The Rise of Automation

• Rapid advances in AI, machine learning, and robotics are set to transform the world of work.
• Companies like Tesla aim for 'lights-out' production, where automated work processes run without human intervention.
• Machines can play ping-pong, cook, engage in sex, and hold conversations.
• Computers are writing symphonies and learning to identify cancers, and are developing legal strategies.
• Self-driving trucks are already operating, and robotic dogs carry military-grade weapons.
• Machines struggle with simple tasks like opening doors and folding laundry.
• Robotic security guards are prone to accidents, and digital assistants and self-driving cars still require human intervention.
• Fast-food restaurants introduced touchscreens in response to minimum wage increases, which was referred to as the "robot employment act".
• Many fast-food workers in Europe work alongside touchscreens and earn better pay than in the US.

Automation Discourse

• Automation talk has evolved into a social theory analyzing technologies and predicting their societal impact.
• Workers are being displaced by advanced machines, leading to rising technological unemployment.
• Society is approaching a largely automated state where machines and intelligent computers perform most work.
• Automation should liberate humanity from toil, but it may become a nightmare due to the necessity of work for survival.
• Universal Basic Income (UBI) is proposed to prevent mass unemployment by decoupling income from work.
• Brynjolfsson and McAfee describe this era as an inflection point where science fiction becomes reality.

Economic Impact and Inequality

• Brynjolfsson and McAfee caution that not all workers will benefit from technological advances.
• Wages are stagnating as demand for labor decreases, and a rising share of income is captured by capital.
• Growing inequality could hinder progress towards the 'second machine age', causing a breakdown of capitalism.
• Martin Ford claims that society is moving towards an 'automated feudalism' where the elite are impervious to economic demands.
• Authors argue that education and retraining are insufficient to stabilize labor demand, necessitating guaranteed non-wage income.

Silicon Valley and Political Perspectives

• Bill Gates advocates for a robot tax, and Mark Zuckerberg and Elon Musk support Universal Basic Income.
• Musk names SpaceX drone vessels after spaceships from Iain M. Banks's Culture Series, depicting a post-scarcity world without markets or states.
• Obama recognized that the "next wave of economic dislocations" will come from automation.
• Andrew Yang is campaigning for president in 2020 on a "Humanity First", UBI platform.

Radical Views on Automation

• Nick Srnicek and Alex Williams argue that automation will drastically transform the labor market.
• Only a socialist government can fulfill full automation's promise by creating a post-work, post-scarcity society.
• UBI serves as a bridge to 'fully automated luxury communism', a term coined by Aaron Bastani, outlining an automated future involving artificial intelligence, solar power, gene-editing, asteroid mining and lab-grown meat.

Definitions of Automation

• Automation is a specific form of labor-saving innovation where technology fully substitutes for human labor.
• Labor-augmenting technologies enhance worker productivity without eliminating job categories.
• Kurt Vonnegut defines automation in Player Piano as eliminating entire job classifications.

Historical Context

• Automation is a constant feature of the history of capitalism.
• Visions of automated factories have recurred in the 1930s, 1950s, 1980s, and 2010s.
• These visions were often accompanied by predictions of catastrophic unemployment and social breakdown.
• Automation discourse points to utopian possibilities within modern capitalist societies.

Economic Insights

• Wassily Leontief stated that automatic price mechanisms in capitalist societies depend on strengthening the dominant role of human labor
• Automation prognosticators argue that capitalism must be a transitory mode of production, which will eventually lead to a new form of life that does not organize itself around work for wages.

Declining Labor Demand

• Automation discourse is revived by the failure of global capitalism to provide jobs for many job seekers.
• There is a persistently low demand for labor, reflected in higher unemployment spikes, jobless recoveries, and declining labor shares of income.
• Wage growth has become skewed towards the top earners, widening the gap between labor productivity, average wages, and median wages.

Automation's True Cause

• Automation is not the primary cause of low labor demand.
• Technological change acts as a secondary cause of a low labor demand
• Critics argue that automation theorists focus on rising productivity rather than falling output growth.
• Overcrowded markets and economic slowdown explain the decline in labor demand.

Global Deindustrialization

• If technological innovation results in job-destruction, it will have to eliminate employment in the service sector, which absorbs 74% of workers in high-income countries and 52% of workers worldwide.
• Automation discourse theorists therefore forecast that technology will destroy service sector jobs.
• This forecast has gone wrong, for example the automated fast food company Eatsa closed most of its stores in early 2017.
• Manufacturing has been the most affected sector.

Decline in Manufacturing Jobs

• While the share of workers employed in manufacturing fell across high income countries, manufacturing output has more than doubled.

Manufacturing Productivity Paradox

• Manufacturing productivity has been growing at a sluggish pace for decades.
• One explanation is the weak demand for manufacturing products.
• There is still steady labor-productivity growth in the US, but there may be over inflation.

