Inventing the Future: towards the automated economy

Once the future belonged to the left. 100 years ago a confident labour movement, emboldened by the prospect of revolution across Europe and excited by the possibilities afforded by rapid technological progress, dreamed of utopian futures.

Workers seemed on the verge of taking control of factories and offices from managers, opening the way for democratic control of workplaces and the wider economy. The mechanisation of the processes of production and distribution promised a fully automated economy, making possible a dramatic shortening of the working week and a new age of leisure.

Modern architecture promised gleaming new metropolises, free of the dirt and squalor of the slum cities of the industrial age. The new science of aerodynamics held out the possibility of escape from the limitations of the earth itself: the utopian science fiction of HG Wells, Mikhail Bogdanov and others, with its dreams of space flight and technologically advanced socialist societies coloured the language of daily political discourse.

Even 50 years ago, after two devastating world wars and relevations of the crimes of Soviet collectivisation had shaken those earlier dreams of utopia, progressives continued to believe they were constructing a new, better world. Post-war social democracy built welfare states and systems of social insurance, and evolved techniques for managing economies that seemed able to guarantee a perpetual full employment. A benign social democratic technocracy was channelling ‘the white heat of technology’ to design modern, civilised, egalitarian societies. The left saw itself as the political agent of the future, the heir to the Enlightenment project. Progressives claimed the rhetoric of freedom, liberty and equality for themselves as they sought to direct technological advance towards the opening of new horizons for human liberation.

50 years further on, today, the rhetoric of modernity, freedom, liberty and equality remains at the heart of political discourse. But though the words are the same, they have been invested with new meanings, meanings defined by the right, not the left. Since the high watermark of social democracy in the 1960s, the right has wrested control of the direction of politics from the left, displacing the Keynesian consensus of the post-war years with the set of conservative political and economic philosophies and policies now commonly referred to as neoliberalism.

Once, ‘freedom’ meant ‘freedom from want’, a ‘positive freedom’ that sought to equip people with the material capacity to participate in economic and political life. Now, it means the ‘negative freedom’ to participate in the market unburdened by state interference: to sell one’s labour, to become an entrepreneur, to be a consumer, to accumulate economic assets.

Once, ‘equality’ meant an ‘equality of outcome’, the prevention of severe societal imbalances allowing particular groups and classes to dominate. Now, it means an equality of opportunity to compete in the marketplace.

Once, ‘modernisation’ meant an unbounded exploration of new possibilities for human liberation, including the contemplation of viable economic arrangements beyond capitalism. Now, modernisation means the continual expansion of the market into new spheres of human life.

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek and Alex Williams is an ambitious, clearly argued and intellectually exciting attempt to explain how the right has attained its current political and intellectual dominance, and how the left can fight back.

Srnicek and Williams argue that progressives, if they are serious about winning back control over the direction of western politics, and not just content to work within terms of political possibility set by the right, must to face up to the sheer magnitude of the task that confronts them, and begin the long, hard, patient process of constructing and promoting a political programme with the imaginative appeal and economic credibility necessary to establish itself as a viable alternative to the prevailing conservative order.

Neoliberalism’s hard-won ascendancy

Srnicek and Williams stress that, crucially, the neoliberal project was conceived as a long-term enterprise from the outset. Its foundations were laid during the right’s darkest hour, at the dawn of the long post-war social democratic ‘golden age’.

In the late 1940s small groups of academics, journalists, economists, politicians, industrialists and financiers came together to share mutual concern about the prevailing political trend towards collectivism, which they perceived as a growing threat to individual liberty. This was the age of Stalinist dictatorship, the Soviet colonisation of eastern Europe, George Orwell’s Big Brother and Arthur Koestler’s Darkness at Noon. For these economic libertarians the left’s advocacy of technocratic economic planning, the nationalisation of the ‘commanding heights’ of industry, high levels of taxation and the bureaucratisation of welfare, belonged to the same thought-world, a move down the same road towards suffocating uniformity. They believed true liberty was only possible within an open market economy, in which the state’s role was limited to the setting of legal frameworks within which markets could operate, and the maintenance of defence, law and order.

Their most celebrated grouping was the Mont Pelerin Society, whose inaugural meeting in 1947 was attended by all of the most important figures of post-war neoliberalism, including political theorists such as Friedrich Hayek and Ludwig von Mises, and economists who went on to form the Austrian and Chicago schools, and to lay the foundations for German ordoliberalism. The Society was ambitious, and prepared to be patient. It resolutely rejected the easier option of working for incremental change within the terms of social democratic economic and political framework, as moderate conservatives seemed prepared to do. The Society wanted nothing less than the upturning of the Keynesian consensus and its replacement with a new liberal order. But they understood that such a radical transformation would take decades, and were ready to think in cultural rather than electoral cycles. The Society, and sister organisations, gradually evolved a long term strategy comprised of several strands:

First, they allowed themselves time to dream, elaborating their vision of an ideal liberal society through a succession of books and journals, and, in Hayek’s The Road to Serfdom, contributed at least one classic to the canon of political philosophy.

