Thursday 1 September 2016

Automation, Immigration, & Civic Remuneration

Jobs with decent pay are getting harder to come by. Some blame immigration [Note 1]. Others criticise employers for moving jobs abroad. But the underlying problem lies with the widely accepted profit-centric economic model, which considers the cutting of labour costs as inherently positive.

It follows that commercial intermediaries (they who make money as the conduit between workers and customers because they own the design, the production facilities, or the distribution outlets) will keep seeking out new ways to have fewer workers and pay less to those they have to retain. Unfortunately, as less is being paid to workers, fewer workers will have sufficient income to buy what is produced. The production surplus then threatens to drive down prices, pushes more cuts for workers, and demand falls even further. And the vicious spiral of recession is in motion.

And the most powerful factor in labour marginalisation is pervasive automation. Exponentially rising processing powers, self-improving programmes, computer-led engineering, and unprecedented access to solar energy, are combining to give us automated mechanisms for virtually every form of production and service delivery. These mechanisms are not just making things we want, they can deliver online or via drones, they take feedback and rectify problems, and they offer a calm interface in providing advice and carrying out orders.

As automated processes radically cut worker costs, it accelerates the decline of purchasing power, and brings us ever closer to a world of plenty that very few can enjoy – unless we change the economic model governing our lives. If instead of pegging pay to activities involving commercial transactions, we link remuneration to contributions valued by society, we can attain a win-win position. Once work in the outmoded sense is no longer needed to be carried out by people, we can focus on what we do value about our fellow citizens – the care, respect, responsibility, creativity, sociability, we cultivate and share with others. A guarantee for civic remuneration can be given to everyone, so people can use it to acquire products and services that can be made available with no labour costs. The more automated innovation happens, the greater the stock of utilisable value there is to be distributed through civic remuneration.

The innovators who design or organise the automation can have a larger share of civic remuneration, so long as they don’t take such a large share as to leave nothing for others. There will be some who feel that without the old profit system, they cannot be motivated to come up with any innovation. But we know that there are always people who invent things like penicillin treatment, higher yield crops, or the World Wide Web, for the common good without insisting on vast monetary rewards for themselves.

Economic systems must adapt to be of use. Before market transactions became dominant, people fed themselves on what they grew; and before that, people gathered fruit and hunted for meat to share amongst themselves. As production processes change, we should leave aside ideological dogmas, and explore how new levels of innovation can be harvested to benefit all, especially when the alternative will pit a profiteering few against the discarded majority with nothing left to live for.

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Note 1: According to the Office of National Statistics, while the number of EU workers in Britain rose by 700,000 between 2013 and 2016, they were outnumbered by the extra one million Britons who went into employment in the same period. In 2016, the number of British citizens working in the UK labour force is at the near-record level of 28 million: http://www.theguardian.com/politics/2016/may/20/reality-check-are-eu-migrants-really-taking-british-jobs; and Dean Hochlaf and Ben Franklin (authors of the Immigration: Encourage or Deter report) have used the Office for Budget Responsibility projections to calculate that by 2064-65, the UK’s GDP would be 11.4% (£625bn) larger with high migration than it would be with low migration:
http://www.independent.co.uk/news/uk/politics/eu-referendum-immigration-immigrants-jobs-brexit-remain-what-happens-unemployment-a7091566.html.

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