Free Trade, Automation, And Were the Luddites Wrong?

Yesterday in the comments on Dan Spencer’s post on Trump’s threat to slap a tariff on some Cheverolet’s manufactured in Mexico there was a discussion of free trade versus protectionism from a job protection point of view. Because, ultimately, protectionism is as much about protecting jobs as it is about protecting businesses.


The question is how does what purports to be a free society operate when the opportunity to actually work is being placed further from the grasp of the guy who occupy the middle of the Bell Curve and made impossible for those people to the left side of the curve. What happens when meaningful work, work that can put a kid or three through school, becomes exceedingly rare and exclusively the province of a very small number of people.

As many of you know I spent a little time in the Army. My last tour was as a plans officer on the Army Staff (motto: “we have the coolest badge in the whole freakin Army“). It was an interesting job for an ADHD type A personality because you were constantly getting taskers for projects that had nothing to do with each other. One of the projects I worked on was trying to develop a way of training soldiers in skills that were not yet needed and sustaining competence in those skills until the equipment was actually fielded. One of the models we looked at was BellSouth which was, at the time, struggling with training line crews, and particularly line supervisors, to install, repair, and maintain fiber optic (which they knew was coming eventually) while nearly 100% of their inventory was copper. They knew customers wouldn’t tolerate a lower standard of service simply because the maintenance crews were not familiar with the equipment.

Anyway, in the course of research I had an, at least for me, Epiphany. When you looked at jobs by skill levels you could see that in the Industrial Age industries, the skill mix looks something like this:



You have a relatively small number of highly skilled positions, like your master machine tool makeres. You have a largish pool in the middle, these would be the guys knocking rivets into that Cordoba rolling down the assembly line, and you had a smallish number of menial jobs, like the guys who sweep floors in the plant all day. But the analogy applied in white collar offices back in the days before spreadsheets and word processors did away with accounting clerks and the typing pool.

As technology became more capable you started seeing a shift to something that looks a lot more like this:


Technology first took a huge bite out of that middle tranche of job skills. Now that car factory needs a largish, as a percentage of the workforce, number of highly skilled technicians and computer programmers, they need a smaller number of people to repair the robots building the cars, and they need a largish number of relatively unskilled people to move stuff around and service the machines. As we’ve seen in the past couple of years, technology is now coming after those low skill jobs. One entire Target distribution facility has replaced forklift drivers and most of the humans moving merchandise with robots. Fast food restaurants are moving towards replacing counter staff with touchscreens. All the big box stores are well on the way to eliminating cashiers.

This same technology is beginning to strike at jobs that previously looked nearly immune.

The futurists of Silicon Valley may not have seen this one coming: The first commercial delivery made by a self-driving truck was 2,000 cases of Budweiser beer.

On Tuesday, Otto, the Uber-owned self-driving vehicle operation, announced the completion of its first commercial delivery, having delivered its beer load from Fort Collins, Colo., to Colorado Springs, a roughly 120-mile trip on Interstate 25.

In recent years, Uber has predicted a future in which you can ride in a self-driving car that will take you where you want to go, no driver necessary. But the idea that commercial trucking could be done by robot is a relatively new idea — and a potentially controversial one, given the possibility that robots could one day replace human drivers.


Truck driving is one of those occupations where a guy with a solid work ethic and little formal education can earn a good middle-income living. A long haul driver can easily make $50K. With the right licenses he can push $100K. You are increasingly seeing husband-wife teams that can legally keep their rig rolling for many more hours than a single driver. But there is a downside. Federal regulations basically limit your driving time to 11 hours/day and 70 hours in a week. But the driver or the company pays for the rig 24/7. That is where so-called autonomous trucks come it. There is no regulatory reason these trucks can’t move around the clock because there is no human to become fatigued. In a very short period of time, you start getting payback as you are not only NOT paying a driver you are basically doubling the number of road miles for the rig which now moves faster because the robot doesn’t need to eat or go to the bathroom.

In one fell swoop an entire industry will be transformed from the first curve to the second.

Where, you have a right to ask, is this going?

Society has dealt with economic dislocation before. Draft animals meant you no longer had to hitch the Old Lady to the wooden plow. Water mills replaced manual labor beginning in the Middle Ages. With each advance though, the manpower freed up flowed to newer and more lucrative pursuits. The first real break in the relationship between man and machine happened in the early part of the 19th century when an entire industry, weaving, was being eliminated by textile mills. The reaction was the Luddite movement that smashed mechanical looms and burned factories.


The movement was suppressed by British troops with substantial loss of life and over fifty of the Luddites were hanged. Change was imposed and everything went on as before except for the extinction of free weavers and home weaving that forced men and women into the mills as workers.

What makes the Luddite movement different from today is that the Luddites lived at a time where the franchise was reserved to a very small number of voters and many industrial cities, like Manchester, had no representation at all. Their concerns were irrelevant as they had no voice. Today is different. That truck driver who has just lost a $50K/year job to a robot votes.

What happens in industry after industry displaced workers no longer have a place to go because humans simply aren’t in demand? There are no trucks to drive. There is no fast food to serve. There may not even be brooms to push. But these men and women can not only vote they might very well outnumber those people with decent jobs. Keep in mind that well under 50% of the nation pays federal income tax.

Though suppressed, that Luddite inclination has never been far from the surface in Britain. In the early 1980s when Prime Minister Margaret Thatcher broke the miners union by shutting down unproductive and nationalized mines, a columnist in the Economist commented that the difference between Britain and America was that in Britain miners went out on strike so their sons could go to work in the mines, in America miners went out on strike to ensure their sons never had to work in the mines. Maybe we have become Britain? Or maybe the miners we mocked in the 1980s were onto something that is only now becoming obvious.


What next? Because if you want a historical model of what happens when voting citizenry is unemployed and can vote you need to look no further than Rome of the “bread and circuses” era. Will we go the way of France with mandatory job sharing? Or Finland with a guaranteed basic income? At some point you begin to enter Atlas Shrugged territory.

Do you take the Randian/Darwinian route of saying “Devil take the hindmost?” Or, in my cultural vernacular, “root, hog, or die.” And how does this work when you are telling a majority of the nation to piss off? And the impact of this decision will be felt by people who might even be philosophically agreeable to that argument. Already we see story after story of people in their 30s, prime income earning years, moving back home because they can’t find a position in the economy that pays enough to live. The bill payer here is the parents. Do we really think the problems of declining family formation and declining birthrate are divorced from economic uncertainty?

I don’t know what the answer is but I am pretty sure that free trade in this environment is going to be a damned hard sell.

Back long ago when I didn’t really have the money to afford it I bought a beautiful, thoughtful book by Jill and Leon Uris called Ireland: A Terrible Beauty. In it they touch on the economic dislocation in Western Ireland as the agrarian lifestyle fell victim to modernity, one image always stuck with me. A middle age itinerant farm laborer:



“When I’m gone you’ll not see the likes of me again” might even serve a the epitaph of the American working class.


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