Beware the Rage against the Machine!

20 March 2017 | Blog Post

In an era where the processing power that put a man on the moon is powering the smartphone in your pocket and global movements are created on the back of hashtag, it is seductive to believe that we have never had it so good. For many, we are living at the very peak of our existence, with the promise of tomorrow’s utopia around the corner.

However, previous generations believed this too. In 1914, John Maynard Keynes described a wonderful image of the Londoner, “sipping his morning tea in bed” and ordering “the various products of the whole earth” to his door - rather like ordering from Amazon. Then the First World War happened.

This technological revolution or the ‘age of machine’ is not unique. Rather it is the second phase, following in the footsteps of the Industrial Revolution. Yes, the Industrial Revolution powered the British Economy to tremendous levels but it came at a cost. The lessons of which, if we do not learn we will be doomed to repeat them, as the old saying of History goes.

In 1811, at the peak of the Industrial Revolution, Britain was the world’s superpower. Its economic growth was powered by new inventions in technology that allowed the economy to produce more at a faster rate. As a result, a new generation of wealth was created on the back of this innovative technology, which saw many workers lose their livelihoods. 

For a period, these workers struggled to make their voices heard. Yet, in the little corner of Nottinghamshire, the rumblings of these workers grew louder as they formed a movement to make themselves heard. Thus, the Luddites were born.

The Luddites were composed of textile workers from Nottinghamshire, Yorkshire and Lancashire, who were concerned about the rapid introduction of technology that threatened their trade and communities. They capitalised on the growing divide between skilled artisans and the free-market/industrial class, a divide intensified by grievances including wage-cutting and the use of ‘wide frames’ to produce cheap and inferior goods.

All this rising anger and resentment came to a head in November 1811 at Arnold, Nottingham where the fightback began. After their warning against the use of frames fell on deaf ears, the Luddites smashed the machines in early morning raids using large sledgehammers.

Soon the uprising spread across the Midlands and Yorkshire, all the way to Manchester, with thousands of frames destroyed. Historians, typically believe the Luddites failed in their quest but in Nottinghamshire, wide frames were not widely used for years after and wage levels were restored.

For many, comparisons with the Luddites are purely academic and have no relevance in our high-tech way of living. However, there is a connection between the Luddite era and today’s connected world as we have the same issues as in 1811: concerns about the capital intensification, displacement of Labour and a new growing class of manufacturers. Even more eerily, the Luddites chant of being enslaved to the ‘machine’ is chanted by people today saying they are ‘enslaved to the computer’.

Furthermore, the global economy is dominated by a new aggressive breed of the corporation, shown in technological firms, Apple, Microsoft and Alphabet (Google) having a combined wealth of $1,573.53 trillion. What is the cost of this technology, which promises a new Eden paradise? Well, some commentators warn of a rising tide of redundant workers. Some in Government have picked up the warning signals. In the death throes of the Obama Administration, the White House released a report predicting that between 9% to 47% of all American workers will see their job be replaced by automation over the next decades.

The fight-back against technology has begun. Arguments that would have made the Luddites proud are being played out in New York, where a 50-year ban is being sought by cabbies on driverless cars. These so-called ‘Neo-Luddites’, are growing concerned about technology tilting power away from the people to corporations. Like the Luddites, today there is a growing divide. Both Brexit and Trump’s victory can all be pointed to the growing divide between those who believed in an open economy and those in a closed economy. This is a divide that will expand as new developments in technology rapidly accelerate.

If you listen very carefully, some 200 years later, the Luddites are rising once again. This time, they are back with a vengeance. From a corporate risk point of view, it would be wise to be alert to the lessons of history. The Luddites attacked frame-makers but the focus of modern day neo-Luddites may well focus on those poor old robots.

Vehicle and aerospace manufacturers, pharmaceutical companies and other corporates should be alert to the potential for acts of violence against machines and technology that makes humans redundant. Beware the rage against the machine!


Artificial Intelligence , Business Interruption, Connected Risk, Economic, Emerging Risk, Re/Insurance, Risk, Risk Manager, Technology

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