Sometimes progressives can have a tendency to accept arguments that support our long-term objectives without subjecting them to the same scrutiny that we do the theories of our enemies.
I think the imminent threat that large-scale automation will eliminate most jobs is one of those arguments.
We like it because it holds out the prospect of humanity being liberated from the drudgery of much repetitive manual labour.
Socialists want to achieve that goal. It is one of the reasons we are socialists.
Several recent acadmeic visitors to New Zealand including Guy Standing a featured speaker at the Labour Party’s Future of Work conference and Nick Srnicek’s who was the keynote speaker at the launch of the new left wing think tank Economic and Social Research Aotearoa.
Both speakers have highlighted this alleged technological threat in order to support the implementation of a Universal Basic Income. A UBI would ensure every adult citizen had an income that would enable their survival if not able to work. A UBI would allow workers to choose full-time or part-time work, to do hobbies or undertake study, become artists or craftspeople at their choice.
Both speakers also thought a UBI could be implemented without necessarily overthrowing capitalism.
But I am not convinced that this “new” threat is that new at all. Technology has been replacing jobs systematically for the 250-year history of capitalism.
This is called productivity growth. In New Zealand it averaged 1.4% per capita from 1860 to 2007.
Along the way, most jobs in agriculture disappeared. This may well be true in the future for jobs being done today that don’t match the new technologies of the future. I am pretty sure that taxi drivers are in that category.
Under capitalism, the most successful economies are the ones that have achieved the highest rate of productivity growth. That is why Germany is one of the richest countries in the world and remains a large exporter despite having relatively high wages.
Capitalism is a dog-eat-dog system based on competition. The most successful dogs are the ones that reduce costs the most. Temporary gains can be made by simply cutting wages, but longer-term the real winners are those who master new technologies first and apply them most successfully. Inevitably this involves some displacement of labour.
This is what has made capitalism such a revolutionary system since its inception.
But capitalism is also a system of commodity production for profit. That means that for economic growth to occur there needs to be both production and sale. That means there must be buyers of the commodities. Buyers need incomes.
A sudden surge of technological innovation being applied to the economy as a whole with accompanying large-scale unemployment would mean there was also a huge surge of production of commodities for sale that would not find buyers. Production and investment would be cut back. Workers would be laid off. Purchasing power would decline further. Production would be cut back. Productivity growth would plunge as a result.
Eventually a new cyclical upturn would start once the system has driven production below demand far enoungh. Prices start rising and profitable selling is restored. Wages have often been cut in the downturn and fat trimmed from the production process which boosts profitability still further. Workers begin to be rehired. Wages start rising. Purchasing power expands. A business cycle is completed.
That is the nature of capitalism. There are limits to growth, therfore there are limits to the application of technology across the whole system. Some methods of production, and even whole sectors will become obsolete, but capitalism will find new ways of exploiting labour and new commodities and services to provide.
In the final analysis all wealth is a product of human labour and whatever can be extracted from the natural world. Without the application of human labour there is no wealth created.
In the history of capitalism, purchasing power is also governed by economic laws.
I commented on this last year:
Capitalism is a system of expanded reproduction. It grows in cycles that expand the production of commodities with each cycle. As a system, it has a growth rate of around 2-3% a year. That has also been true for 250 years. The ultimate purchasing power of consumers, “aggregate demand” in the lingo of economists, appears to have laws that limit its growth.
There is a wide-ranging debate over why that may be so. I adhere to an orthodox Marxist view that purchasing power is ultimately determined by the production of the money commodity gold.
This view is defended by the authors of the Critique of Crisis Theory Blog and summarised in this article:“History has shown that the existing global hoard of gold and its rate of increase ultimately governs, through the mechanisms of price, interest rates and monetarily effective demand, the growth of the global capitalist market. These must be taken into account in any analysis of the general crisis of capitalism.” .
That is also why there are business cycles – they are the periodic clashes between the powerful forces to produce commodities without limit and the actual limit of the market.
This Marxist explanation may not be correct. But there must be powerful objective laws operating in the capitalist system of production to limit its growth rate to 2-3 percent given that the system itself, because of competition, is driven to expand production to the absolute limit possible.
