Ports Have to Go With the Flow

The ghost of Ned Ludd haunts West Coast ports in a labor dispute that shut down the American shipping industry until a federal court intervened at the request of President Bush.

Whether Ludd was a real person or a mythical figure made up to stir the passions of the masses is a subject of debate. What is certain, however, is that a band of machine-hating textile workers calling themselves Luddites rose up in England in 1811 and began destroying the textile frames that they feared would render their jobs unnecessary. As futurist Alvin Toffler points out in “The Third Wave,” the Luddites weren’t the first organized labor movement to employ such tactics.

Workers in England had razed sawmills in 1663, smashed ribbon-making machines in 1676 and destroyed stocking frames in 1710. John Kay, inventor of the flying textile shuttle, fled England after mobs destroyed his home. History is full of examples of workers revolting when they feared that machines would replace them.

At the heart of the West Coast labor dispute too is a fear that automation and technological progress are bad for workers. While dockworkers have yet to take up arms against port machinery, central to their demands is a stipulation that their current jobs, which pay from $80,000 to more than $100,000 a year, will not be replaced by new systems or technologies. As the Washington Post noted, the lockout was “less about money than ... about control of new technology that will determine the efficiency of the ports.”

Specifically, workers are fighting the use of bar-code readers, hand-held computers and the Internet. Technologies that made it into your local grocery store years ago still haven’t found their way to U.S. ports, largely because of union resistance. Shippers must allow workers to do business the old-fashioned way: carry paper forms on clipboards from container to container as they are unloaded from ships.

Meanwhile, port operators around the globe adopted automated systems and electronic verification and tracking techniques years ago, leaving the United States in the shipping Stone Age.

So how long can American dockworkers resist such changes? If we’re still living in the pencil-and-clipboard era 10 years from now, what will it mean for the efficiency and competitiveness of U.S. shipping?

Some dockworkers might not care to ponder this question, but they should. Basic economics tells us that firms or industries that are unable or unwilling to adapt to technological change ultimately give way to those that can and do.

Of course, the longshore Luddites do have one thing working in their favor as they attempt to freeze technological progress: A port can’t be easily moved or replaced. If workers made such anti-automation demands in another sector, companies could move to a more hospitable locale and hire workers willing to acclimate themselves to new systems and technologies. But “voting with your feet” is not an option for shippers. There is airborne shipping, of course, but that would not be efficient for getting fleets of new cars or giant slabs of steel overseas.

Improvements in technological productivity are the key to long-run growth and prosperity, both for the broader economy and individual industries. Some jobs may be displaced by technology, but it can also create new industries and job opportunities.

Some Luddites apparently continue to believe the economic fallacy that every technological advance will forever displace jobs held by humans. If there were any truth to this zero-sum philosophy, it would mean almost no one on Earth would have a job today. Doesn’t that prove Ludd and the unions wrong?