Rise of the Robots

From London Review of Books:

In the next two decades, 47 per cent of employment is ‘in the high-risk category’, meaning it is ‘potentially automatable’. Interestingly, though not especially cheeringly, it is mainly less well-paid workers who are most at risk. Recent decades have seen a polarisation in the job market, with increased employment at the top and bottom of the pay distribution, and a squeeze on middle incomes. ‘Rather than reducing the demand for middle-income occupations, which has been the pattern over the past decades, our model predicts that computerisation will mainly substitute for low-skill and low-wage jobs in the near future. By contrast, high-skill and high-wage occupations are the least susceptible to computer capital.’ So the poor will be hurt, the middle will do slightly better than it has been doing, and the rich – surprise! – will be fine.

Note that in this future world, productivity will go up sharply. Productivity is the amount produced per worker per hour. It is the single most important number in determining whether a country is getting richer or poorer. GDP gets more attention, but is often misleading, since other things being equal, GDP goes up when the population goes up: you can have rising GDP and falling living standards if the population is growing. Productivity is a more accurate measure of trends in living standards – or at least, it used to be. In recent decades, however, productivity has become disconnected from pay. The typical worker’s income in the US has barely gone up since 1979, and has actually fallen since 1999, while her productivity has gone up in a nice straightish line. The amount of work done per worker has gone up, but pay hasn’t. This means that the proceeds of increased profitability are accruing to capital rather than to labour. The culprit is not clear, but Brynjolfsson and McAfee argue, persuasively, that the force to blame is increased automation.

That is a worrying trend. Imagine an economy in which the 0.1 per cent own the machines, the rest of the 1 per cent manage their operation, and the 99 per cent either do the remaining scraps of unautomatable work, or are unemployed. That is the world implied by developments in productivity and automation. It is Pikettyworld, in which capital is increasingly triumphant over labour. We get a glimpse of it in those quarterly numbers from Apple, about which my robot colleague wrote so evocatively. Apple’s quarter was the most profitable of any company in history: $74.6 billion in turnover, and $18 billion in profit. Tim Cook, the boss of Apple, said that these numbers are ‘hard to comprehend’. He’s right: it’s hard to process the fact that the company sold 34,000 iPhones every hour for three months. Bravo – though we should think about the trends implied in those figures. For the sake of argument, say that Apple’s achievement is annualised, so their whole year is as much of an improvement on the one before as that quarter was. That would give them $88.9 billion in profits. In 1960, the most profitable company in the world’s biggest economy was General Motors. In today’s money, GM made $7.6 billion that year. It also employed 600,000 people. Today’s most profitable company employs 92,600. So where 600,000 workers would once generate $7.6 billion in profit, now 92,600 generate $89.9 billion, an improvement in profitability per worker of 76.65 times. Remember, this is pure profit for the company’s owners, after all workers have been paid. Capital isn’t just winning against labour: there’s no contest. If it were a boxing match, the referee would stop the fight.

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In the absence of any template or precedent, the idea that the economic process will just roll ahead like a juggernaut, unopposed by any social or political counter-forces, is a stretch. The robots will only eat all the jobs if we decide to let them.

It’s also worth noting what isn’t being said about this robotified future. The scenario we’re given – the one being made to feel inevitable – is of a hyper-capitalist dystopia. There’s capital, doing better than ever; the robots, doing all the work; and the great mass of humanity, doing not much, but having fun playing with its gadgets. (Though if there’s no work, there are going to be questions about who can afford to buy the gadgets.) There is a possible alternative, however, in which ownership and control of robots is disconnected from capital in its current form. The robots liberate most of humanity from work, and everybody benefits from the proceeds: we don’t have to work in factories or go down mines or clean toilets or drive long-distance lorries, but we can choreograph and weave and garden and tell stories and invent things and set about creating a new universe of wants. This would be the world of unlimited wants described by economics, but with a distinction between the wants satisfied by humans and the work done by our machines. It seems to me that the only way that world would work is with alternative forms of ownership. The reason, the only reason, for thinking this better world is possible is that the dystopian future of capitalism-plus-robots may prove just too grim to be politically viable. This alternative future would be the kind of world dreamed of by William Morris, full of humans engaged in meaningful and sanely remunerated labour. Except with added robots. It says a lot about the current moment that as we stand facing a future which might resemble either a hyper-capitalist dystopia or a socialist paradise, the second option doesn’t get a mention.

“The Robots Are Coming”, John Lanchester, London Review of Books