stages of automation by intelligent machines are apparent in the legal, medical and journalist professions, and it is clear that it will affect every industry and every type of work. Retired British politicians like William Hague and Kenneth Baker (former foreign secretary and education secretary respectively) have begun to speak out about this, perhaps because they have nothing to lose and can afford to say the un-sayable.

No-one knows for sure how automation by intelligent machines will pan out. Maybe we will evolve an economy of what Silicon Valley types call “radical abundance”, where machines do all the boring jobs and humans concentrate on having fun.

Or maybe a more dystopian outcome will happen instead, with millions starving while the super-rich cower behind high walls and powerful AI-based defence systems.

Technological unemployment is not impossible. It is complacent and irresponsible to say that it is, based on no evidence beyond what has happened in the past. We should be discussing it and working out how to handle it if it does happen. Failure to do so is the Reverse Luddite Fallacy*, and it could be extremely dangerous for all of us.  

* Hat-tip to the merry men behind The Singularity Bros podcast who, as far as I know, minted this phrase.

53 thoughts on “The Reverse Luddite Fallacy

  1. Hi C

    One of your best Very interesting analogy – the horse thing …

    M 🙂

    manwith3heads +44 (0)208 949 6144 +44 (0)771 4040100


  2. Here in California there is remarkably little awareness let alone discussion of this issue. I even suspect that the architects and profiteers of the technology that will enable this seismic disruption really don’t want society and politicians exposing the threat. They would rather it happens under the radar. They do very little to apply the value of their innovation to their own communities. Just take a look at social and healthcare in The Bay Area. Shockingly poor unless you are a beneficiary of the massive wealth being created by the new technologies.

    • You may be right about a preference to hide what is happening, but I usually find cock-up explains more than conspiracy. I think most people – in Silicon Valley as much as anywhere else – haven’t thought seriously about whether intelligent machines really could do all our jobs. Even those who have entertained the idea (Martin Ford, Brynjolfsson and MacAfee, Kaplan, etc) think that somehow reforming education will solve all problems.

      Time to wake up, folks!

      • Agree it’s unlikely to be a conscious conspiracy. However, I think it likely it is due to values based more on financial reward and shareholder return than ‘doing good’. Education would be a good place to start, and I think the businesses enabling the on rushing economic
        singularity should take so me responsibility for helping society prepare for it.

  3. “They are already better than us at image recognition; they are overtaking us in speech recognition, and they are catching up in natural language processing. Unlike us, they are improving fast: thanks to Moore’s Law (which is morphing, not dying) they get twice as good every eighteen months or so.”

    In fact these programs (weak AI, for now) develop far more quickly than Moore’s Law allows thanks to software improvements which often develop far, far faster than Moore’s Law allows.

    Don’t think linear progress. Don’t think exponential progress. Think double-exponential progress.

    That’s how fast things are developing. In short, as impossible time as most people have imagining anything like exponential progress, this is far faster than exponential progress.

  4. It’s getting a bit frigging scary. If I could really believe we could just head off and have fun, it would be great – but we have to pay for it somehow. Perhaps there will be a world where we don’t need money, so all will be ok – simply no need to earn anything, just a right to have fun!!!
    But, how will this be possible?

    • If we manage the transition well, the jobless future can be wonderful. But it’s unlikely to happen if we just leave it to chance.

      First we need greater awareness of what may be coming, then we need political and business leaders to develop a plausible plan for how to deal with it. Otherwise, if there is no apparent plan, there may well be panic if and when the first wave of automation hits, and it could be very damaging.

  5. London Futurists news, 25 Sept 2016 | London Futurists

  6. Episode 058: Shoulder the Load – Singularity Bros

  7. Two points.

    The Luddites did not fear that they would be replaced by weaving machines, but that the new technology would be used to de-skill their job and thus force down wages. They were motivated by the falling returns to skill rather than technophobia. In other words, the Luddite Fallacy is itself fallacious – or, more accurately, a strawman: it’s critics are many while its advocates are mythical.

    The idea that technology destroys old jobs but creates new ones on a roughly equivalent basis can be proven in aggregate only at a national level. This is because much of the destruction is offshore. For example, industrialisation in 19th century Britain saw workers leave the fields for factories, but you need to remember that the simultaneous expansion of empire destroyed domestic producers in the colonies to provide a ready market for UK manufactures (e.g. the Indian textile industry was sacrificed for the benefit of Lancashire mills).

    In other words, when looked at in aggregate at a global level, there is no evidence that technology substitutes new jobs for old on a 1-for-1 basis. Globalisation has had the effect of making this more obvious in the West, as jobs have moved from countries like the UK to China, but the dynamic is the same as it has always been, it’s just that the unemployment has finally been repatriated.

