Friday, July 13, 2018

Some Day Even You May Rise Up Against Your Government.

Imagine an army of outraged workers thrown out of work, their jobs taken over not by foreign labour but by automation - robots. Unemployed from a surprisingly broad spectrum of the workforce: unskilled, trades, even the professions. An economy that serves a shrinking elite and impoverishes the many. Democracy, long captured, inevitably succumbing to irrelevance, displaced by the rule of plutocrats, heralding a new era of feudalism. All for want of any viable vision of how to adjust society and the economy to continue to serve the population at large.

Governments, including Canada's run for cover whenever vision is most needed. During Harper's reign, his then BFF, Tom Flanagan told an audience on Saltspring Island that the Conservative prime minister utterly eschewed vision. He was focused on the present. The future held little currency for Stephen Harper.

Justin Trudeau is scarcely better than Harper. He acknowledges challenges such as climate change more freely but his gestural response, hopelessly inadequate, is strictly short-term. He is doing next to nothing to prepare this nation and our people for climate change impacts even in the near and mid-term.

Automation? That's not even on this government's radar. We've already had Trudeau's finance minister, Morneau, consign working class Canadians to a future of "job churn," membership in the 21st century precariat. In abandoning Canadians to a grim fate and doing nothing to avert this calamity, Trudeau and Morneau have pulled the pin on a very nasty grenade.

An essay in Foreign Policy argues that politicians must prepare their electorate for the onslaught of automation or allow their nation to succumb to opportunistic populism.

In 2016, there were already 309 installed industrial robots for every 10,000 manufacturing workers — a measurement known as robot density — in Germany, 223 in Sweden, and 189 in the United States. The use of robots had risen 7 percent in the United States, 5 percent in Sweden, and 3 percent in Germany in just one year. That may not sound like much, but at that rate, robot density would double in the United States in about a decade. And these numbers are only likely to grow because next-generation robots are already highly cost competitive. The average hourly cost of a manufacturing worker in Germany as of 2013 was $49, in France it was $43, and in the United States $36. The hourly cost of a collaborative robot — a machine that does not require skill to interact with — was $4, according to a recent study by Bain & Company.

That same Bain study estimates that advances in automation could displace up to 25 percent of the U.S. labor force over the next two decades. This would mean nearly 2.5 million Americans would have to find new work each year. By comparison, only 1.2 million Americans were displaced annually in the transition from agriculture to industry in the first part of the 20th century. Estimates for other countries vary widely, but all suggest significant displacement can be anticipated thanks to the rapid adoption of robotics and AI in both the manufacturing sector and, increasingly, the provision of services. 
To say that publics are wary of these impending technological changes would be an understatement. In Europe, 70 percent of respondents to a 2015 Eurobarometer survey agreed that “robots steal people’s jobs.” This included 89 percent of Spanish, 75 percent of French, and 72 percent of Germans. In the United States, according to a recent Gallup report, 73 percent of those surveyed worried that artificial intelligence would eliminate more jobs than it created.
... Three in 10 Europeans and roughly 4 in 10 Americans told the Pew Research Center in a recent survey that life was worse today than it was 50 years ago for people like them. As of 2007, 70 percent or more in Spain, the United Kingdom, Poland, France, Germany, and the United States already said their traditional way of life was getting lost. And significant portions of the publics in Europe and the United States — 49 percent of Americans, 45 percent of French, 44 percent of Italians — say their country’s involvement in the global economy is a bad thing because it lowers wages and costs jobs. 
Popular reactions against globalization help explain the nationalist and populist currents in today’s politics. In contrast to widespread support in the past, only about one-third of U.S. Republicans today say trade agreements are a good thing for America, according to a Pew survey, echoing the oft-repeated sentiment of President Donald Trump. Those most critical of trade deals are white men over the age of 50, a demographic group quite likely to have lost manufacturing jobs because of globalization and who various polls show are among Trump’s strongest backers. 
Similarly in Europe, those who have a favorable view of populist parties — such as the National Front in France, the Alternative for Germany party, the Party for Freedom in the Netherlands, and the Sweden Democrats — are much more likely than others to believe that life is worse today than 50 years ago. And they are also more likely to believe that involvement in the global economy is a bad thing.
Governments today respond to these destabilizing changes much as Morneau did with "job churn" - with a shrug of inevitability. They declare themselves powerless to stop or even alter these corrosive forces that spread anxiety, anger and disaffection. Indeed, they are powerless. They have surrendered that essential power to a no-longer-new order, neoliberalism to which they now respond not as instigators but as captives of the very system they implemented. It is people the like of Harper and Trudeau and Morneau that have placed our very democracy in very real peril.

