What Economists Did During the Industrial Revolution?

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You've likely heard about the innovations and impact scientists and engineers had during the Industrial Revolution in the 18th century. The Industrial Revolution changed humanity forever. Since then, our living standards have increased severalfold. Thanks to the Industrial Revolution, we now live better than any medieval king.

The Industrial Revolution removed human muscle from the production system and replaced it with steam-powered machines/engines. Because of this, kings no longer needed to keep 100 slaves to serve them; machines could serve them better.

Yes, the Industrial Revolution was the gateway to how slavery diminished from society. The impact of the Industrial Revolution was huge.

But the fact is, we often don't know what economists actually did back then.

Nope, economists didn’t just sit back and enjoy; they put in great effort to make the Industrial Revolution happen.

How?

At first, when machines were slowly introduced at work, they reduced the demand for human workers. As the demand for human labor declined, people started losing their jobs. This directly impacted employment, leading people to protest against machines.

Their demand was simple: "We don’t need machines; we need jobs. We need to feed our families."

Exactly at that moment, economists stepped in. But they weren’t like today's economists; instead, they were giants in their field. Economics wasn’t their profession; they loved economics, which is why they read, taught, and wrote about it.

The professions of economists at that time were different, such as David Ricardo, who was a landlord.

Economists came and educated people about the system of production, capital allocation, capital formation, productivity, and wealth accumulation.

Seems complicated, right?

Let's simplify it with an example:

One of the greatest economists of all time, Milton Friedman, visited China in the 1970s.

There, he saw people using shovels instead of excavators (digging machines).

Milton Friedman asked, "Why aren’t you using the excavator?

It’s far better than shovels."

People replied, "If we use the excavator, people will lose their jobs."

So, they preferred shovels over excavators.

Can you imagine the level of absurdity?

What 1,000 men with shovels can do in a day, a single excavator can do in the same time period.

So, it’s a great way to waste capital/productive assets.

When you misuse productive assets, you lose productivity, and so does the amount of output.

You will never be able to produce a vast amount of goods.

Meaning you will always be drowned in poverty and destitution.

Yes, by using shovels, you may be able to bring food for your family, but you will surely not be able to send them to engineering or medical school, nor to the hospital for better treatment, nor even buy them good clothes.

Why?

Because you don’t have the income to support any of that.

Or those products may not even be available in the first place.

The scariest asset of humanity is time. Everything can be created more, but not time. Development is about freeing human time and channeling it into more productive sectors, not digging the earth.

Technology will definitely destroy many jobs but will create vastly more than it destroys. This is the nature of technology.

In the 1970s, math teachers across the USA protested against using calculators. They feared it might lead to the loss of their jobs. But now you know how helpful calculators were, and that led to the modern computer today.

Even the latest example: after the birth of ChatGPT in late 2022, Hollywood screenwriters protested for weeks, demanding not to use AI in their field. Remember, the story will never change; again, new technology will emerge, people will fear it, and start to speak against it.

But the truth is, technology is your friend; it comes to free you.

Yes, the purpose of technology is to free human time and bring equality to society by making it available to all kinds of people across the world.

The same ChatGPT you use is the same ChatGPT Sam Altman uses, with no difference.

This is the purpose of technology: to bring equality by removing scarcity.

That’s where economists work.

Economists are an inseparable part of human civilization. They put great effort into their thoughts, research, and writing.

But remember one point clearly: it was, and still is, the classical school of economics and their only successor, the Austrian school of economics—not the Keynesian or neoclassical one.

The Keynesian and neoclassical schools didn’t do a single good thing for humanity; they worked only for the top 5%.

They don’t care about the bottom half because the bottom half/haven'ts aren’t important to them.

They treat everything as numbers, and as the bottom half has nothing, they are kept out in the Keynesian school.

Economics is about how the world actually works, and economists pursue that.

So, you go to economists to know in which direction the world is moving, how the world may look in the future, which sector can do better, how to make more money, or how not to lose money.

But remember one thing very well: never go to Keynesian or neoclassical morons; they neither understand economics, nor history, nor pure mathematics. They are jokers. You must keep a safe distance from jokers when it comes to serious matters.

The choice is yours. I’m just inviting you to think.

That’s all for now.

Thank you for your time.

May God bless you.