Lose your job to automation: Mourn or celebrate?

The three links below of several hundreds that can be found on the internet news sources these days indicate clearly the rapidly accelerating advance of automated technology moving towards the elimination of jobs.

Walmart

Australia

Japan

So far, the action seems to be very widespread but is moving especially rapidly in retail as is clear from the evidence in Australia, Japan and the US. The rationale used to justify automation by Walmart management in the US is creative and ridiculous at the same time. Nobody in management wants to say that their companies are trying to reduce or eliminate their workforces altogether. But that’s exactly what’s happening.

Karl Marx predicted this very outcome in the mid-19th Century arguing that in their efforts to control or reduce their costs of production, businesses, after overproducing in the search for profits, turn to automation to control their labour force and return to profitability. The process has been going on for a long time.

It seems perfectly reasonable for businesses to try to become more ‘efficient’ by automating jobs that are tedious and repetitive, often dangerous. For individual businesses this seems like an effective strategy to control their costs and their processes. The problem is that there is anarchy in the business world, no coordination, and competition prevents cooperation between businesses in the same field of operations. The result is that there is a reduction in the aggregate number of workers in any given area and the reality is that bots don’t buy anything. Workers are also consumers so doing away with workers is doing away with your very own customers. Nobody I know in business is worried about taking customers away from their competitors, but if Walmart eliminates much of its labour force by automation that will inevitably also reduce its customer base.

So, the question is should you mourn or celebrate the loss of your job through automation? The answer is yes and no. The actual issue is not jobs, but income. You should definitely mourn loss of income. The loss of a job not so much. Jobs, i.e, employment, are not really in sync with the human capacity to work. Humans, as Veblen is quick to point out, are programmed to work, but if they are presented with meaningless, repetitive, boring work that is really to make someone else look good or get rich, they balk. So doing away with boring, stupid, meaningless jobs is a good thing in my mind. Several countries are now toying with a guaranteed basic income. It will take some time yet for the importance of this strategy to become more widespread.

We’re at a real crossroads at the moment. With the advent of advanced robotics, automation, and especially artificial intelligence, work will be required of fewer and fewer people for shorter and shorter lengths of time. There will be, in a very short period of time, a huge surplus of people as workers and a shortage of people as consumers. The elimination of tedious labour could result in an explosion of creative energy as people are freed to think for themselves and act according to their talents and abilities. However, they will need income to be able to do that.

One thing for sure, there will have to be a greater distribution of wealth because it does no one any good to hoard cash and take money out of circulation. It sure doesn’t help corporations involved in the sale of consumer goods. From this perspective, banks and financial institutions are at loggerheads with consumer driven businesses. There will have to evolve a very different ethic, one at odds with the current capitalist Neo-liberal one that I wrote about in my last blog post.

I wasn’t going to do this, but I just had to Butts in!


There has never been a clearer and more public demonstration of how much power multinational business corporations exert on national governments than the recently exposed SNC-Lavalin affair. In 2015 SNC-Lavalin (SNCL) realized that they were in serious trouble because of bribery and fraud allegations arising out of its business dealings in Libya so it was time to ramp up the pressure on the Canadian government to go easy on it. Starting in 2016 SNC-Lavalin worked hard at lobbying the federal government to include a Deferred Prosecution Agreement addition to the Canadian Criminal Code in the C-74 Omnibus Budget Bill in the summer of 2018, in anticipation that it would have to go to trial and potentially be barred from bidding on federal government contracts for ten years. With a DPA, SNCL could avoid a lot of nastiness and carry on with business as usual while using some of its eleven billion dollar a year profits to pay a fine instead of facing serious curtailment of its business. 

It’s a sordid affair, but apparently business as usual according to some. Bribery is necessary they say in crazy countries like Libya or it would be impossible to do business there. It happens all over the world, all the time, they say. Don’t come down hard on a poor downtrodden company like SNCL because its only doing what’s best for its shareholders, and its employees. Of course, its employees. Nine thousand jobs in Canada! Why, how could we allow a little bribery and scandal in a country like Libya to jeopardize nine thousand good jobs in Canada? Unthinkable! 

