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Do you ever stop to think just how far we have come in the so called Digital Revolution? We take for granted the time saving and efficiencies of the electronic media that is part and parcel of our life today. Have you thought that there is much more to come? That this is only the start. An article by Robert McChesney in New Philosopher shows us what to expect. “The Internet has transformed our economies, our culture and politics, and our very way of life to such an extent over the past four or five decades that we are in the midst of a communications revolution on a par with the invention of writing or the printing press, perhaps speech itself. Arguably, it’s that important. But what we have experienced to date is only the warm up act.”
An illustration is given, where in 2015 the CEO of one of the largest German industrial corporations in the world, spoke at a seminar revealing that one of their many worldwide factories was now fully automated. They have plans in hand extend this automation to other factories as well. During the question and answer segment of the presentation he was asked when this would happen. The answer was not now. There was a problem, not economic, but political. To do so would, “throw at least 40% of their total workforce, much of it still based in Germany, into the unemployment lines.” He went on to say that do this would see the middle class in Germany burn.
Digital development has reached a point where it needs to be restrained for political reasons because robots are replacing individuals thus potentially creating unacceptable unemployment. The thinking, in this case, was that the CEO could not keep his finger in the channel much longer. Are we on the verge of something comparable to the Cambrian Explosion which refers to a brief period 540 million years ago where life underwent a rapid diversification, including the development of vision. “It was crucial for the subsequent development of complex and intelligent life.” Now, it seems possible to replicate the performance of many of the perceptual parts of the brain, including vision itself.
Gill A. Pratt, until 2015, the Program Director of the Pentagon’s Defence Advanced Research Projects Agency commented, “The effects on economic output and human workers are certain to be profound and the timing of tipping points is hard to predict, but it’s on its way.” Furthermore it will not only be the manufacturing sector to come under pressure as white collar jobs will also be affected. As for the millions of those displaced there are no options available at this time to find alternate work. Opportunities will be created here, but none at this time. No one foresees any new employment sectors opening up that are sufficient to swallow the displaced workers or the hundreds of millions of people entering the workforce across the planet.
These pressures will usher in a new economy where lower wages will be the norm. Robert, “These developments are going to pose direct and mortal challenges both to capitalism and democracy.” The US system is showing long term stagnation, slow growth, and decline in real wages reflecting the economic outcomes caused by these changes. Robert, “For those under the age of thirty, the labour market is hardly superior to that of the Great Depression.” With stagnation playing its role it’s hard to see how new technology can contribute in a positive way. Robert talks about the supreme irony of what is facing us as we improve efficiency but are unable to solve the economic problems that improving this technology was designed for. “The exact moment far less human labour is necessary to produce more than enough to satisfy human wants and needs, the system that fostered that abundance is incapable of adapting to it.”
Economists such as Keynes, Marx and Mill all understood that capitalism as we know it will eventually need to be superseded with a post scarcity system that is built around the new economic reality. These tensions will be played out in the political realm as citizens will demand political solutions to the great problems of stagnation, unemployment and poverty. Robert, “Those who greatly benefit from the status quo will likely battle against progressive change as if their lives depended on it.”
Next time you think how smart we have become, thanks to the rapid improvements in technology, consider the ramifications of its effect on employment and underemployment. In the course of becoming efficient, have we created future problems for ourselves in the forms of decrease in jobs, lower incomes, stagnation and social upheaval? Perhaps we will come to accept this new economic order as being natural. It may take one or two generations to believe in the normality of it all. The power of the very wealthy seems set to disappear and be replaced by a society more interested in the development of the “self” rather than the accumulation of assets that will grow with inflation, for example. In the meantime the digital revolution will continue on, rewarding us with improvements and efficiency in the way we go about working and living our lives.