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Renewable energy, asteroid mining, rockets which can be used multiple times and even fly to Mars, industry leaders openly discussing the implications of AI, DIY enthusiasts immersing themselves in low-cost genetic engineering. And yet, that future is already here. It turns out it isn’t tomorrow’s world which is too complex to craft a meaningful politics for, it’s today’s.
cf Sapiens, Yuval Noah Harari
As with the Second Disruption it will offer relative liberation from scarcity in vital areas – energy, cognitive labour and information rather than simply the mechanical power of the Industrial Revolution. As with the First it will signal a departure from all history before it, heralding a beginning more than a final destination.
Thus, far from being confronted with a choice between change and inertia, a world dramatically different from our own is both inevitable and near at hand. The key question is this one: In whose interests will it be created?
This is why Fully Automated Luxury Communism (FALC) is a politics rather than some inevitable future. To that end, it requires a strategy for our times while carving new figureheads for utopia, outlining the world as it could be and where to begin. So let us start at the end – or so we thought – with the strange death of the future.
In the summer of 1989, as it became clear the United States and its allies had won the Cold War, Francis Fukuyama wrote an essay titled ‘The End of History?’ for the National Interest. Its core proposition was provocative yet simple, with the little-known academic asserting that the collapse of the Soviet Union was of greater importance than simply marking the end of a military rivalry: ‘What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such: that is, the end point of mankind’s ideological
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If Fukuyama’s words were naive in 1992, then in the decade that followed the financial crisis of 2008 they became positively ridiculous. Indeed, he admitted as much in a book he published on identity in 2018.
Capitalist realism is best summed up with a single sentence: ‘It is easier to imagine the end of the world than the end of capitalism.’*
Because capitalist realism has no offer of a better future – especially so over the course of the last decade – its default logic is one of anti-utopianism. Flat wages, falling home ownership and a warming planet might be bad, granted, but at least we have iPhones. And, yes, you may not be able to access the things your parents took for granted, like affordable homes or free higher education, but you should still be grateful – at least it’s not the sixteenth century.
Almost two decades after Fukuyama’s false prophecy, that decisively changed: a banking crisis, a debt crisis, a deficit crisis – all culminating in the imposition of austerity, from Greece to California. Alongside that was war in Georgia, the flowering of the Arab Spring, uprising in the Ukraine, insurrection – and then the most bloody of civil wars – in Syria. Elsewhere previously low-intensity conflict in Iraq and Afghanistan deteriorated further, soon joined by similarly hazy struggles in Libya and Yemen.
Less than a decade after the collapse of Lehman Brothers in 2008, it was now undeniable. An expansionist Russia, isolationist Britain and broken economic model had all been outdone by a reality TV star becoming the most powerful person on Earth. History was back.
Obama and Trump shared a similar faith in the unique ability of markets to find solutions. After all, anything else is tantamount to heresy in a world of capitalist realism – where the end of the world is more plausible than the end of capitalism.
Ours may well be a world of low growth, declining living standards and rising geopolitical tensions, but capitalism’s staunchest advocates draw strength from knowing similar problems have been dealt with before.
There are five such crises, which at times overlap. They are climate change and the consequences of global warming; resource scarcity – particularly for energy, minerals and fresh water; societal ageing, as life expectancy increases and birth rates concurrently fall; a growing surplus of global poor who form an ever-larger ‘unnecessariat’; and, perhaps most critically, a new machine age which will herald ever-greater technological unemployment as progressively more physical and cognitive labour is performed by machines, rather than humans.
Despite the observations of Francis Fukuyama and his disciples, history returned on 15 September 2008 when the global financial system crashed. Within weeks the world’s leading economic powers, previous zealots for minimal state interference, were left with no alternative but to bail out their domestic banks, with some even being nationalised. That exposed their previous free market fervour for the lie it was: this was socialism for the rich and market capitalism for the rest. The critics had always said as much, now nobody could deny it.
It should come as little surprise, then, that nearly 17 million Brits of working age have less than £100 in personal savings. In the United States it’s a similar story, with 63 per cent of Americans saying they have $500 or less put aside.
In Britain, where the Conservative Noel Skelton coined the term ‘property-owning democracy’ in 1923, home-ownership is at its lowest level since 1985 and continues to fall. It’s even worse in the US, though, where a combination of high prices, low wages and little credit means the average American is less likely to own their own home than at any time since 1965 – four years before the Moon landing.
