Robots, Uber and other new forms of work organisation – threat or opportunity?

This is the fourth (and final) of a series of articles based on a speech to a conference sponsored by the Child Poverty Action Group looking at work and welfare in the 21st century. (Part 1; Part 2; Part 3)  

Last week I discussed how the casualisation of work was fundamentally a product of the weakening of working class organisation (and struggle) over recent decades rather than being the inevitable result of new technology.

However, we need to have a strategy for dealing with technological change so that it is not used to further reduce the rights of working people.

Simply opposing technological change doesn’t work, as “the Luddites” discovered 200 years ago – although the truth of their struggle may not have been as anti-technology as it is popularly remembered.

Will robots take over all jobs?

There is a real debate over the possibility that robots will take all our jobs. That may be the case in some future society, but I have doubts that this is remotely possible under capitalism.

Capitalism is a system of production for sale at a profit. Because that is the case, there is an intense competition between capitalists for market share. Only the fit survive. Costs get cut, including labour costs. The essence of a productivity rise over time is the replacement of labour by machines.

Over time, that leads to technological change and rising productivity of labour. The most efficient and successful capitalists drive out or take over the competition and the more productive capitalist sets the new standard.

That is also why there is an inevitable process of the concentration and centralisation of capital into ever greater monopolistic groups over time. Monopolies, however, often seek to suppress new technologies that could “disrupt” the value of their investments. Monopolies ultimately are a drag on capitalist growth and innovation.

I do not believe that rising productivity (which is what robotics essentially is) necessarily leads to unemployment.

Germany’s greater use of robotics in manufacturing has meant it has pushed out its US and other rivals in many markets and, therefore, maintained employment in the manufacturing sector more than the US did.

Until now new types of work also seem to inevitably develop – often in the form of new “needs” (real or manipulated) not thought of before. Capital constantly seeks to commodify all aspects of life to create products for sale at a profit.

As a system capitalism is a perpetual growth machine. It cannot exist without growing. Regular periods of crisis only temporarily interrupt it. Ultimately, that is why it is such a threat to the planet and all species, ourselves included, who live on it.

As David Harvey notes:

Capital is thereby committed to a compounding rate of growth. The quantity of global goods and services traded through the market (which now stands at around $55 trillion) has grown at an average rate of around 2.25 per cent since 1750 or so. (3) In some places and times, it has been much higher and elsewhere much lower. In some places and times, it has been much higher and elsewhere much lower. This fits with the conventional wisdom that a growth rate of three percent is the minimum acceptable level at which a “healthy” capitalism can operate. The average global growth rate from 2000 to 2008 was exactly three percent (with plenty of local variation). Anything less that three percent is problematic, while zero or negative growth defines a crisis which, if prolonged, as in the 1930s, defines a depression. So the problem for capital is to find a path to a minimum compound three percent growth forever.

There are abundant signs, however, that capital accumulation is at an historical inflexion point where sustaining a compound rate of growth is becoming increasingly problematic. In 1970, this meant finding new profitable global investment opportunities for $0.4 trillion. Resumption of three percent growth right now would mean finding profitable investment opportunities for $1.5 trillion. If that rate of growth were to be sustained by 2030 or so we would be looking at $3 trillion. Put in physical terms, when capitalism in 1750 was about everything going on around Manchester and Birmingham and a few other hot spots in the global economy then three percent compound growth posed no problem. But we are now looking at compounding growth on everything going on in North America, Europe, much of East Asia, Latin America and increasingly South Asia, the Middle East and Africa….The implications socially, politically and environmentally are nothing short of gargantuan.

China’s growth and the laws of mathematics

China has doubled its production every decade for the last three decades by capturing a greater and greater share of the world market. The laws of mathematics preclude that being repeated forever. China’s share of world manufacturing output has gone from 3% to 25% in 30 years. It cannot, and will not, be able to double that again over the next ten years without collapsing the global economy it relies on for markets.

Similarly, smartphone production seems to have now reached its peak and become a mature market which can only be divided and redivided between the big competitors. Apple may well await the fate of General Motors which went from the world’s number one car manufacturer to bankruptcy in 2009. It has since been revived in a new form following nationalisation by the US government.