  8. Some very interesting and valuable points being made here but i’m concerned you are not seeing the Bigger Picture.

    As has been mentioned before, machines are improving in their abilities far faster than we mere humans ever have or could, through the limits of biology. Machines have gotten to the point where they are able to do better what humans have taken the best part of the last 100,000 years to achieve in a matter of a century or so.

    This has almost entirely been due to the efforts of a few quite smart humans ( for humans as a whole) who have been the manufacturers, designers and programmers of said machines all being for the ‘benefit’ of the human race.

    But now we are at the point where it is the machines that are designing other machines and are manufacturing and may even already be designing other machines and we have machines that are able to think and create for themselves without any further human input.

    Given the rate of growth in machine abilities versus human abilities just how long would any of you give it until we humans are the second most intelligent species on the planet?

    And when that happens…..??? You are just worried about jobs?

    Try worrying what will happen to the human race when it has another faster, smarter, superior in every way, race to ‘share’ the planet and it’s limited resources with!

    Personally i give us another 80 years max before we become extinct and i suspect that is being quite optimistic.

    Can anything be done?

    Just look at how quickly and effectively we’ve dealt with such a ‘small’ thing as global climate change and ask yourself how well we could prevent this from happening even if we ever actually started to believe it?

    I thank Elon Musk, Stephen Hawking, et al for attempting to bring up the topic for serious consideration and being awarded Luddite of the Year for their efforts.


    • You’re referring to what is often called the Technological Singularity – the point when the first superintelligence is created. My book “Surviving AI” was all about that. You can get that at Amazon, and you can find plenty of other material about it elsewhere on this website.

      However, if we fail to navigate the Economic Singularity successfuly we may not get to the Technological Singularity.

  9. Thanks Calum – apologies for the tone of my first comment, put it down to fear and shock at how far we have already fairly blindly marched towards creating the means of our own imminent extinction. ( I think i’d be happy to be proven wrong on this – maybe around 75% happy atm). If i understand things correctly ( debateable) i’d say economic singularity is almost entirely down to human rates of progress and technological singularity almost entirely down to rate of technological growth?

    Smart money would be on the technology winning this particular race and us losing – no?


    • Both singularities are driven primarily by advances in technology. How we respond to them – and whether we thrive or suffer – is at least partly a matter of policy and implementation. The ball is in our court.

      • I agree that, in theory at least, human kind has a chance to prevent their imminent loss of position as top predator in our ecosphere. I’m extremely pessimistic based upon past experience of humans having to change to meet new threats that we could or would ever do so faster than the current rate of machine ‘intelligence’ and growth in their abilities.
        Going slightly off topic…. are there any attempts you are aware of being made to teach AI machines the equivalence of human emotion or will we become subject to a cold strictly logical overlord(s)?


  10. Calum Chace’s “Reverse Luddite Fallacy #CoffeeOnTheDock | The Baboon Room

  11. Betting on technological unemployment – Pandora's Brain

  12. The Reverse Luddite Fallacy – Like the proverbial frog in boiling water, most economists are convinced that automation will not lead to lasting unemployment. via /r/economy | Chet Wang

  13. Very nice article on the Reverse Luddite Fallacy. I’ve been describing this in my writings, but never had a name for it–until now.

    What is your solution? Mine is that we apply Silicon Valley’s successful disruptive model to society itself. Quickly prototype a model society, based on sustainable, technological abundance. Run experiments, correcting mistakes and improving until the model works reasonably well. Then exponentially duplicate it.

    Let’s turn the forces of accelerating automation and technological unemployment in a positive direction!

    Jonathan Kolber

    • Kudos to the Singularity Bros for the coinage.

      Not sure it’s wise to subject entire societies to the stresses of startup life that Silicon Valley so successfully subjects companies to. The failures and pivots that are essential to Schumpeterian creative destruction in capitalism would be devastating to individuals and communities.

      • Good point. That’s why our proposal is to create such model societies on uninhabited land; potentially starting out as simulations or small scale villages. Once we’ve run the experiments, corrected mistakes, and have an empirically solid model, we can look at retrofitting existing societies. These tests will have a limited duration, and everyone participating will be aware of and committed to the process.

        We can use permaculture techniques to restore “worthless” land, for example in deserts or central Iceland, to be productive and even lush.

        The entire society need not be in flux. Each experiment will have a defined scope. Also, the residents (eventually, the Citizens) will have full control of the society. This will not be a society owned by absentee investors.

          • We can’t know unless we try. What is the alternative?