While neoliberalism, which emerged with the Thatcher and Reagan governments, led to higher unemployment and lower wage growth, for more than a generation this was mitigated by access to cheaper goods and services – by relocating production to countries with lower wages – as well as inflated asset prices, particularly housing, and access to cheap mortgage and consumer debt. As well as forming the foundation for a widely felt material improvement in living standards, this was the economic base for a world where there was no alternative.
There is no consent for a system which, on nearly every measure, is going backwards.
The ‘technological fix’ is different, with Marx consistently clear that technological innovation is an inherent feature of capitalism. His explanation, just as it would be for later voices such as Milton Friedman and Joseph Schumpeter, was that it was propelled by competition between capitalists. The imperative to compete means capitalists must always find cheaper, more efficient ways of producing commodities – often substituting machines for human labour – while also offering improvements on goods and services available to consumers.
This new situation of post-scarcity underpins what will be referred to as ‘extreme supply’, something not only limited to information, but – as a consequence of digitisation – labour too. Here, continuous improvements in processor power, in combination with a range of other technologies, means machines will be capable of replicating ever more of what was, until now, uniquely human work.
An aspect of Marx’s thinking which remains underemphasised is how he recognised capitalism’s tendency to progressively replace labour – animal and human, physical and cognitive – with machines. In a system replete with contradictions, it was this one in particular which rendered it a force of potential liberation. This is most clearly laid out in the ‘Fragment on Machines’, a short but important excerpt within the much larger Grundrisse. The reason you’ve likely never heard of either before, unlike the better-known Communist Manifesto or Capital, is that the Grundrisse was unpublished in
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He was certain about some features of the new society, however. One was that the arrival of communism would herald the end of any distinction between labour and leisure. More fundamentally, it would signal humanity’s exit from what he called the ‘realm of necessity’ and entrance into the ‘realm of freedom’.
Despite the claim that Marx favoured violent revolution, the truth is he never believed the transition beyond capitalism would be an exclusively political process – something so simple to achieve as to merely require replacing one group of rulers with another. It certainly entailed class struggle and the working class gaining political power, but it also needed new ideas, technologies and social relations. Marx considered the working class to be the key to a future society, but only because its revolution was uniquely able to eliminate work and thereby end all class distinctions.
To the contrary, his view was that communism was only possible when our labour – how we mix our cognitive and physical efforts with the world – becomes a route to self-development rather than a means of survival.
Communism is luxurious – or it isn’t communism.
This ended abruptly in the early 1970s, when wages decoupled from improvements to productivity – which now only fed the incomes of the very highest earners. This phenomenon extended beyond just the US. A 2014 report showed how real wage growth in Britain has been on a downward trend for forty years, with wages increasing an annual 2.9 per cent in the 1970s and 80s, 1.5 per cent in the 1990s, and 1.2 per cent in the 2000s. Since the 2008 crisis that incremental decline has gone into free-fall, with real household wages in Britain falling 10.4 per cent between 2007 and 2015, something entirely
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After the release of the 2017 Autumn Budget, the Resolution Foundation, a London-based think tank, predicted that the 2010s would be the worst decade for UK wage growth since the late eighteenth century.
With each passing day, particularly since the 2008 crisis, it seems ever more obvious that Marx was right. The five crises of this century are either an existential threat to humanity, or the birth pangs of something better. Despite what Keynes predicted, neither is inevitable.
For Drucker, however, the transformation didn’t stop with Taylor. He observed an increasingly central role for knowledge as capitalism changed over the twentieth century. Thus, while the period after the 1880s saw a productivity revolution, and the decades following 1945 a ‘management revolution’, it was in the ‘information revolution’ that he saw production increasingly based on the ‘application of knowledge to knowledge’. While knowledge had always been important – after all, the essence of the First Disruption resided in mastering the information content of crops and animals through
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Technological change can potentially lead us to abundance, as Keynes so bravely predicted in 1930, but only if it is accompanied by a politics that demands as much. And Drucker? What he correctly grasped was where value was increasingly located – in information.
In 1990, at just 35, Romer authored a now celebrated academic paper titled Endogenous Technological Change. There he effectively crystallised what Drucker would write just a few years later, highlighting the new and critical importance of knowledge to economic growth.
Romer defined technological change as ‘an improvement in the instructions for mixing together raw materials’. Technological change was therefore, perhaps counter-intuitively, immaterial – amounting to nothing more than an upgraded re-arrangement of previous information. ‘Instructions for working with raw materials are inherently different from other economic goods,’ Romer concluded. So over time, as technology develops, the value increasingly arises from the instructions for materials as opposed to the materials themselves.
