4.

Your Country Needs You
(to work less, if you want to)

Unemployment doesn’t scare the rich; in fact, it is their goal. Most of the British royal family haven’t worked for centuries. While a stint in the military might be acceptable for some of them, nothing would shame a British royal more than a life spent selling real estate or working in a post office. Is going to a charity ball really ‘tireless work for the disadvantaged’? Actually, cleaning the toilets after the ball is the tireless work. The idea that work is required to give people dignity clearly doesn’t apply to everyone.

There is no economic difference between retiring early and unemployment: the difference is purely one of status, attitude and material comfort. Of course, ‘early retirement’ is not the only term used to describe those who don’t need to work to meet their material and psychological needs; others include ‘man of leisure’, ‘playboy’ and ‘of independent means’. The persistent wealth gap between men and women means it is no coincidence that the terms describing the indolent rich are so gendered; nor is it by chance that many terms which do describe women imply some link to a man – for example, ‘kept woman’.

After more than 200 years of rapid economic growth, it should come as no surprise that countries can afford to maintain a class of consumers who have no need to produce anything. Indeed, what is surprising is that, in a democracy, there has been so little pressure for a larger proportion of the population to be admitted to this non-working class. (While more comprehensive wealth taxes and death duties would solve the problem quite quickly, these suggestions are usually dismissed as ‘mere populism’ by those determined to depict reasonable policy change as radically unrealistic.)

Daily toil and the risk of starvation dominated the minds of the majority of humans throughout recorded history, but this changed in the twentieth century. At the beginning of that century, an average worker in the United States worked about 59 hours per week, and by 1970 this figure had fallen to 41 hours per week.¹⁶ The pursuit by organised labour of the eight-hour day, weekends and annual holidays all helped minimise the unemployment that accompanied the steady mechanisation of labour over that period.

The dirty secret of economics is that productivity growth – the ability to produce more output from the same amount of input – is a direct cause both of rises in living standards and of rapid job destruction. One of the biggest reasons for the disconnect between what most economists think is good for society and what most other people think is good for society is that economists focus on how machines free people from toil in the long run, while people tend to focus on how machines free people from jobs (and thus from their sources of income) in the short run. Making things better in the long run can be a worthy goal, but, as Keynes famously said, in the long run we are all dead.

Let’s look at some examples. There is no doubt that the invention of tractors displaced a lot of farm workers. Online hotel booking has meant fewer jobs for receptionists in hotels across the world. Driverless vehicles will destroy taxi- and truck-driving jobs in the decades to come.

The disappearance of some people’s jobs in this way isn’t all bad. Few workers yearn for the days when teams of people – always low-paid, sometimes even slaves – toiled for long hours in the fields with heavy tools, and yet produced less food per acre than a single modern farmer in an air-conditioned tractor can produce. But nor is productivity growth always good. Just because new technologies such as Uber have the capacity to increase productivity (by matching people with spare time and cars to people with no car who need to go somewhere), that doesn’t mean the result is unambiguously beneficial for society. This is especially the case when a new technology can be used not just to navigate city streets, but also to avoid important tax, employment and workplace safety obligations. Similarly, the fact that broadacre farming allows for far more food production, per worker and per acre, in the short term, doesn’t mean that the land, water or natural environment can sustain the intensive production techniques used in the long term.

Any country that banned tractors could create a lot of labouring jobs in agriculture. A country that banned bulldozers could create a lot of jobs in road building and construction. Indeed, there are plenty of low-income countries in which roads are built with a lot more shovels and a lot less machinery than in the developed world. But few people, and even fewer economists, would advocate such an approach to job creation.

What is missing from our debates about technological change and job loss is the fundamentally cultural issue of how the benefits of new technologies, and the remaining work, should be distributed. In a society in which income is (for most non-royals, at least) directly linked to the amount of work one performs, using technology to ‘free’ people from toilsome tasks is the very same thing as depriving them of their income.

