Updated November 11, 2016
Full Employment and the Struggle for Human Dignity
In recent years innumerable studies, books, articles, conferences and seminars have been devoted to the topic, “The Future of Work”. One reason is the prospect that in the foreseeable future robots will be able to replace human beings in most activities presently carried out by human labor, leading to the question of how mass unemployment can be avoided. Another reason is the growing consciousness of the fact that the political instability in countries around the world is rooted to a large extent in the worsening objective and subjective situation of their working populations. The perspective of “robotization” of the economy is still far away, but it already influences the way people think about the present crisis.
There is no doubt that rapid process of improvement of robotic technologies will have a profound effect on the role of human labor in practically all sectors of the economy. In contrast to traditional automation, which is mainly limited to a small repertoire of repetitive operations, robots are characterized by a vastly greater flexibility compared to traditional automated systems. Robotic systems are becoming able to match many of the tactile and motor abilities of human beings; to spontaneously orient themselves and move about in various environments, to utilize a variety of optical, acoustical and mechanical sensors to recognize and to manipulate objects and arrays of objects with respect to their positions, orientations and motions in three dimensional space; to recognize and respond to human speech; to improve their performance, to integrate new information and adapt to new situations through various forms of “artificial learning” etc.
In a number of recent conference presentations former U.S. Secretary of State Robert Reich has highlighted his view of the economic challenges posed by the robotic revolution in the following way: Imagine a huge machine –Reich calls it the “iEverything” -- which is capable of producing everything you could possibly desire. For example you tell the machine that you want a car, and describe the kind of car you want. The car is immediately produced and delivered to you automatically, with no human labor involved. What is the problem? Reich asks the audience. His answer: Nobody will be able to buy the cars, because no one will have any means of earning money! Robotics will have eliminated nearly all industrial and service sector jobs. Reich notes that this scenario is futuristic, “but when more and more can be done by fewer and fewer people, the profits go to an ever-smaller circle of executives and owner-investors.”
This last remark points to the immediate, burning issues which are motivating much of the present discussions about the “Future of Work”, even when not explicitly mentioned. They have nothing to do with futuristic scenarios, but rather with the epidemic of political crises afflicting the world today, not only in the so-called developing sector, but also in the United States and Europe.
The recent political earthquakes in the United States are particularly revealing. Evidently the U.S. establishment – which thought it had firm control of the country -- was not prepared for the degree of popular support that the anti-establishment candidates Donald Trump and Bernie Sanders have been able to mobilize in the population. As it became more and more clear that Trump was going to win the Republican nomination and that large parts of the Democratic Party base – especially young people -- supported the “Sanders revolution” against the Hillary Clinton and Wall Street, articles and commentaries began to appear, calling attention to the miserable situation of much of the work-age population in the United States.
Already on February 22, 2016 for example, an article appeared in the Huffington Post entitled “Hidden Unemployment Explains Rise of Trump and Sanders”. Author Alan Singer recalled that the official unemployment rate in the United States, according to the Federal Bureau of Labor Statistics, is currently under 5 percent. But in his New Hampshire primary victory speech Donald Trump declared that the official unemployment numbers were phony, and said “The number is probably 28, 29, as high as 35.” Many journalists laughed at this statement. “But”, writes Singer, ”the Trump unemployment numbers are not ridiculous and that may explain the rise of both Trump and Bernie Sanders in the Republican and Democratic Party Presidential primaries.” Singer notes that the official unemployment rate only includes people who do not have a job but want one and have actively sought a job in the last four weeks. “But if you include people who want to work and looked for a job during the previous year, discouraged workers who stopped looking because of economic conditions, and people who are working part time but want to work full-time job (then) the unemployment rate rises to 9.9 percent. (But) even this number may be artificially low. In 1999, 85 percent of Americans age 25 to 54 were working. But the figure now is only 81 percent. If we count those missing workers as unemployed, the unemployment rate rises to over 12 percent. And when you add college students who want to work, older people who were forced into retirement, people on disability who would work if they could, and women with children who would work if there were adequate day care, the hidden unemployment rate for the United States is probably over 30 percent.”