Second, they constructed an intellectual infrastructure of their own to promote their ideas. During the 1940s and 1950s the early neoliberals found it difficult to gain a foothold in a left-dominated academy, so they developed an international network of independent think-tanks including the American Enterprise Institute, the Atlas Economic Research Foundation, the Institute for Economic Affairs and the Adam Smith Institute. Neoliberal thought gradually attained a foothold in management consultancies and business schools, and eventually gained currency in academic circles, building strongholds such as the Chicago School of Economics.

Third, they grasped whatever opportunities arose in the mainstream media to popularise their message, contributing regular articles to conservative broadsheets and nominating eloquent representatives to appear as commentators on news and political TV channels.

Fourth, they used their think-tanks and growing influence in universities to hammer their diffuse ideas and policy papers into disciplined, costed, coherent programmes for government, ready for adoption by sympathetic mainstream political parties.

Early neoliberalism had some influence on German ordoliberal economics of the 1950s and 60s, but the big opportunity the movement had been waiting for came with the multiple economic crises of the 1970s. Social democratic governments found the Keynesian economic tools they had relied on for so long – such as demand management and incomes policies – were unable to cope with a series of shocks to the world economy, such as rising oil prices, the breakdown of the Bretton Woods exchange system, and the baffling phenomenon of stagflation: concurrent sharp increases in inflation and unemployment. Governments and electorates were now prepared to listen seriously to the neoliberals, who offered a readymade diagnosis of what had gone wrong and a carefully worked out programme for resolving it.

For the neoliberals soaring inflation was the product of wage and price rigidities forced by an over-mighty labour movement, which had to be cut down to size by curtailing trade union power, more flexible working conditions and cuts to over-generous unemployment benefits. Nationalised industries had to be set free from the dead hand of state control, and the control of inflation had to displace full employment as the primary goal of economic policy.

The neoliberals had foreseen the kind of crisis that might overtake Keynesian social democracy, and had an enticing alternative, ready for implementation. As Milton Friedman wrote, on the cusp of neoliberalism’s ascendancy:

Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.

The rest, of course, is history. Neoliberal influenced conservative parties gained power in the UK and the US at the end of the decade, and by the early 1990s the movement’s ideas were firmly embedded within the IMF, the World Bank and the EU’s constitution. The once marginal neoliberal worldview had succeeded in displacing Keynesian social democracy as the prevailing ‘common sense’ within which mainstream parties and governments operated, defining the parameters of the politically possible.

Srnicek and Williams note that though neoliberalism has never enjoyed mass support amongst electorates, the hegemony it has achieved has not simply been imposed by elites: its proponents have taken special care to emphasise those elements of the neoliberal worldview that resonate with popular beliefs and desires that pre-existed it. For example, neoliberalism’s rhetoric of liberty and freedom has appealed to electorates who participated in the libertarian counter-cultures of the 1960s. Policies designed to increase labour market flexibility have struck a chord with voters frustrated by trade union militancy and wanting to escape from monotonous 9 to 5 working patterns. The cutting of the social wage has tapped into abiding resentment at welfare cheats. And privatisation has been marketed as an efficient alternative to monolithic state bureaucracies.

Moving beyond ‘folk politics’

For Srnicek and Williams the left of 2015 finds itself in a strikingly similar position to the liberals of the late 1940s. Even after the first order crisis of capitalism of 2008, the left is nowhere: neoliberalism continues to direct the vector of politics, pushing the world forwards toward the continued, inexorable expansion of the market. They suggest that attempts by progressives to wrest back the political initiative have taken two broad paths, both inadequate.

The first, followed by traditional centre-left parties, has worked for marginal reform within the overarching framework set by neoliberalism. These parties have fought for valuable causes, such as the protection of the most vulnerable from the most draconian welfare cuts, the restoration of some trade union rights, and the enforcement of minimum wages to protect workers from the worst forms of exploitation.

But mainstream social democrats have been unable to offer convincing visions of a world beyond neoliberalism, or seem entirely uninterested in doing so, content to work within a grid of political possibilities determined by the right. Tellingly, the term ‘modernisation’ within contemporary social democratic circles is usually shorthand for the embrace of further concessions to the neoliberal order: more markets, more labour market flexibility, more experimentation with public-private sector partnerships, and so on.

