An article entitled “Robots could threaten up to half New Zealand’s jobs in next 20 years” highlights yet another problem with our economies. The problem is that workers are losing the ability to find jobs because of the greed inherent in a system that focuses on financial returns for a small minority rather than the well-being of the whole of society.
Since the beginning of the industrial revolution there has been more and more automation. A string of combine harvesters can achieve in one day what would have taken hundreds of people to do in weeks with only scythes. A modern car factory uses robots to do the work of thousands. A small computerised telephone exchange can do the work of hundreds of operators. Automatic teller machines and online banking have replaced the need for human tellers (an the opportunity for human interaction).
By centralising production and automating processes as much as possible modern businesses have decimated the provinces, forcing people to find work in the cities. However, there is often no work to find in the cities either so there is high unemployment both in the main centres and in the regions. Lack of employment causes huge social issues and costs, far more than just welfare payments. There are the mental health costs of people who are left flailing in helplessness, frustration and shame. Increased crime, depression, substance-abuse and teenage pregnancy have all been correlated to high rates of unemployment.
Before I’m accused of being a Luddite I don’t think all technology and all automation is bad. But bad automation does create costs to society and profits to the capital holders.
In New Zealand, as in many other countries, there are taxes on cigarettes and alcohol which do two important things. They put the burden of the health and other social costs (which are known as external costs) associated with smoking and drinking on the shoulders of the smokers and drinkers, which is fair. This is a way of internalising the external costs. If something is harmful to the environment, or if it creates costs to society, then it should pay those costs. Only a tax can internalise the costs. It is often the same people who say we shouldn’t internalise the societal costs of business who also say that we shouldn’t have welfare. They are the ones creating the social problems and who also don’t want to pay for them, one way or the other.
These same people might argue that a tax on profits (which we have) effectively captures a tax on automation. This is not true. There are many highly profitable businesses who make much less use of automation than other businesses. On the other side of the coin there are many highly automated businesses that aren’t very profitable. There are businesses who hide the extra profits they make from automation.
A carbon tax would do a similar thing as an alcohol tax. It would internalise the cost of emissions so that society at large didn’t have to pay for the social and environmental costs of emissions, only the actual users would. A carbon tax would also act a financial disincentive, as well as making low-carbon alternatives more financially attractive. The tax gathered could, and should, be used to reduce carbon emissions in other ways. Subsidies for insulation or solar panels for example. Or investment in biofuels and electric cars. Automation is fuelled by abundant, cheap energy. Automation creates much more emissions than humans so perhaps a carbon tax (which we don’t have) could also capture an automation cost to society. This might be a part solution to internalising costs but it would not capture the costs to society of greater unemployment and inequality.
A big problem is that governments tend to like keeping things simple. They have blanket taxes that are often unfair because they penalise the innocent and let off the guilty. In New Zealand we have a ubiquitous tax on all goods and services. It is a consumption tax but it taxes good and bad things equally. So there is a tax on good things like fresh food, education and health services.
Of course the incessant growth of automation could backfire on the technophiles and industrialists. As the huge unemployed class adapt to low incomes and plenty of time on their hands, by necessity they will create grass-roots, self-sufficient, local economies that will utilise low-energy, human-scale technologies to create lives of sufficiency and well-being. They will not need the expensive, useless crap that technologists conjure up in their labs.
There is no need to throw out the baby machines with the bath water either. Low energy machines that enhance well-being for the maximum number of people and create no environmental harm are ideal. They will likely be much smaller, low-powered, more ‘hands-on’ versions of the behemoths of today.
Excessive automation will not be feasible in the low-carbon world of the future. In the meantime any harm that is done to society and the environment by automation should be paid for by charging a tax.