Productive No More
The NY Times recently published an article highlighting academic work on the slowing of productivity growth. Another report on automation from Citi noted that, “[A]cross advanced economies, labour productivity growth has slowed from 4% in 1965–75, to about 2% from 1975–2005 and further lower to 1% from 2005–2014.” Mainstream economists are bemused by the lack of growth in productivity and real output. It seems that Capitalism, with all its creatively destructive might, is slowing down.
The key is to understand that just like energy is conserved in the universe, technology is conserved. As there is a finite amount of energy, there is a finite amount of technological development possible with human beings.
That limit to technological innovation is our mental and physical capacity. Our eyes are only so good, our fingers only so nimble, our minds only so expansive. Capitalism drives us to replace live human labor with the dead labor of technology. While technology can enhance and magnify us as workers, we are simply driven us closer to our own limits.
This can best be seen in what is being called the “talent economy.” Fewer and fewer workers have the skills necessary to provide value in an increasingly technical world. So, companies like Facebook pay $10 USD million to acquire a few developers. The middle class has gone global while the working poor are being left to rot on the vine. The global labor force participation rate has been declining since the 60s. Also, importantly, it is now becoming generally known that new industries create fewer jobs. While high-tech workers are incredibly and increasingly exploited, the jobs of the working poor are more and more precarious and unproductive.
One great argument for a basic income, then, is that most people are not doing anything productive at work anyway.
There are two very important implications here. The first is that technology cannot be destroyed. Yes, we can blow up factories and destroy supply chains. In the aftermath growth and the profit rate would increase for a short period of time. But, it’s not like we would forget how to build factories or roads. We’ll just build them again and in shorter time. This is why the industrial powers were able to recover so quickly from WWII and why countries that are currently industrializing are doing it so much more quickly than the US or Britain did.
The second implication is that economic growth under Capitalism is nearly over. World GDP growth has been decreasing since the 60s and it will cease before 2040. Meanwhile, the last labor reserves will be reached in the mid 30s as the whole of the world gets internet access. Labor will have become completely marginal. These are secular trends and nothing short of Capitalism destroying itself will halt them.
Ultimately, labor is the means by which we fashion the world; it is how we impart value on things. As technology gets more and more advanced, less human labor is embedded in the process and meaning begins to be lost. You don’t have to understand Boolean algebra to watch a YouTube video. This is colloquially known as taking something for granted.
In fact, something made completely by machines has no value…which is just another way of saying that it is free.
Machines producing goods for free is otherwise known as Socialism. And, we all deserve to take having our basic needs met for granted.
- https://www.citivelocity.com/citigps/ReportSeries.action?recordId=49&src=Home
- http://data.worldbank.org/indicator/SL.TLF.CACT.ZS
- Lin, Jeffrey, “Technological Adaptation, Cities and New Work”, Review of Economics & Statistics, May 2011, Vol. 93, No. 2, pp. 554–574
- Berger, T. and Frey, C.B., “Industrial Renewal in the 21st Century: Evidence from U.S. Cities”, Regional Studies, forthcoming.