The radical left, by contrast, continues to hold on to the hope that ‘another world is possible’, but lacking the professionalism of the centre-left, let alone the neoliberals, has little idea how to begin move towards it.

For Srnicek and Williams most political radicals are in thrall to various ill disciplined and ineffectual forms of ‘folk politics’. Some leftist groups attempt to establish utopian communities that seek to live outside the orbit of capitalism, failing to appreciate the extent to which they are always and necessarily embedded within the wider capitalist world. Others invest hope in protest movements that flame briefly before guttering and dying out. Occupy, for example, undoubtedly succeeding in capturing mainstream media attention, popularising the powerful image of the 1%, but had no plan for mobilising its diverse constituencies into a focused, long-term movement capable of challenging the status quo. Still other initiatives experiment with forms of radical participative democracy that limit their capacity to grow: movements attempting to involve every member in decision-making soon find themselves entangled in a web of byzantine procedures.

‘A Mont Pelerin Society of the left’

Srnicek and Williams argue that if it is to stand a chance of one day overturning the neoliberal order the left has to get serious, and buckle down to the hard work of designing a long-term strategy as ambitious, multi-dimensional and professional as their opponents committed themselves to in the late 1940s. Progressives don’t need another Occupy, but ‘a Mont Pelerin Society of the left’.

The left needs to start by rediscovering its old confidence in the possibility of imagining and building a better world. Radicals need to conceive new possibilities for human liberation that transcend participation in the market, and disentangle concepts such as ‘freedom’ and ‘liberty’ from neoliberal rhetoric. And like the old labour movement, today’s left must recapture the sense that technological progress can be employed for possibilities beyond the confines of capitalist accumulation.

Srnicek and Williams acknowledge there are several directions a new left utopianism might take, but their preference is for the advocacy of a ‘post-work economy’, the revival of the late 19th and early 20th century ambition for a world in which the necessity for unrewarding labour is reduced to a minimum through the automation of systems of production and distribution. This, they argue, is an ideal with a new and acute relevance for today’s world, capable of resonating with electorates beset by a deepening sense of economic insecurity.

For Srnicek and Williams neoliberalism’s Achilles Heal is a chronic overconfidence in the ‘creative destruction’ of the market, which will always provide new openings that workers laid off by the collapse of old industries can readily seize. But for most, conservative rhetoric of a world of freewheeling economic opportunity rings hollow. For ever more workers today’s harsh global marketplace is experienced less as a field of dreams than a prison: the majority of people have to take whatever work happens to be available, no matter how unrewarding or poorly paid. Work is becoming increasingly precarious, with sharp rises in part-time and self-employment, stagnant wages, and greater dependence on crowd-sourced employment, temporary staffing agencies and zero-hours contracts. A third of workers in the US and UK live on a month’s savings.

Creeping insecurity has several causes. Globalisation has created a surplus labour supply by transforming traditional, rural societies into semi-industrialised economies with large proletariats in search of work. And neoliberalism has succeeded, spectacularly, in its aim of breaking the once strong labour movement: workers have been de-unionised and welfare safety nets dismantled, allowing capital to dictate the terms on which employment must be accepted.

But for Srnicek and Williams still darker clouds are on the horizon for workers, in the form of the accelerating automation of manufacturing and service jobs, skilled and un-skilled. The automation of production lines over the past few decades has forced an increasing proportion of workers into low-skill, low-pay manual and service jobs, in fields such as fast-food, retail, transport, hospitality and warehouse management. But these jobs too are now under threat from the latest wave of automation made possible by advances in computer software. Most routine, semi-skilled jobs can now be codified into a series of automated steps. Supermarket, fast-food and customer services workers are being replaced by self-service machines and voice recognition software. And a quiet revolution is underway in the sphere of logistics, as self-driving cars, drone container ships and automated warehouses promise automated worldwide distribution systems. Mechanisation is also encroaching on middle-class jobs, as software finds ways of carrying out non-routine cognitive tasks such as stock trading, legal work and news reporting.

Recent surveys estimate that up to 80% of today’s jobs are capable of being automated, and that new industries are incapable of taking up the slack. Today’s digital corporations, for example, employ only about 0.5% of the US working population, and on average new businesses create 40% fewer new jobs than 20 years ago.

metropolis_film_workers

This looming crisis of automation is still at the margins of mainstream political debate. Neoliberals retain a blithe faith in the capacity of the market to deliver, and the centre-left places its hope in investment in training for the ‘new hi-tech jobs of the future’ despite growing evidence that there will simply be far too few of such jobs to go round. The prospect is of a jobless future in which the wealth generated by new automated economic processes are concentrated in the hands of the asset rich and a small number of highly skilled technical professionals, while the great majority of workers on the outside scramble for whatever work that remains, or offer their labour for free under punitive workfare programmes.

