What economic historian Aaron Benanav calls the “automation discourse” has been around since the Luddits smashed the textile machines in Nottingham in 1811.
The question is whether machines destroy or create jobs. The first case is the easiest to understand. Machines save labor; and labor saved means labor unemployed. Fear of unemployment has always been the dominant response of the workforce to the introduction of machinery.
The second case is to take the repercussions into account. The more expensive it is to produce something, the more demand there will be for it. This means that more workers can be employed.
We then see how the generalization of mechanization to all branches of industry can multiply the favorable effects: more people employed producing more and more varied goods at higher wages for a reduced effort. The fear of unemployment, economists say, is actually a misplaced fear of leisure.
With computers, not only physical labor, but so-called “cognitive” work can be automated. Modern Luddits predict the growth of white collar and service sector unemployment. Again, optimists say, they fail to notice the bright side. The economic argument is simple: “Higher productivity means faster economic growth, more consumer spending, increased demand for labor and therefore more job creation,” argued Sir Christopher Pissarides. and Jacques Bughin in their 2018 article.
The problem is social: to ensure that the fruits of increased productivity are passed on to the mass of the population in the form of higher wages and non-professional income. The political debate is about the extent of public intervention needed to ensure that the wealth created by machines is passed on to all segments of the population.
The interesting question right now is: what effect will the containment of Covid-19 have on this automation discourse? Three effects in particular deserve to be noted. The first is the likely acceleration of automation; the second, the increase in automatic purchases; and the third, the growth of working from home.
Despite all the hype, little progress was made in automation in the UK before the pandemic. According to the International Federation of Robotics in 2018, the UK had only 71 robots for every 10,000 workers. The main reason, I think, was that cheap labor from overseas was an alternative to automation, especially for small and medium-sized businesses that couldn’t afford the capital cost of it. installation of machinery.
However, this supply has dried up and will not be restored quickly. We now have the paradoxical combination of a near-record adult employment rate and the highest number of job vacancies on record.
Covid-19 is almost certain to accelerate automation in line with experience from past pandemics such as Sars in 2003, the driving forces being the economic recession and the need to reduce labor costs, as well as the perceived increased risk of human contact. Jobs with higher levels of physical proximity, such as retail, hospitality, recreation and healthcare, are the most likely to be automated after the pandemic.
Unless the government steps in to subsidize investment (for example, through a national investment bank), financing for automation will be secured through increased concentration of industry in large businesses and the bankruptcy of many small and medium-sized businesses.
The second source of automation will come from the consumer switch to distance shopping. It is the joint result of a change of habits forced by confinement and the fear of contamination. One symptom is the increase in stores without a cashier. The first Amazon Fresh convenience store (with automated sensors to detect when items are removed from shelves and which automatically bill customers) opened in London in March, promising a more “frictionless” shopping experience. Many more are promised.
Finally, the increase in home work will require an increased use of surveillance technology. The proportion of adults working from home has fallen from 27% in 2019 to 37% last year on average, with Londoners most likely to work remotely. Businesses are seeing a clear productivity gain in reducing the time spent traveling and chatting in offices.
However, achieving such gains requires investments in surveillance technology. A recent report in the Financial Time highlighted the development of electronic home work surveillance techniques, including the installation of cameras and microphones in every home. This broadens the discussion to the impact of technology not only on jobs but on freedom. When Jeremy Bentham invented his panopticon to monitor the movement of prisoners, he suggested that it could be applied successfully in schools and hospitals. George Orwell took this thought to its logical conclusion in his futuristic novel Nineteen Eighty four. A two-way TV screen in each apartment ensured that ‘Big Brother is watching you’ all the time.
So, on which side of the optimism-pessimism divide is the automation discourse now located? Automation is not good in itself; it is only a means to an end. We must always keep in mind the question of what purpose it is designed to serve.
Unless this question is continually asked and answered by action, we are destined to become slaves to machines and those who control them. The Luddits have understood this.