Automation and repression, why the two go hand in hand

Fears of social upheaval driven by extreme wealth inequality and political corruption are growing, with some prominent figures warning of inevitable societal unrest. Tech entrepreneur Nick Hanauer famously stated in 2014, "You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counter-examples."

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You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counter-examples.

This sentiment is echoed by experts concerned about the impact of automation. Kai-Fu Lee, a former president of Google China, warned in 2022 that automation poses a "real underlying threat" of "tremendous social upheaval, public unrest, and political collapse stemming from widespread unemployment and grotesque inequality." The urgency of the situation was highlighted by 100 millionaires who signed an open letter for the 2025 Davos Summit, urging wealthy colleagues to consider "taxes or pitchforks!"

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This is the real underlying threat posed by automation: tremendous social upheaval, public unrest, and political collapse stemming from widespread unemployment and grotesque inequality.

New economic research delves into the potential responses of states to these growing threats. A working paper titled "Automation and Repression" by Daron Acemoglu, Mehdi Shadmehr, and Arda Gitmez suggests that political leaders facing the prospect of popular revolt due to automation have two primary choices: redistribution or repression.

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It's taxes or pitchforks!

The economists argue that as automation increases, the need for redistribution to cushion its disruptive effects also grows, leading to a higher tax burden on capitalists. Consequently, the "capitalist state" may find repression a more attractive option because it incurs a fixed cost, unlike redistribution, whose cost escalates with the extent of automation. This perspective frames repression as a calculated cost-benefit analysis for the state, a viewpoint that contrasts sharply with the human cost of social welfare and democratic stability.

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We show that the capitalist state can use redistribution or repression to reduce the threat of a revolt. And greater automation makes repression more attractive to the capitalist state.