In 1834, a man named Walter Hunt created the first operational sewing machine. However, he didn’t patent his invention until 15 years later, and by that time someone had beat him to the punch. Hunt knew his product would be hugely profitable, so why did he wait? As the story goes, his daughter was the one to talk him out of it. She was worried that he would be responsible for millions of seamstresses losing their jobs.
Isn’t that such a silly fear? We are experiencing the same thing now, with people afraid that AI will take their jobs. Since the agricultural revolution, it has been our collective dream to make things easier for ourselves. AI is the next step towards that! Sadly, workers in a capitalist society don’t benefit from technological advances. So we don’t see our lives getting easier, we see our jobs and livelihoods threatened.
In this post I am focusing on how technological progress hurts workers in a capitalist society. Technology advances exponentially, so it is quite possible that AGI will eventually get to the point of fully replacing humans in their jobs. But I will save that speculation for another time. For now, I hope to explain how the current state of AI is powerful enough for many people to lose their jobs, and how technology threatens the average worker.
Even if you’ve not read much about the invention of the sewing machine, it’s still a familiar story. It’s the same as when the tractor got invented – now the farm owner needs fewer farmhands, so they fire half of their workers, who leave to become tractor mechanics.
It should come as no surprise that inventions like the tractor and the sewing machine make workers more productive, that’s the whole point of technology! We use tools to make our jobs easier. If you are an independent seamstress, for example, this is great news for you. You can go from making ten sweaters a day to fifty, making more profit than ever! But if you work for a company, the sewing machine threatens your livelihood.
Let’s say a company has 10 employees, each making 10 sweaters a day, for 100 in total per day. Now with the help of a sewing machine, one seamstress can produce 50 sweaters. For the owner of the company, this is outstanding. They can simply buy 2 sewing machines and fire 8 of their workers! The amount they save on labor costs is significantly more than the cost of the machines, and the output from the two remaining workers is still 100 sweaters a day. Nothing personal against the eight employees they let go, it is simply cheaper to only pay two employees a day instead of ten.
That's just good business. I am not blaming the employer who decides to fire most of their staff to save on labor cost; they are heavily incentivized to increase their profits as much as they can. But I hope you can see that capitalism prioritizes endless corporate profit over raising the standard of living overall. Putting aside my own moral condemnation of this system, even the staunchest capitalists will begin to recognize unfettered capitalism as an ouroboros, the snake that eats its own tail. As corporations chase increasing profit in a world of finite resources, they will begin to realize that their customers don’t have enough money to spend on their products. My hope is that before we get to that point, people will try to fight for their share of the pie – as corporations become more profitable, so should society as a whole.
So like I said, technology makes people more productive, which means fewer workers are needed to produce the same output. The business owner looks at this and says “great, now we can save money on labor costs, our profits will be higher than ever.” There is no obligation to increase the wages of the workers that remain, despite their increase of productivity. Let’s return to the seamstress example, when the company originally had ten employees. Now that each employee can make fifty sweaters a day, why not have each employee work only a fifth of the time they did before. The ten employees would still be paid the same, producing the same output as before, but only working a few hours a day. This example is what it would look like if increased productivity benefitted the workers. You’ll notice it’s quite similar to the independent seamstress example. If you’re working for yourself, and you become five times as productive, now you have a lot more free time!
This brings me to the crux of my argument; for the last 50 years in particular, workers have become drastically more productive with the help of technology. Yet, the average worker does not have more free time, nor do they get paid more. Consider the graph below – workers do not benefit in the slightest from their increased productivity, while companies are making higher and higher profits. Technological advances should allow workers to have more leisure time, earn more money, and enjoy a higher standard of living. However, for most of the world it has led to job insecurity and a fear of technological progress like AI.
Now that we understand who benefits from technological progress, it’s easy to predict how AI will cause widespread layoffs long before the development of artificial superintelligence. It’s a simple matter of workers being more productive using AI tools. Sure, these tools are in their infancy stage and require human input. However, we have already begun to see massive improvements, and most white collar workers would benefit from exploring the capabilities of these tools. Coding, graphic design, marketing, copywriting, video editing, so many tasks can be streamlined with the help of AI. I will make another post about the current capability of AI, such as the rise of AI agents like autoGPT, because there is much to be discussed there. However, without even diving into these functionalities, I think we can all agree that AI tools can increase our productivity.
AI doesn’t need to be super-intelligent to take our jobs — it just has to make workers more productive. When an employer is faced between keeping their 10 employees, or hiring 2 that use AI tools to produce the same output, it’s just good business to cut costs. In the examples I mentioned before, new jobs were created in the technology that replaced the workers. We are beginning to see less and less of that. If factories are fully automated, how many workers could switch to deploying AI systems? And how many jobs will be created in the new AI field? My guess is strikingly fewer than are lost.
As I’ve illustrated, technological advancements have led to record corporate profit, while workers haven’t benefitted from their increasing productivity in the past fifty years. AI is poised to exacerbate the major issue of wealth inequality, and it will do so sooner than most expect. I hope to spread awareness of these concepts so people can understand how they may be impacted. Frankly, our top priority should not be “good business.” We need to focus on raising the standard of living for all, improving society as corporations improve their profit margins.
As far as solutions go, I have many ideas, which I will certainly make another post about. It really boils down to one concept that I like to explain with an analogy to the pandemic. When people started hoarding toilet paper and hand sanitizer, there was a collective outrage. We said “hey everyone needs that, you can’t take so much more than you’d ever need, that’s unfair to the rest of us.” It’s the same thing with money and resources on this planet. People hoard their wealth, and eventually enough people will become enraged enough that we impose some sort of limit.
Good points and I wonder if this can be the thing that ignites what becomes a class war of workers vs owners. Some savvy workers will do multiple jobs with the newfound productivity. Others will decide they don't want to have to do that or just not how they want to live their life.
How long until the average American realizes that they never consented to Silicon Valley billionaires with unlimited VC funding rendering their livelihoods displaced overnight with their AIs? No warning, no regulation, just happened faster than anything in history - during a time of record inflation.
Is Fed considering AI effects in their rate hike models? Not sure. This is a conspiracy but I don't think it's a coincidence that GPT was released during this time of peak inflation and high debt to GDP levels. Was the intention to use it to boost GDP in concert with inflating the debt away?
Great post, thanks for sharing!