The situation of the many Americans who are “privileged” to have a job is often not much better. A March 21, 2016 commentary in the Boston Globe by Roland Merullo focuses on the subjective condition of the masses of working poor in the U.S.: “Trump’s appeal is not primarily grounded in racism or anger. It’s primarily grounded in humiliation. .. I’m close to people who are working, and poor. There is a particular kind of humiliation involved in their lives, though many of them are too proud to use that word. They’re not hungry… But every hour of every day they’re shown images of people who have things they will never have. Virtually every TV show and Internet site offers ads featuring relaxed families … that own a home, have new cars, take cruiseline vacations, and use the kind of electronic gadgetry that would bankrupt the working poor...” Referring to the “political correctness” of the media which seems more interested in the rights of transsexuals than in the problems of the majority of citizens, Merullo writes: “Imagine what it’s like to come home from working a job (or two jobs) you hate, that exhausts you, that leaves you five dollars at the end of the week for a child’s birthday gift, and hear someone call you ‘privileged.”… So when they see protesters disrupting the speech of the candidate they hope can change their lives, and when they hear him say, ‘I’d punch that guy in the face’— the kind of language they grew up with — and when they listen to him talk about the decent-paying jobs that were moved to China (something Trump says more often than any other candidate), is it really a surprise that these people go into the voting booth and cast a ballot for Donald?”
In a recent speech Robert Reich – who became a prominent supporter of Bernie Sanders -- pointed to widespread economic insecurity as a key cause of the political upheaval in the United States. Two thirds of employed persons in the United States have no long-term work contracts. Many of them are working “on demand” on a short-term basis and do not know what they will be doing a year from now. Trade unions, which once played an important role in the fight for job security, now represent less than 7% of employees in the private sector. At the same time, the large section of the workforce that do not have the high-level education and specialized qualifications needed to get secure well-paying jobs, have no other option than low-paying jobs in retail shops, restaurants, elderly care, truck driving etc.
In the 1950s and 1960s the situation was totally different. The “G.I. Bill” enacted at the close of the WWII granted free college education and many other forms of support to returning soldiers. The expansion of U.S. industry provided the opportunity for a majority of the working class families – including black people – to rise into the middle class and to share in the so-called “American dream”. But today, after decades of deindustrialization, tens of millions of formerly middle class working families are living under ghetto-like conditions in the notorious “Rust Belt” and elsewhere, impoverished and largely unemployed, without any future perspective. Formerly prosperous communities are now totally run down, their physical and social infrastructure collapsing, their youth devastated by drugs and crime.
Economic insecurity has drastically increased even among the people who still belong to middle class. It has an especially heavy impact on members of the younger generation, who find it difficult or impossible to plan their lives. Under pressure to obtain the best possible academic qualifications for competing on the job market, many of them are incurring huge debts to pay for their college or university education. The average debt of American college graduates has constantly increased, reaching a level of over $37 000 last year. But in many cases the debt is much higher – over $50 000 for masters of science and over $160 000 for graduates in the field of medicine and health sciences. This has led to a situation where in 2015 over half of outstanding student loans in the U.S. are in deferral, delinquency or default. Many young people enter the job market in a condition of financial ruin. Where will they live? How will they pay their bills? How are they going to start a family?
All of this is happening in the nation which is supposed to be the richest in the world, whose economy has supposedly recovered from the financial crisis and now enjoys “robust growth”. But in fact the process of decline or even extinction of the traditional working middle class, and the drastic increase in economic insecurity has been going on in all industrial countries. Needless to say, the situation of the so-called developing countries is much worse. Practically every nation of the world is today in a state of a profound economic, social and political crisis. Where is the paradise promised by the advocates of financial globalization and other neoliberal policies? Nearly everywhere the crisis is related, directly or indirectly, with the failure to provide secure employment at modern, middle-class wage levels to the majority of the working-age population.
In this situation there is growing interest in the long-standing proposal that governments should provide some sort of unconditional, guaranteed income to all citizens. As is well-known, this idea has already been implemented, in one form or another, in a number of regions and countries, including of course Brazil. Although it was rejected in a recent referendum in Switzerland, the deepening crisis has broadened its base of support among “progressives” as well as conservatives, the latter seeing it as a way to eliminate the huge state bureaucracy connected with existing social systems.
It is not my purpose here to take discuss the pros and cons of a “guaranteed basic income”. Instead I want to ask a different question: What has happened to the goal of achieving full employment? Why can’t governments adopt policies that insure – by direct and indirect means – that there will be a sufficient demand for labor and a sufficient supply of well-paying, productive jobs for the entire labor force? Why don’t governments adopt emergency measures, including the use of productive credit generation in combination with large-scale state investment in infrastructure and other key sectors of the economy, to create millions of productive jobs, to reverse the disastrous policies of deregulation, privatization and dismantling of social systems, and to restore the economic security of the population?
