The Emancipation of labor in the age of robotics.

It exists and it is not a conspiracy – each year the global elite occasionally meet at the World Economic Forum in Davos Switzerland to discuss the planet's economic future.  Already in the 90s, leading politicians, business leaders, Nobel laureates and other prominent economic professors from universities such as Harvard, Stanford and Oxford embodied the future of the global economy in two terms "the fifth society" and "tittytainment".[1]

Back in the 90s it was expected that only one fifth of humanity can expect to make a living from selling ones labor; a truth that has become even more self-evident today.  Unemployment is inevitable. It will never be possible to create so many jobs that full employment will happen again.  During the discussions those years the succinct term 'Tittytainment' popped up at a conference at the famous San Francisco hotel The Fairmont. It was invented by Jimmy Carter's old 'cold warrior' and security adviser Zbiegniew Brzezinski.  The concept is a blend of the words 'entertainment' and the American slang for women's Breasts.  Or to put it precisely this refers to a necessary mix of entertainment, sex and other numbing consciousness manipulative actions keeping the masses in check now there is not enough work for everyone.

And that was even before 2008, when the international economic crisis and declining profit rates finally was recognized globally as a necessary part of a general pattern of development.  Nearly 200 years after Karl Marx's birth in Trier his thesis on the necessity of an industrial reserve army, that can press the general wage level down to a minimum again becomes newsworthy. The global crisis and the great migration to the economic centers are manifestations of the underlying mechanisms for a renewed augmentation of the rate of profit due an increased supply of labor that leads to a falling wage level. It is believed that this once again could bring the system back to growth, prosperity and full employment! Nonetheless, there is another untold story that has to do with technological development that even he could not imagine. However, it was exactly this story "the old boys” global network took for granted.

 Once it was said that technological unemployment does not exist, because there will always be a change in aggregate demand in an economy due to a change in economic activities. Technological unemployment could according to classical liberalism (in the European sense of the concept, GW) and foremost David Ricardo be neutralized by these compensatory mechanisms. As Ricardo wrote in his famous article in 1820 "On Machinery" workers could benefit from the use of machines.[2] Despite lower investment in machines that substitute human labor, shareholders of capital would have excess accumulated capital.  When it does not require the same big investments to create the same output as before, the excess part of accumulated capital can be invested in the production of new or different commodities.  Adam Smith's observation that since "every human need for food is limited by the human stomach’s low capacity, the need for amenities, decoration of buildings, clothing, equipment and utensils will not know of confined or any particular limit".[3] Already Smith suggested the existence of a compensatory aggregate demand for laid-off labor.  Ricardo later regretted his faith in these compensatory mechanisms.  The substitution of human labor, he wrote, is detrimental to workers' interests.  He believed it was not necessarily true that each time a society's net income increased for one social class, the gross income increased in the same proportion for all classes (Ricardo's original terminology lacks concepts of national-income accounting, GW).  If the total income of a society stagnate or decrease landowners’ and capitalists’ income fund increases, while workers' income fund falls.  If the population becomes redundant, the workers' situation creates an impoverishment. The relative demand for labor will decrease (relative to the demand for capital) and the iron law of wages is the only mechanism that can rectify impoverishment. Ricardo agreed with Thomas Malthus. When the working class has many children, an excess labor supply in the long run pushed down wages towards and under the subsistence level.  Famine and hunger could then restore balance.  The practical implications of the technological determined lay-offs of human labor gave the Luddist movement also known as the machine-stormers increased support. Protesting against the “evils” of the first industrial revolution, Luddists rebelled against the introduction of new machinery by destroying machines. They believed they would miss their jobs and be forced to eke out a miserable existence in outright poverty, if they did not do that.  

Robotics and automation in an unprecedented scale represents a constraint on the off-setting compensatory demand that can restore full employment. In a modern Ricardian framework, the question partly is whether there are compensatory effects in terms of job creation that will be sufficient enough, and partly whether there are other sources of income than employment of human labor. The latter represents the issue of capital income if not the phenomena of social transfers in the form of a universal basic income can replace labor income when all options of income in “The Fifth Society” have run out. The welfare state may well look like 'a stop-fed goose', where redistribution can ensure all migratory labor and indigenous labor.  Still, there are limits on how many wide-ranging and how many transfer payments that the State can pay without interfering with incentives to create the entrepreneurial spirit that carries development.  We cannot solve all of the world's poverty problems - over time, we can perhaps barely solve our own problems of poverty as the middle class as seen in the United States gradually is razed. Fiscal crises of a Welfare State may turn out to be severe due the proletarization and pauperization of a hitherto taxable middleclass.  

