The Dark Side of the Jevons Paradox - Cal Newport
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If you’ve been following technology news recently, you’ve probably noticed a sudden increase in references to a 19th-century economics theory called the Jevons Paradox, which is named for the neoclassical economist William Stanley Jevons, and captures the observation that increasing the efficiency of a resource can lead to greater consumption.
Jevons first articulated this idea in an 1865 book, pithily titled, The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal-Mines. He argued that building more efficient steam engines – ones that required less fuel to generate the same power – would not solve the problem of England’s diminishing coal supplies. If you made the engines more efficient, Jevons predicted, people would find more applications for steam power, and even more coal would be burned overall.
This is indeed what happened. (At least, the part about increased coal consumption. The feared coal shortage was averted through new mining techniques.)
The Jevons Paradox is popular again because it provides a useful frame for understanding the potential impact of AI on jobs. Many fear that this technology will make workers so efficient that the labor market will shrink. If one programmer can now do the work of five, then companies will fire 80% of their programmers!
The Jevons Paradox implies the opposite might occur. If you make workers more efficient, their output will become cheaper, and the demand for their services might grow. If one programmer can now do the work of five, the effective cost of creating software will become so cheap that many more individuals and organizations will now pay to develop their own tools and applications.
This is a fascinating prediction that’s worth keeping an eye on. (For a deeper dive into the counterintuitive economics of AI, I recommend Derek Thompson’s recent interview with Alex Imas.) But there’s also a darker side to the Jevons Paradox that hasn’t been discussed as much recently: suddenly increasing demand for a resource can create unexpected negative side effects.
More efficient steam engines, for example, led to soot-stained buildings and the smoky start to the era of human-driven climate change. More recently, in the context of knowledge work, the arrival of digital communication tools such as email and Slack created similar unanticipated problems. By making communication significantly more efficient, the demand for fast interaction exploded, leading to our current moment in which the average knowledge worker is now interrupted once every two minutes. (For more on how this descent into communication madness occurred, check out my 2021 bestseller, A World Without Email.)
If AI ends up making certain types of workers more efficient, I hope the Jevons Paradox holds, as it’s better than the alternative of labor market contraction. But we need to remain vigilant about its side effects. It’s tempting to assume that increasing efficiency, in any context, can only make things better, but economic history has often told a more complicated tale.
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Cal launched the "Study Hacks" blog at calnewport.com in 2007, and has been regularly publishing essays here ever since. Over 2,000,000 people a year visit this site to read Cal's weekly posts about technology, productivity, and the quest to live and work deeply in an increasingly distracted world, while tens of thousands more subscribe to have these essays delivered directly to their inbox (see the sign-up form below). To read more, you can browse more than 15 years of past essays in the archive.<br>In the fall of 2022, Cal launched a new portal, TheDeepLife.com, to serve as the online home for all other content relevant to the deep life movement he helped initiate. Here you can find all past episodes of Cal's popular podcast, Deep Questions, and explore an extensive library of original videos.
This site is the online home for the computer science professor and bestselling author Cal Newport. Here you can learn more about Cal and both his general-audience and academic writing. You can also browse and subscribe to his long-running weekly essay series. For more on Cal's podcast, videos, and online courses, please visit his media portal, TheDeepLife.com
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