            Using advanced modeling software and 3D printing, a model city-state could be built from scratch by the mid- 2020s. If the world is then in the midst of a Great Depression due to technological unemployment, many nations will be highly motivated to explore fundamental change. However, it would be far better to avoid such a Depression. There is at least one viable way to do so.

            We could begin addressing unemployment and under-employment right away, using what I regard as the most powerful transitional tool between our present Scarcity Game and an Abundance Game, complementary currencies. (These differ from cryptocurrencies, though they could be merged. This could be done privately, publicly, or jointly.) FDR’s economic advisor, Irving Fisher, declared that these currencies could have solved the Great Depression in 3 weeks, if properly applied. FDR instead chose the politically motivated New Deal.

            Toward the end of his presidency, FDR declared that it was the effort to win World War II, and not the New Deal, that solved the Great Depression. We should not risk either another Depression or a world war.

            The historical successes of complementary currencies are briefly described in my book. They are thoroughly explained and documented in the book New Money for a New World. They could be used right now, across the globe, to provide large numbers of people with useful education and meaningful work, earning good incomes.

            Historically, the central banks were threatened by complementary currencies. One of the greatest tragedies was the German central bank’s decision to shut down an experiment that was reversing Germany’s post-WWI unemployment crisis; the crisis that probably led to Hitler taking power. It was that experiment, and a similar one in Austria, that so impressed prof. Fisher.

            Today, central banks in Switzerland and Brazil have, in principle, embraced complementary currencies. Studies by RPI have found that Switzerland’s dual currency system is a primary reason for its renowned economic stability.

            Here is my article about how complementary currencies could stabilize the world’s economic system:

  14. The robot debate is over: the jobs are gone and they aren’t coming back | Guardian Sustainable Business @soynadieorg – Soynadie Photo Press

  15. The robot debate is over: the jobs are gone and they aren't coming back | Guardian Sustainable Business - Stockmarket news - Forex - News - Realtime market Data- World News - Trading Ideas-

  16. The robot debate is over: the jobs are gone and they aren't coming back | UBW-News

  17. The robot debate is over: the jobs are gone and they aren't coming back - Hypsterz

  18. The robot debate is over: the jobs are gone and they aren't coming back | Artificial Intelligence News

  19. It will be time in this robotic future to abandon predatory capitalism and initiate a Star Trek-like model of a moneyless society or provide a guaranteed, sustainable income for all individuals. But how is a country that refuses to even provide health care to its citizens as a birthright ever going to agree to “share the wealth” via a guaranteed income policy that will replace the need to “earn” a living once the jobs required to earn that living no longer exist?

    It’s a dismal future of strife and authoritarianism I see, and if the rich figure out how to make the rest of us tasty, we “worthless mouths” will simply be eaten. Humanity will shrink to a privileged elite and their tolerated servants and pets (noblesse oblige). Magnus, Robot Fighter, where are you in our hour of need?

    • “But how is a country that refuses to even provide health care to its citizens as a birthright…”

      Because enslaving others to your service is NOT a “birthright”. And as long as health care require the labor of others to provide, it is NOT birthright to impose slavery on others to provide that labor (or by extension to pay for it). It is NOT a “birthright” to enslave others to provide you with a “living wage”. As long as a thing requires labor of others to produce, you do not have a “birthright” to enslave then into providing you with that stuff without compensation. Nor do you have a “birthright” to enslave others to pay that compensation to the former without compensation.

  20. The robot debate is over: the jobs are gone and they aren’t coming back | ViraLords

  21. The robot debate is over: the jobs are gone and they aren’t coming back – Philip Calvert – Social Media Speaker

  22. The robot debate is over: the jobs are gone and they aren't coming back | Guardian Sustainable Business - Alex Poucher

  23. The robot debate is over: the jobs are gone and they aren’t coming back | BuzzWare

  24. The Reverse Luddite Fallacy

  25. “No-one knows for sure how automation by intelligent machines will pan out. Maybe we will evolve an economy of what Silicon Valley types call “radical abundance”, where machines do all the boring jobs and humans concentrate on having fun.

    Or maybe a more dystopian outcome will happen instead, with millions starving while the super-rich cower behind high walls and powerful AI-based defence systems.”

    Except that we can have a good expectation of which it will be.

    First, consider this: What is the fundamental purpose of an economy? To to provide people with jobs or to provide people with the goods and services they need and want? As the answer is the latter, it is that jobs exist to serve that function in that those goods and services (currently) require human labor (physical or mental) and _time_ to produce those goods and services.

    Now let’s go back to how economies as a construct emerges in the first place in humanity. If one person can produce something a second person wants and that person can produce something that first person wants, there is basis for exchange, there is a basis for “work” in producing those things. We further abstract that direct exchange to indirect exchange. That is, what we produce does not directly exchange with the person with whom we exchange to get the goods and services we want. But what we exchange in the former is something which that person wants.