Pro-capitalist economists of both the Keynesian and Monetarist varieties favoured the removal of “paper” currencies from having any formal relationship to gold. They got their wish in the 1970s. But there has been no escape from the objective limits to growth whatever the monetary policy that may be being followed by a particular government.
That is also fundamentally why there will remain limits to the application of machinery to production – under capitalism. Capitalism produces commodities – items for sale at a profit. If there is no one with the income to buy, there is no sale. If there is no prospect of a sale there will be no production. With a limit to the expansion of the market, all that can be achieved is intensified competition with a further division and redivision of the existing market.
History disproves “Says Law”, one of the fundamental “theories” of pro-capitalist economists, which is that production creates its own demand. If that were true, capitalism would never have crises. Instead, crises recur with monotonous regularity every 7-10 year. It also seems that there is a period of prolonged depression every four or five business cycles. These have occurred in the 1840s, 1870s, 1930s, 1970s, and it seems we have another on our hands today.
The generalised crisis of overproduction that began in 2007-8 has meant that the per capita growth rates were actually radically reduced over the last decade. In New Zealand it has been about 0.6% a year on average since 2007. Worse figures can be seen in Europe and the USA. Rather than a technological revolution there has been a technological stagnation for almost a decade.
The problem with capitalism is not that it displaces human labour with machinery but that it does so in an unplanned and unequal manner.
Capitalism has no concern for the displaced millions in search of work across the globe. It welcomes displacement and human misery because it means working people are forced to compete against each other even more.
If there is no resistance, or not enough resistance, working people get pushed back. Our jobs become more casuaslised. Our rights as workers are undermined. This was the end result of a series of defeats suffered by working people in nearly all the advanced capitalist countries over the last three decades.
The retreat by working people as a consequence of defeats in struggle has produced the massive growth in inequality and casualisation. This is not the inevitable result of technological change.
Waterside workers in New Zealand were casual workers before unions organised the wharves strongly in the eatly part of last century. They became bastions of union power and strength in the 1930s and then have been progressively casualised again in New Zealand since the 1980s as a consequence of repeated defeats the workers and their unions have suffered. This has not been true in ports in the USA. The number of workers have been radically reduced but union power has kept these jobs well-paid and secure.
The problem everywjhere has been that for the last three or four deades nearly all the productivity gains have been captured by the 1% of super rich. They use their control of business, media, and state institutions to dictate the rules of the game to ensure their continued wealth and power. They pay no tax and make sure governments cuts social services as much as possible to remove social protections won by workers in the past to weaken their position and power. Maximising profit is their sole purpose in life.
Loss of purchasing power by workers can be compensated by a radical increase in purchasing power by the rich and super rich. As a system capitalism does not discriminate between the production and sale of loaves of bread or million dollar Learjets so long as it is a profitable activity. Only constant struggle can ensure workers protect their rights and standard of living.
Constant increases in productivity mean that each worker is producing more and more wealth each year. As a system capitalism doubles comic output every 30 years or so. The nature of that output, much of which is wasteful and useless if not dangerous to life and limb, and the wrecking of the planet’s life forces, is ignored by the system.
That is why we need a new system based on democratic economic planning for human need and ecological survival.
Until we can eliminate capitalism, working people must fight for measures of social support that ensures we are in the strongest position possible to resist the inevitable ravages of this system.
We need strong unions and parties willing to fight for our interests. We need a living wage for all. We need overtime rates restored, including on weekends. Workers should fight for a shorter work week so that a living wage can be achieved in 30 rather than 40 hours.
We need to demand policies from governments that provide basic support and protections. This must include universal free access to education and health care.
We must also demand access to welfare benefits we can live on when thrown out of work by this system. This can include a universal basic income for all to get rid of the stigma often attached to accessing welfare even when survival depends on it.
Some right wing economists support a UBI as an alternative to a good job at good wages. Some even favour getting rid of minimum wages if a UBI is brought in. But a UBI should only be supported as something that is in addition to good jobs at good wages. The existence of a UBI would also give us the option of sharing work more equitably and coping with technological upheavals more easily.
It those circumstances a UBI can be a mechanism for strengthening workers bargaining power collectively and individually when we are bargaining with the bosses or their governments while we use the “free” time we have to prepare to overthrow the system for good.