Page - (000050) - in Disrupted Development and the Future of Inequality in the Age of Automation

42 L. SCHLOGL AND A. SUMNER legal constraints could be preventing the toll road operator from firing employees. One could imagine the political backlash of a state-owned enterprise making 20,000 people unemployed. There may be also concerns over strikes, attacks on the new toll-booth machinery, politi- cal interventions (including fears of the political replacement of senior management making such decisions) or negative media reports which demonstrably influence business decisions in part of wholly owned SOEs and to some extent in private companies too. 4.3 theoreticAl perspectives on AutomAtion One could crudely distinguish the existing scholarly literature on auto- mation and digitization effects into two camps: first, there is an opti- mists’ camp which essentially sees the “business as usual” of market dynamism at work. Technological change, they argue, has been an essential element of “modern economic growth” since the Industrial Revolution, and disruptive innovation has always been met with what Mokyr, Vickers, and Ziebarth (2015) call “technological anxiety.” This has been the case at least since the arrival of the steam engine and the power loom. Simon Kuznets (1971) in his Nobel lecture argued that the most important feature of modern economic growth is a “combina- tion of a high rate of aggregate growth with disrupting effects and new ‘problems’.” Such disruption refers, in particular, to changes in the eco- nomic and social structure that technological innovation generates. Joseph Schumpeter, key theorist of technological innovation, famously coined the notion of “creative destruction” for the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one” and called this the “essential fact about capitalism” (Schumpeter, 1943, pp. 42f., emphasis in original). Schumpeter’s view on the econom- ics of technology in the context of the Industrial Revolution preceded the neoclassical standard model of growth advanced by Solow (1956). In his aggregate production function, Solow attributed all output growth not accounted for by increases in capital and/or labor to a broad category of “technical change” (Granstrand, 1994, p. 13). Scholars in this optimistic tradition thus tend to emphasize the histor- ically demonstrated adaptive capacity of market economies to innovation and change with little emphasis on any temporary or permanent “losers” in the process. Further, they argue that robots and computers take over