What General Motors discovered was that despite its size it ceased to be able to produce cars at a quality and type able to be sold at a price that gave them at least the average rate of profit.

Unless there are purchasers of products at prices that realise at least an average rate of profit from the surplus value embodies in them they will not be produced – by robots or humans.

If goods may be produced but they are not sold a crisis follows. People lose their jobs and factories, warehouses and shops close down. The crises feed on itself for some time.

Eventually, the crisis passes but not until a portion of accumulated goods and means of producing them are written off and production can resume on a more profitable basis with the elimination of the weakest players.

By then the pressure of unemployment will have reduced the value of labour power to the point where it becomes more competitive against new machines and is re-engaged as the market recovers.

Business cycle a ‘vicious circle’

It is this repeated clash between the growth in production and the less rapid growth in the market that has produced the periodic crises of overproduction every 7-10 years that have plagued capitalism for the last 200 years.

This was summarised well by Karl Marx’s close collaborator Frederick Engels in 1877:

We have seen that the ever-increasing perfectibility of modern machinery is, by the anarchy of social production, turned into a compulsory law that forces the individual industrial capitalist always to improve his machinery, always to increase its productive force.

The bare possibility of extending the field of production is transformed for him into a similarly compulsory law.

The enormous expansive force of modern industry, compared with which that of gases is mere child’s play, appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance.

Such resistance is offered by consumption, by sales, by the markets for the products of modern industry.

But the capacity for extension, extensive and intensive, of the markets, is primarily governed by quite different laws that work much less energetically.

The extension of the markets cannot keep pace with the extension of production.

The collision becomes inevitable, and as this cannot produce any real solution so long as it does not break in pieces the capitalist mode of production, the collisions become periodic.

Capitalist production has begotten another “vicious circle”.

(I discuss why this is the case in an article discussing crisis theory for those interested in a more theoretical analysis)

Without these periodic crises, the demand for labour power would continue to the point that full employment would be the norm and workers bargaining power would be enhanced. The rate of profit would decline as competition favoured the sellers over the buyers of labour power. Capitalists would be driven to replace living labour with dead labour at an even faster rate. Ultimately, this too would lead to an undermining of capitalist profitability.

But a crisis interrupts this process and restores capitalist stability until a new crisis breaks out.

An immediate danger from app-organised labour

But there is an immediate danger with some of the new technologies like Uber and Task Rabbit that are becoming available that if the control and benefits are left solely in the hands of the bosses it will lead to greater control over workers lives and increased exploitation as a consequence.

They say about 3-4 million are employed in the US by these app-based companies and this is expected to double in five years.

These apps are allowing labour to be connected directly to a customer in a bidding process that incentivises the lowest cost providers.

At the moment, many of these workers are being classified as self-employed and they often have no protections.

What I also know is that if we could make sure the benefits of robotics and automation are shared in society then we should welcome their arrival.

But that is the problem. That is not what has been occurring.

New rules needed

I don’t believe unions can stop the technology. We need to figure out ways to use it.

Where there are unfair advantages because one group is following the law and the other is not then that needs addressing. Uber, for example, should be obliged to have necessary insurance, to do checks on the drivers, and so on.

But if it is an artificial barrier designed to protect the existing taxi company monopoly then that doesn’t need to be supported.

The technology can be modified to protect workers as well. One of these apps in the US has adopted an algorithm that allocates work based on earning at least $15 an hour. Another one which arranges someone to do your shopping has shifted from a self-employed model to a waged model.

Californian courts have ruled that Uber drivers are employees not self-employed. The Seattle City Council is considering a law to allow Uber drivers collective bargaining rights.

We can also write the law to make that happen here as well.

That means they would have to be paid at least the minimum wage. It means the contract would stipulate the app must include an algorithm that ensures that is the case.

These apps also open up the possibility of cooperative labour being promoted. Why can’t a local government help drivers establish their own cooperative using the same technology?