For Srnicek and Williams the left must turn the crisis of automation to its advantage by inverting its default assumption that full employment is always and necessarily good, and automation always a threat. A modern left should replace the social democratic goal of full employment with an older progressive ideal: full unemployment. The aim should be to design an economic system allows people to move beyond work, rather than do more of it:

Using the latest technological developments, such an economy would aim to liberate humanity from the drudgery of work while simultaneously producing increasing amounts of wealth. Without full automation, postcapitalist futures must necessarily choose between abundance at the expense of freedom (echoing the work-centricity of Soviet Russia) or freedom at the expense of abundance, represented by primitivist dystopias. With automation, by contrast, machines can increasingly produce all necessary goods and services, while also releasing humanity from the effort of producing them.

A post-work economic strategy would seek rapid acceleration of the automation of the economy. Despite the increasing availability and affordability of new workplace technologies many companies have little incentive to take full advantage of them because labour is so cheap. Srnicek and Williams argue for the introduction of state subsidies and tax incentives to encourage such investment, and for the restriction of the supply of cheap labour through increases in minimum wage rates, the encouragement of job sharing and the introduction of a four day working week.

Automation would be further encouraged by the central component of a post-work programme, the introduction of a Universal Basic Income (UBI), a flat regular payment to all as a right of citizenship. If set at an appropriate rate a UBI would remove the coercive aspect of wage labour by giving people much greater freedom in choosing what work to undertake. Employers would no longer be able to repress wages in the knowledge that workers have no other means of subsistence and so would have much greater incentive to invest in technologies automating routine work.

Srnicek and Williams believe a post-work programme based on full automation and a UBI has the potential to appeal to a sufficiently broad constituency of interests to gain the political traction necessary to present itself as an alternative of the current neoliberal order. It offers the prospect of economic security to a workforce struggling to stay afloat in an increasingly harsh global marketplace. It is capable of bridging political divisions between socialists and greens, reconciling the socialist emphasis on universal economic prosperity with the green concern for sustainability (a post-work economy would, for example, reduce commuting times and demand for convenience products). It recognises the value of labour that is currently unpaid: the household duties still undertaken overwhelmingly by women, and the work of domestic carers. It would encourage rewarding labour according to its value rather than its profitability: dull, demeaning or hazardous work would have to be better paid, and inherently interesting work less well paid. And, of course, by promising greater leisure it would appeal to all who desire greater opportunities for self-expression and creativity than most 9 to 5 salaried employment can offer.

Making it happen

Achieving consensus, even within the relatively narrow circles of the radical left, for the concept and structure of a post-work platform would be fraught with difficulty. But the much greater challenge, of course, would be the building of political support in the wider world, a task just as daunting as it was for Hayek’s small band of libertarians some 70 years ago.

To have any prospect of translating a vision of a post-neoliberal world into a credible programme for government, Srnicek and Williams argue, the left urgently needs to overcome its tendency to prioritise abstract political theory over concrete economic analysis:

Building a postcapitalist world is as much a technical task as a political one, and in order to begin thinking about it, the left needs to overcome its general aversion to formal modelling and mathematics.

During the 1950s, 60s and 70s conservative economists worked out credible programmes for the realisation of neoliberal principles. Today, a left promoting an ambitious agenda such as a post-work programme would have to provide answers to the hard questions of how proposals for full automation and a UBI can be implemented in the real world:

A series of emerging contemporary phenomena must be thought through carefully: for instance, the causes and effects of secular stagnation; the transformations invoked by the shift to an informational, post-scarcity economy; the changes wrought by the introduction of full automation and a universal basic income; the possible approaches to collectivising automated manufacturing and services; the progressive potentials of alternative approaches to quantitative easing; the most effective ways to decarbonise the means of production; the implications of dark pools of financial instability – and so on.

Progressive economists need to make inroads into economics departments dominated by neoclassical methodologies, and to develop an ecology of think-tanks building on the example of pioneering institutions such as the New Economics Foundation.

In addition to doing the hard work of showing that alternative economic systems such as a post-work economy are credible, progressives need to overcome their hostility to the mainstream media. The radical left has always been rather better at developing its own communications channels than finding ways of engaging with traditional media outlets, but mainstream newspapers, TV and radio programmes continue to play a critical role in framing the parameters of what is considered politically credible. By establishing themselves as regular newspaper and TV commentators conservatives such as Milton Friedman did much to familiarise prime-time audiences with neoliberal ideas.

