Technology revolutions sometimes have unexpected long-term consequences for the finances of a nation — and its citizens. A century ago, the US tax system was changed permanently by the social upheaval caused by a wave of new technology sweeping through agriculture and transport.
“Farmers were up in arms, and that largely caused the Progressive movement,” says Joel Mokyr, an economic historian at Northwestern University in Chicago. Along with anger at the great fortunes amassed by the industrialists of the gilded age, these pressures led to the introduction of a permanent personal income tax.
If that earlier bout of technology-fuelled disruption brought such deep social and fiscal dislocation, then it may pale in comparison to the effects of the latest advances in robotics and artificial intelligence. “The number of jobs lost in 1890-1914 was nothing like today,” Mr Mokyr says.