Dealing with the “4th Industrial Revolution”

Posted on January 30, 2016


I didn’t expect anything worthwhile to emerge from the World Economic forum annual meeting that ended in Davos last week.  Once, again, I was not disappointed. Yet the focus was supposed to have been on what the WEF called the “Fourth Industrial Revolution”.

In fact, this term refers merely the maturation of the third such revolution that began with the development of the integrated circuit, the micro chip.  This followed the first “revolution” based on the power of water and steam and then the great surge provided by electrical power that gave rise to the assembly line era known as Fordism.

Each of the first two revolutions resulted in fears of massive job losses, but opened up new, different work prospects.  Today, for example, in most developed economies, service industries account for more labour than does manufacturing.  This historic fact seemed to blind most mainstream economists to the reality of the consequences of the newest technology.

Fundamentally the high priests of a system based on competition and the accumulation of profit, these gurus of what has been called the dismal science continue to wear their free market blinkers.  Only now, with the consequences of over capacity and production evident and with the lunatic extension of credit having apparently run its course, is there acknowledgment that the world may be facing the most serious economic and social crisis in history.

But rather than tackle this issue head-on, supporters of the present system concentrate instead on the promises of increased productivity and efficiency, with an occasional nod to the possibility of job losses.  And most of the labour movement is no better.  Like the employer class, labour appears to be stuck in a mindset that belongs to the start of the 20th Century, if not earlier.

While trade unions are a reaction to capitalist society and do not pose an alternative, they can — and should — put forward alternative measures in order to carry out their fundamental role:  to protect jobs, wages and conditions.  Merely to demand that jobs be retained in the face of the march of automation is, at best, a futile exercise.

And such tactics tend to lead to a position where the unions are seen to be trying to halt the march of progress and where workers see labour-saving technology as an enemy.  In the early 19th Century, skilled garment workers in England, known as the Luddites, took to smashing machinery that put them out of work while employing less skilled and lower paid workers who could produce more with the aid of machines.

Today the situation is somewhat reversed:  millions of workers, with varying degrees of skill, are being replaced by machines that require many fewer, but generally very highly skilled workers to operate and maintain.  As a result, free marketeers point out that in South Africa, for example, there are now an estimated 59 000 vacancies for highly skilled jobs, especially in the fields of engineering and medicine.  At the same time, they will admit that there are more than 7 million unemployed men and women, none of whom have the required skills.

So the blame is put — with some justification — and the education system.  But even if the system was miraculously transformed and 1 million such highly skilled specialists were produced, all that would happen would be that the vacancies would be filled and there would be many more very highly skilled unemployed people.

And skills are no guarantee of losing out to automation, whether it be in engineering, medicine, financial analysis or any other human activity.  It is just a matter of time, given the exponential growth, especially of technologies employing artificial intelligence, that practically all human activity may be carried out by machine.

So what should be done?  First, it is essential to recognise that these developments have the potential to free humanity from drudgery and poverty, but only if they are under true democratic control and serve the interests of humanity as a whole.  So it is not a matter of demanding changes in mere policy, but in the political system.

It seems vital to dump the democratic charade that plays out every five years when citizens place a cross on a ballot and so, individually, hand over collective power to a political elite.  Using modern communications technology it should be feasible to make elected representatives wholly accountable to, and recallable by, the electors.

That would be a good start.