All Commentary
Monday, April 1, 1985

Do Machines Destroy Jobs?

Dr. Russell, recently retired from a full schedule of academic work, continues free-lance consulting, lecturing and writing from his home in Westchester County, New York.
      This is one of a series of articles examining current interventions of the welfare state in the light of warnings from the French economist and statesman, Frederic Bastiat (1801-1850).

Yes, machines do destroy jobs. In fact, that’s the purpose of machines, i.e., to do the work formerly done by labor. And if a machine doesn’t replace human labor, the making of that machine has been a waste of scarce resources, including the skilled labor that invented and constructed the machine in the first place.

Usually, however, this relationship between machines and jobs is expressed more softly, e.g., machines decrease the costs of production, thus permitting lower prices to consumers; or machines are helpful to mankind because they can do the boring and repetitive tasks, thus freeing human laborers for the more interesting aspects of production. Both statements are true, of course. But in every case, the purpose of a machine is to replace human beings and wipe out existing jobs. That’s good, however, not bad; for that process is the basis of all human progress.

In various of his essays and speeches, Frederic Bastiat clearly saw this relationship between machines and jobs. And as usual, after pointing out “what is seen,” he also looked behind popular opinion for “what is not seen.”

“I see some machine replacing 20 or 100 workers,” wrote Bastiat. (“Human versus Mechanical Labor”) But if it’s true, he continued,”that the domain of invention [machines] and that of labor [jobs] cannot expand except at each other’s expense, then it must be in places where there are the most machines—in the [textile districts of England], for example—that one should expect to find the fewest workers.” But there’s where you find many thousands of workers at their new jobs of operating those machines! Bastiat continued:

The mistake made by the opponents of . . . machines is in evaluating them according to their immediate and temporary effects instead of following them out to their general and ultimate consequences.

The immediate effect of an ingenious machine is to make a certain quantity of manual labor superfluous for the attainment of a given result. But its action does not stop there. Precisely because this result is obtained with less effort, its product is made available to the public at a lower price; and the total savings thus realized by all purchasers enables them to satisfy other wants, that is, to encourage manual labor in general to exactly the same extent that it was saved in the particular branch of industry that was recently mechanized. The result is that the level of employment does not fall, even though the quantity of consumers’ goods has increased.

Let us give a concrete example of this whole chain of effects.

Suppose that the French people buy ten million hats at fifteen francs each; this gives the hatmaking industry an income of 150 million francs. Someone invents a machine that permits the sale of hats at ten francs. The income of this industry is reduced to 100 million francs, provided that the demand for hats does not increase. But the other fifty million francs are certainly not for that reason withdrawn from the support of human labor. Since this sum has been saved by the purchasers of hats, it will enable them to satisfy other wants and consequently to spend an equivalent amount for goods and services of every kind. With these five francs saved, John will buy a pair of shoes; James, a book; Jerome, a piece of furniture, etc. Human labor, taken as a whole, will thus continue to be supported to the extent of 150 million francs; but this sum will provide the same number of hats as before, and, in addition, satisfy other needs and wants to the extent of the fifty million francs that the machine will have saved. These additional goods are the net gain that France will have derived from the invention. It is a gratuitous gift, a tribute that man’s genius will have exacted from Nature. We do not deny that in the course of the transformation a certain amount of labor will have been displaced; but we cannot agree that it will have been destroyed or even lessened.

Machines Mean Progress

The beneficial effects of machines are far greater than Bastiat stated—or even imagined in the 1840s in France. One of his examples of how machines increase production without decreasing the number of jobs was the textile industry in England. So I’ll start there too, and dwell briefly on the fantastic outpouring of machines during the Industrial Revolution, and the effect that development had on jobs and the “quality and length of life.”

I’ll begin by citing a few statistics I believe to be correct. And since figures never speak for themselves, but must always be spoken for, I’ll offer my interpretation of their meaning.

Population of England and Wales

Year       Population

1600       5 million (rough estimate)
      1700       51/2 million (rough estimate)
      1750       61/2 million (rough estimate)
      1801       9 million (census)
      1820       12 million (census)
      1831       16 million (census)

In London in 1750, about 70 per cent of all children died before age five.

In London in 1830 (80 years later), about 30 per cent of all children died before age five.

The so-called Industrial Revolution in England had no particular beginning date; it was a long and slow development. But the hundred years between 1750 and 1850 are the dates most often used when referring to the advent of power-driven machinery, the development of the factory system, rapid industrialization, and the laissez-faire or “free market” economy. And that’s the period Bastiat usually had in mind when he referred to the effects of machinery and mass production.

