Each time the U.S. Congress and the President attempts to promote and pass a "free trade" deal, Americans receive condescending lectures from establishment economists and pundits that international benefits everyone. These condescending lectures include predictable references to the eternal knowledge of David Ricardo. Opponents of free trade deserve receiving this condescension. Perhaps the U.S. elites need to negotiate free trade deals in secret lest the working classes cloud the debate with selfish proclamations lacking any academic rigor. Thus, to render progressive movements like free trade deals palatable to reactionary masses, elites inject consolation gifts into them like funding for "job retraining" programs. The Trans Pacific Partnership (TPP) has followed this trend so far. But, like the main debates that occurred during the passage of NAFTA, other underlying issues affecting the masses are mostly ignored by our credentialed and wealthy experts. These elites ignore these underlying economic issues because they are not affected by them and because they benefit from implementing schemes that undermine democracy that they misname as "free trade" deals. Before the "workers of the world unite," they first need to wake up. If they wake up, they should see that as they become less needed, they are subject to more surveillance.
Instead of resurrecting David Ricardo again by quoting his theories on trade, we should review Norbert Wiener. The latter's views on technological progress affecting the labor market is far more relevant to the challenges facing workers today than another lesson about comparative advantage.
Wiener warned us of the paradox of progress experienced from industrialization liberating us from struggling for subsistence to being enslaved by its momentum and reach:
Let us remember that the automatic machine, whatever we think of any feelings it may have or may not have, is the precise economic equivalent of slave labor. Any labor which competes with slave labor must accept the economic conditions of slave labor [1].
His comments reveal no new message about the fears of technology rendering humans mostly obsolete. Such fearful expressions are made so frequently they comprise a staple in our discourse. The current issue of the Council on Foreign Relations publication Foreign Affairs includes several essays from establishment thinkers about the impact of robotics on humans. Persons expressing such criticisms are dismissed by establishment types with a Pavlovian response of being a neo-luddite, which include history lessons that such fears stated in the past proved unfounded. But the current application of technology is definitely effecting the structure of the labor market, and is turning humans into chronic subjects of surveillance.
Wiener's fears of human obsolescence coincided during his lifetime with the development of the surveillance state. Wiener's social and political thoughts incited his being monitored by this surveillance state:
The fuss began when the FBI received a report from one of its informants who watched over the ports in New York City stating that "WIENER (sic) or a member of his family will shortly be going to England to visit with the well-known British Communist, J.B. HALDANE (sic)." The report also revived two wholly refuted charges that "WEINER, the famous scientist, will freely admit that he is a Communist and has been over a long period of years," and that "This man...has access to some of the top secrets in the country." When Hoover received the news, he sent a new order to SAC Boston "TO REOPEN THIS [MATTER] AND CONDUCT THE NECESSARY INVESTIGATION." (sic). The same day, Hoover dispatched the first in a series of secret cables to the Justice Department's attache at the U.S. Embassy in London firmly recommending that "British Intelligence Authorities" be advised of Wiener's pending visit to Haldane. [2].
The state usually tags its critics with a label that associates them with the universally hated movement of that era. In the early 1950s Hoover concluded that Wiener's criticism of the U.S. developing what Eisenhower later famously dubbed the "military industrial complex" demonstrated his communist credentials. This alarming coincidence of increased technological inputs revolutionizing our economy while enabling a surveillance continues today, suggesting Weiner's fears were worth heeding.
Most industrialized nations are experiencing similar labor market trends regardless of their domestic institutions and the dynamics currently affecting their relationship to labor and capital. One such trend that shows workers across the world (and not just the U.S) are benefiting less from economic gross is their share of national income. For example:
In a June 2013 research paper, economists Loukas Karabarbounis and Brent Neiman, both of the University of Chicago's Booth School of Business, analyzed data from fifty-six different countries and found that thirty-eight demonstrated a significant decline in labor's share. In fact, the author's research showed that Japan, Canada, France, Italy, Germany, and China all had larger declines than the United States over a ten-year period. The decline in labor's share in China-the country that most of us assume is hoovering up all the work-was especially precipitous, falling at three times the rate in the United States. [3]
These trend and others cast doubt that more free trade deals and/or job retraining will improve future prospects for most workers. These suggestions are especially important when the former is not about "free trade" any more than NAFTA was and any job retraining provisions can be defunded in the near future. Meanwhile aggregate economic trends throughout the industrialized world show workers benefiting less from their increased output.
