Is technology a threat to our jobs?
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.
“We like it because it holds out the prospect of humanity being liberated from the drudgery of much repetitive manual labour.”.
That’s an interesting statement.
However one problem is repetitive manual labour is simply being replaced by the drudgery of repetitive computer and call centre jobs.
Furthermore, there are many people who are very happy with what some would call repetitive manual labour. They have no desire what so ever to live forever, designing computer software or drifting through time and space running yoga classes and selling one another cups of coffee. Nor could the economy cope if they did.
I have yet to see any evidence that this path of technology is taking us anywhere good. The benefits are all for the shareholders and all about profit, workers are now like so many drowning rats trying to get by in a world where jobs are now called ‘gigs’.
The fact that some Right wing economists and tech heads are all for a UBI, should ring alarm bells.
These are not people looking to free up your time so you can work on the Revolution. Seriously, the NeoLib Capitalists Tory whatevers are not about to do ANYTHING that risks their hold on power.
Just look at the panic caused by the mere existence of Bernie Sanders and Jeremy Corbyn.
For the average man and woman in the street…there will be no ‘free time’. Unless we are cut loose and left to ourselves in some shanty town.
The Luddites were right, which is why they were vilified and annihilated by the establishment.
200 years later the industrial system is in the crisis phase which leads to its collapse, and globally the environment is ruined.
Great post.
Agree with in NZ “Rather than a technological revolution there has been a technological stagnation for almost a decade.”
The stagnation is caused by low wages which mean that corporations do not invest in technology and just keep the status quo going as labour is getting cheaper. This means as new technology gains traction the early adopter countries reap the most benefits. For example solar power production was adopted by Germany and this is a massive industry there. Likewise China is also investing in that technology. In NZ we just buy fake carbon credits and build more roads and gas power stations and our productivity is low as is our innovation.
It’s Bill English’s view of having a low wage economy.
Also agree 100% with
“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.”
And 100% with
“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.”
A UBI could be a great mechanism for the redistribution of wealth. It must be an amount that can support a person’s living costs and would exert upward pressure on wages as people would no longer be forced by necessity to accept poorly paid work.
Recognising that sources of wealth are dependent on the society and culture that has produced technological developments over several generations and can now be paid as a social dividend to all citizens is a step forward for a modern society. I think that it will be accepted as the way of the future.
Mike, as always, your analysis is both broad and deep. I agree with many of your conclusions, but respectfully, I believe there are a few serious flaws to your argument which need to be addressed;
First, technology is destroying Capitalism almost as fast as Capitalism is shedding labour, and the coincidence of these two parallel trends is complicating the discussion considerably. Jeremy Rifkin talks about the long-term affects of the drive toward Near Zero Marginal Cost, which is leading to the inexorable, accelerating demise of Capitalism through the proliferation of technology. Rifkin has a number of excellent potted summaries of his thesis on Youtube.
Second, we are no longer living in a monolithic Marxist economic frame. We are transitioning between a simple world of bricks-and-mortar Capitalism, to a much more complex digital, post-Industrial world. In this world, our world, the First and Third Worlds are converging, creating previously unimaginable labour surpluses. First World workers now have less than a generation to learn how to syndicalize themselves outside of full-time paid employment and leverage their educations before being forced into the hyper-capitalist economic quantum universe of “System-D”. In System-D, as described by Mike Davis in “Planet of the Slums”, everything has a price, but nothing is worth anything. Millions of educated First World workers exist in System-D now, below even the Precariat. They are the victims of terminal alienation, living in an economic substrate which for many of them literally lies underneath the homes and communities their parents once owned and built.
Third, you say, “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.” But the reality is, the Left is demanding these social supports by attempting to commandeer a sinking ship. Capitalism is losing the ability to sustain itself either economically or politically, and in many respects, the economy is reverting to a pre-capitalist feudalist rentier base. No one is absolutely sure why or what to do about it, but one thing appears certain; the Left has no credible, viable competing economic system to replace it, beyond theory.
