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

Author

Listed:
  • Daron Acemoglu
  • Simon Johnson
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.

Suggested Citation

  • Daron Acemoglu & Simon Johnson, 2024. "Learning from Ricardo and Thompson: Machinery and Labor in the Early Industrial Revolution, and in the Age of AI," NBER Working Papers 32416, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32416
    Note: EFG LS PR
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    Cited by:

    1. Findeisen, Sebastian & Dauth, Wolfgang & Schlenker, Oliver, 2024. "Organized Labor Versus Robots? Evidence from Micro Data," CEPR Discussion Papers 19192, C.E.P.R. Discussion Papers.
    2. Caleb Peppiatt, 2024. "The Future of Work: Inequality, Artificial Intelligence, and What Can Be Done About It. A Literature Review," Papers 2408.13300, arXiv.org.
    3. Andreas D. Landmark & Johan E. Ravn & Hans Y. Torvatn & Lisbeth Øyum, 2024. "Digital Transformations Through the Lens of the Collaborative, Co-Generative and Domesticative," Systemic Practice and Action Research, Springer, vol. 37(5), pages 537-548, October.

    More about this item

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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