The debate over the impact of automation on employment has been raging fiercely in the last several years, as advances in artificial intelligence and robotics have been making some science fiction-esque scenarios look more plausible, and technology-enabled services like Uber have been upending conventional labor models. But when do you think people first started debating this issue? Some would point to the early Industrial Revolution, and in particular the Luddite protests of the early 19th century. While this is the canonical historical example – so famous it added the word “Luddite” to our vocabulary – in identifying a starting point for the debate over technology and employment, it turns out the Luddites are at least 600 years too late!
In this age of rapid technology-driven change, it is interesting to read history and see how much in human affairs actually stays constant over the centuries. There are a number of socioeconomic trends that many believe are unique to our modern era, but which were in fact also prevalent in pre-industrial times. It is also interesting to parse out the things that truly have changed over time – the genuine fundamental shifts in human affairs.
Some months ago I read Carlo Cipolla’s Before the Industrial Revolution: European Society and Economy 1000 – 1700. The book is a very interesting and enjoyable read on European economic history that never feels dry despite being a true scholarly work full of hard facts and figures. Given how wrapped up I am in the technology industry, I couldn’t help but read this book with a particular eye toward technological change, and a desire to understand society’s relationship with technology prior to the critical inflection point of the Industrial Revolution. I found many interesting and surprising ways in which pre-industrial society functioned, with respect to economic and technological affairs, very similarly to today. In this post I will highlight some of the more interesting comparisons.
I should disclaim that just because a socioeconomic phenomenon is centuries-old does not mean we should accept it as immutable or dismiss those who wish to change it. However, we should acknowledge that if something has been going on for centuries, there may be something in human nature that strongly favors its persistence, and efforts to change it will be an uphill battle. In some cases, we’d be better off learning from history and finding ways to mitigate the effects of a particular phenomenon, rather than fighting it directly.
Similarities between the pre-industrial economy and today
Labor-saving technology faced resistance due to fears of job loss
Many have pointed out that the debate over technology’s displacement of jobs is not new. However, there is still a perception that this conflict began with the Industrial Revolution. In fact, there is evidence the debate goes back to at least the thirteenth century, when water mills were being introduced into the process of making textiles. Citing Cipolla’s book:
In France the adoption of mills sparked violent protests among workers who maintained that the new technology was detrimental not only to the quality of the product but also to employment.
Interestingly, Cipolla makes the case that water mills and windmills were extremely significant precursors to the Industrial Revolution because they were the first incarnation of the harnessing of energy sources that were not living things (human, animal, or plant).
Technological advances often resulted from the passion of individuals for their creations and what might have been viewed as “frivolous” hobbies
Chris Dixon likes to point out that big industries are often hatched by hobbyists in garages and dorm rooms. Similarly, he reiterates the insight of Clayton Christensen that the next big thing always starts out being dismissed as a “toy.” Interestingly, this was just as true in pre-industrial times as today. For example:
The earliest mechanical clocks kept time so imperfectly that they had to be continually adjusted, the corrections being made by “clock governors” who turned the hour hand (the minute hand appeared only a good deal later) backward or forward precisely on the basis of sundials and water clocks. The first mechanical clocks cannot therefore be regarded as substitutes for sundials and water clocks.
Mechanical clocks initially brought zero benefit over other options, but some forefather of today’s “engineer in a garage” found them conceptually interesting and was drawn to their potential.
Many important civilian technologies had origins in the military
Many technologies we use on a daily basis were developed as part of military research, such as GPS, the Internet, and even the general-purpose computer (designed primarily to calculate ballistic trajectories). Though we associate this phenomenon with the twentieth century and particularly WWII and the Cold War, it dates back much further. Again from Cipolla:
So many developments of a technological nature, from the casting of iron to the emergence of schools of veterinary science and engineering, had military beginnings… It was certainly with an eye to greater effectiveness in battle that the technical innovations in iron working and horse breeding had been first promoted. Eventually, in the course of the twelfth century, both the use of the horse and that of iron were handed down from the squires to the peasants.