Summers and DeLong even conceded such a point when they wrote that temporary monopoly power and profits are the reward needed to spur private enterprise … the right way to think about this complex set of issues is not clear, but it is clear that the competitive paradigm cannot be fully appropriate … we do not yet know what the right replacement paradigm will be. Nearly two decades later and still nobody can answer that question.
Until now.
In 2011 the Economist, in circulation since 1843, posed its readers a question: ‘What happens when … machines are smart enough to become workers? In other words, when capital becomes labour?’
While wanting to all but eliminate workers from production in order to save money, Ford also wanted to maintain demand for the company’s products, now made more efficiently than ever. Simply put, Ford wanted cheap employees but affluent consumers – something which simply wasn’t possible.
After the First Disruption physical work was increasingly performed by novel configurations of human labour, animals and the elements, and by the twelfth century the sight of the water and windmill was increasingly common across much of Europe. This was a world where motive force was overwhelmingly organic: oxen in the field, horses to travel, human motion for the spinning wheel, even a special breed of canine – the Turnspit dog – would turn meat while it roasted.
Most Europeans would not drink water as clean as that found in Ancient Rome until the twentieth century, with no city achieving its scale and prominence until London in the early 1800s.
The United States, which by that time had become the world’s largest and most advanced economy, wouldn’t reach its apogee until 1915 when over 26 million horses lived and worked alongside humans. Within just a few decades, however, they would disappear from the world of work, substituted in a range of tasks by machines which were more reliable, didn’t get sick and, most importantly, led to far greater productivity. Paradoxical as it might seem, we employed animals like never before at the very moment they were becoming obsolete.
In 1970 there were around 1,000 industrial robots worldwide. By the beginning of 2016 that number had risen to 1.8 million and is expected to exceed 3 million by 2020. Since 2010 the global stock of industrial robots has increased by an annual average of more than 10 per cent. Compound growth means if that trend persists manufacturing won’t just stop creating jobs – as it already has done despite massively increased output – but their numbers will significantly decline.
By 2007 American manufacturers were using more than six times as much equipment, including computers and software, as they had done twenty years earlier – while doubling the amount of capital used per hour of employee work. Contrary to popular misconceptions in the US of millions of manufacturing jobs being lost to cheaper workers abroad, for the most part they have simply been automated – subject to ever improving efficiency.
The extent of such change is most obvious in those countries which industrialised first, and today Britain and the United States have a smaller percentage of their workforce in manufacturing than they did in the early years of their respective industrial revolutions. Because this process of productivity gains leading to job losses in manufacturing is global, some forecasts predict that at the current rate of displacement, factory employment, which accounted for 163 million jobs in 2003, is likely to employ no more than a few million people by 2040.
Such hugely differing levels of productivity, combined with worker’s wages in China rising continuously for two decades, means automation is beginning to put pressure on those industries which relocated to the Global South after the 1970s. While many jobs in manufacturing remain there for now, lower levels of comparative development will count for little. Indeed it is estimated that China will be spending nearly $60 billion a year on robotics by 2020.
And while countries like China and South Korea benefitted from the global relocation of production after the 1970s, the same will not hold true for today’s lower GDP countries like Bangladesh and Indonesia. This time, capital’s ‘fix’ is primarily technological rather than spatial. That has stark implications for how poorer countries might navigate development.
While it feels like manufacturing is in uncharted waters thanks to technological unemployment, we’ve been here before. Indeed what the Third Disruption is presently doing to manufacturing mirrors what the Second Disruption did to the breakthrough technology of humanity: agriculture.
Just as we reached ‘peak horse’ a century ago, as one paradigm came up against another, within a generation we are set for peak human.
A case in point: until 2015 Atlas had to be permanently plugged into a wall socket. Now, with its 3.7-kilowatt-hour lithium-ion battery pack, it can walk around for about an hour. These trends are only set to continue.
But the nature of jobs under capitalism – comprised of tasks rather than the generalist approach seen with artisanal labour – also plays a part. Industrial change, particularly since the 1880s, has meant each job is reduced to a managed set of components, all of which are measured and managed as scientifically as possible. Without knowing it, the project of Frederick Taylor and his productivity revolution – for Drucker the first step in making information the primary factor of production – has turned out to be just as crucial to peak human as the exponential progress of digital technologies.
To create cars that drive themselves, the likes of Uber, Tesla and Google didn’t model and then replicate how humans drive – this remains well beyond our present technology. Rather, they tried to solve the problem by breaking it down into a set of component operations and putting a data processing system on wheels. As a result these vehicles can navigate streets and motorways by relying on precise GPS data, huge amounts of information regarding maps, and a continuous stream of real-time updates on other cars, potential obstacles, pedestrians and all the variables human drivers have to
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