There are thousands of people in Canadian prisons for peddling or using drugs. The Canadian government wasn’t worried about them losing their jobs. Yeah, yeah, you might say, those druggies were doing illegal things so they deserved to go to jail! Well, I’m afraid that logic also applies to SNCL if it gets convicted of the charges its facing in court. 

The jobs argument is so ridiculous in any case. “Well, you can’t do that, there would be huge job losses!” I guess the guards and staff at Nazi death camps could have argued that after the war as their facilities were being shut down.[1]Or, horse breeders and buggy whip manufacturers when they were faced with the arrival of the automobile. 

Like I said, this is all pretty sordid stuff. After all, we live in a democracy don’t we? We are all represented equally by our government are we not? We don’t live in a plutocracy, don’t they say? 

Or this: “What kind of a commie opposes our good, wholesome multinational Canadian businesses?”

And what about this?: There is certainly plenty of evidence that the business of the Canadian government (presumably on our behalf) has historically been orchestrated by corporate interests going back as far as Confederation. (It was going on way before that too but Canada wasn’t officially Canada yet.) 

The Canadian Pacific Railway (CPR) of the post-Confederation 19thand early 20thCenturies was the past equivalent of modern day SNC-Lavalin. Of course, it’s not a perfect equivalence, but SNC-Lavalin has been front and centre in the massive transfer of public tax money into private hands by way of infrastructure projects and public/private partnerships (P3s).[2]That’s just like what happened decades ago with the construction of railroads in Canada. No P3s back then, but, relatively speaking, just as much transfer of tax money into private hands. So it goes.

I don’t know what Jody Wilson-Raybould’s motivation is for doing what she did. I tend to believe what she said to the Justice Committee. Gerald Butts to me is unbelievable but a great flag-waver for big business’ interference in Canadian politics. He’s never been in business himself. He’s a policy wonk. But he sure knows who to bow down to when he leaves a room and it ain’t you and me, nor SNCL workers. 


[1]I know I’m not supposed to mention Hitler or Nazis or what they did. It’s kind of an online rule: https://en.wikipedia.org/wiki/Godwin%27s_law

[2]SNCL is proud of its P3s in Canada: http://www.snclavalin.com/en/market-services/capital.aspx

It’s your life, so sell it along with the rutabaga!

This is one way to think about modern capitalism. There are others.

Most of us glide through life not thinking particularly deeply, if at all, about the underlying forces controlling our lives.  In fact, we are taught all along that there are no forces that control our lives at all and that we are fully in charge of our lives whatever we make of them. That belief is actually part of the very real underlying forces I just mentioned, one that aims to line up our personal lives in such a way that we don’t question the forces that drive us to behave in certain ways and not in others.[1]

An example might help.  I’m sure you found yourself recently in a grocery store buying food for the week, or maybe just for dinner, assuming that is that you have enough money to actually shop in grocery stores and not in dumpsters, but that’s another matter I’ll deal with later.  Two aspects of this shopping scenario are of interest to me here.  First is the idea of the store itself.  How many of us actually question the very existence of the store? Not many, I’m sure.  

Stores are such a regular and ubiquitous part of life that we tend to think of them as just part of the landscape, as places to go buy things, certainly, that is if we think of them at all.   Well, a store is nothing more than a place where things are stored, awaiting distribution or for people to come along and pick them up in exchange for money. People have been storing things ever since the dawn of humankind.  

Finding secure places to store food and other goods has been a human preoccupation throughout history (and pre-history for that matter).  In a situation where food is readily available and there is no worry about spoilage because it’s consumed very soon after it’s collected, storage isn’t an issue.  This was true, for instance, of the !Kung San in Southern Africa before colonialism. It does become an issue when there is a large number of people to feed and where food can become scarce at times. Obviously, food storage is not so much an option for nomadic as opposed to settled peoples so it has been a very important pre-occupation of humankind especially for the last ten thousand years or so since the advent of large scale domestication, settlement and formal government.  Preserving food then becomes imperative and storing it securely even more so.  