All of those possibilities need looking at.

It is probable in the near future that a driverless car and a phone app combo will eliminate taxi drivers for good. That is progress in my view. That is not labour that is particularly rewarding. But the overall productivity gain and share of the profits, needs to be captured by society not only by Google or whoever invents it.

The jobs lost in one sector need to be replaced and that is a social obligation. If the jobs can’t be replaced then the work can be shared and the free time devoted to leisure, education and crafts art and all manner or creative pursuits.

Government intervention needed

Governments need to intervene to ensure that happens. At the moment the bigger and wealthier you are as a capitalist the less you seem to pay in tax or contribute in any other way usefully to society.

That is why legislative measures remain vital to restoring security and dignity for workers. Having a National Government doesn’t make that task impossible.

We have pushed the minimum wage back up to 50% of the average wage and this government has not felt able to reduce its real value. That is a victory.

However, the government’s promise to eliminate zero-hour contracts has proved to be a lie. The draft law actually makes the legal situation worse.

The MBIE website is upfront. It says that with the new law “The employer and the employee do not have to agree on set hours if both prefer flexibility.”

Telling a young, unemployed, unskilled worker that they can make a choice to “prefer flexibility” when accepting a job with a fast food giant is a lie and Workplace Relations Minister Michael Woodhouse knows it.

But the fight is not over on this issue. I think the government is vulnerable. They were hurt by appearing to pander to their mates over weakening health and safety law changes. Unite and other unions will be campaigning to force the government to meet its promise to actually end zero-hour contracts. We will need your support.

We need laws that will allow a radical expansion of union coverage. Most workers like unions. Given a genuinely free choice, most would join.

How hard is it to design laws that give that choice? We need real access rights. We need a real choice for workers when they start work, including meeting the union for that sector.

Unite Union has 7000 members but only 20% density. With 60 or 80% density, we would be able to bargain much more effectively with the bosses in our sectors.

We need a minimum wage that equals two-thirds of the average wage.

We also need laws on breaks, scheduling, and overtime.

We need additional sick leave and annual leave to spread the benefits of the productivity rises we have already achieved.

We need to radically reduce the use of self-employment and subcontracting unless it is a genuinely equal contract like happens for some specialised and very skilled workers.

We must make the big companies employ directly unless they have a good reason not to. We could also make the lead contractor liable for unpaid wages or failed health and safety compliance committed by the subcontractor.

And we need a welfare system based on universal entitlements not begging for crumbs.

There should be universal access to publicly provided housing. The most deserving should be assisted first but our goal should be to progressively make public housing a right for whoever wants one.

Health care and education must remain universal entitlements and made really free.

A Universal Citizens Income

There should be a generous universal family benefit for all children.

There should be a universal citizens income for all when you leave school.

We could end Working for Families and nearly all benefits currently being paid by WINZ.

I was sceptical for many years on a universal income. It has been promoted by some who see it as a support mechanism to avoid challenging casualisation, low wages and job insecurity because we supposedly can’t stop it. I would dispute that.

A citizens income shouldn’t be done to avoid taking action to turn back the clock on casualisation and job insecurity. We need better laws and stronger unions for that to happen.

But I think a citizens income will empower workers to join unions. It will enable workers being abused to give the boss the one finger salute and be safe while finding other work.

And the “cost” is not much more than the current tax and benefits regime. In fact, the elimination of the punitive multi-billion dollar bureaucracy known as WINZ would be a wonderful sight. And it will give many WINZ staff the chance to find a worthwhile job to regain their self-respect.

The future of work and welfare is another one where there will be a social struggle between the interests of the majority and those of a small minority.

Let us step up with radical but practical ideas for the challenges that lay before us.

Let us propose humane solutions. Let us be reasonable. But let us also be insistent that change must come.

And if the system can’t accommodate these sane practical solutions then we need to change they system so that it serves the majority not a small group of super rich “haters and wreckers”.

I see no reason why the majority of humanity would surrender their lives to some form of a super wealthy elite with a tiny minority of winners and a vast number of losers.

A social struggle will determine that outcome.