At the time Karl Marx was describing the degrading living conditions of the people who worked in those early factory towns of industrial England, these statistics were readily available to him. For it was in “the world’s greatest library” (the British Museum) that he did most of his research and writing on the “exploitation theory” that he developed into a book that shook the world. There’s just no way he could have overlooked those statistics on the population-explosion that occurred in England with the advent of power-driven machinery and mass production. Since there’s no reason to suggest he didn’t believe what he was saying, perhaps he just didn’t believe the statistics.

Since I can’t know, I’ll leave it with this: Karl Marx was a far better reporter than he was an economist and philosopher. The terrible and depraved living conditions of the “working classes in England” were as he described them, perhaps even worse. But he was so busy looking at the rotten trees that he never did see the flourishing forest in which they were located.

Children Lived Longer

With the advent of machinery and child labor in factories, children were living longer; a drop in the death rate from 70 per cent to 30 per cent in 80 years is a mark of tremendous progress by any measurement. An explosion of the population from a somewhat static level of six or so million in 1750 to more than 16 million in 80 years is almost unbelievable. (Perhaps that’s why Karl Marx ignored the statistics; they strained credulity.)

At any rate, he predicted categorically that widespread poverty, mass starvation, and death among the working classes would be the inevitable results of capital formation and industrialization in a market (nonsocialist) economy of private ownership. His prediction was totally wrong.

The population exploded because people began to live longer. After 1830, the rise was even faster, as hundreds of thousands of Britons poured out of those islands and settled all over the world. But I stopped my statistics with 1831 in order to forestall any possible use of invalid reasons for those impressive figures.

For example, public health measures were almost nonexistent in England in 1830; in fact, the crowded conditions in those industrial towns caused them to become far more unsanitary and disease-ridden than they had been a hundred years before. So that possibility for the increasing life span can be ruled out.

Nor were there any breakthroughs in medicine. The vaccines that were to save the lives of so many children didn’t even begin to come along for another 30 years or so.

Nor was there a “green revolution” to increase the supply of food. True, the potato was coming into popularity around 1800, with its four-fold increase in food production even on marginal agricultural lands. But that was occurring mostly in Ireland and Poland. The potato didn’t become a staple in England and Wales until the middle of the century.

Increasing Freedom

Even if government welfare schemes and controls over the economy could cause a rise in the material level of living, that was not a factor in this particular increase in longevity. For government interventions in the economy were actually decreasing during this period. Per- centagewise, there was less government welfare instead of more. The economy became increasingly free.

I can find only one reason for the increase in longevity and population. With machines, people produced more than they did without machines, and they were paid wages for their work. True enough, they were paid only a pittance for their long hours of exhausting and dangerous labor. But at least they were paid more than they had been paid before entering those primitive factories and mines. And with the little money they were paid, they could buy food, something they couldn’t do before they had any jobs at all.

As a result of their spending of the pennies (wages) they earned, food began to come into England from all over the world. And even though those workers had only a little food in their bellies, they and their children lived longer than they did without any food at all. As the machines improved, the operators of the machines produced still more, and they were paid more; not much more, it’s true, but a little more. Thus they could buy even more food and live even longer—especially the children.

Finally there was enough capital (machines) available to enable a man to produce enough to put his children into schools, if he wished to do so. It was machines under private ownership, not child labor laws, that finally took children out of the factories and put them into schools. If this surprises you, think of what would necessarily happen to children today if there were no ma chines; we would all be grubbing from dawn to dusk—most likely for grubs themselves. And millions of us would soon die of starvation.

In addition to a dramatic increase in the life span of human beings in general, machines also rendered another signal service; specifically, machines were mostly responsible for the abolition of human slavery, a mass wiping-out of the jobs of millions of human beings. But, again, that’s the purpose of machines, i.e., to abolish jobs by replacing human labor with mechanical labor.

The Columbia Encyclopedia tells us that “The British, in abolishing slavery, were primarily motivated by economic, not humanitarian, interests. While the institution produced great wealth under the mercantilist system, it became unprofitable with the rise of industrial capitalism.”

Machines Displaced Slaves

H. G. Wells, in The Outline of History, discusses the same idea: “A vast proportion of mankind in the early civilizations was employed in purely mechanical drudgery. At its onset, power-driven machinery did not seem to promise any release from such unintelligent toil . . . . [But as the mechanical revolution] went on, the plain logic of the new situation asserted itself more clearly. Human beings were no longer wanted as a source of mere indiscriminated power. What could be done mechanically by a human being could be done faster and better by a machine.”

Whatever else slaves might be used for, it’s certain they couldn’t be trusted with the responsibility of operating the power-driven ships, trains, and factory machines that were becoming increasingly common in the western world of the late 18th and early 19th centuries. Thus the ever-present moral arguments against slavery were soon buttressed by the overriding economic arguments against it.

