Wednesday, 26 February 2014

I, Paycheck

Bloomberg News unsurprisingly hails such advances - and rather vaguely posits that this will lead to as yet unknown and unseen "new economic opportunities" being identified in the future. This in spite of the same article pointing to how the current recession is so persistent and the much lauded recovery so skewed towards a tiny elite - for example, of the £60,000 millions created in the British economy since 2008, less than 1/60 has reached the pockets of ordinary people.

With one recent survey suggesting that by 2040, nearly half of all jobs will be automated, it poses a major challenge that capitalism appears ill-equipped to handle: in the absence of paid work for humans, how will companies with even the lowest prices have any significant market to sell to? Whilst some have posited a basic citizens' income as a means to the end of maintaining some sort of demand in the economy, the levels suggested appear to represent an emergency lifeline rather than a means of resuscitation and sustainable recovery. 

Communist Robotics will set us free!
And so, even in this age of apparently untrammelled neoliberalism, some socialists have hailed the advance of mechanised labour as the key to the eventual overthrow of capitalism, finally undone by its own contradictions. The robot worker is transformed into the Trojan Horse; the apparent gift of low cost or even free labour is in fact a deadly poison in the heart of a system that needs a market to sell to in order to keep its pulse beating. No workers, no wages, no purchases - Ford foresaw the need to prevent this by paying his employees enough to afford their own products; but now, in a sharply competitive global economy with its race to the bottom, such a philosophy, even one as manipulative and self-serving as the Fordist one, is soon undercut and negated. The System faces ruin and replacement with a society where instead of marginalising the People, robots free them to pursue the higher human plains foreseen by Trostky in "The Dream" and Morris in his visions of egalitarian anarchism. 

Or does it? 

The above argument rests on the traditional view that the economy of any society ultimately exists to serve its inhabitants, however tangentially and unfairly. Even the Hobbesian social contract extends beyond the political into the economic - everyone needs some stake, however small, for society to function in any civil manner. Hence, even rightwing governments used to see unemployment as at least a threat to stability and no matter how reluctantly sought to reduce it.

But with monetarism and the rise of neoliberalism, birthed by the bastard alliance of Thatcherism and Reaganomics in the 1980s, a new view emerged - unemployment as an political-economic tool : maintain a significant level of mass unemployment and you can reduce the power of unions and lower the wages of those in work with the threat of their easy replacement. 

And so forward to the next step change following on from 2008: with insecure employment and low wages a major feature of the world economy, human labour as a factor in driving economic demand becomes weaker and weaker. But with increasingly repressive surveillance states more and more the norm and with multinational corporations operating above and beyond the reach of the national governments largely in their pockets in any case, the needs of ordinary people matter less and less and a new economic paradigm is reached.

In the UK, major corporations have sat on over £800 billions of cash assets throughout the recession, refusing to invest in any supply sided recovery on the basis that there was insufficient demand in the economy. No one would buy anything they created.

This did not lead to them going bankrupt or losing out to competitors: with more and more monopolies and informal cartels in place, there was little chance of challenge from new companies. Instead, they sat out the recession, avoided their tax and paid out higher and higher dividends to shareholders and bonuses to senior staff, ratcheting up the inequality that in the past would have spelled out ruin for their enterprises.

But instead, as posited in more detail in this article from the US website, Punkonomics, the business elite have worked it out: they don't need you and me to sell stuff too. They can make their money other ways; and much more of it - by selling and wheeling and dealing with each other. Like a bubble above us, though still plundering our world of its resources and exploiting the surplus of the labour of those for now still required for human employment, the capitalists have reached the threshold of a new age of elitism: the Golden Age of Acquisition by Android.

American capitalists have found ways to profit even when their workers cannot buy their stuff.

From Punkonomics, February 2014:  (with thanks to Dr Beni Balak)

by Jerry Friedman

There is a story that when the late union leader Walter Reuther was given a tour of a GM plant, a manager introduced him to a set of the company’s new robots.  The manager challenged Reuther to say how he would organize the robots into the UAW.  The union leader supposedly responded by asking: how will General Motors sell cars to the robots?  While American unions have failed to organize the workers in the new economy’s factories, its capitalists seem to have figured out a good answer to Reuther’s question.
We shouldn’t be surprised that conservative politicians and orthodox economists are calling for the Federal Reserve to end its program of monetary ease and for the Federal government to end its program of extended unemployment insurance.  Believing in Say’s Law and the virtues of unregulated markets, they have never been comfortable with state action to help the unemployed; instead, they have long argued that the only proper role for government is to protect price stability and the integrity of banking system.
What should surprise us is that so few in the business community are pushing back against these ideologues in support of policies to bolster economic growth and employment.  Robert Reich asks whether capitalists and managers have forgotten the basic Fordist compromise, in which businesses rely on affluent workers to consume their products?[1]  If a rising tide lifts all boats, don’t capitalists benefit when unemployment falls and workers have more to spend?  And shouldn’t they support policies that bring the tide in?
They don’t because American capitalists have learned to profit from recession.... MORE HERE
"Has anyone else here seen sea-beams glitter in the dark near the Tannhauser Gate?"

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