New technology is not inherently good or bad. When economists talk about technology, they are thinking very broadly about anything that helps us produce things faster, better or cheaper. In this sense, technology is always better for someone, as it wouldn’t be considered technology if it wasn’t useful in solving an existing problem or meeting a new want. The problem is that often the effects of new technologies are much better for some people than others. And in a lot of cases, new technology is downright bad for a lot of people. Assessing whether a new invention is a positive or negative thing involves not only looking at its impact on different groups in society, but also on future generations and the environment.
A popular idea in economics is that while innovations and new technology may cause short-term problems, in the long run they make things better off for just about everyone. This idea is often called creative destruction, as new ideas destroy the old economy in order to rebuild the new. In modern terms, robots might kill manufacturing jobs, but in the long run we’ll all be happily employed in the robot economy.¹
Historically there is a good deal of support for this idea. Technology has been ‘killing jobs’ since at least the start of the Industrial Revolution in the 1700s, when machines dramatically reduced the amount of time needed to produce things like cloth. But over the very long run, the world as a whole has gotten much richer. And while unemployment is now a bigger problem than it was before the Industrial Revolution, for the most part new jobs have indeed replaced the old.
The problem is that the short-term disruptions can last an awfully long time. By some estimates, the living conditions of workers during the Industrial Revolution got steadily worse for over 100 years, before finally improving around 1850. Similarly, a lot of economists say that some of the financial innovations which contributed to the 2008 crash may eventually lead to a stronger economy, but the crisis has caused a terrible amount of pain in the meantime.²
Another issue is that new technologies affect future generations. Sometimes this can be positive; life is much better today for most people because of the technologies of the Industrial Revolution. But it can also be negative, as is most apparent with technologies that cause environmental damage or speed up climate change.
Balancing all these factors is a tall task. It asks us not only to consider who is benefits from new technology, but also to think about the values we use to evaluate economic success.