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.

26 thoughts on “UNAM 3 – the robotic future

  1. Dear Michael,

    Long time reader, first time poster. I enjoyed reading your post and as always learnt something new. I have a question in light of it which I hope you will entertain.

    I am curious if you agree with the view that the incentive structure of current large corporations is such that the corporate managers of industry are rewarded according to the amount they can give the shareholders. To achieve this, profits need to be maximised by ruthlessly cutting costs e.g. wage bills, inventories, middle managers and investments etc. Indeed in order to encourage managers to behave in this way, the proportion of their compensation packages tied to stock options has also increased. I recall reading something by Ha Joon Chong where he reported that distributed profits as a share of US corporate profit stood at 35 to 45 percent between the 1950s and 1970s, but has been on an upward trend since the 1970s, now standing at around 60 percent (I think this was pre-2008). So the ever increasing share of profit in national income has not been translated into higher investments (necessary for the automation wave) but rather to simply fatten the pockets of shareholders.

    As we see a drift to oligopoly or monopoly style capitalism, the pressures to reinvest lessen and the owners of these organisations simply live off the fat of the land. Under conditions where firms are ‘financialised’ to use the current jargon, the pressure is to make profits in the short-run to return to highly mobile shareholders who are too impatient to wait on long-term investments (at least in Anglo-Saxon style, liberal market economies).

    Do you think there are any merits to this view and that if it is true it likely places significant obstacles on the diffusion of the so-called robot revolution? Incidentally, I think much of the roboto mania is generated by self-interested consultancy groups and large technology firms with a product to push (Deloitte, Adobe et al.).


  2. The resistible rise of the robots should be understood in terms of deskilling (the capitalist tendency that Harry Braverman stressed in his “Labor and Monopoly Capitalism”). Capitalist managers introduce robots as part of the deskilling process aimed at undermining the status of the higher-skilled and higher-paid workers, especially those who have some power in the labor process. While the benefits to capitalists are high, the cost of introducing them is lower for the “repetitive and laborious” jobs that have already been deskilled. These phenomena tend to thin out the “middle class” occupations while punishing the working poor.

    Note that this is not the same as the “skill-biased technical change” that mainstream economists blame for widening income gaps among employees in the U.S. during recent decades. Deskilling is a normal part of capitalism, while the theory of skill bias is an after-the-fact rationalization of relatively recent events. The rising gaps should instead be explained by the decline of working-class resistance (labor unions, etc.)

    1. Yeah right. STEM workers are so deskilled and such a small, declining and lower paid proportion of the workforced compared to traditional crafts. Especially IT workers and especially those in AI and robotics.

      Also Harry Braverman’s craft guild workers obviously had far more power in the labor process, were far more progressive and far more inclined towards the communist mode of production than for example the Free Software Movement that built the internet and the open culture movement and is busily automating everything:


      1. Sarcasm can be problematic in blogs. Just in case let me clarify “yeah right” with this joke:

        An MIT linguistics professor was lecturing his class the other day. “In English,” he said, “a double negative forms a positive. However, in some languages, such as Russian, a double negative remains a negative. But there isn’t a single language, not one, in which a double positive can express a negative.”

        A voice from the back of the room piped up, “Yeah, right.”

  3. Sceptics have always said “anyway it will never happen”, and have always been proved wrong.
    So suppose it does happen. The government produces tokens (fiat money) that enables the population to access any of the outputs of the robots that they want. A few technocrats programme the robots to produce other robots in response to demand trends.
    True communism is at hand
    And we all die of boredom

    1. “The government produces tokens (fiat money) that enables the population to access any of the outputs of the robots that they want”.Having read Robert’s post you must have understood that such a token distributing government” would have to be transitional and socialist of some kind. Capitalism cannot operate without such excitements as exploitation, repression, and war.

      …I don’t know what “true communism” is. If one existed, neither would a “true communist”. Your simplistically construed “true communism” reflects the limitations of your own mind. Try to be less conventionally cynical and more revolutionarily imaginative.

  4. Providing alternative perspectives is good practise when giving lectures. But it is incumbent on Marxists to look at new phenomena in terms of their internal dynamic. What is it about this stage of development of technique that is unique? It is not the march of the robots, but the march of the predictive algorithm and increasingly the adaptive algorithm. This process has latterly been described as digitisation. Algorithms have become sufficiently sophisticated so as to replace humans in a wide field of clerical occupations ranging from medicine, through finance, legal, accounting and so on. This will be their main impact, rather than production. It will lead once again to major deskilling as has been mentioned and therefore to the erosion of the working class. This levelling of the working class, this creation of a mass of unskilled work if at all, will add to the inequality that has built up. Where does it end? If robots produce robots such that value production is destroyed, so that the entire output is owned by the capitalist class, well then the only jobs for us will be as personal servants to the capitalist class. But never fear, long before that happens capitalism will no longer exists, because while workers can be made stupid by the system, they are not fools.

  5. “So even if many of today’s jobs can be entirely replaced by machines, technology can also create new roles. … The key issue is Marx’s law of the tendency of the rate of profit to fall.” Marx’s law has operated throughout 200 years of industrial capitalism – precisely why it does not explain the singular historical change we are living through. Capitalist accumulation can no longer “create enough new roles” to push toward mass prosperity (and then a bust, and so on). Marx’s more fundamental thesis – the relations of production eventually set an unsurpassable barrier to further development of the forces of the production (overall, even while technology advances). Capitalism has arrived at this phase, which can now be “explained as a concrete emergence of the unsurpassable barrier.

  6. A reader from Brazil here. I agree with your post, but i think that the big changes in productivity is coming from 3d printer, since this will make possible the use of new materials, in a more efficient way, and less dependent on mining. This could trigger a decrease in world value circuits, since 3d printing brings production closer to the market, reducing the need to spread the production process across the planet.

    I wold like to see what you think of that

  7. Thank you for the post. Insightful informations.

    I wish David Noble’s work, i.e. “Progress without people”, was more known. I think he really hit the nail on the head when it comes to technology, work and society. He was a great voice. To bad there’s no more people like him around. Or maybe it’s simply me who lost track of it?

  8. I do not think that your remarks on the peasantry and slavery in the empire of Rome are correct. See for instance: ‘The class struggle in the ancient Greek world’, G.E.M. de Ste Croix, Duckworth, 1981.

  9. Yes, but not in the way that slaves replaced (in)dependent farmers. He called it slave economies, because according to him slaves produced the (or a big part of the) surplus. The many farmers (who also were most of the soldiers) produced not much more then their subsistence (of their families). If I remember well the latest Cambridge history of slavery now thinks that 20 per cent of the population consisted of slaves, as we used to think some decades ago it was about 40 per cent. Of course this figure changed over time and we will never know. Rob

  10. Dear Michael, may I ask for your permission to translate this article into Spanish? It’s wonderfully clear. Best!

  11. There is much to consider in the future of technology, but I rather fear too little is made of the very basic, even essential part of life which seems to get largely overlooked, and that is in the production of food. With even minimal population growth it is patently obvious that we need technological developments to improve crop production, gathering and distribution. We need to move away from live animals for protein, as even on an humanitarian level animal production is an inefficient, and non-economically viable resource for the future. Bio-technology and physical technologies should concentrate on these areas, and not be so concerned about factories producing more products. Food and food supply involves us all, and is a basic need.

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