The internet, smartphones, and social media have transformed the way we interact with each other and the world around us. What would happen if these digital technologies moved off the screen and further integrated themselves into the physical world?
Advanced industrial robotics, self-driving cars and trucks, and intelligent cancer-screening machines presage a world of ease, but they also make us uneasy. After all, what would human beings do in a largely automated future? Would we be able to adapt our institutions to realize the dream of human freedom that a new age of intelligent machines might make possible? Or would that dream turn out to be a nightmare?
The new automation discourse asks just these sorts of questions and arrives at a provocative conclusion: mass technological unemployment is coming, and it must be managed by the provision of universal basic income, since large sections of the population will lose access to the wages they need to live. Do the automation theorists have this story right?
The resurgence of automation discourse today responds to a real, global trend: there are too few jobs for too many people. Chronic labor underdemand manifests itself in economic developments such as jobless recoveries, stagnant wages, and rampant job insecurity. It is also visible in the political phenomena that rising inequality catalyzes: populism, plutocracy, and the emergence of a sea-steading digital elite—more focused on escaping in rockets to Mars than on improving the lives of the digital peasantry who will be left behind on a burning planet.
Pointing with one hand to the homeless and jobless masses of Oakland, California, and with the other to the robots staffing the Tesla production plant just a few miles away in Fremont, it is easy to believe that the automation theorists must be right. However, the explanation they offer—that runaway technological change is destroying jobs—is simply false.
The Demand for Labor Is Permanently Depressed
There is a persistent underdemand for labor in the United States and European Union, and even more so in countries such as South Africa, India, and Brazil, yet its cause is almost the opposite of the one identified by the automation theorists. In reality, rates of labor-productivity growth are slowing down, not speeding up. This phenomenon should have increased the demand for labor, except that the productivity slowdown was overshadowed by another trend: in a development analyzed by Marxist economist Robert Brenner under the title of the “long downturn”—and belatedly recognized by mainstream economists as “secular stagnation”—economies have been growing at a progressively slower pace since the early 1970s.
The cause? Decades of global industrial overcapacity killed the manufacturing growth engine, and...
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