A digital wake-up call for labour

Posted on April 14, 2018


All the issues surrounding the much talked about and little understood 4th Industrial Revolution arrived in South Africa with a vengeance via a delayed and now postponed listing on the Johannesburg Securities Exchange. But the underlying factors will probably be missed as the concentration will be on how many investors may show an interest in Sagarmatha Technologies (SM), that is being promoted as a potential global digital giant.

However, this should be a wake-up call to labour, a clear — and local — signal that a new age is dawning that, given existing economic and social systems, could tear apart the fabric of society. Yet, significantly, this purported African vanguard of the latest industrial revolution has the backing of a number of trade unionists who have clearly not understood — along with a number of commentators — that digital computing and artificial intelligence (AI) herald an era different from the mechanical technologies that preceded it.

This was summed up prophetically in 1949 by the “father of cybernetics”, Norbert Wiener. He wrote: “If we can do anything in a clear and intelligible way, we can do it by machine.” Previous industrial revolutions required people to make, service and operate machines, functions which, in a growing number of areas, can already be undertaken by “the machines”.

In the same essay, Wiener noted that this could reduce the economic value “of the routine factory employee to a point where he is not worth hiring at any price”. Over the past decade in particular, this warning has been borne out, well beyond manual factory labour. At the same time, internationally, the wage and welfare gap has soared and joblessness has grown.

Yet both the general secretary of the Federation of Unions of South Africa, Dennis George, and the general secretary of the clothing and textile workers’ union, Sactwu, have pronounced themselves, without qualification, in support of the SM listing. Sactwu, that has seen a dramatic decline in the South African textile and garment industry, is already invested in part of the SM deal, having contributed more than R200 million to the apparently heavily indebted Independent Newspapers group.

Should SM take off in the manner its backers wish, this could more than secure the Sactwu investment. George, however, supports the controversial listing because it promises to draw in “much needed foreign investment” and create perhaps 5 000 jobs. He also points out that “robots could be taxed”.

However, nowhere in the documents accompanying the listing is there any clear indication of where jobs — let alone 5 000 — will be created. But investment is certainly required: between R3 billion and more than R7 billion, but with no detail about how the claimed organic growth and acquisition policy mentioned will unfold.

SM may perhaps signal the birth of an African version of Amazon, Apple, Facebook, or Google, the “Big Four” of the global IT world. If so, SM could certainly make money. Lots of it.

And, if recent history is anything to go by, it will not create more jobs than it will destroy. Nor will it necessarily benefit any but a minority of employers and investors.

The IT Big Four, as Scott Galloway notes in his book, “Four”, have a combined market capitalisation of some $2.3 trillion or roughly the GDP of a country such as France. While France has a population of 67 million, the Big Four employ just 418 000 people.

From a labour perspective it is obvious that the 4th Industrial Revolution, under present management and control, is of no help to workers. But it is not the technology that is the problem: the social system and its economic foundation is where the problem lies.

Even World Bank president Jim Kim admits: “It’s imperative that we find those new paths to prosperity. The traditional route to economic growth and job creation through industrialization is rapidly closing.”

There is a growing realisation that this is so and some more aware tycoons such as Bill Gates of Microsoft have proposed some form of social welfare net to stave off a dystopian future: a world comprising small islands of extreme wealth surrounded by a sea of desperate poverty. This, as George also noted, could be financed by a tax on robots.

And as the SM issue made headlines, Investec economist Brian Kantor earlier this month acknowledged that “the pace of technological and scientific change” will result in mass unemployment. To cope with this he suggested that it may be necessary “to find ways to make not working seem meaningful”.

More controversially, he also noted, as part of the solution for a largely jobless future: “Families may also be prevented from having as many children as they might prefer.”

The more aware elements of capital, fearful of the instability and prospect of violence that the new era could herald, are putting forward suggested solutions that aim to protect their positions. Labour has, so far, been on the back foot, largely reacting to situations as they arise — and usually in a traditional, knee-jerk way.

Hopefully, with the amount of debate generated by the controversy surrounding SM, not least the presence of Dr Iqbal Survé, labour will begin to be proactive.  Unions must clearly analyse what digital computing and AI mean for the future of work and workers or they may be on a hiding to nothing.