Workers in the U.S. and much of the world seem to be running on a treadmill, which has made their income earning power much leaner. The U.S. labor's share of national income during 1947-2014 has significantly declined from 65% to 58%. [4]. This figure contrasts with corporate profits as a percentage of GDP reaching near historic highs during the same time period noted above. [5]. These two figures show a long term trend whereby the interests of labor and capital diverge. The sanguinary phrase uttered ad nauseam that "rising tides lift all boats" is quackery that only a mainstream economist can believe. These two stats are not outliers though. Other measured data show capital and labor are not just neo-marxist polemics.
General Motors in 1979 and Google in 2012 show one vivid example that illustrates our economy offering less support for sustaining a vibrant middle class. Over the last three decades smokestack corporations have withered, shrinking the size of the middle class, only to be replaced with corporations who monetize algorithms and bits:
In 2012, Google, for example, generated a profit of nearly $14 billion while employing fewer than 38,000 people. Contrast that with the automotive industry. At peak employment in 1979, General Motors alone had nearly 840,000 workers but earned only about $11 billion-20 percent less than what Google raked in. And, yes that's after adjusting for inflation. [6]Another example that illustrates this trend is seen dramatically in the social and economic cost of wide usage of social media:
At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only thirteen people. [7].
These examples offers an alarming microcosm of an economy efficient uses of algorithms enrich a small elite while the middle class further vanishes from an image of an American Dream.
Though these masses vanish from the narrative of the American Dream, the elites do not forget them insofar as their actions and thoughts need to recorded and analyzed to ensure they show no subversive signs. The digital elites build and oversee a vast surveillance matrix monitoring the masses that mocks any concern of civil liberties as antiquated sentiments best left buried in the pre 9-11 and pre-social media eras. But, while this omnipresent surveillance matrix renders our world into a permanent condition of post-anonymity, they still manage to monetize mostly for their benefit and to our detriment our personal information. This scene has become our daily reality, which is so deeply embedded now into our socioeconomic edifice that no trade agreement or any measure passed under that banner will reverse the trend of a vanishing middle class. Of course such agreements are intended to do so anyway.
Will trade agreements like TPP written by corporations help revitalize shrinking middle classes across the industrialized world? And if the TPP is approved on the condition that Congress will fund job retraining for the affected workers, what jobs will they be retrained for?
Looking at these facts presents problems that need more attention than glowing platitudes from politicians and futurists. They will only wax about "vision." Ray Kurzweil, prolific inventor and post-human/mortality prophet, tell us that as we attempt to "live long enough to live forever" that technological inputs such as smart phones directly links us to billions of dollars. [8]. Forget the cynics. Next time you hold your smartphone believe you are a virtual venture capitalist. In such a world who needs job retraining? Humans may need retraining but current technological capabilities once perfected further will phase them out. Why waste time obsessing over the minute details of the TPP when we are this close to immortality? Or for the most of us....extinction?????
1. Wiener, Norbert. The Human Use of Human Beings: Cybernetics And Society. Da Capo Press. 1954. Kindle version. page 161 of 193.
2. Conway, Flo and Jim Siegelman. Dark Hero Of The Information Age: In Search Of Norbert Wiener The Father Of Cybernetics. Basic Books. 2005. Kindle version. page 261 of 423.
3. Ford, Martin. Rise of the Robots: Technology And The Threat Of A Jobless Future. Basic Books. 2015. Kindle version. page 41 of 334.
4. Ibid. 39.
5. Ibid. 40.
6. Ibid. 75-6.
7. Lanier, Jaron. Who Owns the Future? Simon and Schuster. New York. 2013. Kindle version. page 2 of 381.
8. Ford. Rise. 78.
No comments:
Post a Comment