UNAM 3 – the robotic future

My third and final lecture at the Autonomous National University of Mexico (UNAM) was on the impact of robots and artificial intelligence (AI). Are robots set to take over the world of work and thus the economy in the next generation and what does this mean for jobs and living standards for people? Will it mean socialist utopia in our time (the end of human toil and a superabundant harmonious society) or capitalist dystopia (more intense crises and class conflict)? Robots and AI Mexico

As readers of my blog know (only too often), I consider the current period in the world capitalist economy as a long depression, with low productivity, investment and trade growth.

One question is whether robots and AI can turn things round for capitalism and perhaps for us all. Robots have arrived. The level of robotics use has almost always doubled in the top capitalist economies in the last decade. Japan and Korea have the most robots per manufacturing employee, over 300 per 10,000 employees, with Germany following at over 250 per 10,000 employees. The United States has less than half the robots per 10,000 employees compared to Japan and The Republic of Korea. The adoption rate of robots increased in this period by 40% in Brazil, by 210% in China, by 11% in Germany, by 57% in The Republic of Korea, and by 41% in the United States.

Now all the talk is that the age of robots will mean the end of jobs for human beings. Two Oxford economists, Carl Benedikt Frey and Michael Osborne, looked at the likely impact of technological change on a sweeping range of 702 occupations, from podiatrists to tour guides, animal trainers to personal finance advisers and floor sanders. Their conclusions were: “According to our estimates, about 47 percent of total US employment is at risk. We further provide evidence that wages and educational attainment exhibit a strong negative relationship with an occupation’s probability of computerisation….Rather than reducing the demand for middle-income occupations, which has been the pattern over the past decades, our model predicts that computerisation will mainly substitute for low-skill and low-wage jobs in the near future. By contrast, high-skill and high-wage occupations are the least susceptible to computer capital.”

On the other hand, a study by economists at the consultancy Deloitte on the relationship between jobs and the rise of technology by trawling through census data for England and Wales going back to 1871. Their conclusion is unremittingly cheerful. Rather than destroying jobs, technology historically has been a “great job-creating machine”. Findings by Deloitte such as a four-fold rise in bar staff since the 1950s or a surge in the number of hairdressers this century suggest to the authors that technology has increased spending power, therefore creating new demand and new jobs. “The dominant trend is of contracting employment in agriculture and manufacturing being more than offset by rapid growth in the caring, creative, technology and business services sectors,” they write. “Machines will take on more repetitive and laborious tasks, but seem no closer to eliminating the need for human labour than at any time in the last 150 years.”

The story of bank tellers vs the cash machine (ATM) is an example of a technological innovation entirely replacing human labour for a particular task. Did this led to a massive fall in the number of bank tellers? Between the 1970s (when American’s first ATM was installed) and 2010, the number of bank tellers doubled. Reducing the number of tellers per branch made it cheaper to run a branch, so banks expanded their branch networks. And the role gradually evolved away from cash handling and more towards relationship banking.

So even if many of today’s jobs can be entirely replaced by machines, technology can also create new roles. At the end of the 19th century, half the US workforce was employed in agriculture, and this employment was rendered obsolete by technical change. But in that time a whole raft of new occupations – electrical engineer, computer programmer, etc – have been created.

Will the information revolution reduce working time under capitalism and thus lead progressively to post-capitalism? Well, previous technological changes have not done so. The average working week in the US in 1930 – if you had a job – was about 50 hours. It is still above 40 hours (including overtime) now for full-time permanent employment. In 1980, the average hours worked in a year was about 1800 in the advanced economies. Currently, it is about 1800 hours. So, since the great information revolution began under the ‘neoliberal period’ of capitalism, the average working year for an American has not changed. Indeed, hours of work have been rising since the 1970s in the US.

Then there is the great contradiction that I raised at UNAM on the question of robots – indeed with any technological revolution under capitalism. The aim of capitalist accumulation is to increase profits and accumulate more capital. So capitalists want to introduce machines that can boost the productivity of each employee and reduce costs compared to competitors. This is the great revolutionary role of capitalism in developing the productive forces available to society.

But in trying to raise the productivity of labour with the introduction of technology, there is a process of labour shedding. Yes, increased productivity might lead to increased output and open up new sectors for employment to compensate. But over time, a ‘capital-bias’ or labour shedding means less new value is created (as labour is the only content of value) relative to the cost of invested capital. So there is a tendency for profitability to fall as productivity rises. In turn, that leads eventually to a crisis in production that halts or even reverses the gain in production from the new technology. This is solely because investment and production depend on the profitability of capital in our modern (capitalist) mode of production.

