We're in for a wild ride. Exponentially accelerating technological, cultural, and socioeconomic evolution means that every year will see more developments than the previous one. More change will happen between now and 2050 than during all of humanity's past. Let's explore the 21st century and ride this historic wave of planetary transition with a confident open mind.

Saturday, July 18, 2009

Technological Progress Causes Permanent Global Unemployment

Less than 20% of world's population is ultimately needed to produce ALL the goods and services.

Exponential technological progress and corresponding leaps in efficiency can only create rising unemployment under the current economic system. The problem remains even if every citizen is provided a graduate school education.

College graduates working as waitresses, jugglers, baristas, and improvising craftsmen are not signs of an economic downturn the way we tend to think of it. It is just an inevitable symptom of mechanization and rising efficiencies due to technological improvements. Mechanization is not just the biggest cause of unemployment domestically (compared to usual scapegoats like outsourcing) but internationally as well if you look at all of human population as a whole.

Research and development of more efficient machinery to replace human workers has not stopped with Henry Ford's death. The subsequent results do not just affect blue collar workers of course. The Internet and constant breakneck improvements in communication technology systems are constantly eroding white collar sector and driving down consumer prices.

Although economic/political system of United States is very inefficient at providing higher education infrastructure at an increasingly affordable price ( one of the more visible signs of supply not fulfilling demand as intended), mechanization makes itself felt nevertheless. The quarter of Americans who somehow acquire the resources to get a Bachelor's degree are increasingly finding themselves doing "service sector" jobs that don't need even a high school diploma. There is the fact of cut throat competition that human replacement brings (with the corresponding rise in power of the capitalist class that buys the labor).

This is tired old news but the problem of mechanization would not be solved even if the state built thousands of grad schools to make sure that the new generation of workers all have PhDs. Germany and France provide most of their people with access to higher education through advanced state capitalist economic schemes yet each country had relatively higher unemployment compared to United States. The only reason why United States did not have Eurozone levels of unemployment in the last 20 years is because the elites restricted supply of new university construction. If American public was supplied with education that it craves then we'd see the same riots, car burnings, student movements, and street protests as in Germany and France.

European oligarchs have long decided that keeping their poor citizens uneducated is too blunt in terms of spitting in the face of the general public. Considering that even the relatively technologically backward Russians were able to provide education for most of their society within 2 generations, German and French authorities could not deny their people the same without facing revolt. Considering it is also a spit in the face to ask a chemist or a media major graduate to serve food and booze, the elites in Berlin and France also provided welfare provisions and emulated United States with plugging menial labor gaps with immigrants. These measures have worked for a few decades and now are also breaking down as technology makes most people and their labor unnecessary. Obviously most people in the world (or France for that matter) can't be neuroscientists, investment bankers, software database experts, or consultants even if they were certified for that. American elites are facing an even greater crisis since the economic system of United States was only sustained by class/race inequalities and decades of ideological state propaganda.

(A sidenote: provision of graduate level schooling, health care, and affordable housing to everybody in a country is but a logistical engineering problem that can be solved very cheaply (in terms of energy/labor expenditure) with today's efficient tools. It is not even a problem of the state needing to own all means of production and distribution. 2009 technology allows the state to control just a bit of the vertically integrated industrial chains in order to rapidly build up the however many university buildings needed (besides the sheer cheapness to create a national standardized Internet curriculum and the supporting broadband architecture).

At the beginning of 20th century, many workers decided that although they could work 15 hours a day, they didn't want to. They wanted to work just 8 hours a day by virtue of being alive in a resource rich sovereign state. The economic system of the time of course easily fired those who wanted some time during the day to themselves. The result was that thousands of workers engaged in years and years of strikes, skull crushing violence in the streets, and appeals to reason ("this is horrible human condition, I don't like this, change it since technology allows more time during the day"). The oligarchic reforms, such as creation of 8 hour workweek and some safety nets, are well known. The efforts to prevent social instability and violence are repackaged as saving capitalism (and demonstrating capitalism's adaptive qualities) in today's history books. They also show that society did not collapse when the shift to an 8 hour workday occurred. Technology made it more than possible. When less than 1% of the population are needed to grow food and ( less than 30% of population needed to make knives, cars, computers, plates, jeans, and umbrellas) humanity can finally engage in mass reduction of daily energy expenditure.

Although one of the world's dominant economic experiments (free market capitalism as nicknamed by its ideologues) stagnated a lot of technological progress through inefficient distribution of education and key infrastructure, technology kept advancing exponentially nevertheless at least on micro consumer level. Mass unemployment is coming regardless of shifts to and from center-left or center-right socioeconomic structures. Even if the state started to aggressively employ millions of people, it would just delay the inevitable effects from mechanization. Although many of the rich and economic experts expect everybody to be content with doing service jobs for one another ( with the Marxist mantra of "from each according to his ability to each according to his need" repackaged as "I'm a biology major but I can cook let me bake you a pie. I've studied computer repair but can cut hair let me be your barber") the authorities know this is not sustainable in a profit driven system. The current slide into an international economic depression will reshape the world even more so than the depression of 1930s. Oligarchs will try once again to preserve capitalist structures by reducing unemployment through provision of new welfare safety nets, reducing competition between workers through idling them in universities or sending them to war, and shifting political support towards more state capitalism.

As more engineers, scientists, researchers, and mathematicians publicly realize just how much more efficient 21st century direct state provision of goods and services is, it'll be increasingly difficult for governments of the world to justify their efforts at placating the rising tide of unemployed and underemployed. State capitalism can only go so far in the face of material reality. Rising unemployment among large swaths of the population, social stagnation, falling profits is the only outcome of 19th century Laissez Faire economics grafted on top of 21st century scientific possibility. The rich will have to decide whether to push the world's rising unemployed further into suffering and possible violent revolt or to provide a livable stipend and thus try to preserve personal power and some profit.

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