From 1900 to 1970, deliberate steps were taken across Western economies to ensure the shrinking amount of physical work was shared more evenly. The eight-hour day, the two-day weekend, paid public holidays and paid annual leave didn’t just happen. They were the result of decades of campaigning by unions – campaigns that were often fiercely opposed by employers.

Today, though, at a time of rapid technological disruption (also known as productivity growth), job shedding in labour-intensive industries is taking place at the same time that work hours lengthen and holidays diminish. Put simply, the cultural preference for working longer hours and taking fewer holidays is worsening inequality and unemployment.

Redistributing work has the inevitable consequence of redistributing income. If a million people chose to have a three-day weekend, the equivalent of 200,000 full-time jobs would be created.

But redistribution relates to tasks as well as time. When a company sacks administrative staff and pays its middle managers a bit more money to work longer hours, it increases income inequality in a society in which it is often claimed that no low-skilled jobs are available. The fact is there are low-skilled jobs that need to be done, but increasingly we expect more highly skilled workers to perform them, along with the high-skilled aspects of their jobs. (A side effect: this makes high-skilled workers less productive.)

Most of us could work shorter hours, and it would benefit all of us to do so. Our decision not to do so is as much cultural as personal. It has nothing to do with economics.

THE MAP IS NOT THE TERRITORY

Like explorers setting out for unfamiliar territory, voters, business leaders and policy-makers wish that someone had made a map that could help them prepare for the journey and guide them once they were underway. But just as no explorer can map a land they have never seen, so too can no economist or futurist map a future that has not yet arrived.

This doesn’t mean no one tries, of course. As with all things economic, the best way to understand the future is to understand the past.

Spectacularly wrong though they often were, there was an honesty to the early maps of the world. Having carefully (if erroneously) mapped the relative size and distances of known rivers, mountains, towns and streams, cartographers would depict the ‘end of the world’, often with dragons and sea monsters, which simultaneously served to signal the finite knowledge the map contained and to discourage people from wandering too far afield.

Economic models are attempts to map the economy. They try to show the relative size of its different parts, and the links between them. Like a map, economic models can help us plan a journey – not one to new places, but into a new future. Perhaps even a future with lower taxes, fewer coalmines, more driverless cars or higher wages.

Unlike primitive maps, the primitive economic models we use today have no dragons around the edges to remind us of the limits of our knowledge. Rather than admit there are limits to how far they can see (hint: not very), economic modellers churn out fat reports full of fifty-year predictions about employment in specific industries, and the predictions are often precise to two decimal places. Modelling commissioned by the Minerals Council of Australia, for example, once attracted front-page media coverage with its prediction that the introduction of a modest carbon tax would result in the loss of 23,510 jobs over a twenty-year period.¹⁷ Not 23,530, mind you – that would be an exaggeration. Exactly 23,510.

Despite the appalling track record of economic forecasters, there is usually nothing vague or imprecise about the predictions that the economic modellers make. That is not an accident. Commercial economic modellers know what their clients want, and their clients know that the public confuses precision with accuracy.

All economists have a terrible track record of predicting the future (myself included). None of our models comes close to the sophistication of the models used to predict the weather or how fast a plane that is yet to be built will fly through the air. Not only did economists fail to predict the global financial meltdown in 2008, many of the most prominent economists in the world confidently predicted there would be no such meltdown. And then, when they were wrong about that, they confidently predicted the recession wouldn’t last long. And then, when the economy was slow to recover after an event they said would never occur, they offered advice about how best to fix things. In reflecting on the failure of economists and regulators, the former head of the US Federal Reserve Bank said, ‘We had been lulled into a state of complacency.’¹⁸ One of the main reasons we are advised to ignore the scientific warnings about the dangers of climate change is that some in the economics community actually argue that the cost of reducing greenhouse-gas emissions is too high, relative to the benefits of preventing dangerous climate change.

Economic modellers have absolutely no capacity to predict what will be invented in the next fifty years, or even the next five. They have no idea how the costs of different technologies will change over time, nor do they have the capacity to predict how consumer tastes and preferences will evolve over time.