What does this mean if we enter the extreme (science fiction?) future where robotic technology and AI leads to robots making robots AND robots extracting raw materials and making everything AND carrying out all personal and public services so that human labour is no longer required for ANY task of production at all? Surely, value has still been added by the conversion of raw materials into many more goods (but now without humans)? Surely, that refutes Marx’s claim that only human labour can create value?

But this confuses the dual nature of value under capitalism: use value and exchange value. There is use value (things and services that people need); and exchange value (the value measured in labour time and appropriated from human labour by the owners of capital and realised by sale on the market). In every commodity under the capitalist mode of production, there is both use value and exchange value. You can’t have one without the other under capitalism. But the latter rules the capitalist investment and production process, not the former.

Value (as defined) is specific to capitalism. Sure, living labour (and machines) can create things and do services (use values). But value is the substance of the capitalist mode of producing things. Capital (the owners) controls the means of production and will only put them to use in order to appropriate value created by human labour. Capital does not create value itself. So in our hypothetical all-encompassing robot/AI world, productivity (of use values) would tend to infinity while profitability (surplus value to capital value) would tend to zero.

This is no longer capitalism. The analogy is more with a slave economy as in ancient Rome. In ancient Rome, over hundreds of years, the formerly predominantly small-holding peasant economy was replaced by slaves in mining, farming and all sorts of other tasks. This happened because the booty of the successful wars that the Roman republic and empire conducted included a mass supply of slave labour. The cost to the slave owners of these slaves was incredibly cheap (to begin with) compared with employing free labour.

A fully robot economy means that the owners of the means of production (robots) would have a super-abundant economy of things and services at zero cost (robots making robots making robots). The owners can then just consume. They don’t need to make ‘profit’, just as the aristocrat slave owners in Rome just consumed and did not run businesses to sell commodities to make a profit. So a robotic economy could mean a super-abundant world for all or it could mean a new form of slave-type society with extreme inequality of wealth and income. It’s a social ‘choice’ or more accurately, it depends of the outcome of the class struggle under capitalism.

But just how close are AI/robots to doing all human work? Not very. The Defense Advanced Research Projects Agency, a Pentagon research arm, held a Robotics Challenge competition in Pomona, Calif. There was $2 million in prize money for the robot that performs best in a series of rescue-oriented tasks in under an hour. Robots had an hour to complete a set of eight tasks that would probably take a human less than 10 minutes. And the robots failed at many. Most of their robots were two-legged, but many had four legs, or wheels, or both. But none were autonomous. Human operators guided the machines via wireless networks and were largely helpless without human supervisors. Little headway has been made in “cognition,” the higher-level humanlike processes required for robot planning and true autonomy. As a result, any researchers have begun to think instead of creating ensembles of humans and robots, an approach they describe as co-robots or “cloud robotics.”

So there’s still a long way to go. Indeed, as Professor Jose Sandoval, who commented on my paper at UNAM pointed out, American economist Robert J Gordon reckons that the great new innovatory productivity enhancing paradigm that is supposedly coming from the digital revolution could be over already and the future robot/AI explosion will not change that.

William Nordhaus from Yale University’s department of economics, has tried to estimate the future economic impact of AI and robots. Nordhaus says, projecting the trends of the last decade or more, it would be in the order of a century before growth in robot skills would reach the level associated with full automation.

Robots and AI will only really take off when the current depression enters a new phase. Marx noticed that “a crisis always forms the starting-point of large new investments. Therefore, from the point of view of society as a whole … a new material basis for the next turn-over cycle.” (Marx, Capital Vol. II, p.186). New and massive investments will take the form of new technologies, which will be not only labour-shedding and productivity-increasing, but also new forms of domination of labour by capital.

The key issue is Marx’s law of the tendency of the rate of profit to fall. A rising organic composition of capital will lead to a fall in the overall rate of profit engendering recurring crises. If robots and AI do replace human labour at an accelerating rate, that can only intensify that tendency. Well before we get to a robot-all world, capitalism will experience ever-increasing periods of crises and stagnation.

I’ll be posting all my papers and the accompanying powerpoint presentations on my Facebook site.