Could the consequences of automation lead to the growth of communism, as Mark Carney has warned? Mathew Lawrence writes that deep technological change opens up two divergent paths: one where technologies are managed and owned to our collective advancement against one where they deepen inequalities. He draws on IPPR research to outline three strategies that will ensure automation works for the common good.
A spectre is haunting economists, the spectre of automation. Mass unemployment, wage stagnation and the intellectual and political revival of communism – these are just some of the outcomes Mark Carney foresaw over the weekend when discussing the potential economic impact of technological change. Nothing is determined; how we manage automation will determine whether it immiserates or helps emancipate.
We are not on the cusp of a ‘post-human’ economy, with breathless rhetoric about the imminent rise of the robots and technologically-induced mass unemployment overblown. Nonetheless, the governor of the Bank of England was right to argue the accelerating capability of automating technologies could shake foundational economic and social assumptions: the role of employment as the primary means of distributing economic reward, labour’s position as the central factor in production, notions of scarcity, and how we organise working time, among others.
The reason why the coming wave of automation could, in time, be different to previous waves – more rapid, pervasive, and disruptive – is because of the growing power of artificial intelligence. Whereas past waves of automation typically required machines to have a clear set of instructions in structured environments to enable them to perform tasks once done by humans, today’s machines can act without explicit instruction in complex environments. In other words, machines are increasingly able to problem-solve, and ‘learn’, independently; and are able to perform an expanding range of both physical and mental tasks better and more cheaply than we can.
Under these conditions, automation could emancipate or immiserate. Managed well, automation could build a future of shared economic plenty, the productivity gains of technological change allowing us all to live better and more freely. Managed poorly, automation could create a ‘paradox of plenty’, in which we produce more, yet the fruits are less equally shared, as the benefits of technological change flow to the owners of capital.
Critically, the nature of the machine age will be human-shaped. This is because the pace, extent, and distributional effects of automation are determined by institutional arrangements, and the broader distribution of economic power in society. The future is not technologically determined. Automation is not an external force acting on us, but something shaped by our collective choices, with public policy powerfully steering how technologies are developed, used, and for whose benefit.
IPPR’s report on managing automation set out three core strategies to ensure it works for the common good.
First, we need a managed acceleration of automation to reap the full productivity benefits and enable higher wages and living standards. Due to the UK’s low investment rates, poor management practices, and long tail of low-wage, low-productivity firms, it is the relative absence of robots in the UK economy, not their imminent rise, that is the biggest challenge. To address this, the more rapid adoption of digital technologies, including automation, should become one of the national ‘missions’ of the government’s industrial strategy. A new partnership body, Productivity UK, should also be established with the goal of raising firm-level productivity, including the acceleration of investment in automation technologies. It should focus on the adoption of digital and other technologies for firms in the non-frontier ‘everyday economy’, where technological adoption rates are low, and support ordinary workers to develop and implement technological solutions.
Second, as the fallout from Facebook’s actions continue, it is clear we need to act to ensure the ethical and regulatory architecture shaping the use of digital technologies is publicly determined, not left in the hands of tech giants. We therefore recommended the establishment of An Authority for the Ethical Use of Robotics and Artificial Intelligence to regulate the use of automating technologies. Interestingly, there appears to be growing momentum towards such an outcome; whether the government’s new Centre for Data Ethics and Innovation will be sufficient will be worth watching.
Finally, if automation is to underpin a future of shared prosperity, we urgently need to develop new models of collective ownership. As automation grows, ‘Who owns the robots?’ becomes a vital determinant of the distribution of prosperity. If the share of national income flowing to the owners of capital increases, then existing, deeply unequal levels of capital ownership will accelerate inequality. To make sure that the dividends of automation are broadly shared, we need new models of ownership that hold wealth in common and democratise capital at scale.These could include a Citizens’ Wealth Fund that owns a broad portfolio of assets on behalf of the public and pays out a universal capital dividend and the creation of employee ownership trusts to give workers a stronger stake in the firms for which they work – and an ownership claim on the value they help create.
