THE LEVER OF RICHES INVOLVES TRADE-OFFS.

That follows because innovations are Marshallian improvements.

Some economists use the term "Marshallian improvement" (I stole it from one of Paul Krugman's policy books, don't remember which one, sorry) to refer to a situation in which social welfare increases in the aggregate despite losses to some agents. To visualize this, draw a production possibility curve, pick an allocation of output along it, draw a new production possibility curve to the right of the old one, and pick an allocation of output that is NOT to the northeast of the old one. You've just identified a Marshallian improvement, in the form of expanded output, but one that requires some people to give up some of their current consumption to make the improvement happen.

Thirty years ago, recently recognized Northwestern economic historian Joel Mokyr reviewed Kirkpatrick Sale's Rebels Against the Future to spell out the trade-offs.  (And multiple cheers for Reason retroactively storing many of their print articles, my copy of the issue having long since gone for recycling, online.)

Ever since Prometheus discovered fire and Daedalus the art of flying, some people have felt uncomfortable and guilty about technology, and in each generation we can find some evidence of "Luddism," a hostile attitude toward the tools and ideas that are meant to make society richer.

What explains technophobia? The opponents of technological change are neither fools nor demons, their arguments neither insane nor ignorant. While on the whole their resistance is both misguided and futile, it is imperative to understand the roots and sources of their attitude. To start with, not all enemies of technological progress were created alike. The most fundamental distinction is between the victims and the ideologues.

Technological progress inevitably has victims. It is difficult to think of a single invention in history, no matter how beneficial to society, that did not make somebody worse off. Once a technique is replaced, those who had invested in the old way of doing things end up losing their investment. If physical equipment and human skills could painlessly and costlessly be converted from technique to technique, innovation might have only beneficiaries. In practice, obsolescence is inevitable, and thus there is pain and suffering for some even when society as a whole benefits. Technological progress in a free market society means that on the whole the benefits exceed the costs, so that society is better off, even if the improvement is not "Pareto-superior," as the economists like to say. Those at the losing end of the story, whose jobs may disappear, whose skills and equipment become worthless once they are replaced by machine, would be rational to do all they can to stop the competitive market process that threatens them.

The political economy of Marshallian improvements is messy, because Pareto-superiority isn't likely when machinery displaces either people who work with their muscles, consider the diesel locomotive, or people who work by their wits and dexterity, consider Ned Ludd and his fellow blue-collar aristocrats who would be replaced by loom tenders.

It's going to be hard to work out the Hicks-Kaldor sort of welfare economics compensations that look so easy on the chalkboard.

Yes, the comparative advantage of the United States might rest with knowledge-intensive, advanced-technology goods (and developing these modifies the concept of comparative advantage away from David Ricardo's resource endowment examples).  But it's in that modification that bad stuff can happen.  People equipped to work with heavy machinery (the advanced technology of a century ago) might run into troubles adapting to keyboards (the alleged advanced technology these days.)  And thus does what looks like a Marshallian improvement on a whiteboard turn into something less pretty in fact.

It's more difficult, Professor Mokyr notes, when there are multiple reasons for people to object to new technologies, with many of those motivated by something other than continued employment.

Whereas the textile mills in Britain increased the overall economic welfare of the average Briton by reducing the price and improving the quality of textiles, the stocking-frame knitters in Nottinghamshire and woolen-cloth croppers in Yorkshire were clearly worse off.

The ideological sources of resistance to new technology are more diverse. Philosophers, social thinkers, and political activists who themselves have little to lose from new technology object to some or all of the changes brought about by industrial development. They range from British aesthetes such as John Ruskin to the philosophers of the Frankfurt School and their adherents (Herbert Marcuse and Jacques Ellul) to radical writers of our own time, such as Amory Lovins, Jeremy Rifkin, and Chellis Glendinning. Kirkpatrick Sale firmly belongs to the last category of ideologues. The intellectual foundations of their attitude are well understood. One element is simply an intuitive dislike of change and novel, unfamiliar things, the "if it ain't broke, don't fix it" mentality. Another is the dislike of technology itself; while few people admit to a dislike of mechanical devices, there is an instinctive sense that they are unnatural, opposed to the carefree green pastures and sunny skies of an old bucolic world that industrial smoke has obscured forever. Bleak and lonely life in grim and grimy factory towns is compared with a Walt Disney image of friendly and cooperative peasant communities of rustic society. Changes in technology often alter the environment, which is vaguely felt to be sinful and somehow contrary to a human instinct to leave the world to our children in the same shape we found it.

There is more to this movement, however, than just nostalgia, bad history, and intuition. One perfectly rational element is risk aversion: Precisely because new technology is new, its exact consequences cannot be known in advance.

Well, yeah, the exact consequences of getting up in the morning or interacting with a co-worker or asking somebody for a date cannot be known in advance.  On a larger scale, trying something new, whether it is eating this fish or using this tool, can have unpleasant consequences.  Experience can make humans cautious.

There is some probability, no matter how small, that nuclear power will lead to a major radioactive disaster or that bioengineering will create a mutant virus that wipes us out. There is no social calculus that can prove these judgments wrong; no matter how small the likelihood, if one is unwilling to take any chances, new technologies will always be suspect. Some cases of unanticipated nasty side effects of a seemingly benign product, such as asbestos and chlorofluorocarbons, support these views.

A related argument is that new techniques often fail to pay for their full social costs: The new factories of the Industrial Revolution unworriedly polluted the air, although clean air was a scarce resource as well. Only much later was it fully realized that even resources that are not privately owned may be scarce and should figure in the cost-benefit calculus; in the meantime the environment may sustain major damage. It is also felt that new technology dehumanizes, turns people into slaves of their own technology, and is responsible for assorted social ills, from crime to loneliness. Whereas the standards of proof required in these accusations are often loose and the nostalgic look backward to an earlier and better period usually based on incomplete knowledge of the human condition before the Industrial Revolution, it would be rash to dismiss an argument just because it was technophobic.

That's prescient and totally foreseeable.  The Serious People fretted about anomie when the technology people were chained to was a television, not the latest iteration of the smart 'phone.  Such technical improvements are hard to stop, as emergence finds a way even when the calculus of Pareto optimality suggests not.

In similar fashion, the Sales and Rifkins of this world do not have a prayer of stopping modern technology, from computers to nuclear plants.

As long as they insist, with fellow-traveler Wendell Berry, that a new contraption should be adopted only if it is cheaper, smaller, and locally made; uses less energy; does not disrupt anything good that already exists (including family and community relationships); does not infringe on the rights of other species (plants and animals alike); and does not harm the interests of the next seven generations, the "neo-Luddite" movement will inspire derision rather than effective technological resistance.

Via Cafe Hayek, where there are additional reflections on this year's Economics awards at the link.