We Need to Be Ready for the Next Revolution

Challenging austerity is urgent, but the Left won't survive the bigger battle over technology and jobs if it doesn't start agitating for a basic income now.

April 13. 2016

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We Need to Be Ready for the Next Revolution

Challenging austerity is urgent, but the Left won't survive the bigger battle over technology and jobs if it doesn't start agitating for a basic income now.

“To even stand still we have to move very fast.”

The frenetic, fast pace of the election cycle seems almost to be never ending here in Scotland. With a referendum, UK General Election and Scottish Parliamentary Election all falling within 20 months of each other it’s as if the campaigning never stops.

The Bank of England predicts machines may replace up to 50% of jobs in the UK and USA

Likewise the same questions always seem to be asked: education, tax, foreign policy, health, pensions, the case for or against austerity. The United States seems almost a mirror image, if a more surreal one, with the answers to these questions never varying by any great degree on either side of the Pond. Yet no politician or major media outlet seem to dare mention what could be the most important societal shift since the Industrial Revolution: a technological revolution that will impact how we work and live together with ramifications that we cannot possibly conceive yet.

For the last 50 years our lives have continually adapted and improved with the advances of technology and automation. During the postwar years this advancement was mutually beneficial to labor and employer. The development of machinery led to higher production, which led to an increase in wages. Yet since shortly before the turn of the century, the advancement of technology has only helped to increase capital, while wages in real terms have fallen. There is now a very clear and present danger that automation and robotics will develop at such a rate that the Bank of England predicts machines may replace up to 50% of jobs in the UK and United States.[1]

This will only work for us if there are better, higher paid jobs and occupations provided

In The Rise of the Robots, Martin Ford explains why the threat to human labor by technology has suddenly become such a real and daunting prospect. Citing Moore’s Law, which states that over the history of computing hardware the level of advancement has doubled every two years. Which meant that the rate of advancement initially was slow, but as we have progressed over time, the more advanced computer hardware has become – and so the quicker the next breakthrough inevitably is.

To give an example take 1 pence and double it every day for 30 days. By the end of the first week your total would only be £1.28, at the halfway point your total would be £327.68 but by Day 30 your penny would have accumulated to over £10 million.  This rapid development has led to the American Association for the Advancement of Science to report that:

“ …intelligent and semi-intelligent autonomous systems — such as self-driving cars and autonomous drones — ‘will march into our society’ in the next two to three years, with driving expected to be fully automated in 25 years.”[2]

Those who have been paying attention a while have seen that this machinery is already coming to life. Go into most supermarkets and you’ll find self service checkouts where cashiers used to be, Fast food restaurants like McDonald’s now employ touch screen order boards in many of their establishments. Farm work (in particular fruit picking) is now increasingly done by robots, thanks to new visual perception software. Many economists and politicians have written this off as no issue; after all, low skilled, low waged service jobs such as these are thought of as unwanted, allowing workers to retrain and to seek better opportunities. But this only works if there are better, higher paid jobs provided.

In 2013 the Bureau of Labor Statistics stated that in 1998 workers in America put in around 194 billion hours of labor. 15 years later the growth of output had increased by 42%, meaning that the total amount of labor required for this was…. 194 billion hours. This demonstrates that as thousands of new American businesses had developed in that time, and the population increased by 40 million in that time, the human labor the economy required ultimately stayed at the same level. As technology developed, less labor was required to achieve the same growth output.

The recent financial meltdown led to businesses having to ‘skeletonize’ their workforce just to stay afloat

In addition to this, the job market is becoming crowded. With life expectancy growing, retirement ages rising and a worldwide population expected to reach 9 billion in coming decades means that thousands of new jobs need to be continually developed just to cope with the current labor market. This is what JFK meant in 1963 when he said “to even stand still we have to move very fast.” In addition to this, the recent financial meltdown led to businesses having to ‘skeletonize’ their workforce just to stay afloat. During this time they discovered that advanced technology can often do the job faster and more efficiently than humans, and so despite business growth we will not see a return to previous hiring levels.

As a socialist it’s often difficult not to feel anger at this, but from a business perspective, if given the choice would you hire a human who can: only work 8 hours a day, need days off and vacations, may call in sick, may not perform to consistent level every day, would need an office, car parking space, HR department, management? Or an automated machine that can work 24 hours a day if necessary to a consistent output?

If 50% of the population are without jobs, who will buy the products that are being made by this new technology?

Ford describes the current labor market as a jobs pyramid, which reflects why half of UK graduates are unable to find anything other than what would be described as ‘non-graduate work.’ This has led to the growing inequality in our society as 95% of total income gains between 2009 -2012 went to the top 1%. The question we all need to therefore ask is: even if automation and robotics only take up the low skilled, low paid jobs (though this is not really the case as intelligent algorithm technology is now beginning to threaten high skilled jobs) how will we be able to produce enough jobs to keep an ever growing population working? If 50% of the population are now without jobs, who will buy the products that are being produced by this new technology?

