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| Capitalism, however, has been here before. One of its great historic strengths has been its ability to reform and change shape as social needs and democratic demands shift. In the late 19th century, parties of the right in Europe brought in a wave of progressive reforms to suit the times, from expanded union rights to the social insurance that began the creation of the modern welfare state. In these cases, there was a pragmatic and also a moral imperative at work to improve the lives of ordinary citizens. |
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| Yet today, politicians and thinkers have largely stopped making the case for capitalism as a moral good. What we have instead are abstract ideas about the supremacy of markets. At the same time, the surges in inequality seen in country after country are corroding the moral principles that underpin capitalism. The ethical basis for capitalism must be that it offers better life chances for a majority of citizens. If it is failing to do that, what is the justification for its dominance as an economic system? Little wonder that a Gallup poll found only 45% of U.S. young adults view capitalism positively, a 12-point decline in just two years. |
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| Artificial intelligence has the potential to alter our lives to an even greater extent. AI is best understood not as an upgrade of our existing structures but as a general-purpose technology (GPT), like electricity or the steam engine. GPTs are transformative in their social and economic impacts, reaching into every aspect of life. “Some people believe that it’s going to be on the scale of the Industrial Revolution,” says Demis Hassabis, the AI expert who co-founded the pioneering machine-learning company DeepMind. “Other people believe it’s going to be the class of its own above that.” |
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| The crucial factor for managing these changes is time. In 1900, the proportion of the U.S. population who worked in agriculture was 38% and the proportion who worked in factories was 25%. Today only 1.5% of the population works in agriculture and 7.9% in factories. So there’s been a catastrophe of unemployment? Absolutely not: the losses were more than made up for by growth in other sectors of the economy, which went from providing 24 million jobs in 1900 to some 150 million today. Most of the new varieties of work simply didn’t exist at the dawn of the last century. Given time, we know from experience that a society can manage this kind of transition. The question is, do we have that time? |
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| …Think about what the working life will be of a person who can expect to live for a full century. What can we say about the likely span of her economic and political life? The only absolute certainty is that it will involve change. It will not be static. It will not involve doing the same thing in the same place over and over again. Unless we are all prepared for change, we are not prepared for the coming world of work. |
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| At the individual level, the prescription for what we should do to prepare for this new landscape is relatively straightforward. For a life of multiple careers and skills, people need an education that prepares them for a lifelong process of training and retraining. They will need, more than anything else, to learn how to learn. Flexibility and resilience will be crucial. It won’t be easy, but at least we can see it clearly. At the level of society it is harder. Let’s be honest: this is a vision of insecurity, projected across a working life. It is a clear principle of economic and political history—one we’re relearning today — that humans hate insecurity. |
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| What we need is to rethink the relationship between the individual, the corporate sector and the state. In recent decades, we have seen a “great risk shift” — to borrow the term of the Yale social scientist Jacob Hacker. Individuals in temporary, insecure, giglike employment are taking on risks that used to belong to the corporate sector. Not coincidentally, the share of GDP going to the corporate sector as profits has risen and the share accruing to labor as pay has gone down. |
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| That trend, and that risk transfer, are not sustainable over time. We need a social safety net focused on career support rather than just simple unemployment benefits. Companies and individuals and the state must work together to build an enhanced and more flexible version of the welfare state that overlaps with lifelong training and education. |
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| The architects of this new industrial revolution, by the way, agree with this proposition. Yann LeCun, the chief AI scientist at Facebook and one of the pioneers of deep learning, said recently that every economist he has spoken to agrees that governments must take measures to compensate for rising inequality brought about by technology. “All of them believe this has to do with fiscal policy in the form of taxing, and wealth and income distribution.” |
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| We also need a functioning marketplace. The collapse of U.S. government action in the area of antitrust and competition law has led to a damaging concentration across most industries — from cable TV to airlines, online advertising and farming. While a new generation of robber barons controls huge sections of the U.S. economy, corporate profits surge, wages stagnate, and fewer ordinary workers have reason to believe in the capitalist system. |
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| The final component of what we do next concerns not what we do but what they do — “they” meaning the elites who have profited most from the trends of recent decades. Quite simply, those elites have to pay their taxes. They have to stop using offshore havens and accounting tricks to hide their wealth from the societies in which they live and from which they make their profits. Instead of founding think tanks and gorging on discussions about improving distant lives, they have to attend to the lives around them in the places they actually live. |
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| A new emphasis on the role of the nation-state; a new partnership between the state and the private sector and the individual; new action on lifelong learning and training; higher and fairer taxes; less security for big corporations: these things shouldn’t be unthinkable. It is strange and sad that the least likely thing on my wish list is the idea that elites will change their behavior. |
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| But elites may have to change if they don’t want change to be imposed on them. This coming wave of technological transformation has the potential to be the most serious challenge modern capitalism has faced. For people who don’t have the chance to change and adapt and reskill, a pitiless world ruled by algorithms and machine learning, in which they have no utility, no relevant skills and no security, could look completely unlivable. Facing that prospect, the populations of the developed world may do things that make the current populist moment look polite, low-key and lawful. |
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| — John Lanchester |
| From his article in Time Magazine (dtd: Feb4/11, 2019): “Economy: Leveling The Playing Field“ |
| The article also appears online as: “The Next Industrial Revolution Is Coming. Here’s How We Can Ensure Equality“ |
| The link to the entire online version is: http://time.com/collection/davos-2019/5502589/next-industrial-revolution/ |
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| [Please note: This article is extensively quoted without permission from the author or from Time Magazine. I personally subscribe to the physical version of Time Magazine and have done so for almost 50 years now. I make no claim to ownership of the article or its ideas. I do NOT normally post so extensively from an article, but this was (to me) a powerful article about the future of civilization, so I have made an exception. The ellipses indicate where I have edited out portions of the article. I hope neither the author nor Time Magazine will object to my editing or use of the article. Obviously, I encourage all of my readers to go to read the original. — KMAB] |
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| On This Day In: |
| 2018 |
New And Old |
| 2017 |
Ever |
| 2016 |
At The Center |
| 2015 |
True Value In Life |
| 2014 |
A Potential To Be Concerned |
| 2013 |
Fine No More |
| 2012 |
Have You Checked Your Height Lately? |
| 2011 |
Are You Convinced? |
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