Will Technology Make Workers Obsolete or Merely More Miserable?

by Neil H. Buchanan

There has been a fair amount of chatter over the last several years to the effect that technology will soon make workers obsolete.  This has been a recurring theme in capitalist countries ever since there has been capitalism, with Luddites being the infamous touchstone for anti-automation extremism, but there is always a new audience willing to believe that the latest technological advances will truly, finally, and inevitably bring about the end of labor as we know it.

That point of view received a big boost in the 2019-20 presidential primary season, when tech dilettante Andrew Yang decided that he was qualified to be the leader of the free world.  Almost everyone disagreed, but because of his wealth and the inclusiveness of the early primary season (a process so open that a self-help nutjob was given a respectful audience in Democratic debates), Yang was able to run a one-note campaign based on the idea that human beings will soon be left behind by the relentless forces of capitalism.

I happen to support Yang's major (OK, his only) policy idea, which is a guaranteed "universal basic income" (UBI), even though his path to that idea was completely wrong.  Lately, of course, Yang has regained a bit of the spotlight, this time promoting an earnest and empty idea with two C-list (at best) former politicians (Trump-defying Republicans Christie Whitman and David Jolly), trying gamely to promote a vacuous concept for a new Third Party.  That idea is so vacuous, in fact, that it has aptly been called "political vaporware" and "a party of the total absence of ideas."  Basically, Yang has now joined the bothsidesists with a vengeance.

But good ideas (UBI, not Yang's silly new political party) should not be disparaged merely because unserious people promote them.  Unsurprisingly, serious people are thinking about this as well.  Here, I will explain why it is wrong to think that capitalism will make people obsolete, but I will make clear that that is for even more cynical reasons than the understandably worried people to whom I am responding might imagine.

I am using as my jumping off point some promising work by Professor Hilary Escajeda, who recently began her academic career at Mississippi College School of Law.  (Her growing list of work is available on SSRN.)  She is building a body of work that ultimately supports UBI but that attempts to build the case for it on solid analytics rather than Yang-like sloganeering.

At the recent Law & Society Association annual meetings in Lisbon, Professor Escajeda offered a presentation of her most recent work, during which she responded as an aside to a point that I had once made in conversations about her previous paper.  I cannot recall her words verbatim, but the gist of the point was that she wanted to push back against my rejection of the claim that workers will soon be tossed aside by capitalism.  The substance of her response was that she is not as optimistic about the motives of capitalists as she takes me to be, viewing my position as saying that capitalists will stop short of totally annihilating labor out of some notion of decency or morality.  She argues that we should at least take seriously the possibility that they would abandon people in a New York minute if they could.

Frequent readers of my work will surely be shocked to imagine that anyone has accused me of optimism.  To those people I say: Fear not, for my point of view is in fact more pessimistic about the future, not less so.  The future looks grim, but not because people will be left with nothing to do.  In fact, they will become even more miserable than if they were merely tossed on a junk pile and left to die.

Those same readers who were temporarily worried that I had gone soft will also know that I have a hostile relationship with mainstream economic theory.  Because of my deep skepticism about things like Pareto efficiency, market equilibrium, and the Invisible Hand, I am especially careful any time that I find myself saying anything that sounds like orthodox economic humbug.  I did not, for example, feel comfortable when I concluded that "personal service contracts" were unobjectionable examples of free choice (which can, of course, be abused in some circumstances, as all such things can be); but being opposed to the monolith of mainstream economic theory does not require one to believe that it is wrong about literally everything.

And when it comes to the question of whether labor will become obsolete, one can believe that labor will continue to be "a thing" without accepting the hidden normative assumptions that the pseudo-scientific economists use to drive their conservative economic results.  Indeed, the logic of supply and demand need not be embellished to reach the pessimistic forecast that I reach here.

In the most basic Econ 101 sense, saying that labor will be abandoned by capital is to say that there will be no market for labor.  That is, no matter how low wages are pushed, capitalists would not find it profitable to hire workers.  "Yes, I understand that you're willing to work for a dollar a day, but I simply have nothing for you to do!"

In one sense, this is easy to imagine, because if machines become better and better at everything, we might wonder what would remain for human beings to do.  But that is not how capitalism works -- not for altruistic reasons, but because there will always be something that we could have people do, even if machines could do it better and faster.

One of the great insights of classical economics (which is quite distinct from neoclassical economics, the modern mutation that is still taught in economics departments worldwide, although I should point out that this one good insight has been included amongst the many bad ideas) is the concept of "comparative advantage."  Usually applied to the logic of international trade, the idea is that a country that is better than every other country at producing every good and service imaginable will still find it profitable to specialize in a subset of those goods and services and trade with unquestionably weaker countries for the others.

Why would it do that?  One memorable analogy that was included on one of my problems sets in college was "the professor and the assistant," which stipulated that the professor in question was better than her assistant at both teaching and typing.  She was, however, "more better" at teaching than at typing, so it made sense for her to farm out the typing to someone who was much slower and more mistake-prone, because this freed up the professor to do the things in which she had a comparative advantage.  It is an appealing theory in part because it is easy to demonstrate by using clever mathematical examples, and because it is so counterintuitive.  No matter the reason, David Ricardo's insight from more than two hundred years ago remains one of the true breakthroughs in the history of social science.

Are the poorer countries better off because of such trade?  The theory says so, but it also leaves open the possibility that the less-productive countries will nonetheless still be quite poor.  Trading is better than not trading, but it is not necessarily the road to prosperity.  For decades, economists have grappled with why poor countries remain poor, and there are interesting arguments that some countries might be better off not trading (so-called autarky); but again, that is a matter of choosing a less-bad outcome, if the trading situation is sufficiently exploitative.

One of the many controversies that economist and former Harvard president Larry Summers generated in his career was his claim that the logic of capitalism argued strongly in favor of having rich countries dump their waste in poor countries, especially in Africa.  The controversy arose in part because Summers seemed to positively like the idea, as opposed to presenting it as a "Can you believe this?" observation.

The point here, in any case, is that Summers did not say that even the most "worthless" places on Earth should be ignored but that they should be exploited (for their own good!).  Unlike Summers, then, I am reporting this as a can-you-believe-this shocker, but I am saying that we should believe it because it gets at the very core of what it means for the powerful to exploit the powerless, even as we should find it shocking to the point of unbelievable that human beings could be so cruel to other human beings.

But of course, that is sadly all too easy to believe.  So do I think that workers will ever be entirely replaced?  No.  Do I think of that as good news?  Definitely not, because the reason that they will not be replaced is because there is always an extra drop of sweat or blood to be squeezed out of a human body.  Labor will continue to exist not because bosses will relent and be good to their workers but precisely because they will not.