A turning point in labour history

The latest wave of automation heralds new transformations for society, but how can we ensure that nobody is left stranded?

Miklos Kis
3 August 2016
Flickr/Stròlic Furlàn - Davide Gabino Follow. Some rights reserved.

"The so-called sharing economy and the new wave of automation are appearing to rewrite the old rules." Cab drivers protest against Uber in Lisbon, 2016. Flickr/Stròlic Furlàn - Davide Gabino Follow. Some rights reserved.Several profound transformations are taking place in the world of labour at the same time. Aspects of a so-called sharing economy and the new wave of automation are appearing to rewrite old rules. The long-term consequences of this turning point depend on the policies adopted by different governments.

It is a hotly-debated question whether technology will displace more jobs than it creates over the next few decades. In the news we read about self-driving cars that threaten to eliminate a line of professions: truck drivers, bus drivers, cab drivers – even Uber-drivers. We read about automated supermarkets or hotels. According to research by Carl Benedikt Frey and Michael A. Osborne, 47% of total US employment consists of occupations which could become automatable over the next decade or two.

Optimists refer us to history: automation in the short-term has eliminated jobs, but also diminished the prices of products, increased workers' wages and opened up possibilities for creating new products and new jobs. That was exactly the case when the automation of agriculture enabled the development of modern industry. Likewise, the automation of industry has led to ‘service economies’ in developed countries, and the importance of the service sector is still increasing. Why should we be worried about the automation of the service sector in the light of historical experience?

To tell the truth, we may have some reason.

Firstly, the rise in inequality appears to be unstoppable. According to Oxfam, the richest 1% have seen their share of global wealth increase from 44% in 2009 to 48% in 2014. This is connected to the downward trend in labour shares of GDP across much of the world since the 1980s, which has contributed to widening income inequality. This fall has weakened consumption and produced demand deficits, followed by increased unemployment, as noted in a recent ILO report.

As Nouriel Roubini says, when income is redistributed from labour to capital, it flows from those who have a higher marginal propensity to spend (low- and middle-income households) to those who have a higher marginal propensity to save. 

The rise in inequality appears to be unstoppable.

An optimist would suggest that technology creates new industries with brand new products with millions of new jobs. That sounds great. But without sufficient demand, who will buy those products?

Secondly, there is a huge difference between increased productivity and the total substitution of human labour. Historical experiences are about more just productivity. Mechanisation has meant better tools for human labour, but the forthcoming human-level artificial intelligence could lead to a total substitution, a radical turning point in labour and human history.

The first shock to society will be autonomous transport. Many commentators are worried about Uber and Lyft because they eliminate relatively good cab driver jobs, which are part of the regulated labour market. Artificial intelligence will eliminate Uber drivers' jobs, having a deeper and more enduring effect on the labour market than this type of sharing economy.

How can we prepare for these changes? Many theorists, such as Robert Reich, suggest a universal basic income. This seems to be a logical solution, but it is not enough to give money to everyone for some food and for some entertainment. People need a sense of esteem and importance. Work is too integrated into our lives not to leave a devastating vacuum. It offers a sense of belonging, status, identity and much more.

“We must cultivate our garden” concluded Voltaire in Candide. This wisdom is not outdated. People want to create value, and thus work is important. The result of work is usually measured by money —except in cases regarded as special, such as Wikipedia. Most people are accustomed to the fact that work creates products, and that these products are paid for by someone. If no one wants to pay for a product, it is not considered a real product, nor is its creation considered as work, but an amateur activity, and voluntary work is rarely considered  the best solution to the problem of the absence of work.

But if humanity were free from the drudgery of work, how could humanity use this newfound freedom? No one wants a society where only a minority can live a useful, active life, because as Hans-Peter Martin and Harald Schumann wrote in The Global Trap, “only 20% of the population will suffice to keep the world economy going” in the near future.

“We must cultivate our garden” concluded Voltaire in Candide. This wisdom is not outdated.

Martin and Schumann quote experts from a 1995 conference in at the Fairmont Hotel in San Francisco, which was created at the invitation of Mikhail Gorbachev with 500 leading politicians, business leaders and academics. Though this meeting took place more than 20 years ago, its effects are still ongoing — it handed down to us two new expressions, via Martin and Schuman’s book: “20-to-80-society” and “tittytainment”.

“20-to-80-society” tells us that an active 20 percent of the population will participate in living, earning and consuming. “Tttytainment" was created by Zbigniew Brzezinski — national security advisor to Jimmy Carter — who thought that the frustrated population of the world could be kept happy with a mixture of food for survival and numbing entertainment.

But both these visions and suggestions are morally unacceptable, because they are incompatible with the concept of human dignity. “Tittytainment” — in the sense that many people spend their leisure time passively consuming the products of mass culture, has been with us for many decades. As in the consumption of alcohol, the main problem is with overuse and addiction to TV shows or computer games. But of course augmented reality will allow us to create more seductive and addictive games than ever before. 

We may see many people escaping from freedom, to use Erich Fromm's term. They will choose voluntarily to take on new dependencies and addictions, offering big business new opportunities. “Every person speculates on creating a new need in another, so as to drive him to fresh sacrifice, to place him in a new dependence and to seduce him into a new mode of enjoyment and therefore economic ruin,” as Marx wrote about the market economy. 

The other suggestion allegedly advanced at the Fairmont conference concerned a wide field of voluntary community services, neighbourhood assistance, sports activities and other kinds of associations. “These activities could be upgraded by a modest salary that would promote the self-esteem of millions of citizens,” one expert remarked. But is this any less worrisome?

We are at a crossroads. One way leads to a dystopia where the majority lose their human dignity to a modern form of ancient Rome. The other way would be better. It requires less inequality and much more access to high-quality education. It could take us to a modern type of ancient Athens, where humans are creative and deal with science and art at their pleasure, the main difference being that the slaves are substituted by droids. But this of course sounds like a utopia.

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