Civilian adoption of iron and horses led to improvements in agricultural productivity that were certainly not envisioned by the military, much in the same way that the early computing researchers could not possibly foresee all the eventual impacts of computers on society.
Humans rapidly depleted natural resources, often in very irresponsible ways that governments could not succeed in controlling
In pre-industrial Europe, the primary environmental issue was deforestation. Public concern about deforestation dates back to at least the 13th century. In France this concern led to a series of royal and local ordinances regulating the consumption of timber. Similar statutes appeared all over Europe in the coming centuries, but were generally ineffective at preventing what Cipolla describes as “parasitic and extremely wasteful” destruction of forests. England in particular experienced a timber crisis at the beginning of the 17th century, despite a number of Acts of Parliament. However, it can be argued that scarcity drove innovation, as the shortage of timber forced England to make use of another type of fuel: coal. This was one of the factors that set England on a course toward the Industrial Revolution. A contemporary at the time wrote:
There is so great a scarcitie of wood through the whole Kingdom, that not only the Citie of London, all haventowns [ports] and in very many parts within the land, the inhabitants in generall are constrained to make their fires of sea-coal or pit-coal.
There was a war for talent
Tech companies know that hiring the best is critical to success (Mark Zuckerberg famously said the best engineers are ten times more productive than average engineers). Although the term “war for talent” was apparently coined as recently as 1997, the importance of human capital was recognized by leaders even back in medieval times. Cipolla writes:
In the Middle Ages and in the Renaissance, the relevance of human capital to economic prosperity was taken for granted. Governments and princes were active in trying to attract artisans and technicians and in preventing their emigration.
For example, a welcoming immigration policy, tax breaks, and interest-free loans to artisans were all part of an economic development policy of the Commune of Bologna in 1230.
In fact, movement of human capital was often closely associated with shifting economic tides, such as the flight of professionals with “artisanship, commercial know-how, entrepreneurial spirit and, often, hard cash” from the Spanish-controlled southern Netherlands to the Northern Netherlands in the late 16th century. In the following century, the Netherlands became the most dynamic economy in Europe, while Spain went into decline, lacking human capital and heavily indebted after a military spending binge fueled by gold and silver from the Americas.
Economic booms and busts were quite common and severe
Although economic cycles tend to be associated with our modern capitalist economy, severe recessions were actually quite common in pre-industrial Europe. One of the reasons recessions were so severe was the fact that most capital was in the form of working capital, specifically inventory, rather than fixed capital like production equipment. Working capital is extremely volatile relative to fixed capital, as Cipolla explains:
When investment is in the form of working capital, disinvestment is easier: one sells existing stocks (if one can) and refrains from replenishing them. This means that when stocks and inventories make up a large fraction of the existing capital, disinvestment can be more massive and drastic than if a large fraction of investment is sunk in fixed capital.
Differences between the pre-industrial economy and today
Some of the aforementioned similarities between the pre-industrial and modern economies may have given the mistaken impression that the Middle Ages was a vibrant economic period in which a modern businessman or technologist would have felt right at home. In fact, pre-industrial Europe was a generally miserable time and place to be alive, something I will expand upon when discussing the period’s abysmal living standards. But besides the prevalence of death and poverty –things that have deservedly garnered this period its reputation as the Dark Ages – what else was different?
A disconnect between science and technology
In the Middle Ages and early Renaissance, science and technology were seen as completely distinct, as embodied in the saying scientia est unum et ars est aliud (science is one thing and technology is another). Due to a combination of flawed epistemology and rigid class distinctions, science was viewed as a philosophical endeavor and not a utilitarian one. Science was the domain of upper class gentlemen funded by inheritance, or perhaps aristocratic patronage, who had no interaction with craftsmen who produced anything. The idea of commercializing academic research was completely unheard of.
In the 17th and 18th centuries this began to change with the adoption of the modern scientific method and also an emerging view that science could be directed at the material improvement of mankind. In time, the linkage between “scientists” and “artisans” was strengthened. Today we have professors using their research to found companies worth tens of billions of dollars.