And because the main driver of economic growth is new investment in the factories required to produce new things, economic models simply can’t help us predict which parts of the economy will grow and which parts will shrink.

Imagine that in 1980 you asked an economist to model the 2018 economy. Given that her starting point would be the economy in 1980, and the way the different parts of the economy interacted with each other then, her model would have no mobile phones in it. And therefore no mobile phone manufacturing jobs, no mobile phone retail jobs, no mobile phone repair jobs, no mobile phone bills for consumers, and very little demand for lithium (a key ingredient in mobile phone batteries).

Now, imagine you asked an economist in 1990 to do the same thing. You couldn’t have emailed him your request, as almost nobody outside the defence and science communities used email until 1994. Like his colleague from 1980, an economist in 1990 would try to build a picture of the future through what he knew of the present, and like his 1980 colleague he would fail to capture not just the rapid growth in the mobile phone industry, but in the internet industry as well. In 2017 the three biggest companies in the United States were Apple, Google and Microsoft. Like Amazon, Facebook, Twitter and Alibaba, none of them were big employers in 1980; most of them didn’t even exist.

If we wanted our economic models to help policy-makers and the public think about the future – rather than helping the status quo defend itself from policy change for a few more years – we would include the computational equivalent of dragons at the edge of our known world. That is, we should model the existence of the unknown, and not pretend that the sectors of the economy we have today will be the only sectors of the future economy. Modellers’ predictions about the future should, therefore, include an estimate of the number of people who will work in jobs that haven’t been invented yet.

While it may seem scary, disappointing or even absurd to think that in the future most of us will work in jobs and industries that haven’t yet been invented, it is the only honest prediction we can make. If someone in 1917 had accurately predicted that employment in agriculture in 2017 would fall from 30 per cent of the labour force to 3 per cent, you can imagine that agricultural workers would have been sufficiently alarmed to resist any technological changes to farming. But how many people in wealthy countries today see themselves as unemployed farmers and yearn for a return to hard, low-paid work with shovels and hoes?

Only when we freely admit that we have no capacity to predict the future of the economy will we be able to begin to plan for it in a meaningful way. And only when we admit how destructive productivity growth can be to the lives of individuals will we acknowledge the need for society to provide generous, constructive support to those made unemployed by technological change.

ONLY THE PAST CAN HELP US UNDERSTAND THE FUTURE

Those under the age of thirty may not know what I’m talking about, but no economist knew whether Beta would prevail over VHS, DVD over LaserDisc, or Facebook over Myspace. But while economists have no particular skill in forecasting more than a year ahead, we can help people and politicians understand the causes and consequences of technological change and ‘technological lock-in’.

Once a technology gets a head-start over its rivals, it can become unstoppable. Perhaps the most famous example of technological lock-in is the QWERTY keyboard. Early typewriters had a wide range of layouts, with some even going for the crazy option of alphabetical order. But once a critical mass of people had learned to touch-type on a QWERTY keyboard layout, or bought a VHS video recorder instead of Beta, their rivals fell by the wayside as typists (which was once a common job) refused to learn how to use two keyboards, and video libraries (once a big employer) refused to stock two formats of every film.

Economists can explain the theory of lock-in, the significance of critical mass and the way that, once a technology gets a lead over its rivals, the ‘economies of scale’ that come with mass production allow it to undercut its competitors on price. But what economists can’t predict is which technology will prevail. We can only explain, in retrospect, why one product prevailed over the other. Like ‘Monday-morning quarterbacks’, economists pretend to know exactly why things that have already happened were inevitable.

While recent history tells us Facebook’s growth and usurpation of Myspace was unstoppable, a longer view tells us that all unstoppable forces will ultimately be stopped. Just as surely as the CD manufacturers crushed the cassette tape, music streaming services destroyed not just the CD industry, but most shop-front music stores as well. Email destroyed the fax machine industry, spell-check software devastated pocket dictionary sales, and tablets and laptop computers have sent desktop computer sales plummeting. All of these changes have both created and destroyed jobs and industries.

