From the Guardian this morning:
John Harris is right to say the left has articulated no comprehensive answer to the existing and future threats posed to employment by automation. Key to this must be prioritising labour-intensive sectors that are difficult to automate, such as health, education and elderly care. Equally key is a climate-friendly infrastructure programme. Crucial to this will be to make the UK's 30m buildings super-energy efficient, thus dramatically reducing energy bills, fuel poverty and greenhouse gas emissions. The housing crisis should be tackled by building affordable, highly insulated new homes, predominantly on brown field sites, and local public transport links need to be rebuilt.
This massive work programme would provide a secure career structure for decades, and would involve a large number of apprenticeships and professional jobs, as well as opportunities for the self-employed and local small businesses. It can be paid for by “people's quantitative easing”, from fairer taxes, local authority bonds and green ISAs. Since such savers are likely to be predominantly older, this would also be a necessary exercise in intergenerational solidarity.
Colin Hines
Convenor, Green New Deal Group
Of course, this would apply just as easily to the Job Guarantee.
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Colin is mistaken when he combines promoting affordability and brownfield in the same development.
It’s cheaper to build from new on agricultural land, and let the previous locations of housing return to parks or to how they were before the industrial revolution.
There are other issues to consider….
I like Colin’s confident, matter-of-fact style with this letter. He has taken the right approach given the limitations of a letters forum.
Thinking about it though I am inclined to be to be a little more dramatic. What Colin is talking about is the end of the industrial revolution and the end of capitalism as we know it: the imminent phase of history where mechanisation in one area of industry fails to create new demand and new jobs in another because we’ve run out of new areas to move into. There are some areas but not enough, not any more, not in this system.
This is the phase of history where “productivity growth” ceases being the solution and becomes the problem, where an inevitable crisis of demand is imminent because an increasingly unemployed populace cannot pay for the stuff that the robot owners are trying to sell them, where “the market” as such it is no longer functionally capable of allocating income and employment (the end of capitalism).
One thing is for certain: when everything that can be automated is automated we’ll see the end of growth. Economic growth has two varieties: Aggregate (population growth basically) and per capita. Neverending population growth would be neither viable nor popular and per capita growth ends when “productivity growth” ends when automation runs its course. And a capitalism that doesn’t rely on growth bears no resemblance to the capitalism we know.
To give just one core example, compound interest cannot continue indefinitely without growth (think about it). So those “savers” that Colin was talking about might eventually be in for something of a surprise if they are still around.
Basically, everything changes big time with this one. What Colin describes are some of the useful things that governments can do in an ideal version of these circumstances. How we get there and manage the myriad of other implications is a much bigger story.
If growth ends then is the only way to increase wealth to take it from someone else?
This may shock you, but some have more wealth than they need, or have ever earned
In that situation the qualitative aspects (quality of life) will have become more important. Besides which Richard is right about wealth and productive capacity. There is already plenty enough to go around.
Colin’s suggestions are all positive, and will no doubt help, but they still don’t amount to the “comprehensive” solution we need for the future. Neither is it helpful to see this as an issue of left and right, as both sides are today in denial about the scale of problems we are likely to face in the next decade. Indeed, we may yet come to look back on the 20th century as a golden era when the interests of business, government and workers all aligned to create employment and income growth. But by 2030 our technology will already reach the point where most major corporations ( and many public services ) can meet their operational needs without the huge workforce they required in the past. The breathtaking speed of this change means that Governments, workers and unions, will be left asking “what the hell just happened”?
As many people simply don’t accept this as fact, its worth dwelling on examples like Tesla in the United States where they have been driving a new business model of direct national sales to customers without using dealerships. Various states have rushed to implement legislation making this illegal, for the simple reason that car dealerships in the US actually employ far more Americans than factories. Expect more of this highly charged job protectionism to come ( one reason why it would be a terrible idea to nationalise big employers and draw up the lines for future industrial disputes – what happens when driver only trains move onto driverless trains ? ). People don’t yet understand this because it never happens all at once, but is more like a death by a thousand job cuts. Still watch for a steady stream of high street banks and retail outlets closing each month, to be replaced by cheaper online services. Even those outlets that remain will increasingly be automated with self-scan checkouts or unmanned outlets like the the petrol court installed last year at my local Asda. Make no mistake, jobs are going from out local communities and they are not being replaced.
If we want a truely “comprehensive” solution we have to think like economists, and this means dramatically reducing the marginal cost of labour in high-income countries. This approach gives multiple advantages :
1) Labour cost to businesses in UK becomes more competitive with Global labour rates
2) Lower labour cost reduces payback on automation so will slow replacement of jobs
3) Lower marginal labour cost will make all kinds of local enterprise economically viable (including local food production, recycling, creative arts, journalism, research and design, and many more)
4) Lower marginal labour cost would give a massive boost to new business start-ups at a local level
To date, far too much thinking on the idea of a basic income has assumed that it will be given in addition to existing wage levels, making it far to expensive to implement. The reality is that giving everyone a state basic income not only eliminates poverty and stabilises communities now being hollowed out by the loss of jobs. It also reduces the marginal cost of labour in ways that will allow a complete realignment of our economy, and change many of our citizens from “job seekers” into “job creators” in their local communities. Over the long term this is the only way to stem the loss of income and employment that many of our communities now face ( including those that voted for Brexit or Trump ). So far the vision and will to take such a bold step remains far beyond our politicians, but if they fail to wake up we are all going to be caught out by the speed with which The Global Race is now moving.
Robert P Bruce
author http://www.TheGlobalRace.net
Business does not work in marginal cost and never has – because it is rare it knows what it is and even rarer that it can match it with any marginal analysis of revenue
Your logic has all the feel of the Silcon Valley version of UBI, which is to basically rest people as homogenous entities that are given an allowance and told to survive on it, and tough if they cannot
There would be pitchforks
So, Robert P. Bruce says:
” But by 2030 our technology will already reach the point where most major corporations ( and many public services ) can meet their operational needs without the huge workforce they required in the past.”
Well aren’t they clever – so where are they going to find their customers when “the huge workforce” is out of a job?
You clearly have no concept of the demand side in economics nor did you bother to read the other comments in this forum.
Your completely lopsisded, misguided suggestion about labour costs would imply that greater technical advances should lead to a LOWER standard of living and the irony of that apparently escapes you as well.
Here, try this: http://www.economist.com/blogs/babbage/2011/11/artificial-intelligence
But Robert may be right
They may be stupid 3nough to not think this issue through
The household fallacy runs deep and each thinks itself a household
Hmm. If that is the case then the inevitable transition will be more fraught than it needs to be and I suppose that’s likely.
Household fallacy or not the main problem with Robert’s offering is one that I didn’t previously mention. He begins with an assumed premise that schemes of the major corporations etc. are a fait accompli and, for better or worse, we all have to fit in with them.
In reality those institutions serve a purpose in supplying things and employing people. When they cease to serve their purpose they become expendable.
I would rather hope that they have some understanding of the demand side and to that end their own survival. If the Economist magazine (see link above) can grasp the key ideas at this stage then there may be some hope.
I fear that these dates the Economist is eardrums of the pack
With ever more customers with unmet needs I see no upcoming jobs crisis.
We just have to be prepared to learn how serve others well. Some of us also have to learn how to live by consuming less. We may or may not be aided by machines and we may earn less too.
Let’s start by replacing our offices with the compact housing we need for our ever expanding population and in readiness for millions of flood victims and refugees escaping the rising seas.
After all, we are on this earth to serve each other.
“With ever more customers with unmet needs I see no upcoming jobs crisis.”
Yeah, sure – and if most of them don’t have incomes?