Capitalism, therefore, will likely eliminate itself long before the Left is able to arrange its demise. Outside of its mostly well-run unions, the all-volunteer Left barely has the skills to organise a BBQ at the beach, much less win an election, and even less, create a new Socialist banking, financial and industrial system to replace the current Capitalist one. If even electoral victory is too much to hope for, then organising an alternative Socialist economic system with all its working parts might as well be a trip to the Moon on a soap bubble.
The utter failure of the Left to plan beyond its next central-committee-piss-up was never more graphically illustrated than by the complete capitulation of Syriza during the recent Greek crisis. The Greeks had spent 100 years discussing Socialism without ever once considering what they would do on Day One if the Revolution actually happened and they found themselves in charge. There simply was no plan.
This is why *in our present condition*, it is such romantic nonsense to talk about “the coming Revolution”, and “the Collapse of Capitalism”, as if these are good, magical things that we should all be wishing for and urging on. The truth is, a Revolution is the worst thing that could possibly happen to us. To the present generation of Socialists, “plan” and “program” are dirty words, and “organising” means at most, kicking the comrades out of bed at sparrow-fart on a Saturday for “banner painting” and a march down Main Street. Even the most shoddily run Girl Guide troop makes better preparation for its weekends away than the supposedly best-run Revolutionary Socialist organisations prepare for what one would think was their entire raison d’etre.
The reality is, we all need to take the needle off the record, and stop repeating platitudes that would have been familiar to Rosa Luxemberg, but which mean about as much as the “Second Coming” means to the average worker today. The Left needs to completely reboot itself, and do the opposite of everything that it has done during its 30 year long losing-streak. This new Left needs to dial down the rhetoric and roll up its sleeves. We need to understand “building Socialism” in literal terms. We must learn how to create and run socialist economic systems, and cure ourselves of our addiction to sugar-filled social media protest porn, endless issue-chasing and political ADHD. If we are to avoid the “inevitable ravages of this system” as you say, we must stop waiting on the State. We must organise, Mondragon-style, to create literal or virtual enclaves of socialism within and around the current Capitalist system, to both survive its collapse, and avoid being plunged headlong, one technologically-obsolete worker at a time, into the oblivion of System D.
When you add up all the different kinds of income support the NZ state already pays out (superannuation, Working for Families, unemployment and invalids benefits, publicly-funded salaries in not-for-profit groups, and so on), and add the cost of all the stingy means-testing required to make it pretend to work, I doubt a UBI would cost much more. Yet it would create so much more financial certainty for everyone, the state included. Recently announced figures show that the NZ state is already paying a huge chunk of our rent and mortgages, through the accommodation supplement. Why not stop pretending there hasn’t been a massive market failure in housing, and pay it through a UBI instead?
One of the most important points about UBI is that this would transform markets, removing them from their current role of supreme power (deciding who does and doesn’t get to live in a house and eat properly), and reducing them to the more appropriate role of sorting out the distribution of scarce luxuries (who does and doesn’t get this or that personalized plate or whatever). This would reduce corporate capitalism to a role analogous to the role of religions in our current system (with the exception of totalitarian cults like Gloriavale); offering nice-to-haves in the flavour and packaging of your preference, but not in control of anything you actually *need* to live. Something people could choose to participate in or not, just as atheists and skeptics can choose not to participate in religion.
Mike pretty much nails it here:
“The problem with capitalism is not that it displaces human labour with machinery but that it does so in an unplanned and unequal manner.”
I would add that it keeps people dependent on monetary income for their basic needs at the same time as booting them out of jobs willy-nilly. Not only does this not serve workers, it doesn’t really serve businesses either, as Mike point out, because they are dependent on workers having disposable income. Separating basic needs from the requirement to have constant monetary income, while keeping money and luxuries for those who need and want external motivation to work, seems like the obvious and sensible solution.
Robots do. Robots cannot create. Let the robots do while we create. We can “plant” for new ideas: http://upriser.com/posts/plant-power-dutch-company-harvests-electricity-from-living-plants-to-power-streetlights-wi-fi-and-cell-phones#sthash.MWtxzjbv.dpuf