They ought to be consulting the very best minds, the public intellectuals, the great progressive economists, on how to get out of this trap, how to steer another course, while there's still time.  Will they? Hardly and in their failure, their unwillingness to act with the vision needed in these rapidly worsening times, they betray the nation and our people.


Anonymous said...

I for one welcome our new robot overlords!

The Mound of Sound said...

Anon, why are you wasting time typing? Have you topped up all of the light oil reservoirs yet? And, don't forget, you have an appointment this afternoon at 2 o'clock for a robotic probe. Relax, we had another robot check it. There won't be an electrical short this year. Not again.

Lorne said...

While this may sound unforgivably simplistic and naive, Mound, the only course a responsible government could follow would be to restore corporate taxation to a reasonable level and provide support for displaced workers. For a government with vision, that could take the form of aggressively pursuing development and jobs in the green economy. Of course, this will not happen, but sometimes I like to indulge in that "vision thing."

Toby said...

Further to what Lorne said, governments need to tax the robots.

For several decades we have been told that our manufacturers need to be more efficient. Well, efficiency became a false flag, a pseudonym for fewer workers.

Anonymous said...

Toby is right, in fact, Bill Gates suggests that governments tax the owners of robots at a rate comparable to cost of the employees they replace. This would reduce the incentive to automate and allow the government to provide services to the displaced employees.

As things stand, the incentive to automate is huge. Companies replace often highly-paid employees that cost them training, wages, pensions and benefits with relatively inexpensive depreciable assets and all the tax advantages these bring. The discarded workers, if they are able to find work, often find precarious employment. As a result, the government collects less in income taxes, CPP and EI, yet is still expected to provide services. This is untenable and needs to be fixed ASAP.


ffibs said...

Algorithms that place orders for goods, algorithms that process the orders, robots that pick and pack, driverless trucks that deliver the goods to warehouses where robots pick pack and then ship selected goods that were ordered from the Google Home app of the consumer, who now has one function in life which is to consume.

Hugh said...

Robots making stuff that people can't afford to buy because their jobs were taken by robots.

The Mound of Sound said...

Wise comments, all. Many thanks.

James Galbraith dealt with the automation problem in his book, "The End of Normal." He focused on paid labour as an asset to any healthy economy. He advocated a dual response - a charge or tax on robotic labour and a shifting work week so that the benefits of automation can be shared by the entire population. A four day, perhaps even three day, work week with commensurate income to today's 40 hour, five day week.

After all, without an adequately compensated labour force the consumer economy self-destructs.

If you read the follow-on post that deals with a prescription by World Bank president Kim on the duty of government to prepare its populace for the era of automation you'll see how what our governments are doing undermines our people. The neoliberal model has to go.

I'm convinced our government must institute a Royal Commission to enquire into neoliberalism and alternative political-economic models we might consider implementing. Such an enquiry is long overdue and a matter of real urgency.

Purple library guy said...

The thing is that, while all the reforms mentioned above are very sound, the people owning those robots are the same people who've been hosing us and avoiding tax and buying policy for decades. They're not interested in shorter workweeks or avoiding unemployment or paying taxes to support society, and they have the dollars and the lobbyists to back up their position.
While it's true that collectively they're sort of better off if consumers have some money, there are two problems with that. First problem, it's a collective action problem--any given plutocrat is better off free-riding by resisting solutions and avoiding tax. Second problem, they're mostly not into positive-sum games, they're more into positional games. That is, they don't mind much if there's less total in the economy as long as they have it and other people don't.
The only way it changes is if the public takes their stuff away and gets rid of their privileged strategic positions as the owners of the means to prosperity.