In this context it is unfortunate that large parts of the “left” internationally, including parties with a social democratic orientation, who are supposed to represent the interests of working people, have de facto abandoned the traditional struggle for full employment. One reason for this is evidently the belief that there is no realistic possibility today to overturn the basic “rules of the game” which have been established by financial globalization and other neoliberal reforms. At a conference on “The Future of Work”, held a week before the Swiss referendum on guaranteed basic income, former Minister of Finance of Greece, Yanis Varoufakis, expressed this by declaring -- in agreement, ironically, with the neoliberals on this point -- that “the social democratic, New Deal paradigm is finished. It can never be revived.” According to Varoufakis, capitalism has entered a new objective stage of development in which the old-fashioned solutions have become obsolete. But no doubt the biggest reason why the idea of full employment has disappeared from the agenda is the belief, articulated by Robert Reich at the same conference, that in the foreseeable future the large-scale use of robots and robotic systems will cause a collapse in the demand for human labor. Only a small fraction of the workforce will be needed to supply the economy. In such a situation the idea of ever returning to full employment would obviously be a complete fantasy, and Reich does not even mention it.
Reich appears to be a decent person, but in my opinion his conclusions are based on a fundamentally flawed conception of economics. The problem is not only typical of professional economists like Reich, but is shared by most politicians and ordinary people. The problem becomes apparent when we ask ourselves: what is the goal of an economy? What is the purpose of economic activity? The obvious answer is that the purpose of economic activity is to fulfill human needs. But what are human needs? Taken seriously, this question demands a completely different sort of answer than (for example) listing types and amounts of goods and services corresponding to some chosen “minimum standard of living”. Contrary to the biases of nearly all “establishment” as well as leftist economists, it is impossible to define human needs without taking account of Man’s essential nature as a spiritual being – a being possessing creative mental powers of the sort that distinguish Man absolutely from all other living species. To live as a human beings in the fullest sense requires that each individual’s creative powers be constantly exercised, realized “in actu”. “Human needs” therefore includes everything required in order for people in society to live as human beings in the fullest sense.
Obviously the task of fulfilling human needs in this sense can never be achieved all at once, but only in open-ended process of development. Also it goes beyond the domain of what an economy by itself can accomplish. But what are the implications for economics, when we postulate that the purpose of an economy is to contribute as much as possible to that process? We begin to see clearly the fallacy underlying the idea that “in the future fewer and fewer people will be needed to produce what society needs”. In fact, what society needs are not only goods and services, but above all certain forms of human activity – activities through which the members of society can develop and realize their potential as beings “created in the image of God”. Hence the primary task of the economy is to “produce” those sorts of activities. How can this be done? By employing people to do them! More precisely: by guiding the economy – through suitable economic policies – along a trajectory of economic development which insures a constant expansion of employment in the desired forms of activities, as well as the supply of the goods and services (including especially education) necessary to support that expansion.
I specify such a trajectory in my book on “The Physical Economy of National Development”. Its essential feature is to drastically increase the percentage of the workforce employed in scientific research and related technological development, in part through state sponsorship of science-intensive projects such as the long-term exploration and colonization of space. Far from being a threat to employment, “robotization” will help to accelerate this process, by freeing the labor force from routine, uncreative activities. Supplying the hardware and infrastructure for scientific research – for the study of living Nature, for the exploration of the Universe on all scales -- will account for an increasing portion of the total demand for manufactured goods. Employment in manufacturing will be concentrated more and more on the development, engineering and production of “one of a kind” products required for scientific experiments and for prototypes of new technologies intended for use in various sectors of the economy. Such work is a labor-intensive and science-intensive activity demanding large amounts of creative problem-solving and innovation. This is an area in which small and medium-sized enterprises have unique advantages, and their economic importance will grow.
With the economy structured in the indicated way, the growing expenditure of manpower and resources for science-related activity will be compensated by the increases in physical productivity which will be constantly generated as a byproduct of the growth of scientific knowledge and its applications in technology. I call this the “Knowledge Generator Economy”. Naturally, a revival of classical music, art and poetry has an essential role to play, especially for young people, because of its spiritual content and because it makes people more creative, rather than more stupid as does present-day popular culture. In summary: The goal is to transform the development of human knowledge and human creative capabilities into the main generator of employment, investment and demand!
The neoliberal world order is collapsing, and with it the authority of the ideologies and institutions upon which that world order has been based. The political earthquakes occurring around the world make possible radical changes in policies. Therefore it is especially urgent to correct the false assumptions and habits of thinking about economics, which block the way toward solving the crisis, and could make it even worse. The goal I have sketched above may seem very far away at the moment, but it can function as an indispensible “star on the horizon” for guiding economic policies in the right direction.