“Technological Development leads inevitably to increased unemployment”
Discuss with reference to Marx’s observation of Deskilling
“The handmill gives you society with the feudal lord: the stream-mill, society with the industrial capitalist”
Karl Marx (1818-1883) ( cited MacKenzie, 1984)
This is an old quote from Karl Marx, but does it still apply for today or is it too technocentric and over-simplified? I would like to discuss technological development as regards increasing unemployment and find out is it an appropriate way to view society.
In a recent article, (Coburn, L. 2013, P.1) it stated “In the last 40 years computers and robots have replaced humans in more than 9 million traditional jobs”. That is a lot of jobs. He goes on, “The fourth economic paradigm is being created by transhuman entrepreneurs who use the internet and advance computer systems to augment their intelligence, enabling them to better utilize our growing scientific and technological knowledge. Look at the market value of companies started by transhumans like Bill Gates, Steve Jobs, Peter Diamandis, Ray Kurzweil, Larry Page, Sergy Brin, Mark Zuckerberg and thousands of others. Rather than needing capital, these companies are generating trillions of dollars of surplus capital”. Also, he says ” Today transhuman entrepreneurs are pulling us into a new age where bioinformatics, nanotechnology, 3D printers, ISECS, and robot slaves will do our work, freeing us for love, play and fun”.
This highlights a few things for me; 1. Technology and how far it has come, 2. The widening gap this wealth creates and
3. The skills required for these technologies.
1. It was suggested in the 1980’s that the invention of the microchip was causing a new form of society to emerge. Many believed we would have two choices; a society with greatly reduced working hours for everyone or one with an elite in full time work and a mass of permanently unemployed. This can be seen as a technological determinist viewpoint.
Fears around technology have been around for centuries. From the mid 1500’s, where the weaving mill caused much disturbance about people being out of work. It was written the inventor was secretly strangled or drowned (Karl Marx. Capital Volume One) to the subsequent burning of the loom in Hamburg by order of the state. It wasn’t until 1765 that its use was openly allowed in Europe.
Today, Technology such as bio informatics or nano technology can be a world away from the average person. It is understandable how we can become fearful of such technologies. We often don’t understand them or the consequences of them. We ask, who is controlling them and who is regulating them? Will we lose jobs?
In recent decades there has been films and books about this, such as Brave New World (A.Huxley), Animal Farm (G.Orwell) or films Such as Metropolis 1927 (F.Lang). Karl Marx was talking and writing about this in the mid 1800’s. He was discussing the power of money. This leads me on to my second point, the widening gap of wealth.
2. Marx gave great explanation of capitalism. He believed that it was ‘workers versus bosses’ and that profit was at the heart of everything.
Further that, capitalists never want to pay more money and high labour costs are bad for business. If there is competition for jobs, a boss only has to pay a minimum wage.
Unemployment is inherent within the unstable capitalist system and periodic crises of mass unemployment are to be expected. The function of the proletariat within the capitalist system is to provide a “reservoir army of labour” that creates downward pressure on wages. This is accomplished by dividing the proletariat into surplus labour (employees) and (unemployed). This reserve army of labour fight among themselves for scarce jobs at lower and lower wages.At first glance, unemployment seems inefficient since unemployed workers do not increase profits. However, unemployment is profitable within the global capitalist system because unemployment lowers wages which are costs from the perspective of the owners. From this perspective low wages benefit the system. Yet, it does not benefit workers. Capitalist systems unfairly manipulate the market for labour by perpetuating unemployment which lowers laborers’ demands for fair wages. Workers are pitted against one another at the service of increasing profits for owners. (Wikipedia, 2013)
Is the current crisis to be expected? According to Marx theory it does and it provides good explanation as to how things are going economically in the world today. To
consider unemployment as a tool used by capitalists may seem unlikely, but if we look deeper at corporations and their often lack of a social compass, it can look very likely. Marx shone alight on this. At the top of the superstructure it is hard to tell if someone is working for a private corporation or the government as they move back and forth, e.g. a president who works in the oil business. Big corporations pay huge amounts of money to political candidates. From an article (Paulus, 2013, cited in Nation of Change)
“According to Open Secrets, Monsanto spent nearly $6 million on lobbying in 2012 and contributed about $500,000 to federal candidates in the last election”, Also, ‘Regarding its influence on the judicial system, Monsanto recently wrapped up a Supreme Court case in which it pressed charges against an Indiana soybean and wheat farmer, Vernon Hugh Bowman, whom it accused of breaking a patent agreement on second-generation Roundup Ready soybean seeds. The case made it all the way to the Supreme Court, whose line of justices includes a former lawyer for Monsanto: Clarence Thomas. Thomas did not excuse himself from the case’. These kinds of antics are not only within governments, corporations and the judiciary but banks too. Banks get money from corporations and invest it back in corporations. This symbiotic relationship at the very top fits well with Marx narrative on class solidarity. Does this work for everybody else? The ruling class maintains power and privilege. With this power comes a firm grip on technology. New technologies and young enterprise will be doing well to escape it and find a firm foothold to flourish. In an interesting article (Chakraborrty, A. 2013), it says, ‘The appmakers certainly know who’s boss. In extensive interviews conducted by Birgitta Bergvall-Kåreborn of Sweden’s Luleå University of Technology and Debra Howcroft of Manchester Business School, even successful developers made clear that when Apple told them to jump, the only acceptable response was how high. “If they decide that they do not like us any more, and they do not want to promote us, that makes a big difference in how much money we make,” one said. “They are very much custodians of their marketplace so you’ve got to be well-behaved.” Meanwhile, ‘Apple takes about a 50% gross margin on every one of its smartphones made in China and 30% from every app sold, all the while taking full advantage of tax loopholes – and receives not lectures, but adoration’.