So, we’ve needed to store food and other products for a long time.  Once food and other goods are in storage, they need to be made available to people for consumption.  Not just any people, of course.  In what we know of pre-history and early history, family was the most important unit of distribution.  People would pass around chunks of meat around the campfire. As we went along as a species especially in certain parts of the world we now know as the Middle East, Europe and the Far East, the units of distribution grew ever larger driven by domestication and urbanization.  Well, that was then, what about now?  

Eventually, political units tended to grow in size and motivations changed.  There was an increasing need to mobilize, equip and feed large numbers of people for various tasks like war, agriculture, large infrastructure projects like water diversions, roads, sanitation systems as well as religiously inspired projects like pyramids, cathedrals and the like. This historical development required innovations in storage management and distribution.  Centralized storage systems like granaries, warehouses and eventually freezing and cold storage facilities grew more prevalent.  But of course, human production never occurs in a vacuum.  Production, distribution and consumption, the three ‘moments’ of human production are not just economically but also politically driven for the most part and limited by the availability of raw materials, labour and technology.  In our time, and for the past three centuries, give or take a few decades, business has been increasingly dominant in all phases of human production.  Business. Yes, business. 

Business is a method, a way of organizing human activities, most predominantly economic activity.  That said, the ways and means of business have become pervasive in all types of organizations, governments and non-profit.  It’s a truism to say that businesses exist to make money. That’s not all they exist for, but if they don’t make money they don’t last long (unless they get government subsidies which they often do). And what is the interest of business in human production? Well, as I noted above, business is an organizational vehicle for the production, distribution, and often, the consumption of commodities. Note that I said business is in it for the creation of commodities not products. 

Commodities are products specifically created for the market. General Motors doesn’t make vehicles for its own use, it makes them to sell. Once a vehicle is sold it no longer holds any interest for GM. In fact, if people, car buyers, were more concerned with GM’s welfare (as GM thinks they should be) they would drive their vehicles into the first power pole they encountered upon leaving the auto dealer lot. That would mean an opportunity for GM to sell another vehicle to replace the one just smashed up against the power pole. Smashing up cars is good for business. 

Of course, the scenario I just painted is simplistic and the real situation is much more complex, but the truth is that business makes products to sell. We call those products commodities. Distribution businesses like grocery stores are also in the business of making money but their challenge is somewhat different than GM’s. Grocery businesses have conditioned us over the decades to expect a myriad of consumable commodities on their shelves. People (like you and I) get very upset when they see empty shelves or even half empty shelves in their favourite grocery store. I can hear people saying to themselves “What’s wrong? Why are the shelves getting empty? Should I stock up?” Fear and panic can set in. So, it’s better to keep the shelves topped up to avoid triggering a sense of doom and scarcity.

The reality is that grocers can never sell all the commodities that grace their shelves so masses of produce, meats, dairy products and other perishable items get tossed in the garbage every day. That is of no fundamental concern to the grocer (can you say Jimmy Pattison) as long as on average and over the long term enough commodities get sold to still make a profit. The ‘wastage’ is collateral damage. If food producers and distributors actually made food to consume rather than to sell, there would be no hungry people on the planet. But that’s not the way our world works. We allow people to starve if they have no money to bring to the market to exchange for food. It’s all about the market.

People get consumed too in the productive process. We sell our labour-power to a buyer at the best price we can get if we’re lucky and that buyer then has the ownership of our time and our capacity to work. Our time spent at work is not our time. It belongs to our employer.

However, my point is that we have to own ourselves in order to sell ourselves just like we have to own a rutabaga to sell it. That’s a basic legal foundation of capitalism. As owners of our labour-power we enter the market as free players, at least in theory. And if we are free players in the market we must also be free players in other aspects of our lives. It’s a singular philosophical expression of the reality of life in a capitalist society. More on this in another post. This one’s long enough already. 


[1]Dr. Bruce Lipton explains how we get programmed early in life to accept the reality we are presented with:  https://www.youtube.com/watch?v=7TivZYFlbX8

Capitalism: On Its Way Out?