Towards postcapitalism

The successful implementation of something as ambitious as a post-work programme would be a monumental achievement, but Srnicek and Williams go on to suggest that it should be conceived as just the first phase in an ongoing project to establish long-term political hegemony for the left. The introduction of measures such as a UBI, a shorter working week and the accelerated automation of the means of production and distribution would serve as a platform for the exploration of possibilities for moving not just beyond neoliberalism, but towards a postcapitalist society.

These would include the investigation of mechanisms for affording workers greater democratic control over their workplaces and the direction of the wider economy. Srnicek and Williams note that as recently as the 1970s it was still possible for workers to propose imaginative schemes for taking control of their own workplaces, and make special mention of the plan drawn up during the mid-70s by employees of Lucas Aerospace for redirecting the company’s production away from the supply of military hardware to socially useful hi-tech products such as solar-energy heating systems and medical technologies.

The Lucas Aerospace plan was premised on recognising the contribution made by the taxpayer to the research and development on which the company relied, a contribution that, its workforce argued, justified a measure of democratic control over the firm’s future direction. Srnicek and Williams argue that the Lucas Aerospace proposal for greater employee involvement could – in some future postcapitalist economy – be extended across multiple sectors in recognition of the major role the state plays in subsidising technological breakthroughs from which private enterprise has benefited. Since the industrial revolution the state has pioneered new technologies such as the railways, supersonic flight, satellites, space exploration, pharmaceuticals, nanotechnology, touch-screens and voice-recognition software. An economy of the future would recognise the public sector’s critical role in innovation by opening up decision-making regarding the purposes for which new technology is employed.

A practical utopianism

Inventing the Future is an intellectually exciting adventure in what might described as ‘practical utopianism’. Srnicek and Williams set out a vision of the kind of new society of which the left once dared to dream, while charting in detail the course by which it could be realised. They chart a way forward for progressives that rejects both the uninspiring caution of mainstream social democracy and the indulgent escapism of folk politics.

The particular shape of a world beyond neoliberalism Srnicek and Williams propose, that of a post-work economy, certainly has intuitive promise as an inspiring alternative to today’s increasingly brutal global market, in which an ever larger labour force competes for ever fewer jobs. It is perfectly possible that, just like their neoliberal counterparts, the left could develop an intellectual infrastructure for working out the detail of how bold ideas like an automated economy and a UBI could be implemented. (Though given the many objections sceptics raise regarding the affordability of a UBI it would have been helpful had Srnicek and Williams devoted more than a single paragraph to the means by which it might be financed.)

The book’s closing speculations about the possibilities for moving yet further, beyond a post-work economy towards a new, postcapitalist system are interesting, but somewhat unfocused by comparison with earlier chapters. Srnicek and Williams seem interested in the possibility of moving beyond markets altogether as a means of economic exchange, suggesting that new computational power might allow a revival of some form of large scale economic planning:

Between the early Soviet attempts at economic planning and today, computing power has grown exponentially, to become 100 billion times more powerful. The calculation of how to distribute our main productive resources is increasingly viable.

It is not at all clear, however, whether the immensely complex web of economic decisions that, within a market system, are co-ordinated by price signals could ever be made more effectively by rational calculation, no matter how powerful the technical resources at hand. Nor is it obvious why a left committed to human liberation should wish to abolish markets. The market can be a significant driver of new prosperity and opportunities for extending human freedom, provided it doesn’t – as today – seek to intrude into every sphere of life, and that people are able to participate within the market from a position of economic security (as a UBI would help ensure).

But the core thesis of Inventing the Future offers hope that a world beyond neoliberalism if progressives are prepared to start dreaming again, and to take the hard, long road necessary to turn visions into reality. As Srnicek and Williams conclude:

This is a project of opening up the future, of undertaking a labour that elaborates what it might mean to be human, of producing a utopian project for new desires, and of aligning a political project with the trajectory of an endless universalising vector. Capitalism, for all its appearances of liberation and universality, has ultimately restrained these forces in an endless cycle of accumulation, ossifying the real potentials of humanity and constricting technological development to a series of banal marginal innovations. We move faster – capitalism demands it; yet we go nowhere. Instead, we must build a world in which we can accelerate out of our stasis.

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek and Alex Williams is published by Verso Books. The images above are from the film Metropolis, 1927, directed by Fritz Lang.

This review first appeared on Sceptical Scot.