Saturday, October 24, 2009

Technological unemployment as left wing technophobia

I stumbled across this article the other day, and wanted to address it as well as I am able. The article basically attacks those on the left (I do not consider myself left wing) who claim technological unemployment exists, is bad, and must be stopped. I agree with the article that technological unemployment is misunderstood and misdiagnosed, but not that it does not exist in an ongoing and "threatening" way. I put "threatening" in speech marks because it is only a lack of creative thought that turns what should be a much needed emancipation process for all people, into an evil.

Two things leaped out at me on initial reading. One was the palpable certainty emanating from the article that the author (Gerard Jackson) was right, while those he dismisses are hopelessly wrong. The other was the fire and brimstone hatred for the left wing and liberal party. I'm always suspicious of the content of tribal bickering, doubly so when the bickering parties are 100% convinced of their rightness, but nevertheless, one should always look at the arguments, not whence they come, nor how they are couched. So, let's look at the arguments.

"Any assertion that technology destroys jobs is based on the fallacy that capital is a substitute for labour and not a complementary factor. This belief in turn springs from the fallacy of composition, confusing the part with the whole. This is not to deny that machines do not destroy jobs — they do. But the process by which this is done expands real purchasing power, lifts living standards and raises the demand for labour in general. Therefore observers have confused the destruction of certain jobs with the destruction of employment, thinking they are the same thing."

I assert that technology destroys jobs, while the pressure to find waged labour creates new ones. Employment levels rise and fall in response to many factors, one of them being technological developments introducing machinery that can do better some job-role than any human can. As technology expands the area of labour it can perform, so human labour increasingly migrates to services, where human soft skills reign supreme. In other words, the destruction of job-types forces human labour increasingly onto the "dry land" of the services sector. ILO charts show this quite clearly, and while the pattern is slower in developing countries where even agriculture still employs sizable proportions of the working population, the technology to replace them exists. The speed with which agricultural (and manufacturing) labourers are replaced is slowed by financial considerations.

"based on the fallacy that capital is a substitute for labour and not a complementary factor."

This is somewhat vague. It is true that machinery which improves production efficiency tends to increase demand and thereby improve employment prospects, but only as an unintended consequence. The machinery was not invented to improve employment prospects, which is fine, nor was it designed to employ more people to run it than it replaces. The employment "slack" is taken up in another sector, typically services.

"Rather than being a substitute for labour capital is a means of economising labour, because it is the least specific factor, and making it more efficient."

This strikes me as casuistry. What is the real difference between substituting and economising? Either way there is displacement. Either way people lose their jobs. In time efficiency gains filter through to increased demand somewhere else (perhaps in another country, most likely in another city) where demand for jobs (perhaps in retail) increases. How often are the very people who are displaced by technological developments the very ones who find new work where they live as a direct consequence of that particular technology?

Mr Jackson mentions x-ray machines and jet flight. These are good examples of technology that directly creates new work (even though air travel is competition for railways there is still a choice), or at least principally. But what happens when stewards and stewardesses, pilots and co-pilots are replaced by software and robots? What happens when x-ray machines are no longer operated by humans, but by AI or other computer software?

"Technology can only be applied through capital. It would be pointless having the best programmers in the world if you cannot supply them with computers. Technology, including so-called information technology, is always applied through capital which in turn is fuelled by savings. It therefore follows that savings limit the extent to which investments in technology, no matter how highly advanced or desirable, can be made."

Yes, programmers need computers, but computers are manufactured largely without human hand. Skills such as programming and computer design are still in demand, but this is hardly the point. The point is the proportion of human ability that can be replicated by machines. As to capital being funded by savings, that sounds naive considering the indebtedness of virtually the entire planet to banks, the indebtedness of the banks to one another, and leverage ratios above 30:1. Investment is funded by the extension of credit, which has only a tenuous link with savings in modern (seemingly 100%) high risk banking (which will stay high risk until the tax payer can no longer afford to clean up the bankers' mess). However, that money is an impediment to technological development generally I accept.

There is then some high blown castigation of simple-monded left-wing technophobes, then this:

"These views overlook the fact that machinery is primarily employed to raise output per unit of input, i.e., productivity, not to displace labour."

Nevertheless, regardless of intent, a machine designed to do what humans had done displaces labour. Weapons designed to keep peace can be used to kill. It's not the intent that matters, its the consequences.