I’m going to try to keep this simple. The answer to my own question in the title of this post is: of course. All things come and go. The era of capitalist domination will inevitably come to an end one way or another. How long capitalist domination can hang on is open to conjecture but it carries within itself the seeds of its own destruction.

I’m actually researching a series of blog posts on the relationship between capitalism, liberalism and democracy. Below I consider the most important dimensions of capitalism including its life-historical reality, its structure as a set of social relations, its difference from other modes of human production and its effects on morality and other aspects of life. If you haven’t read my post Is Canada a Capitalist Country?, now would be a good time. I may have been a bit too strident in that post, but I’ll try to make up for that here.

Some writers, actually many writers who might now be considered apologists for capitalism (and some left-wingers too) claim that the spirit behind capitalism has always existed in us humans. They argue that the key to capitalism becoming the dominant mode of production in history was removal of the fetters that kept it from emerging. I don’t buy that and neither does Ellen Meiksins Wood. Capitalism didn’t evolve next to feudalism and just wait until the time was right to overthrow feudal social relations. Capitalism grew out of the failing social relations of feudalism.

Simply capitalism is based on the system of wage labour. As feudalism was on its way out, there was a lot of stress between serfs and lords. Many lords couldn’t keep up with their responsibilities towards their serfs and serfs were reluctant to wait around for the lords to get their shit together. The productivity of agrarian England, particularly regarding wool production, for example, was rapidly diminishing to the point where in the 17th Century a half of English workers (called servants then) were wage labourers. I’ll not get into the specific mechanisms and forces that led to that outcome in this post but will explore it later in review of C. B. Macpherson’s book The Political Theory of Possessive Individualism (Oxford, 1962).

As workers we have a relationship to our bosses, our employers, based on wage labour. In a classic capitalist scenario, a capitalist hires workers to extend his or her own capacity to produce commodities for sale. It’s no surprise that businesses that mine oil and gas, for example, are referred to as petroleum producers. That designation does not include the people who work for those businesses. Hasbro is a toy producer. No reference to their workers as the real producers. Their labour power has been bought and paid for by the capitalist and he or she can therefore refer to it as his or her own labour. After all, it was bought and paid for.

Capitalists buy our labour power. Not our labour, but our labour power, our capacity to work. Of course a lot of us never work for an individual capitalist. We work for governments at various levels or non-profits. So, it’s more accurate to say that workers as a class work for capitalists as a class.

The system of wage labour has infiltrated every nook and cranny of our worlds. We expect to grow up to be nothing else than workers or employees (as many people prefer to be called) and we are trained at home and at school to expect no other outcome. We just want a good job. So few of us can ever become capitalists despite our dreams. Besides, the reality is that we, as individuals, are not very important in the scheme of things. It’s capital versus labour on a grand scale that counts historically. Individuals are simply personifications of our classes and no one is indispensable. Steve Jobs, the founder of Apple died a while ago but Apple lives on. Us workers are a dime a dozen. You want to find meaning in your life? For most people it’s futile to even contemplate finding ‘meaning’ in their work.

So, why will capitalism die? Because of its own efficiency and effectiveness. Due to severe stresses often caused by periods of overproduction of commodities, the capitalist class embarks on a program of renovation that changes the relationship between capital and labour. Globalization is a result of that renovation. Capitalists seeing their profits drop from failing sales have some options. They can curtail production and they can make their production processes more efficient, meaning that it takes fewer units of labour to produce the same product. They can also move production around like build a factory in Sri Lanka to take advantage of low wages, favourable labour and safety laws, better access to raw materials, and new markets.

Let me back up a bit to a very simplified illustration of what happens when someone wants to produce a product. Let’s look at a hypothetical product called a widget. It’s for ducks to perch on. So Sam McGee, a prominent local duck hunter and entrepreneur decides he wants to produce widgets. What does he do? Well, he gathers together all the things that he will need, what I call INPUTS in the table below. He hires a manager and the manager gets on with it. Sam sits back and watches the whole thing unfold from his condo in Panama.