Slower Output Growth

• In Germany and Japan, manufacturing-productivity growth rates have declined since their postwar peaks.
• Deindustrialization continues despite falling output rates.

Manufacturing Output vs Employment

• For any given industry, the rate of growth of output (∆Ο) minus the rate of growth of labour productivity (AP) equals the rate of growth of employment (ΔΕ). Thus, ΔΟ – ΔΡ = ΔΕ
• France is typical of other high income countries, with falling and lower productivity rates.

French Manufacturing Output

• Production in French manufacturing has declined, as shown in Figure 3.

Global Impact

• Automation theorists incorrectly suggest that productivity has been growing at rapid pace in manufacturing due to bad output growth in manufacturing.

Worldwide Deindustrialization

• Deindustrialization took place in high income countries in the late 1960, in low income countries in the 1970s, and became a global epidemic by the end of the 20th century.

Global Manufacturing Expansion

• Global manufacturing has expanded in 2008 at 1.6 percent per year, lower than the 7.1 percent per year achieved during the post war Golden Age.

Global Wave of Deindustrialization

• The origin is not runaway technical change, but increasing capacity to produce more in world markets.
• The US had the most dynamic economy after WW2, and communist expansion in Europe, East and Southeast Asia led the US to implement trade transfers to Germany, Japan, and other frontline countries.

US Market for Manufactured Goods

• The invasion of the US market caused the rate of output growth to decline.
• The US reacted to heightened import penetration by breaking from Bretton Woods, spreading similar problems to other countries with high wages.

Global Redundancy

• Global redundancy of technological capacities created crowded markets, making industrial outputs harder to achieve.
• Severely depressed prices across global markets for manufactured goods led to lower income-per-unit captial rates, then falling rates of profit, then to lower rates of investment.

Firms in a Globalized Market

• As overall growth rates slow, the only way for firms to quickly increase business is to steal market shares of other firms.
• All firms must upgrade because of competitors.

Globalization and Production

• US firms did well by globalizing production facing prices challenges, and the first expert-processing zones occured in Taiwan and South Korea.
• The globalization of products allowed better products to retain their manufacturing capacity.
• In some countries, such as China, new plants were shifted.

Automation and Economic Expansion

• Overcapacity and low manufacturing expansion has resulted in a negative impact for many countries.

China's Growth

• China has grown due to low wages, advanced technologies and infracstructural capacities.

Worsening Overcapacity

• Job loss in the manufacturing sector is primarily due to large overcapacity over technological change
• Automation may therefore still seem a good explanation for the decline in demand for labour across the service sectors of each country's economy, and so across the world economy as a whole. - Yet this broader problem of declining labour demand also turns out to be better explained by the worsening industrial stagnation I have described than by widespread technological dynamism.

Economic Growth Engines

• The economy has no longer has a driving or an engine for growth to replace manufacturing.
• In France, in 2001-17 period the period, MVA was only growth per year, versus much higher in the past.

French Manfacturing

• Manufacturing growth rates have declines as shown in Figure 7.

Low Economy Growth

• Declared economy growth for high income countries has been mostly steady.

Overstated Productivity

• This economic wide decline in labour demands is not a result of rising productivity growth rates across the service sector.
• Slow economy growth created low demands for labour to find employment.

Global MVA and GDP

• In 1970s onwards manufacturing declined, so that global GDP growth.

Slow Globalization

• Not all regions in the world experienced slow downs that occurred from the the globalization. China grew well during this period.

Unique Economic Engine

• Manfacturing turned out to be a unique economy engine for overall economy growth. The industrial production tends to be amenable to increases in productivity achieved.

Industrial Expansion

• Industrial production consists of all economic processes that have capacity to grow through industrial processes. The allocation workers from services into higher productivity jobs raised levels of income and economy growth rates.

Increased Productivity

• Those such as Japan, South Korea, and Taiwan mostly did so by industrializing and exploiting opportunities via trading.

Lack of New Engine for Rapid Growth

• Due to the replication of technical capacities, international redundancy, and fierce competition for the markets.
• The workforce pools in low sector productive jobs due to deindustrializing.
• Many firms react to ever-accumulation in existing manufacturing capacities.

No Alternative Engine of Change

• The alternative is for poorer countries to export manufactured domestic goods. Over capacity exists in agriculture where is service is limited in growing domestic services.

Rapid Labor Force Exports

• Decreasing exports took place during rapid labor exports, as many workers became unemployed.

Slow Global Growth Rates

• Growth rate is nothing new, it compares to other global rates except exception golden rates.

Unemployment and Unequality

• In the period lack demand labor making up employment insecurities and great economic relations.
• The automation is the actual consequences for economic stagnation for growth.