Thursday, June 25, 2015

Even more on the jobless future

I wasn't planning on touching again on this subject for some time, but I read an excellent article in The Atlantic this week  that merits some comment (pieces like these remind me of the importance and the nobility of good, old fashioned, public minded journalism): A world without work. It has convinced me even more of the soundness of my previous analysis. A couple of especially sobering data points I think worth highlighting:

“The most-common occupations in the United States are retail salesperson, cashier, food and beverage server, and office clerk. Together, these four jobs employ 15.4 million people—nearly 10 percent of the labor force

Well, no biggie, according to techno-utopians new technologies create as many opportunities as they destroy (here is my friend Steve Denning at Forbes, which I'm having so much fun with lately: Jobless future is a myth -well, so was the idea that house prices could go down), so sure they will come up with at least 15.4 million jobs in the next few years in high value added occupations, so funny and fulfilling and rewarding we can’t even fathom their stupendousness today, like big data analyst, or Internet of Things interpreter, or AI semantic discombobulator, or deep learning rules transcriptor, or  transgender transition coach, or poodle psychologist (as the article points that humans find it more convenient to tell their sorrows to a cleverly written software program than to another nosy, judgmental human, whilst we can assume expensive pets will have no such qualms)… but wait:

Nine out of 10 workers today are in occupations that existed 100 years ago, and just 5 percent of the jobs generated between 1993 and 2013 came from “high tech” sectors like computing, software, and telecommunications

So essentially we are screwed… as the previously hinted at works will be either a) requiring a kind of qualifications that less than 0.1% of the population may have or b) makejobs that doesn’t add any kind of value to anybody, but have the potential to be a hell of a ride for those lucky enough to get ‘em (see “entire financial sector”) or c) glorified names for fragments of domestic service (what in older and less ceremonious times were called maids and servants) to be performed for very little money and no security whatsoever, at the whim of ever more despotic masters (as in a buyer’s market they’ll know more and more they hold all the best cards of every hand, so why be nice), but in all three cases will amount to a quantity entirely unsuited to the number of available human beings made redundant by technological advance. Interestingly, the article adds a dynamic perspective I hadn’t taken into account: the loss of jobs is likely to happen not gradually, but by fits and starts. During recoveries nobody likes to lay anybody off (and they can afford to keep unnecessarily bloated headcounts), but when recession hits the managers have the perfect excuse to reduce from their staffs all the excess workers, which will not be needed again when the economy picks up speed again (for proof, see today’s labor environment just about everywhere).

The author tries not to tilt too much towards pessimism, so he presents three potential future scenarios, which he names consumption (people spend their lives in leisure, although what form of meaningful leisure society as a whole may develop, as distinct from watching 16 hours of TV a day, the author can’t fathom), community (people pool resources to essentially build arts & crafts for each other in communal centers that allow them for rich human interactions) and contingency (people live by the day, hand to mouth, hustling minimal services for each other that do not require any special qualification or result specially compelling). He can see traces of all three in our current society, and reckons that probably we will see a mixture of all of them to different degrees in different locations. What I found missing in his analysis is the macro aspect. For the first two scenarios to significantly play out all those non-workers need some sort of income, as both the leisure and the equipment needed for that resurgence of craftsmanship require to be paid for (even the broadcast model of entertainment is predicated on the assumption of the receivers being potential consumers which deserve the investment in advertising that keeps the whole enterprise working in order to convince them to spend their income in the advertised product… so no money means no leisure), and the big question is where will the money for all those non-workers come from, as without it we automatically fall back on the third, mildly dystopian scenario (even the hustle and bustle require that, between them, all the unemployed have some ultimate source of income –be it in the form of food, building materials, fabrics and leather for clothing, etc.- which they can then distribute by the provision of mutual services). A Universal Basic Income is mentioned (as has become customary when discussing this matters), along with the likely resistance to its implementation (“the rich could say, with some accuracy, that their hard work was subsidizing the idleness of millions of “takers””), without realizing that, until very recently, those same takers were also able to work, and that the product of their labor was what made the rich wealthy in the first place (not by direct coercion, or because they had their surplus value somehow mystically “extracted” from them as in the Marxist trope that requires labor to be the only source of such value in the first place for such a circular notion to make any sense, but by turning them into compulsive consumers). Previously the journalist has recounted a well known (probably apocryphal) anecdote that points to the crux of the problem:

In the 1950s, Henry Ford II, the CEO of Ford, and Walter Reuther, the head of the United Auto Workers union, were touring a new engine plant in Cleveland. Ford gestured to a fleet of machines and said, “Walter, how are you going to get these robots to pay union dues?” The union boss famously replied: “Henry, how are you going to get them to buy your cars?”