The dollar values on the right in the table below are the costs per widget. In this case they add up to $28.50. He envisions making a profit of $12.50 per widget. Not bad. Note that McGee has to hire workers before he starts operations. Workers are part of the inputs. Workers do not share in the profits of the business. Workers’ labour is part of the costs of production like the land, equipment, and raw materials. McGee has agreed to pay market value for all the inputs. In this scenario, McGee gets $40 per widget which he also sells at market value. So how does McGee make money?

Sam McGee’s World

The Widget factory
 INPUTS
raw materials$2.00
equipment$4.00
land$5.00
buildings$5.00
labour$8.00
power$0.50
overhead$4.00
TOTAL$28.50
OUTPUTS
Widgets $40.00

Well, McGee is a clever kind of guy and he’s figured out that he can make money as things are. All he has to do is make sure that his costs of production amount to less than what he can get for widgets on the market. If the workers shared in the profit, the table above would look somewhat different. The $8.00 Sam pays his workers would rise to $20.50. So, the only way Sam cam make money is by not paying his workers full value for their labour. The $12.50 in profit comes from not paying his workers a full share of the market value of the widgets.

His cleverness will be tested, however, when the market for widgets collapses because he’s now produced a lot of widgets and he’s saturated the market and because he also now has competitors that pay lower wages and make even more money than he did. Damn. What to do? Cutting production is an option. The problem is it takes 10 workers to make 100 widgets a day. They can’t make any more and if they make any less, the costs of labour per widget go up. So what to do. Sam, the clever guy, knows a guy in welding and fabrication who says he can build Sam a piece of equipment that will allow for the same output of widgets but using half the current employees. Not only that, the equipment will allow Sam to tailor his production of widgets to any number he wants. Bonus! Sam gets on that right away, installs the equipment and fires half his staff. He also cuts back on production temporarily and lays off half his staff again. He’s now down to 2 workers and is still producing widgets, but a lot fewer of them. Sam is still making money but his workforce is not doing too well by him. As a side thing, Sam needs to also figure out how to make flimsier widgets. The ones he makes last way too long. He has to cultivate a forever returning clientele.

I know this is a huge simplification of how capitalism works, but it’s the essence of the thing at least from the production end of things. Of course, there’s money to be made in the distribution of commodities too and in their consumption. And if Sam needs to borrow money all the better. Then Goldman Sachs can get rich too.

What I’ve just shown here, simplified as it is, is the way that the labour force is being squeezed right out of existence. Either production is automated to eliminate workers altogether or the value of labour power is so reduced that workers can’t survive on the wages they are offered. We’re in that place right now. Simply put, there is a greater and greater amount of capital going into production at the expense of labour and as the system gets closer and closer to essentially eliminating necessary labour, the margins of profit drop, and capital can no longer exploit workers.

Oh, but it’s so much more complex than this. Governments have gotten into the picture helping Sam McGee in his time of terrible trouble partly by helping to manage and maintain his now mostly unemployed workers. (On EI, they are always free to come back to work. They constitute a free pool of labour for Sam). Banks too have joined governments to ensured that Sam will be fine. After all, Sam is the creative producer and his workers are nothing more than part of the cost of production. Sam needs our help!

Now think of Sam McGee as the totality of global commodity production and think of his workers as the global labour force and you will begin to get the picture.

In my next post I tackle how capitalism along with its essential liberal legitimation has infiltrated our very psyches, our values and our morality, and I will address how that infiltration is not as solid as it might seem.

Power and Politics in the Tar Sands

I’m no political scientist, but I have been following provincial/federal politics in this country for decades. Just for fun, I’m rereading Larry Pratt’s 1976 book The Tar Sands. Pratt died in 2012 but during his lifetime in academia at the University of Alberta and later as a writer and researcher with the Parkland Institute he wrote reams and reams of analysis of the oil industry and politics. His 1976 book, The Tar Sands: Syncrude and the Politics of Oil traces the process by which Syncrude was bailed out by the Canadian government with help from some provinces.