Beginning in 1833, the British Parliament rapidly outlawed the practice of slavery throughout their vast empire. Of course, it could have been merely a remarkable coincidence that slavery diminished as mechanical sources of power increased. For example, what about slavery in the United States? Since this nation had many machines, why wasn’t slavery voluntarily abolished here?

Slavery in America

The history of human bondage in the United States also lends support (with a reverse twist) to the theory that machines, rather than morality or education, may have been of primary importance in determining the issue of slavery. Roger Burlingame, in his Backgrounds of Power, explains that reverse twist while discussing Eli Whitney’s 1793 invention of the gin for cleaning cotton.

“The gin led directly to a social, economic, and political crisis. By increasing a hundred fold the productivity per worker in separating short-staple cotton from its tenacious seeds, it produced an unbalance between cleaning and picking, planting and cultivation. The faster the cotton was cleaned, the more labor was required in the field. Thus slavery, moribund in 1790, became a dominant institution . . . .”

Before the cotton gin, not much cotton was grown in the South because it was too expensive to clean by hand, even when the hands belonged to a slave. But Whitney’s first crude machine enabled a man to clean 50 pounds of cotton a day, and rapid improvements to the machine soon doubled that amount. The resulting demand for cotton caused its cultivation to become highly profitable. But picking cotton was such a backbreaking and monotonous task that it was the last job a free man would take. Since, at that time, there was no machine to relieve the drudgery of the job—and since no education or skill was required—it automatically fell to slaves.

Those are two tremendous advances in the well-being of mankind that can be attributed directly to machines that were designed to put men out of work, and did. (1) With machines, we produce more, and have more, and live longer—even though we actually work less. (2) Since human slaves can’t compete with inhuman machines, millions of slaves lost their jobs.

When you stop to think about it, that’s a remarkable achievement for something (mechanization) that’s traditionally considered the deadly enemy of the working man. The mass education that’s made possible only by machines, seems merely to have intensified our hatred and fear of our benefactor.

As Bastiat said, machines do indeed eliminate specific jobs. But the net result of the machines (capital formation) is to actually increase the number of jobs available in the economy. You can satisfy yourself on this point by using a five-year period to measure it.

For example, in 1980, there were a given number of jobs in the United States, along with a given amount of capital (machines). During the five-year period from 1980 to 1985, those machines eliminated hundreds of thousands of jobs. But if you compare the number of jobs at the beginning and end of that five-year period, there will be more jobs now than in 1980.

Further, the new jobs will tend to be less physically demanding, because of the machines, than the jobs they replaced. The total pay for the added jobs will be higher (on the average) than for the jobs of five years ago. In addition, there is likely to be a decrease in the number of hours worked for the higher pay. That’s what machines are all about.

This relationship holds true, however, only as long as our laws are designed to encourage capital formation, i.e., more machines. If the advent of more efficient machines is forbidden or impeded, the result will indeed be more jobs—but hours of work will lengthen, the work will be come more physically demanding, and pay will plummet downward.

Frederic Bastiat’s satirical paragraph written 135 years ago could just as easily have been written today: “A curse on machines! Every year, their increasing power condemns to pauperism millions of workers, taking their jobs away from them, and with their jobs their wages, and with their wages their bread! A curse on machines!”

An Increasing Reliance on Government Welfare

Why do we continue to think of machines as “the enemy”? I don’t really know. I can easily understand why “an automated welding process” would be thought of as an enemy by the man who just lost his job to one. And even though I don’t advocate any government interventions against peaceful people in a free market economy, I don’t protest unduly the “retraining programs,” or “unemployment compensation” to offer temporary support to a willing worker seriously searching for another job, or any other “politically realistic” measures designed to ease the transition from a lost job to another job. I tend to look on those measures like taxes, i.e., a cost for living in reasonable harmony with hundreds of millions of people with different viewpoints.

But that’s not the problem; after all, those “job transitions” involve thousands (not millions) of people. Thus the problem goes much deeper. I suspect it’s a general fear of the free market that’s based on personal responsibility for our own free choices. We enjoy freedom to choose, of course. And as long as our choices turn out reasonably well, we’ll defend it as a “human and inalienable right.” But when the choices turn out to be unfavorable, we turn to a “greater power” for help. That’s certainly understandable; it proves only that we’re human beings. That “power” used to be God and, perhaps, voluntary help from our neighbors. Increasingly, however, we’re turning to government for help—all over the world.

With Bastiat, I can only recommend that we think beyond what is immediately seen, to what is not seen; think beyond the short-term effects, to the long-term effects. I know only that “more government” is not the answer.