We have been grappling with that same question since the 70’s (with the first oil shock), and as I hinted in my previous post on this issue (How bad it may turn out to be) only very recently have the owners of capital arrived at a satisfactory answer: they do not need the robots, or the software for that matter, to buy their cars (or their watches, or their designer furniture, or their tailor made suits, or any other gadget that their automated factories churn out) because they have reached a size that for the current level of automation makes it viable to produce only for themselves. They do not need a mass market for any of the advanced products they manufacture because the constitute a sufficient market with just the members of their same class, and they can keep their very luxurious lives going just by selling those high-quality products and sophisticated services to each other. This is what growing inequality points to, a caste system with just two castes (the haves and the have-nots, the 1% and everybody else, the “makers” and the “takers”) more and more separated, more and more isolated, with less and less mobility between them (as that is essentially what a caste is, a social group to which you belong by being born into it, which you can not leave through any kind of effort or betterment of your circumstances).

The real meaning of trickle down economics will then be revealed: the upper caste will be interested in preserving the existence of the lower one as they will draw their servants from it (even if robots could cook for us, clean our houses, take our kids to school, take the dog for a walk, polish our shoes, iron our shirts, take out the garbage or drive us around there will be people, I suspect, that still find it thrilling to boss around other people… who knows, a good butler may become a coveted kind of positional good which may even drive their salaries up), so they will let some wealth drip from their vast and ever expanding stock, just enough to keep the little people alive and well (well enough not to cause too much trouble, that is).

It could be argued that our current political and ideological system would never allow such a state of affairs to happen. That the 99% have means of representation that ensure their interests are taken into account and would never let such egregious disparities to grow to such levels. Just let me finish giggling before I try to provide a (serious) answer, which will draw from my own personal experience. The first foreign country where I relocated with my family was Brazil, in 2002. I absolutely loved it (still do), but to say that my European sensibility was shocked by the level of inequality I witnessed there would be a gross understatement, and one of the reasons I wanted to move back is because I didn’t want my son to grow up accepting as a normal state of affairs such social differences, and the attitudes that accompany them. The Gini index (a widely used although not very nuanced  measure of inequality that can vary between 0 –in a perfectly equal society where all members have exactly the same income- to 100 –a perfectly unequal one, when one person has 100% of the income and all the rest have nothing) for Brazil in 2003 was  58, and it went down to 52.7 in 2012, the last year for which World Bank figures are available, in good part due to the bolsa família program, which increased the share of GNI going to the poorest 20% from 2.6% to 3.4%.  In a similar period (1997 to 2007, the latest year the CIA world factbook would show, which is in and of itself surprising) the USA saw its Gini index go from 40.8 to 45 (and the % of the total GNI received by the poorest 20% drop from 5.2% to 4.6%). So think about it. In just one decade (and the one before the crisis struck, marked by optimism and the belief that the tide was lifting all boats) the USA has seen an increase in inequality similar in magnitude to the decrease experienced by Brazil in a similar timeframe, widely credited by economic historians to be one of the most dynamic and equalizing in its whole history, and which has hugely increased the ranks of the middle class there (so an equivalent decrease would mean, in the case of the USA, the impoverishment of a similar percentage of such class). Without anybody as much as noticing, or complaining about it (the Occupy Wall Street and similar movements wouldn’t start making headlines until 2011, even Pickety’s splashy book –with a comment of which I inaugurated this post: How it all got started- wouldn’t arrive until 2013). The moral is that societies, like the proverbial frog in a cauldron of heating water, will allow themselves to be boiled to death provided the temperature (the inequality) increases slowly enough.

What I do believe is that the attainment of such levels of inequality, and the congealment of such a stratified system where a few enjoy all the advantages of a technologically advanced society while the vast majority fends for themselves between the most squalid and dilapidated structures of what once where welfare states can not (and will not) happen without substantial changes in the underlying structures of justification (the ideological scaffolding of society), that will need to dust off some old narratives to revert to a way of organizing human groups that, although prevalent during most of our History (as I tried to convey in this recent post: Inequality in history) we not only believed that we had left behind after the Industrial Revolution, but have learned to consider much less desirable than the current one. Of course, what was once learned can be unlearned, and there is no social structure so bad that does not have at least a bunch of defenders somewhere…

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