You Can’t Stop Technology by Attacking the Machine

A small food delivery robot approaches a crosswalk and asks for help. 

Instead of pressing the button, a man begins shouting at it. “You took a human job,” he tells the machine. 

Other people have kicked these robots, knocked them over, or blocked their paths. 

At the University of California, Berkeley, approximately 1,600 of Kiwibot’s first 80,000 deliveries reportedly involved vandalism. 

The machines cost approximately $2,500 each. Destroying them will not protect anyone’s job. It simply repeats a mistake people have made throughout history. 

When a new technology arrives, fear usually appears beside it. People focus on the jobs that might disappear. They rarely imagine the better jobs and industries still waiting to emerge.

Wall Street Journal columnist Andy Kessler recently compared this backlash with the original Luddites. The Luddites were English textile workers during the early nineteenth century. 

They took their name from Ned Ludd, a legendary worker said to have smashed textile machinery. Whether Ludd actually existed remains uncertain. However, his name became a symbol for workers resisting industrial change.

They feared that new machines threatened their skills, wages, and livelihoods. Some workers responded by smashing textile machines and burning factories. 

Their anger was understandable. Their strategy was useless. The machines kept improving because they produced more goods at lower costs. Businesses adopting those machines became more productive than businesses resisting them. 

The Industrial Revolution continued regardless of how many machines were destroyed. Over time, it created industries the Luddites could never have imagined.

Factories required engineers, machinists, managers, accountants, builders, and transportation networks. 

None of this happened without disruption or hardship. Yet the answer was never stopping the machines. The answer was helping people adapt to a changing economy.

That same pattern continued throughout American history. 

The automobile displaced blacksmiths, carriage makers, and stable workers. Yet it created carmakers, dealerships, repair shops, highways, motels, and suburbs. 

Computers eliminated many clerical tasks once completed by hand. They created software, semiconductor, cybersecurity, and digital communications industries.

The internet threatened newspapers, travel agents, and traditional retailers. It produced electronic commerce, cloud computing, streaming, and online financial services. 

Technology closed certain doors while opening much larger ones.

Kessler points toward another fascinating part of this cycle. People who benefited from earlier innovation often resist the next advancement. 

In August 2015, New York City taxi owners and drivers protested Uber and Lyft because those new services threatened their established business. 

Now, some Uber and Lyft drivers are protesting Waymo robotaxis. The disruptors eventually became the disrupted.

That process can feel unfair when someone’s livelihood faces immediate pressure. We should never dismiss the workers affected by technological change. 

Companies and communities must help people learn valuable new skills. But protecting every existing job forever would freeze economic progress. It would preserve yesterday’s methods regardless of cost or quality.

Imagine banning automobiles to protect carriage drivers. Imagine outlawing computers to protect typists and filing clerks. Imagine blocking email because it threatened postal employment. 

Those choices might protect certain jobs temporarily. They would make the entire country poorer over time.

Artificial intelligence will follow the same economic pattern. Some tasks will disappear, while many jobs will change. Entirely new careers will emerge as businesses discover fresh applications. 

Nobody could predict the smartphone application economy before smartphones existed. Today, millions earn their living through businesses that were previously impossible.

Artificial intelligence will create similar surprises. It will help workers analyze information, automate paperwork, and serve customers faster. It will help manufacturers reduce waste and prevent equipment failures. 

Doctors will use it to detect patterns hidden inside medical data. Farmers will use it to manage crops and equipment more efficiently.

Small businesses will gain capabilities once limited to giant corporations. The greatest benefits may come from uses nobody recognizes today.

This creates an important lesson for investors. Mr. Market regularly overreacts when a powerful technology threatens familiar industries. 

Investors see disruption approaching and assume every threatened company must fail. They see excitement growing and assume every new company must succeed. 

Both reactions can produce expensive mistakes.

New technology does not automatically create a great investment. A brilliant product can still support a terrible business. Competition can destroy margins before shareholders earn attractive returns. An excessive valuation can eliminate the benefits of outstanding growth.

The better opportunity often appears inside proven businesses embracing new technology. 

These companies already possess customers, capital, distribution, and trusted brands. They can use artificial intelligence to lower costs and improve their products. They can make employees more productive while serving customers more effectively. Their existing advantages can become even stronger.

That is where our Alpha-4 Approach becomes especially valuable. At the American Prosperity Report, we do not invest based on excitement alone. 

We seek exceptional businesses led by skilled and shareholder-focused management teams. Those businesses must possess durable advantages and powerful growth prospects. Most importantly, we insist upon buying their shares at attractive prices.

We are not trying to predict every technological winner. We are identifying strong businesses turning innovation into lasting economic value. 

The original Luddites could destroy machines, but they could not stop progress. 

Today’s protesters can kick robots or delay their arrival. They cannot erase the productivity those machines create.

America became prosperous by embracing better ideas and building better businesses. Artificial intelligence represents the next chapter in that remarkable story. 

At the American Prosperity Report, our mission remains unchanged. We will follow innovation, ignore the fear, and invest in America’s finest businesses.

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Regards,

Charles Mizrahi
Prosperity Insider