The unconventional author and futurist Kevin Kelly, who in 1993 co-founded Wired magazine describes in his new book 'The Inevitable' the future society, as it could evolve over the next 30 years.  According to Kelly more than 60 % of today's financial activities may be replaced by robotic automation in one form or another towards the end of this century.

It is an open question whether the future Society does justify the mentioned credence to a compensatory aggregate demand that creates a re-employment of laid-off labor. Intelligent robots are not just a matter of a machine's limited operations under human supervision. According to Kelly it is just a matter of time, before we will see robots that can think for themselves and develop themselves. Artificial cognition, cheap sensors, machine learning and distributed intelligence make it possible to include all jobs ranging from manual work to knowledge work.  Robots will see the light of day in all sorts of shapes, sizes and configurations, and they will unmask themselves as different "species".  Some will move around in public and private spaces, "many will be immobile as plants or as diffuse as a coral reef ''.

In the future, robots taking over tasks hitherto performed by human labor will assume epic proportions. Robots will not only substitute assemblers, they will also replace workers in warehouses, i.e. highly productive robots which can lift about 150 pounds and pick up boxes, sort them and put them on trucks.  Harvesting of fruit and vegetables will also be handled by robots.  Pharmacies will introduce robotic automation that distributes medicine. Robots that deliver medicine to patients can now be seen in California hospitals, and so far they have not been erroneous in dealing with prescriptions. Labor-intensive activities regarding maintenance and cleaning of offices, schools and public spaces can be taken over by robots at any time of the day. Robots can clean floors and toilets 24/7.  Truck transport on the highways can be controlled by robots in self-driving vehicles as can self-driving public transportation. And what many would not think as being possible are robotics and automation entering white-collar industries. Any job that includes piles of paperwork can be performed by robotics and automation.  Whether you are a doctor, translator, editor, lawyer, architect, journalist or even a programmer, robots will be able to intrude into your workspaces. The list is endless, when it comes to robotics and automation based on artificial intelligence in tomorrow's business community.[4]

Yet, what Kelly does not mention in his latest book, is the potential negative impact on employment. It is implicit in his reasoning that human intelligence is not substitutable with artificial intelligence - he seems to think that the two intelligences are complements to each other, and that employment can be maintained?  What “the old boys” belonging to the global elite took for granted in relation to “the fifth society” characterized by unemployment and the 'tittytainment' is not seen in Kelly’s book that also implicitly extols elements of “tittytainment” (description of computer games, GW). Additionally, unwanted phenomena such as unnecessary monitoring, privatizations, the rolling back of the State and the deterioration of well-functioning unionized labor markets due to 'Uber-like' structures are not put under a critical microscope. The evils of neo-liberalism based on seemingly free markets under the control of corporate power, state-monopolist bureaucracies and further monopolization leading to consumers’ welfare losses will together with unemployment, underpaid labor, proletarization and pauperization inevitably raise the question of distribution. Children going hungry to sleep in the US indicate a whole generation may end up in poverty and social instability.  The compensatory demand that previously led to reemployment of laid-off labor is lacking partly because of intelligent robotics and automation per se, partly also because poverty inevitably will lower demand in the private sector.  If we metaphorically put on Kelly’s' 3D visionary virtual glasses, we see a totally new pattern. Past industrial revolutions demanded human intelligence involvement, but when the artificial intelligence (AI) ​​enters the stage, all human intelligent activity may be doomed to become superfluous if human intelligence is substitutable with AI. The question then is what is left of compensating aggregate demand that can create new jobs?  What is left of human labor – A Danish Industrialist C.F. Tietgen once said, that we cannot all live off of haircutting and shaving each other. That was not true before, but it is today. We cannot earn a living in Kelly’s 'Techtopia', because we will in the future be served by a robotic haircutter. Hence, we are faced with a problem, when human labor shrinks to one-fifth of all economic activities; what can we live on?