Yet none of these changes was anticipated by economic modellers, and no ‘structural adjustment’ packages were ever provided to help the unemployed fax machine workers of the world. While the occurrence of economic change is easy to predict, its direction and timing are impossible to know in advance.

There have, of course, been much larger shifts in consumer preferences in the past 200 years than the shift from fax to email. The Industrial Revolution began with the shift from no engines to steam engines. As with the shift to email, the result was a massive increase in productivity, a massive reduction in the cost of living and massive displacement of workers across the rapidly mechanising agriculture and manufacturing sectors. While falling prices for food and manufactured stuff eventually led to a rise in demand for these things, and many more people were eventually employed in factories as a result, the ‘transition’ for the unemployed labourers was as harsh as it was undeserved. That so little of the profits from the new factories were redistributed to the displaced workers is an indictment of the tax and welfare policies of the day, not of the shift from shovels to tractors.

While the move from steam engines to internal-combustion engines was more gradual than the shift from horses to steam, it was no less devastating for those whose skills or capital were tied up in the production of boilers, valves and pistons. Diesel trains needed far fewer people to fuel them than did the steam trains they replaced, and just as electric trains required far less maintenance than diesel trains (and produced a lot less pollution in crowded cities), the handful of moving parts in electric cars will soon destroy the business model of car dealers and mechanics, which has been built up over the last 100 years.

The last whaling ship sailed out of Australia’s Byron Bay in 1962.¹⁹ Whale oil was once the ‘cleanest’ form of internal lighting, and around the world the hunting of whales, the refining of the huge quantities of oil they held in their heads, and the retailing of that oil was an enormous and profitable industry. But the electric light was brighter and cheaper, and required far fewer people to produce it.

Electric refrigeration was named by the US National Academy of Engineering as one of the most important inventions of the twentieth century. It was also responsible for the rapid destruction of one of the world’s most traded commodities. Giant chunks of ice were once carved from Arctic lakes and moved around the world in ships lined with sawdust and hay. Ice was even ferried as far south as Sydney and Cape Town.

As the size and profitability of the Arctic ice-harvesting industry boomed, the threat from ‘artificial ice’ was seen as remote and trivial. Given that thousands of ships were dedicated to the task of moving ice around the world, the prospect of commercial production of ice was of some, but not much, concern to ship owners. As The American Ship magazine explained in 1880: ‘Ice machines would be as useful in supplying New York as a boy’s squirt gun at a fire. Running full time, one of them can make six tonnes per day, while requirements of a single company in the summer season are 250 tonnes per day.’²⁰

Like the owners of coal-fired power stations today, those who profited by selling ice convinced themselves that there was little chance of a competitor becoming cheaper and more convenient. As Upton Sinclair once quipped, ‘It is difficult to get a man to understand something, when his salary depends upon his not understanding it.’

By the start of World War I, the Arctic ice-harvesting industry was beginning to collapse under pressure from new steam-powered artificial ice-making machines; they were no longer squirt guns but garden hoses. Yet it was the emergence of the humble household electric refrigerator that really destroyed the natural ice industry, and in so doing transformed the world. It made food cheaper and safer to transport and store, and largely created the processed-food industry we know today. The electric refrigerator simultaneously destroyed the livelihoods of hundreds of thousands of people whose incomes revolved around the natural ice trade, and made fortunes for some manufacturers, farmers and retailers.

The pace of the transition from no fridges to lots of fridges was staggering. In 1926 only 2000 household refrigerators were sold in the United States; by 1937 an estimated 3 million had been installed.²¹ No economic model could have predicted the shifts to steam, electricity or refrigeration, nor could any model have anticipated the huge growth in employment that electrification, refrigeration and internal-combustion engines would create. Without cars, there would have been no caravans, no caravan factories, no caravan parks and no grey nomads.

Although we have no capacity to predict the composition or size of the economy in ten or 100 years, history assures us that it will not look much like today’s. Change is the only constant, and how we adapt to change is the most important challenge we face. No democratic government can decide which new industries will emerge and which old ones will decline, but all governments can decide whether they will be kind or cruel to those thrown from their jobs by the turmoil that we call ‘technological change’ or ‘productivity growth’. No democratic government can mandate the direction in which new technologies – and, in turn, whole industries – will evolve, but all governments can influence the pace of the transitions and how the costs of change are shared among people and across communities.

