Calamity – or something very close to it – will come upon millions of European citizens in the next decade. Their quality of life, measured by nearly every Eurostat indicator, will decline sharply. Distress will expand like a pandemic, from the richest to the less developed countries. And, unless the governments provide the right remedy, the social state will vanish before our eyes.
According to the 2017 McKinsey Global report on automation, as much as 800 million global employees will be displaced in the next twelve years as a result of the adoption of new automation technologies. In the wealthiest European countries, such as Germany, about one-third of the workforce will be dislodged. This will not only result in a lower standard of life of the workers involved, but will also signify a big leap towards the dismantlement of welfare states.
The cutting-edge technologies do not only threaten the jobs of factory workers or supermarket cashiers, but also those of robot technicians, programmers, medical doctors, teachers and, of course, a wide majority of white-collar occupations, such as bank clerks, accountants, financial and sports reporters, IT project managers, system administrators, web designers, and all kinds of analysts, to name just a few.
Replacement of workers by the new technologies is often justified as a means to increase productivity, to lower costs and prices, to increase the growth rates, and hence, to create new jobs. However, several links of this chain – including the one between innovation and productivity – have never been properly assessed, as David F. Noble brilliantly explained in his 1991 book, “Progress without People”.
Even if, in the long run, every lost job is replaced, we cannot overlook that in most cases workers will be reallocated to lesser-paying jobs. This will not only be a trauma for tens of millions of families across the continent, but will have a cataclysmic impact on larger societies.
Automation would not harm as many people if governments enforced regulations to limit its damage. One of the most obvious solutions is a tax on automation. Here is what the International Association of Machinists Technology Bill of Rights suggested, as quoted in Noble’s book:
”Local communities, states and nations have a right to require employers to pay a replacement tax on all machinery, equipment, robots and production systems that displace workers and cause unemployment, therefore decreasing [public] revenues.”
Regardless of how sensible the above statement may be, no governing authority in Europe – engulfed in a globalised world – dares to levy such a replacement tax to employers, especially when European states have been competing for decades to lower corporate taxes.
Equally difficult would be to impose a multinational tax on financial assets, as Thomas Piketty suggested in his “Capital in the Twenty-First Century”. In both cases, a coordination of governments at a global level is required, and this seems to be beyond the bounds of possibility, at least as long as worldwide free trade exists.
Therefore, we can predict the massive destruction of jobs through automation as another failure of globalisation, just like job insecurity, deregulation of international money markets, and the incapacity to distribute wealth.
The primacy of people’s lives seems to have been forgotten by politicians worldwide in recent decades. The existing political parties (left and right alike) do not offer solutions since their programs do not question what macro-economists consider the inevitable international forces, pushing for innovation and free movement of capital. In fact, they are representing the interests of the transnational corporations, free of social and geographical obligations.
As John Ralston Saul wrote: “we are caught up in an artificial negative tension between a theory of global economics and a reality in which people live”. The theory also includes the so-called technological progress as something inevitable and beyond discussion. But what kind of progress does not benefit people?
In many cases, the only clear advantage of automation technologies is neither productivity gain nor costs savings, but the increase of managerial control, an obsession that has been in place since the time of the earliest factories but that now has reached an entirely unforeseen stage.
We have already seen what globalisation has meant for so many people in the U.S. and how they elected a President, tagged as the world’s new public enemy number one, who is starting a trade war in order to – astonishingly – address some of the major problems of his voters.
It is uncertain if Europe will follow this trend, but once tariffs are enforced, nothing will be able to stop the chain reaction that leads to a less globalised world. In such conditions, many governments – or the EU itself – could regain the required sovereignty to work for the interests of the people.
It is clear that automation has to be analysed in terms of social necessity. It is our duty as citizens to oppose irresponsible policies that will leave millions of workers with worse jobs, and that lead to the destruction of the social state. Or, as Adam Smith puts it: “He is certainly not a good citizen who does not wish to promote, by every means in his power, the welfare of the whole society of his fellow citizens”.