Here the San Franciscan lawyer and creator of the binary economy Louis Kelso is interesting. The binary economy mentioned in one of his books "Two-factor Theory - The Economics of Reality" states that the economy only consists of two income generating activities - respectively human labor and participation in ownership.[5]  He distinguishes between "economic employment" and "non-economic employment".  The latter form of employment is not primarily directed to the production of marketed goods and services; it is maintained by means of subsidies and grants, and it is in some cases not at all necessary, because it is totally useless. In the worst case, one can even talk about a non-economic employment that serves to kill, cripple and starve humanity. The Keynesian economic performance is based on the compensatory aggregate demand that creates full employment by the economic employment in interaction with non-economic employment. The debate on voluntary unemployment (Says Law) where the utility of leisure is greater than the utility of work constitutes implicitly a basic philosophy. It is employment itself, which is the objective, no matter how wasteful and useless it is.  The production of military hardware, over-subsidized agriculture (which petrifies the developing economies in poverty), overstaffed "sweep leaves together in windy weather" activities and the bureaucratic monitoring and State control of society are just some examples of the non-economic employment.

The late Louis Kelso’s conceptualizations were later in U.S. legislation operationalized through pension legislation (ERISA) by Senator Russell Long through the ESOP (Employee Stock Ownership Plan).  The ESOP primarily aims at employees' ownership of the means of production that creates economic employment, but the philosophy behind the ESOP has gained renewed relevance with the latest technological achievements.  With the robot-automatization, the real capital (machinery) soon will be able to completely to take over all manual work.  Full employment as an end in itself will lose any importance, because the economic employment no longer or to a less degree is required with machinery’s takeover of work.  The question is whether labor as the Luddites machine-stormers should fear "the new machinery", or whether labor should see robotics as the final emancipation of all human labor from the sedative and monotonous inhumane manual Taylorism.  The philosophy behind the labor free business rests on the concept of breaking the link between a person's income and physical survival on one hand, and a person's job on the other.  If there are not enough jobs, and if the market society in the future should not end in a total non-economic employment, there is no way around the fact that human labor to an increasing degree will disappear at the workplace. If citizens instead partially could reap the fruits of human economic employment, i.e. they could instead enjoy what the rich already have benefitted from due to ownership of property of capital and other assets, the persistent poverty one sees in market communities could disappear.  If everyone has an income as co-owners of robotics and in general of enterprises, everyone can also continue to buy the goods and services the robot-automated economy produces. The Fifth Society having problems of the sort Zbiegniew Brzezinski called "tittytainment" could hopefully gain from more fruitful and different activities than the “tittytainment”, he foresaw as a necessary substitute for wage labor.

 Karl Marx is misunderstood by many - not least ideologues in the former nation-carrying communist parties - when he in "The German Ideology" philosophized about what his communist utopia contains.[6]  The real existing socialist societies were poor imitations of the first industrial revolution’s factory hell.  The future society did not according to Marx and Engels necessitates that each exclusively should specialize in one area.  Instead, it would be possible to make one thing today and something else tomorrow.  One could, just as much as one wanted it, go hunting in the morning, fishing in the afternoon and deal with cattle breeding in the evening.  Later, one could criticize over a dinner, without ever becoming hunter, fisherman, shepherd or critic.  That this might happen without firing a single shot, or without "fire and brimstone in the streets", he or his hegemonic descendants of the defunct Soviet Union, did not however have the fantasy to imagine. To avoid the fifth society this of course requires that the issue of a substitution for Labor income is solved e.g. through broad participation in ownership by the citizens as consumers and employees.  

[1] First published in German by Hans-Peter Martin and Harald Schuman: Die Globalisierungsfalle. Der Angriff auf Demokratie und Wohlstand, Rowoldt Verlag Hamburg, 1996 (In Danish “Globaliseringsfælden. Angrebet på demokrati og velstand, Borgen, Copenhagen 1997 pp 11 – 12).

[2] Danish translation of the third edition of David Ricardo: The Principles of Political Economy and Taxation, Batoche Books Kitchener, 2001, ch. 31, pp. 282 – 291 (In Danish: Principper for den politiske økonomi og beskatningen, Rhodos Copenhagen 1978)

[3] Oswald St. Claire: A Key to Ricardo, p 174, Routledge Library Editions, reprinted, New York 2003

[4] Kevin Kelly, The Inevitable p. 50 f., Penguin Random House, New York 2016.

[5] Louis Kelso and Patricia Hetter: Two-Factor Theory: The Economics of Reality, Vintage Books, Random House, New York, 1967.

[6] Marx and Engels: The German Ideology, introduction by Roy Pascal (London, 1942), p. 22. Originally published by the Marx-Engels Institute in Moscow in 1939 and most recently in a reprint from CreateSpace, an Amazon.com company in 2011.