LarryPratt

You’ll notice that the drawing on the cover of Pratt’s book includes a brilliant caricature of Pierre Elliot Trudeau. Fascinating how after 42 years, father and son (Justin) have been captured by the oil industry. In 1974 the government bailed out Syncrude to the tune of $2 billion. That would be a lot more now, probably akin to the $4.5 billion the government is paying Kinder Morgan for its pipeline to nowhere.

This book will make interesting bedtime reading, but, after reading a few pages, I reckon I just have to watch the CBC news to get the story. The players may have changed, but the politics haven’t. Of course, the stakes are higher now and the dynamics are somewhat different but Pratt’s 1976 conclusions hold today. Canada is being held hostage by the oil companies and the federal government doesn’t have the guts to stand up to them and deal with the attacks on sovereignty they represent.

More later.

 

The Wealthy Need The Poor

Just a quick note to start off the day. The title says it all. The wealthy need the poor. In fact, it doesn’t matter who ends up poor, it just matters that many people do. I mean, who can know if someone is wealthy if there are no poor people around to compare them to? No, poor people are essential to the wealthy for many reasons. First, they make a great cautionary tale, as in, “see what can happen to you, my child if you don’t put your nose to the grindstone, work hard, aspire to the things that make us rich and believe in free entreprise, because mygawd it’s our way to glory and eternity.” Of course, in the same vein, they are also a great example of how not to live your life. “Those people have made a poor choice in parents. You’ve at least started life not making that mistake!” They are also a great source of cheap labour and can’t save any money so everything they make goes right back into the hands of business. What a great setup.

Actually, it’s  really quite simple. We live in a class society no matter how much we attempt to deny it. Wealth and poverty are a consequence of that, not the cause. So we have rich and poor people as an inevitable consequence of the way our society has evolved. Wealth is a major moral goal so poverty must be a major moral failure. So we merrily blame the poor for their circumstances and for all the ills of the world. We don’t have the good sense to see who and what are really to blame.

Strangely enough, there is no such thing as ‘capitalism’, which is a word that would describe a system of wealth accumulation that can be compared to the evil isms, socialism and communism. Capitalism is an a-historical concept that fails to take history into account. Capital accumulation and the rapid concentration of wealth in finance capital will come to an end. What will come after? I have some sense of that in very broad terms but that’s the subject of another post.

Trump and protectionism

This is just a short blog that is a reaction to a CBC radio interview this morning with a representative of the Canadian Manufacturers and Exporters Association (CMEA). The interviewer asked the rep from the CMEA how Trump’s presidency would affect Canadian manufacturers. His reply was that Canadian manufacturers are worried, but that Trump’s rhetoric is just that, rhetoric designed to appeal to particular gullible and self-interested audiences, and fact is something else. He said that if the US imposes tariffs on Canadian goods, then Canada should do the same with regard to American goods.

Problem is, there is a basic flaw in this perspective. Canada produces nothing. The US produces nothing. Corporations, sometimes registered in one country or another, produce things and services for sale. People produce things, not countries so why do economists and journalists still insist on using the country as their primary unit of analysis? When are they going to stop saying that Canada’s trade with the US is this and that, rather than focusing on the real situation which is that corporations are dominant and manipulate governments for their own interests? Ironically, many ‘Canadian’ manufacturers have their products produced in China or in other countries that provide them with tax breaks, lax labour and environmental laws, and cheap labour in export processing zones. And just because a corporation has a head office in Toronto and is technically a Canadian corporation that doesn’t mean that its prime motivator is to serve Canada as a country. No, its prime motivator is profit and as long as a Canadian head office serves its interests that’s fine, the moment it doesn’t do that anymore, its ‘loyalty’ will dissolve as quickly as salt in water and it will move its head office elsewhere. More to the point, of course, is that much of ‘Canadian’ manufacturing is controlled from abroad. That led Harold Innis (Google him) to note in the late 1940s that Canada is a country with its brains spread all over the globe.

Economists and journalists need to give their head a shake and stop letting corporate capital and its governmental lackeys lead them around by the nose.