The real Luddites would have loved AI

Welcome to Disrupting Japan, straight talk from Japan’s most innovative founders and VCs. This is our 250th episode, and I wanted to give you something special; something I have been thinking about more and more as my career in startups and venture capital has developed. Leave a comment Today we are going to talk about a group of people who are perhaps the most reviled and maligned by technologists and innovators worldwide. People who stand in opposition to everything innovators hold dear. Today we are going to talk about the Luddites — those individuals who through a combination of ignorance and shortsightedness opposed technology and change. But that’s not really true. The Luddites were not who you think they were. In fact, almost everything you have ever been told about them is wrong. In truth, the Luddites were not really opposed to new technology. Not even when it threatened their livelihoods. There is growing concern today about AI taking our jobs, but if AI had emerged 220 years ago, the Luddites would have embraced it. Far more important, they would have held a much better understanding of the true dangers posed by today's new business models than do most of the AI advocates or critics talking about it today. Although the Luddites are accused of opposing the very technology that resulted in the incredible progress and the rise of living standards that we have experienced over the past 200 years, that’s simply not the case. In fact, as you’ll see, although the higher living standards and shared prosperity enabled by the technology of the industrial revolution are undeniable, we actually have the Luddites, and not the technology, to thank for that. The Luddite in the Mirror So who exactly were the Luddites? You have probably heard that they were cloth workers in late 18th century England who, early in the industrial revolution, saw their livelihoods threatened by the new textile factories, and they tried to shut down those factories by destroying automated looms and other textile equipment. That much is completely true. The important question, however, and the one with a wildly misunderstood answer is “Why?” “Why were the Luddites breaking machines and shutting down textile factories?” The mythology is that Luddites rejected the new technology because they benefited from the old system. Rather than embrace technology which would lift millions out of poverty, lengthen lifespans, and lead to greater shared prosperity, the Luddites selfishly wanted the world to stay as it was. They were backward-looking rubes who simply could not see the bigger picture. And that, all of that, every single word of that, is simply wrong. If anything, the Luddites were alarmed because they saw the big picture far too clearly. So let’s take a quick step back into the world of the Luddites and see just how much like us they really were. And also see that although the technologies are completely different, how the new business models of the industrial age changed society in very much the same ways as the new business models of our emerging AI age. As the industrial revolution was gaining momentum in the closing decades of the 1700s, textiles were one of England’s most important and profitable exports, and they were manufactured using what was called the “domestic system.” Textile workers worked with their own machines in their own workshops. Some of the more enterprising had multiple machines and employed others. The work was distributed, done mostly at home, and the finished product delivered to merchants. This system is where the English term “cottage industry”comes from. By and large, these clothworkers did not have leisurely or even particularly comfortable lives, but it was a better living than agricultural work and much better than most of the newly emerging factory jobs. What these clothworkers did have, however, and what they were very afraid of losing, was a degree of economic freedom. The freedom to negotiate fair prices with their customers and, based on those negotiations, the freedom to decide what and how much they would produce. These proto-Luddites had no problems with machinery or technology. They used and maintained machinery. They experimented with and developed technology. What they objected to was not the new technology, but the new business models. To understand the Luddite’s position here, we need to understand that new technology was not the only thing powering England’s industrial expansion. These new factories were also powered by some of the most horrific forms of child labor imaginable. Children as young as six were forced to work 14 to 16-hour shifts crawling under machinery to recover scraps of cloth and reaching into running machines to untangle threads and remove debris. Some business owners even made deals with the government to take orphans off public hands and put them to work in their factories. And to be absolutely clear, these children were not pa