Automation

Monday 17th July

We are at possibly only the beginning of another Industrial Revolution, and this one may prove as chaotic and damaging as the last one – when millions were forced into factories and mills and mines to toil in darkness and fear and poverty.  Automation is the new innovation, though hardly an innovation – it has been happening for at least fifty years now, it is only the pace of change which is frightening.  There was a time when thousands of ‘skilled’ workers were employed in the motor industry, doing largely repetitive jobs which are now done by robots.  Automated tills are now in most large shops, and despite teething problems – “unexpected item in the bagging area” – we are slowly accepting them.  And largely, so far, they have replaced low-skilled and repetitive tasks.  And of course many of those jobs were semi-automated anyway – bar code readers replacing someone who remembered all the prices in the shop, or who had to add things up by hand.   So, in many ways Automation is a good thing.  The problem is not really Automation but the nature of Capitalism which needs two things – as low a cost of production as possible and a market of consumers to buy the stuff it makes.  And with the speed of automation there will almost certainly be an exodus of jobs – some are predicting up to 40% of the current jobs may disappear in the next twenty years.

And of course, as well as those employees losing wages with which to buy the products they formerly helped to produce, but which now are made by machines, the Government will lose Income Tax and National insurance.  In a strange way it is already happening.  Much as we applauded the increases in tax thresholds which have taken many low-paid workers out of income tax, this has contributed to lower tax revenues.  A better policy would be to increase wages so that these people not only have a decent income but can pay some tax too.  So, how do we go forward?  Strangely enough, San Francisco, which is at the forefront of Artificial Intelligence and Robots, is thinking about this problem.  Now, much as it makes economic sense for individual companies to automate and lose employees there is a strong case for them to pay an “Automation Tax”, maybe based on the number of workers made redundant, or just a flat rate – in order that Governments can pay a decent wage to, and employ many more, care-workers or nurses or teachers, jobs that for the forsee-able future will not easily be replaced by machines.

This needs a complete rethink of the nature of business, money-making and social responsibility.  There have already been calls for a transaction tax to be applied to all money transfers and buying and selling of all sorts of shares and bonds and futures.  But for this to work we need far more co-operation between countries, rather than competition.  I fear that there will be far more pain before any gain.  But unless we start to think in different ways the world is in for a period of massive disruption yet again.  There are now 7.6 billion people on the planet (and growing) and with more and more automation our current largely unregulated and chaotic ‘free market’ and ‘dog eat dog’ Capitalism will become far more ruthless in its quest for larger and larger profits – and people, especially poor people, will be, particularly as their labour (the only thing they have to offer in this cruel world) becomes obsolete, as machines work harder and faster and don’t complain – many will have no role or value in any vestiges of society left.  Also, of course, the more that Capitalism automates, the fewer consumers there will be for their products – but as Capitalism is not a unified force, individual companies will either benefit or not.  Unless Governments start to think about their Citizens in a totally different way….there could be trouble ahead.