Carney was right to highlight Marx and Engels as useful guides to an age of automation. When considering the divergent paths deep technological change is opening up – a world where technologies are managed and owned to our collective advancement against one where they deepen inequalities of power and reward – we have one political choice confronting us: socialism or barbarism.
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Mathew Lawrence is a senior research fellow and co-author of IPPR’s report on automation. He tweets @dantonshead.
All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Wikimedia Commons (Public Domain).
A mention of stringer trade unions would have helped.
People who own stuff and run things make decisions. This is their world, not ours. The rest of us are merely tolerated because they need a workforce.
They love Ayn Rand more than all that loaves and fishes “crap”. As soon as they can build an army of robot slaves we will be surplus to requirements. You only have to look at how the unemployed and the poor are treated today to figure out what comes next.
With climate change there may not be enough food to go round anyway. This is already a cast-iron certainty for many poorer parts of the world. In the worst-case scenarios some industrialised countries could also be in the firing line.
At least the economy will carry on though with its climate-proof robot workforce. That’s the main thing.
The problem isn’t jobs (which are, after all, a ‘bad’) … it’s how society decides to share GDP between labour / citizens and capital in the future.
And, the issue has been with us for decades. The (wage) share of GDP going to labour has been falling in much of the developed world since the 1970s and the average real wage in the US is little better today than it was in 1973.
In the first sixty years of the British industrial revolution (1780 to 1840) wage share followed a similar path with all productivity gains going to capital. This situation reversed in the second half of the 19th century. A new skilled (industrial rather than agrarian) labour ‘aristocracy’ emerged and expanded in size over time and wage share (and real incomes) grew strongly … this increase was associated with rising levels of international trade, longer working hours and higher union density.
If similar processes drove / drive the extended wage pause in both of these periods perhaps we should look to the second half of the 19th century where wage share grew strongly to better understand how we can manage the transition to a less work (if not post-work) world?
We need to forget old models, including such terms as ‘Communism’ plagued as it is with images of authoritarianism and gulags with the failed attempts at its institution, and get back to basics.
The basics are that an economy creates value, and that value needs to be distributed among those beholden to and dependent upon that economy. In an economy in which human labour features only marginally in production, old models – along with old ideologies and their associations – become redundant. Every economic model in human history – hunter-gatherer societies, slave ownership, feudalism, communism, free-market economics – have all had at their core the idea of human production and subsequent distribution of their labour, fairly or otherwise. If we are to increasingly write people out of the means of production then, clearly, an entirely new model is needed.
UBI (Universal Basic Income) has, to my mind, insufficiently considered the direct provision of free essential goods and services in its modeling. Such distribution, along with a cash payment for extras, would seem to solve the distribution issue. However, there are lessons to be learned from the old arguments about the free market versus the communist ideal when it comes to incentive. Societies that offer financial incentives for innovation tend to develop more rapidly than those that offer a brass plaque proclaiming the innovator a ‘Friend of the People’ to stick on the wall of his or her apartment. Can we imagine a day when we cheer robots on at Old Trafford? Read a superior work of literature given the upgrades to version IX of the Autowriter? Visit a gallery to admire the works of Van Gogh, Picasso, and the IBM 3507 series 14? Robots may be able to better build a better mousetrap, but how long before they invent one?
I doubt the human race will be made redundant in either sense of the word – a sad day for humanity if it ever is – and while we continue to value the efforts of our fellows, those fellows deserve additional reward for those efforts.
Robots, it is to be hoped, will free the world of need and bring about leisure. That should be enough without insisting upon egalitarianism to boot. That way lies stagnation and humanity’s utter redundancy.
I totally agree with the 3 points and I the “People´s Fund” would be useful both to own assets and to invest in R&D with the aim to own partially copyright and patent. I think that it is more strategical than UBI policies. Socialism or barbarism in a broad sense, hoping to highlight the great importance of Public-Private Partnership. We cannot sacrifice the synergy between different actors in the society for a slogan of the 1970s.