Thursday, November 5, 2009

Can manufacturing be the world's job saviour?

This sentence caught my eye today (I saw it at Econospeak):

"Among the 1.3 billion Chinese people, approximately 800 million have, accordingly, no buying power".

That's a chunk over 50% of their huge population without significant purchasing power. I find this compelling evidence in support of the slow process of technological unemployment generally, especially in light of outsourcing towards China, and in light of the graph I put together in an earlier blog. In that graph East Asia is the worst performer in the global employment-to-population stakes. That is, East Asia from 1998 to 2008 experienced falling employment relative to its population, during a period of intense outsourcing, and, in China's case, electrifying GDP growth. As the article I quote from mentions, China (and other countries) cannot be the recipient of jobs from elsewhere unless they keep wages low. Having high numbers of their population desperately struggling with poverty is part of this gruesome equation.

Why should this be evidence of technological unemployment? Because if human labour were in high demand, China's trick would be impossible to pull off. In detail technological unemployment is almost impossible to prove. One has to find instances of redundancies explicitly due to some technological innovation, and show that that innovation, in reducing the cost of producing some good or service, does not lead to an equal amount of employment elsewhere in the global economy in time honoured trickle-down style. That is not an easy task, and certainly way beyond my limited resources. Similarly, new companies can start up on the back of some new technology and employ less people to produce more stuff than they might otherwise have done. Such a thing would not show up in the statistics as evidence of unemployment growth.

In simple terms, we produce more and more stuff with less and less human labour. That is the pattern. Without the technological developments replacing what human labour once did, demand for human labour would increase, and would be visible in rising wages and higher purchasing power. On top of this, demand needs to keep up with (including purchasing power) the ever increasing quantities of stuff available for purchase. Were demand truly infinite (as in infinite wants), who knows what miracles of consumption we might pull off (forgetting for the sake of discussion the little issue of the ecosystem). But wants are not infinite, wages must be kept low, technological developments do mean producing more with less people, and so we have a major problem.

Unless, of course, we begin testing, with a view to pursuing, a resource-based economy. Blocking this endeavour are two major factors. One is a status quo which would cease to hold the reigns of power should such a direction be adopted, the other is our love-hate relationship with labour and money. We believe strongly, without really looking at it, that money is the only incentive out there to get unwanted things done, to reward good work, to demonstrate success etc. Because this seems to have been the case for millennia, we think it a fact of life, as ordinary as air, as inevitable as death. If this were true, then I'm afraid we would be marching ourselves to our doom.

There have been exceptions to this mode of living, with no money as incentive mechanism, and without waged labour as indicator of societal usefulness, all of which produced vastly different behaviours from their "citizens," citizens who were (or are) as genetically homo sapiens sapiens as are we.

So after all that I return to this post's title: Can manufacturing be the world's job saviour? No, it can't. Quotes are easy to come up with, compelling arguments far harder, but this one is eye-catching enough to use:

"Within ten years, less than 12% of the U.S. work force will be on the factory floor, and by the year 2020, less than 2% of the entire global work force will still be engaged in factory work."

It's the soft skills that are hardest to replicate technically, not the manual. But even there, artificial intelligence and other database softwares will wreak havoc with employment over the coming decades. The only thing that can stop this is civilizational collapse. Lets learn to embrace the process as the emancipation from unwanted slog that it is, and construct a different society that can maximize the benefits of humanity's ingenuity equally for all, while keeping human dignity and the ecosystem at the very forefront of our concerns.


Martin said...

Funny though how much of the robot arms, artificial intelligence, and database softwares is used to actually produce and perpetuate the unwanted slog.

Toby said...

That is an important point, Martin, and thanks for raising it. My reasoning on it is that, because we culturally just know waged labour is essential, that dignity arises directly from our economic usefulness to society, we do not want to fully automate. That would turn us all into bums, because of human nature don't you know. On top of that, the profit motive warps us away from true productive efficiency for various reasons, such as meeting market-determined deadlines, built-in and perceived obsolescence, and the whole conspicuous consumption gig. In such a system efficiency is anathema. Slog and waste predominate.