With the rise of neoliberalism in the 1980s, the desire of governments to intervene and help workers and communities adjust to change diminished sharply. However, the recent voter backlash against rising inequality, which has delivered the Brexit movement, the unexpected electoral success of Donald Trump, and nationalism in countries such as Australia, Sweden and France, has forced a significant rethink of this. Just as the Russian Revolution in 1917 led to a more enthusiastic embrace of income redistribution by other European aristocracies, the rise of economic nationalism around the world has forced organisations such as the World Bank and the IMF to admit that there might just be a few more policy options than they had previously admitted. It is now rare to hear business leaders or politicians declare that ‘there is no alternative’.

HARMING THE ENVIRONMENT WON’T GUARANTEE JOB SECURITY

In a country with low unemployment benefits where it can take months, even years, to find a new job after you have been retrenched, it makes sense to fear losing your job. But what makes no sense is the belief, deliberately propagated by the extractive industries and many politicians, that the more harm we do to the environment, the more jobs, and the higher quality jobs, we will create. With robot trucks and robot logging machinery it is, of course, becoming increasingly possible to do enormous environmental harm while creating almost no jobs whatsoever.

Whether countries rapidly transform their energy and transport sectors to reduce greenhouse-gas emissions or not, hundreds of millions of people around the world will likely lose their jobs in the coming decades as a result of new technologies, such as robots, artificial intelligence and 3D printing. While history suggests hundreds of millions of jobs will be created in new industries we can’t imagine yet, history also tells us the transition will not be smooth or fair.

Put simply, regardless of a country’s willingness, or reluctance, to reduce greenhouse-gas emissions, its workforce will experience enormous amounts of job shedding and job creation in the coming decades. While robot trucks and robot doctors attract lots of attention, in reality robot welders have already replaced vast amounts of people in the car industry, and online hotel booking algorithms have already replaced huge numbers of receptionists, travel agents and call-centre workers.²²

There is perhaps no more ironic example of how phoney the ‘jobs versus environment’ debate is than the coal industry. The burning of coal is the single largest cause of greenhouse-gas emissions in the world, yet not only does the industry have a tiny workforce, that workforce has been shrinking rapidly as a result of improvements in technology. In an open-cut coalmine more people are now employed to drive trucks than to perform any other task, and the latest generation of mines is already using robot-controlled trucks.

Put simply, the coalmining industry is simultaneously standing in the way of new (renewable) electricity generation technologies while spending up big to develop new (highly automated) coal extraction technologies. The mining companies’ own annual reports make clear that they are planning to increase fossil fuel production while reducing the size of their workforces. And the kicker is, they have the chutzpah to blame environmentalists for the job losses. While environmentalists often plead for effective climate policy on the basis that ‘there are no jobs on a dead planet’, it seems the coal industry is keen to ensure that there aren’t even any jobs on a dying planet.

Between 1987 and 2002 the Australian coalmining industry shed half its workforce.²³ These enormous job cuts devastated local mining communities, but they were not the result of radical changes by government in environmental policy: they came simply from the pursuit of profit. Changes in technology and the law allowed for a shift away from the relatively labour-intensive process of underground coalmining, and towards the open-cut mines that now scar the planet. While the Australian coalmining industry has, over the last twenty years, doubled its output, and the environmental harm it does, it now provides even fewer jobs.²⁴

Yet the idea that harming the environment is necessary if we are to achieve low unemployment is central to the political strategy of those who profit from causing climate change. Take, for example, the proposed Adani Carmichael mine in Queensland. At full capacity, it will produce 60 million tonnes of coal per year.²⁵ When burned, this coal will release more than 120 million tonnes of carbon dioxide into the atmosphere.²⁶ Over its planned sixty-year life, the mine’s proponents aim to produce 2.3 billion tonnes of coal. Emissions from the mine – extracting, transporting and then burning its coal – will release the equivalent of more than 4.7 billion tonnes of carbon dioxide.