Marx believed technology displaces labour and that capitalism is coerced to adopt new technologies by competition.
In Sociology (Giddens, 2006, P.112) it explains the Marxist perspective as; Capitalists competing with one another to sell their goods to consumers, and in order to survive in a competitive market, firms have to produce their wares as cheaply and efficiently as possible. This leads to constant technological innovation, because increasing the effectiveness of the technology used in a particular production process is one way in which companies can secure an edge over their rivals. There are also strong incentives to seek out new markets in which to sell goods, acquire cheap raw materials and make use of cheap labour power.
This competition provides cheaper goods for people in one part of the world at the expense of others in another part.
Corporations are not setting out to improve peoples lives or give them jobs, they are there to make money often to the exploitation of those workers. Only recently India suffered it’s worst industrial disaster where estimated 400 people were killed in a factory in a garment factory that collapsed. The Owner of the factory, ‘had permission to build five stories but added three more floors illegally. When huge cracks appeared in the building a day before its collapse, police ordered an evacuation, but Rana told tenants that it was safe and they should go back in. The next day, a bank and some shops in the building refused to open but factory managers told their workers to go back in. A couple of hours later the building collapsed’. (Bangladesh Workers Protest as Building Collapse Death Toll Passes 400, 2013). Farmers in India are also suffering at the hands of huge corporations. Reportedly, since the big companies moved in, there have been 270,00 farmer suicides, (Vandana Shiva. 2012).
Marx called this coercive laws of capitalist competition.
In an article, (Mangus, 2011), it reads,
“Consider, for example, Marx’s prediction of how the inherent conflict between capital and labor would manifest itself. As he wrote in Das Kapital companies’ pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an “industrial reserve army” of the poor and unemployed: Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery.” He goes on, “The process he describes is visible throughout the developed world, particularly in the U.S. Companies, efforts to cut costs and avoid hiring have boosted U.S. corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 percent and real wages are stagnant”. So in the U.S there are higher corporate profits, with stagnant wages and 9% unemployment.
In Ireland we have 14.7% unemployment predicted to rise to 15% in 2015. A total of 24,000 young people aged 18-24 are unemployed – this is equivalent to 23.8 per cent of Northern Ireland’s labour force in this age group. Around 34,000 or almost 20 per cent of 18-24 year olds are not in employment, education or training. (Carr, 2013)
Marx class solidarity theory applies well. This class antagonism creates a climate of us and them, a battle between those who earn very well and those who earn little. The resulting unemployment seems indeed a natural result of such polarities of existence.
3. The skills required for these new technologies are very niche. Marx theory would see it as that as these skills become more niche, the value of their labour power increases and bosses profits go down. Bosses will require more machines (as they cost less than workers) so they don’t lose out on profit. Capitalists want a cheap labour supply with none of the costs. This eventually leads to an elimination of high skilled power from automation, known as deskilling. Many of these workers go back into the market where they are unskilled, workers are forced back into unemployment or emigration. Considering also that, badly paid workers or the unemployed don’t spend.Also who is going to have the money to spend on such goods as 3 d printers? Here is a crisis of capitalism Marx warned about.
Marx theory fits well also.
Our lives are intertwined with technology, it is an inextricable part of capitalism. Marx said technology changes things, it changes social structure then changes culture. I believe
technology can contribute to unemployment but it alone does not create unemployment, it is only one factor, there are also political and cultural factors. It is how technology is handled within the world.
Accountability in the future, would help, by denying corporate wrongdoers the right to obtain government contracts. Penalties for corporate endangerment of people’s lives and well-being. A law that would make it illegal to recklessly endanger consumers or workers, with stiff fines and sanctions for companies and jail time for responsible corporate management, would restrain corporate misconduct. In this type of environment technology, could be used in a way that works for the better of all. Marx explained the superstructure, class antagonism and deskilling very well.