Innovation and Its Army of Opponents

In fighting technology, neo-Luddites claim to be protectors of the general well-being. What they're really doing is safeguarding their own interests

By Rob Atkinson

More than 50 years ago, noted economist Joseph Schumpeter wrote, "The resistance which comes from interests threatened by an innovation in the productive process is not likely to die out as long as the capitalist order persists." He might have been more prescient if he had said that such resistance would actually strengthen over time.

A growing array of neo-Luddites (they get their name from Englishman Ned Ludd, whose followers sabotaged textile factories at the beginning of the Industrial Revolution) views new technology as a threat, not as progress. A host of organizations—ranging from liberal groups such as the ACLU to conservative ones such as the Eagle Forum—is fighting innovations like mobile commerce, smart IDs, behavioral targeting on the Internet, and the use of IT in health care, decrying them as threats to privacy and civil liberties.

What is especially troubling is that in contrast to a generation ago, when neo-Luddites were largely consigned to the fringes of political debate, today they are accorded more widespread legitimacy. Twenty years ago, a person who wrote that the government plans to forcibly implant radio frequency identification (RFID) chips under the skin of Americans, akin to the mark of the beast as prophesied in the Book of Revelation, would have been dismissed as a crackpot. Yet today Katherine Albrecht, the person who makes this claim in her book Spychips, is widely quoted by the mainstream media, is invited to testify at government hearings, and even gets published in Scientific American, a journal that used to stand for objectivity.

Resisting Innovative Technology

Passionate activists are not the only digital Luddites. Businesses threatened by technology-based competition have sought to enlist government protection. The list is long and troubling. Car dealers have succeeded in getting laws passed in all 50 states making it illegal for automobile manufacturers to sell vehicles directly to the consumer, including over the Internet. Realtors have colluded to try to shut out Internet-based brokers to protect their 6% sales commissions. Brick-and-mortar pharmacies have fought to make it illegal for pharmacy benefit manager programs to impose lower co-pays for drugs purchased from pharmacies but through mail order and Web orders. Optometrists have conspired with contact lens manufacturers to prevent e-commerce lens sellers from getting products.

Unions and their allies also get in the game fighting against new technologies, fearing job loss. One industry that has long been a battleground is food retailing, where grocery unions have opposed consumer-friendly innovations. For example, in the mid-1970s when grocery stores began to widely use bar codes on food products, unions convinced several states, including California, to pass mandatory price-marking legislation that required stores to place individual price labels on all products. In other words, stores had to waste money putting individual price labels on all products.

Now California is poised to act again. Legislation introduced on behalf of the United Food & Commercial Workers (UFCW) union and its allies would restrict self-service checkout in grocery stores, making it harder for companies to give consumers the choice to use technology to avoid long checkout lines.

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