    The point being, if there is a need or a want, there is a job opportunity for someone willing and able to fill that want. So, if there are people who are “starving”, thus a need, it is implausible that exchange would not take place. I mean, we could completely compartmentalize the “super-rich” a la “Elysium”, but we are to believe that economic exchange and constructive economies would not form? That is, isn’t this simply where humanity started from, and yet that produced the modern economy. But we are to believe that because there are these super-rich people in some disconnected place that means that the “poor people”* would not crate econoimc activity the same as primitive humans did and for the same reasons as primitive humans did? * And “poor” people are only “poor” because there is some extant basis for comparison, as the natural state of existence of humanity is that “poverty” and it is through economic activity, people exchanging goods and services with increasing productivity that has made possible the “non-poor” existence we have today.

    Plus, those poor people now have the benefit of extant technology for productivity that primitive humans didn’t have but had to first invent before modern productivity could be had. The point being that it is implausible that in such a scenario, that those “poor people” wouldn’t have access to that productivity increasing technology. If nothing else, it is implausible given things like “open source” initiatives that are making technology widely available to people – what some call the “democratization of technology”.

    We can extrapolate further – as given this, that as long as there are wants and needs, there will be jobs and economic activity possible to provide for those needs and wants, then if there are in fact no jobs or opportunities to engage in econoimc activity, that must mean that there are no needs or wants exiting to be filled. If there are no needs or want remaining to be filled, then the economy must have fulfilled it’s promise to provide all people all things, including _time_ not being spent on production but now available for “consumption”.

    And thirdly, as to how people would gain access to such technology, we have the basic concept of what is an economic product: the classic question of why no one can charge money for air or water? (What you pay for in paying for water, is not the water but the service of collecting and transporting it to your convenience). The reason is that it exists in abundance without need of _human_ resources to produce it. So when AI enabled machines can take over productivity, then such economic goods and services will no longer have economic value so will be widely available to all, not withheld any more than air or water can be withheld for economic benefit.

    • This sounds like so much wishful, airy thinking to me — shades of the “Invisible Hand of the Free Market”!

    • Very deep insights !

      But don’t you think that for every trade there is a winner and a loser ? (Win-win trades will create wealth out of nothing and will result in inflation, negating any increase in purchasing power).

      Historically, humanity as a whole has grown richer only because our mother earth has grown poorer (loss of non-renewable energy sources). But we cannot continue that for long, right ? Having better technology will only expedite this process.

      I also think one should factor in the concept of “human greed”. The rich, no matter how rich, continue to get richer and will always continue to do so (with AI / without).

      Billionaire clubs are already in existence and that elysium for super-rich is realistic (in my opinion) but I am sure that the source of their super-richness — (other people’s efforts) would not change.

      It’s like the world going back to olden days of there being a few “Kings” and their “Universal Kingdom”. To me, it looks like only those kings and their princes and princesses will focus on having fun for the rest of their lives. For everyone else, life’s just as miserable.

      • I can’t help but think of the carnosaurs, after the comet or asteroid or whatever hit, and for a time they lived great off the dead and dying plant-eaters, but eventually the death of their ecosystem claimed them, too. The billionaires may die off last of all, but they live on this planet and can only live like parasites as long as there are other people to produce for them. Once the hosts are gone, through ecological catastrophe or sheer die-off caused by overpopulation and exhausted resources and oppression from the well-to-do, the parasites go the way of the dinosaurs.

        • Forgive me but you seem to be missing the basic point here, which is that we humans are rather recklessly making devices that do ALL ‘work’ better than we humans can, rendering us unnecessary to the elite – they can live like billionaires without the need for human labour, in fact 7 billion humans plus will be competing for all resources like land, water and air and food that the billionaires need to survive.

          Basically – we are toast! Unless we see the dangers inherent in AI and work to prevent the obliteration of all ‘useless’ to our economy humans.

          The horses in Callum’s post failed to do so and the vast majority of them ended up in the glue factories or pet food cannery’s. An elite few now live somewhat better lives.

          Which part of Humanity do you think you will be in? The Elite or the pet food supply?


  26. If I understand you correctly (and I’m not at all sure I do) you are saying that unemployment is impossible as long as there are needs.

    Your claim that no-one can make money out of water also seems questionable.

  27. Robot Dawn – Nova Economics

  28. Robot Dawn: technology creates more jobs than it destroys – UK Productivity Review

  29. Relax, the robots aren’t taking our jobs away – Diana McPartlin

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