Social Stability Watch

WEF brings no plan to stop the brewing revolt

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With so much attention this past week focused on the World Economic Forum (WEF) in Davos, Switzerland, no one can be in any doubt anymore – humanity is presently in the midst of a highly disruptive transition to a new epoch in its history.

Developments in artificial intelligence, robotics, and biotechnology, called the Fourth Industrial Revolution (FIR), would disrupt the business world in a way similar to previous industrial revolutions, the WEF said in a report published last week.

What this new chapter in our history will eventually be called, is not possible to predict at this stage. Depending on their vantage point, various pundits are guessing at various outcomes.

Looking at the convergence of factors like production automation/robotics, the ‘connection of things’, a biotechnology revolution, climate change, online retailing and globalisation of corporations, many are predicting a jobless society, ‘end of jobs’ or a ‘post-work’ world by the middle of this century – one in which human labour will just about have become redundant.

This notion is not just a flight of science fiction fancy and has been coming for some time. In the early 1960s, then US president John F. Kennedy declared that the major domestic challenge of the decade was to “maintain full employment at a time when automation … is replacing men”. Just consider the following statistics, facts and predictions:

  • A WEF survey of 350 senior company executives in 15 major developed and emerging economies, representing 65% of the global workforce, found that as many as 7.1 million jobs in the world’s richest countries could be lost through redundancy and automation;
  • Global unemployment has reached its highest level since the great depression of the 1930s, with more than 800 million people unemployed or underemployed, and is likely to rise sharply, with less than 5% of companies around the globe having even begun the transition to the new machine culture;
  • The technological changes in the production of food are leading to a world without farmers, with untold consequences for million people who still rely on the land for their survival. Millions of marginalised farmers could lead to worldwide social and political upheaval;
  • The world’s largest manufacturing activity, automobile manufacturers – responsible for one out of every 12 manufacturing jobs in the US and with more than 50 000 satellite suppliers – under pressure from Asian competition, will soon produce a finished automobile in less than eight hours, using the latest automation technology. It will eliminate thousands of jobs;
  • The closely related steel industry is following a similar trajectory. In one case,  a $400 million new cold rolling mill reduced production time of 12 days to one hour, leaving thousands of blue collar workers jobless;
  • Similar trends occur in service industries where, for instance, debit and point-of-sale banking gained wide use;
  • By the end of the 1990s, intelligent machines were already invading even a range of professional disciplines from education and the arts, long considered immune to the pressures of mechanisation, to doctors, lawyers, accountants, business consultants, scientists, architects, and others; and
  • On a holistic level, a May 2016 report found that in the US middle class workers are losing their jobs to robots ... and technology advances to a point where there is no need for the average, middle class worker.

How it works

The same report explained how the process works, using Uber and Lyft personal transport services as examples.

Lyft announced plans, with General Motors as partner, to create a fleet of self-driving cars as early as this year.

After the 2008/09 recession people flocked to gig-based ways to earn extra income. One of the more popular routes was becoming drivers for services such as Lyft and Uber. Although taxi drivers lost their jobs, thousands of new ones were created in the process,

It looked like the repeat of a historical pattern where technology has always ended up creating more jobs than it destroyed.

However, now those very same companies (Lyft and Uber), having created the new opportunities, are finding ways to automate the total process, removing the driver all together.

Fares collected will go directly into the company’s pockets, contributing to one of the problems caused by the (FIR), also identified by the WEF, the stagnation of median income and the growth of economic inequality in societies.

Social impacts

As far back as 1964 a group of Nobel prize-winners, known as the Ad Hoc Committee on the Triple Revolution, in a memo to US President Lyndon Johnson, warned about the danger of a revolution triggered by “the combination of the computer and the automated self-regulating machine”.

It was leading to a new production era, requiring progressively less human labour, threatening to divide society into a “skilled elite and an unskilled underclass”.

This threat now seems to have become a reality, at least in the transition to a new phase in human history, until we reach the point described by the Massachusetts Institute of Technology (MIT) as the “economic response to automation” – where technology eventually creates more new jobs than it destroys.

However, the impact of automation in the FIR is much broader than in the past. Unlike new technology two centuries ago, information technology leaves no economic sector untouched. Then, workers could move from one low-skilled job to another. This time round, however, upskilling, or total reskilling, is called for.

In the world of programmable computers, change occurs in the blink of an eye, compared to the days of steam or other forms of fossil fuel-generated energy.

Scope of the challenge

The Converge website reports that “reflecting on the significance of the transition taking place, the distinguished Nobel laureate economist Wasilly Leontief warned that with the introduction of increasingly sophisticated computers, ‘the role of humans as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors’”.

CNNNEWS recently reported that around 65% of children starting primary school today will end up working in jobs that don’t yet exist, and their future training is crucial.

In the meantime, an MIT2013 study declared: “Productivity is at record levels, innovation has never been faster, and yet at the same time, we have a falling median income and we have fewer jobs. People are falling behind because technology is advancing so fast and our skills and organizations aren’t keeping up.”

US president Donald Trump, in his 2016 election campaign claimed “bad trade deals” robbed Americans of job opportunities, but The Financial Times (FT) concluded that most US manufacturing jobs are lost to technology and not trade.

However, with his populist approach, Trump was and is, tapping into the growing rage among voters towards the ‘establishment’ seen in the growth of populist parties across the globe and the United Kingdom’s pro-Brexit vote.

On the website Business Insider senior editor Josh Barro, in December, wrote: “Our society is increasingly destabilized. Trust in institutions is low, and participation in institutions is declining. People are less likely to attend church. They are less likely to be members of unions. Their families are smaller. They change jobs more often.”

Writing about what seems to be the only possible plan round presently, a welfare programme called a Universal Basic Income to everyone, working or not, he wrote:

“De-emphasis of work will only make this atomization worse. The robots have not taken our jobs yet. It is not time to surrender to a social change that is likely to further destabilize a world that is already troubled.”

Also read: Could ‘jobless world’ destroy the human soul?

As Trump became part of the establishment at his inauguration, it seems as if the tide of resentment has now turned on him as well. Hundreds of thousands protested against him in the streets of Washington, and as a sign of the global mood, the protests spread across the globe, swelling into the millions.

With no credible solutions to the problem of millions of ordinary people sinking into jobless poverty worldwide, emanating from the WEF or any other institutions, the FIR might be on the brink of morphing into a full-scale social revolution.

by Steve Whiteman

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