There follows a long description of the way increasing efficiencies of production lead to higher levels of employment, which is indeed born out by economic history up till now, a point I do not seek to gainsay. Indeed, the article I am criticizing is not aimed at me. I am not left wing, and I am most certainly no technophobe. I seek the emancipation of waged-labour generally, via an economic system that does not need a medium of exchange; a resource-based economy. In such an economy technology is purposefully deployed so that humans no longer have to do tedious, repetitive and mind-numbing work. This position is neither left nor right wing, it is fringe, it is unorthodox, and I doubt Mr Jackson has even heard of it, and I can't blame him for that.

The article then talks at great length about demand for new goods and services made cheaper by technological developments. However, there are some assumptions inherent in this well-known thesis. One is that demand for goods and services will always increase just because the price falls, regardless of how the environment copes with our rapacious appetites, and regardless of how clued up the buying population becomes (see The Story of Stuff for a hint of how attitudes to consumption might be changing). The other is that consumerism will always reign supreme. The Spirit Level was published in February 2009, after the article was written, and shows very clearly indeed that happiness is not owning more and more shiny things, nor is it earning more and more money. Gerard Jackson, being -- based on his article's content -- an orthodox economist, would probably assume that it is, or, at least that rational people are invariably motivated to acquire more and more wealth. But maybe even economics' troublesome "rational market actor" is capable of change. Maybe those rational buyers and sellers are starting to put two and two together. Maybe they are slowly becoming insensitive to the allure of conspicuous consumption.

"Without labour-economising technology the American telephone system would collapse. In 1972 it was estimated that using 1900 technology 20 million operators would have been needed to handle the volume of calls. (Taken at face value technology has destroyed more than 20 million jobs in this sector alone). In 1998 it was estimated that American telephone traffic uses so much computer power that if it were done manually the number of operators would exceed the numbers generating the traffic. So where did all the operators go? To other jobs, every one. That’s where."

This is a very important and well made point. Humans are becoming incapable of coping with the volume of work that needs to be done to run the global economy. We often just don't make the grade. As Mr Jackson rightly points out new jobs have been created to find work for the displaced workers, if not specifically then generally, but for how long can this pattern persist? In that we sleepy, hungry, sweaty creatures can't compete with our machine counterparts in areas A, B, C and D, how long until machines, computers and AI take over right up to P, or V? What biological evidence is there showing we will always be necessary in the work place, that we are infinitely capable of staying ahead of our ability to replace what we do in the workplace?

"Seeing the economy as integrated stages of production, as we should, rather than isolated sectors, as is frequently the case, helps put things like information technology in their proper perspective because it forces us to seek out economic linkages."

Again true, but as I have written elsewhere, technological unemployment should be seen as the ever improving ability of humans to replicate via machines, computers and software what they do physically. Seen in this light, the economic linkages of agriculture down to supermarkets, restaurants, cookery books and cookery TV shows become largely irrelevant. That the economy can be notional divided up into interlinking sectors does not alter the fact that humans have a particular skeleton, musculature and brain, yielding a particular, limited and replicable range of abilities.

So while it is true that increasing efficiencies can be seen to have led to higher demand for labour (although flat real wages in America over the last few decades suggests otherwise, even after factoring in globalisation -- why aren't the low-skilled skilling up and getting those luscious high-pad jobs?), the pattern created by technological unemployment and re-employment is one of incremental encroachment on the skill set humans have, and therefore predicts that this pattern of increasing efficiencies leading to higher employment will eventually break down. That may well be happening right now. Technically we can replace agricultural workers worldwide should we agree to do so, and remove humans from the factory floor in huge numbers (Jeremy Rifkin predicts 2% of global workforce working in factories by 2020). Now we are replicating our soft skills increasingly adroitly. Soon we will have hardly any skills left to replicate. Cashpoint machines, automated restaurants, the Eureka Machine, accountancy software, self-healing hardware, automated monitoring, AI generally, nanotechnology, are developments in their infancy, and I have not mentioned by far all that are out there.

As wonderful as we are, our abilities are largely replicable in the workplace. There will always be things that humans can do better than technology (although that is actually quite a bold statement), like friendship, society, courage, creativity, but these skills will not, I believe, be able to generate money sufficiently to run the current system. How can friendship or trust be paid for? Can you pay people to be courageous or creative in numbers sufficient to keep a global economy going? Will we pay each other to watch each other's films, or read each other's literature, or buy each other's art? I doubt it very much.

We need therefore to draw up plans that lay out a direction towards emancipating humanity from unwanted, forced labour via technological development and ingenuity. We need to give The Venus Project much more of our time and energy.

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