Most speculation about AI has focused on its potential to kill jobs and on the policies that government might implement to control AI. But it’s important to remember that our only window into the future is the past. From the colossal changes wrought by the Industrial Revolution to the Digital Revolution of the last quarter-century, improvements in technology have created an array of jobs that far exceeded—in quantity and quality—the ones eliminated, elevating standards of living.
In America growth during the Industrial Revolution was of biblical proportions, writes The Wall Street Journal (Nov. 2, 2025). From 1870 to 1900 real gross domestic product tripled, the population and labor force roughly doubled, and output in manufacturing grew sixfold. Per capita income rose by 110% between 1865 and 1910, while real wages of manufacturing workers increased an estimated 173%. Life expectancy rose by a quarter as inflation-adjusted costs of food, clothing and shelter dropped by roughly 50%.
During the Digital Revolution of the last quarter-century, U.S. GDP rose by 66%. Data show the extraordinary capacity of the American economy to absorb new technology. Since 2000 on average 5 million Americans have either been laid off or quit their job every month, but the economy has created 5.1 million better-paying jobs a month. This creative destruction isn’t new. In 1810, 81% of Americans worked in agriculture; today only 1.2% do. In 1953, 32% of Americans worked in factories. As real industrial production quadrupled, the share of the labor force in manufacturing declined to 7.8% in 2025.
Almost every discussion of AI calls for extensive economic assistance for those who are displaced. Yet this impedes workers’ transition to new jobs.
American exceptionalism—in which Americans are more productive and have higher living standards—depends in part on our extraordinary ability to adjust to change. Europe makes it hard to lay people off, which constrains the ability to create jobs. In China, most industrial subsidies go to noncompetitive industries, not to the potential winners of the future.
By letting the market system develop and absorb AI technology, we can achieve a second economic miracle, which will enrich America and the world.
Classroom discussion questions:
- Will AI create more jobs than it destroys?
- Will overall productivity measures improve in this AI revolution?
1. Yes. Based on past technological revolutions, AI is likely to create more jobs than it eliminates. While some roles will disappear, new and often better-paying jobs will emerge as the economy adapts and productivity increases.
2. Yes. AI is expected to significantly improve productivity by helping firms produce more with fewer resources. Historical evidence from the Industrial and Digital Revolutions suggests that new technologies raise overall output and efficiency over time.