Not only that but a society based around those who have jobs or don’t have jobs is far more likely to exacerbate inequality, allowing the richest to maintain control and have less pressure exerted on them to give workers progressive radical policies.

Corbyn and Sanders’ plans to increase vocational training and create employment through infrastructure are positive steps, but these measures will only provide a short term relief against an oncoming technological tide

Economists are already beginning to  develop ideas towards this new reality, and it is vital that socialists and the wider left begin to recognize the imminent threat that this poses to our current models of employment and economic policy. Both long term and short term plans must be set out. Indeed, Jeremy Corbyn and Bernie Sanders’ plans to increase vocational training and create employment through infrastructure are positive steps, but these measures will only provide a short term relief against an oncoming technological tide.

Some more conservative economists have floated the idea of a mutual fund. At first glance this makes sense: it will have been the working and middle class taxpayers’ money which has contributed to the research and development of technology and as such a mutual fund in which we all share the capital seems ostensibly reasonable. However from a business standpoint this would result in very few people daring to risk what they have as it’s unlikely there would be a safety net to fall back on. Banks would be unlikely to invest in new ventures if the concept of risk is virtually wiped out. From a socialist perspective the notion that those – and there will be some – who take a risk with their capital would have to face an incredibly bleak future should it fail, as any sort of safety net would only encourage riskier investment. More worrying would be the acceptance that labor is now worthless and your net worth is purely what you own.

A basic income of £10,000 is ostensibly double the current welfare budget, but it would allow the economy to be further stimulated, increasing purchasing power and allowing income and tax revenue to be replenished

It seems the most attractive and logistical proposal is to introduce a basic income: an income given to all on an individual basis without means testing or condition. Through this setup, if done properly, a common but dramatically restructured safety net would allow us to alleviate poverty, end extreme poverty and homelessness, and eradicate income inequality.

Giving every UK resident over the age of 16 an annual £10,000 would cost the Government £400 billion upfront. This is double the current welfare budget of £200 billion. However, a basic income would allow the economy to be further stimulated, increasing purchasing power and allowing income to be replenished. It would also provide greater tax receipts for the treasury as someone earning £8,000 a year would not be paying tax, but with the basic income their pay would total £18,000 a year and be liable for tax on around £7000 currently. Basic income would still provide the citizen with a significant improvement in living standards (and higher tax bands could still be created). Finally, administrative costs from scrapping Universal Credit (Welfare) and moving to a universal basic income would also diminish, as means testing alone requires an enormous government bureaucracy to maintain.

We have to accept that we could see an increase in those who choose to live off their basic income alone

In fact there is a strong argument for a basic income right now, despite the short term increase in social security spending. Within the current model, social security spending would sky rocket anyway when 50% of the employment is taken over by automation and robotics.

Unfortunately the current state of our politics means that a consensus on this seems a long way off. To accept a basic income, the Right would have to get over their fixation of benefit scroungers and the Left would have to acknowledge that there is more to life than work. While studies have shown basic incomes provide incentives for individuals and communities to invest and initiate new ventures, we have to accept that we may even see an increase in those who choose to live off their basic income alone for whatever reason. This can be argued is a positive for labor as those who choose to opt out are more likely to be less productive than those who choose to work. Others may want one or both parents to stay at home with their children. Regardless those who choose not to seek further employment still have a role to play as consumers within the society. They will still need to buy food, clothes, electronics, pay rent/mortgages and this will maintain the demand that mass unemployment at the expense of technology could not.

There are of course immense logistical questions surrounding the implementation of basic income – immigration, initial start ups and incentives to continue to work which will need to be thought through and discussed. This is why it is so vital for socialists and the wider left to begin to take the lead on this. It should not, however, be seen as an unworkable ideal, rather a policy whose time is hasn’t yet come.

It is time now for this discussion to be given the importance that it deserves. While politicians dance around with short-sighted squabbles about tax loopholes, a radical shift is fast approaching that they are either too blind too see or too concerned with the next opinion poll to care about. Short and long term plans must now begin to be put in place to ensure that as the technological revolution continues at an advancing pace we are ready for it. That we have invested in education, developing infrastructure, and most importantly developing an affordable safety net for those who no longer find their labor of worth, for a society which has and will continue to get more unequal, with more extreme poverty and despair; and for an economy currently incapable of maintaining an equilibrium of production and consumerism.

If we don’t begin to move to address this now, I fear it may be too late to even stand still.

 


 

Image: Nesster

[1] http://bgr.com/2015/11/16/robots-replacing-human-jobs/

[2] http://www.aaas.org/news/increasing-use-autonomous-systems-could-threaten-jobs

April 13. 2016