The economic power of the Church
One of the things I found most alien about the economic landscape in the Middle Ages was the role played by the Church. Today, the Catholic Church is still an enormously wealthy institution, more so than I realized until I looked up the figures. The Economist estimated the Church’s annual spending in the US at $172 billion, roughly equivalent to the revenue of General Motors and not too far behind Apple. However, that’s still less than 5% of the US federal budget of $3.8 trillion. In the Middle Ages, the Church was a tremendous economic force, in many places more wealthy and influential than the government. Cipolla writes:
About 1430 the English monasteries owned about 15% of the English land, while the rest of the Church owned another 10% and the Crown only 6%.
With few productive places to invest long-term capital, fixed capital was disproportionately directed to construction of churches and monasteries:
A medium-sized city such as Pavia (Italy) in the fifteenth century, with about 16,000 inhabitants, had over one hundred churches, and this was in no way exceptional. Hospital beds, on the other hand, were so scarce that, until well into the 19th century, it was common practice in every part of Europe to place two or three patients in one bed.
The slow diffusion of technology
The instantaneous sharing of knowledge is a powerful driver of our modern economy. It enables new technology, once it is invented, to achieve pervasive adoption very quickly. It also enables aggressive recombinant innovation, supercharging the pace of new technology introductions. In pre-industrial Europe, technology spread very slowly. Remember those water mills the French were protesting in the 13th century? While they were common in some areas of Europe in the 10th century, it was not until roughly 500 years later that their use had spread across most of Western Europe. Compare that to today, when new technology can reach billions of people in a few decades or less.
Abysmal living standards and economic productivity
The most obvious difference between pre-industrial and modern economies is how far we’ve advanced in terms of living standards and productivity. Pre-industrial Europe was not a good time or place to be alive. Society was wracked by war, famine, and epidemics, and any progress came at a snail’s pace. The Industrial Revolution ushered in sustained per-capita growth in productivity and living standards, essentially bringing the exponential function to human affairs for the first time. With two hundred years of compounded annual growth behind us, GDP per capita is now on the order of 100x what it was in 1800. It is not the intent of this post to rehash how much of a miraculous discontinuity the Industrial Revolution represents in the course of human history, but studying pre-industrial Europe can be a sober reminder of how miserable life used to be.
Everyday life could be horrific to an extent difficult for a resident of a 21st century developed economy to imagine. A 17th century Italian wrote of walking in the city:
You cannot walk down the street or stop in a square or church without multitudes surrounding you to beg for charity: you see hunger written on their faces, their eyes like gemless rings, the wretchedness of their bodies with the skins shaped only by bones.
Although fertility was normally higher than mortality, pre-industrial Europe was characterized by frequent catastrophes that would wipe out any population growth achieved in “normal” times. There was a total lack of an economic safety net:
In a year of bad harvest or of economic stagnation, the number of destitute people grew conspicuously. We are accustomed to fluctuations in unemployment figures. The people of pre-industrial times were inured to drastic fluctuations in the number of beggars.
The cities of pre-industrial Europe – even major ones such as London – were such death-traps that they actually had higher mortality than fertility, and only grew because of continued inflow of migrants from the countryside. Disease was of course a major contributor to mortality. Plague was a more or less regular feature of the landscape, repeatedly flaring up in various pockets of Europe over the centuries. One particular plague, the Black Death, killed 25 million people out of a total European population of 80 million in the short span of 1347-1351.
I believe the similarities between pre-industrial and industrial economies illustrate that there are certain facets of human nature that will always influence society: resistance to technological progress when it impacts one’s livelihood, the importance of hobbyists and recreational tinkerers, the power of fear (of one’s enemy) to drive innovation, the difficulty in controlling resource consumption at a societal level, the importance of human capital, and the ups and downs of the business cycle. Yet, whether in spite of or because of these factors, paradigm shifts in human affairs are possible. This makes the future reassuringly difficult to predict.