The pits of the proposed Adani Carmichael mine, if laid end to end, would be 40 kilometres long and 10 kilometres wide. If they started at the base of the Eiffel Tower, a person standing at the top of the tower would not be able to see their end. But although the surface area of the mine would be three times the size of metropolitan Paris, the mine would, according to the developer, create a maximum of 1400 jobs. If all those jobs go to people who are currently unemployed, the result would be a 0.01 per cent reduction in Australia’s unemployment rate.

The potential for fixing unemployment by causing climate change is even lower in the United States and the United Kingdom. While less than 0.5 per cent of Australians work in coalmining, in the US and UK it is 0.03 per cent and 0.01 per cent respectively.²⁷ But while the fossil-fuel industry accounts for only a tiny fraction of the world’s jobs, it is one of the most profitable industries in the world. So, just as Luddite workers once jammed their spanners into machinery to slow down the shift from manual to mechanised production, the fossil-fuel industry now seeks to jam its lobbyists into the political process to slow down the global trend to limit burning of fossil fuels.

Fossil-fuel companies are not naive enough to think that saving their profits will be seen as a good reason to avoid dangerous climate change. So instead they feign concern for the workers who could lose their jobs. But history provides clear evidence that the expansion of environmentally harmful activities does not guarantee more jobs. Indeed, it is possible for that expansion to cost jobs. For example, the enormous Adani Carmichael mine will be automated ‘from pit to port’. If it goes ahead, it will take business from other, more labour-intensive mines. Put simply, as well as causing climate change, building enormous new coalmines can cause unemployment. The fact is that the vast majority of workers in the coal industry are destined to lose their jobs whether or not the world limits its greenhouse-gas emissions.

But the fact that workers in the coal industry, and a wide range of other industries, will lose their jobs as technology and culture change doesn’t mean that individuals or countries should be indifferent to their plight. On the contrary! If – and it is a big if – governments are concerned about the plight of coal workers, or video-store workers, or fax-machine workers, any workers at all, they should focus on helping such workers and the regions where they live.

DON’T LOOK AT THE TIGER, LOOK AT THE MAGICIAN

Magicians love to take to the stage alongside tigers, scantily clad assistants or flames shooting from the floor. Sometimes they go for all three. It’s a great way to distract people from the sleight of hand. The same is true of conservative politicians and business leaders talking about the labour market.

Each month in the United States, around 3 million people leave their jobs, either voluntarily or involuntarily. Luckily, in an average month, around 3 million people also find a new job so, despite the huge ‘churn’ in the labour market, the overall number of unemployed people tends to change only slightly each month. The same pattern is evident in all developed countries. But this churn is so common that it doesn’t receive media attention. What is more likely to be reported is the closure or opening of a large or somehow symbolic factory, mine or shopping centre.

There is no doubt that the closure of a factory and the loss of 300 jobs in a community is devastating for those who are sacked and their families. But there is also no doubt that when a local bakery closes down and three people lose their job, it is devastating for them and their families as well. Only after you accept that millions of people lose their jobs in a country the size of the USA every month can you start to conceive of the full horror of mass unemployment.

While the media focus on large factories suddenly shutting down is understandable, the picture it paints of the labour market helps neither citizens nor policy-makers understand how the economy really works, and what really causes (or fixes) unemployment. While averting premature factory closures is obviously of benefit to those who work in them, the idea that unemployment can be significantly reduced by preventing the closure of symbolically important workplaces is as dangerously misconceived as suggesting that the biggest threat to workers’ job security is the effort to reduce greenhouse gases. Indeed, often far more workers are required to clean up a coalmine or disused factory than to operate one. Reshaping economic activity in ways that reduce environmental harm can help to create jobs in a multitude of ways. Imagine, for example, if environmentalists and unionists succeeded in persuading governments to spend up big to construct a large amount of renewable energy capacity, to invest heavily in public transport infrastructure and to build new schools, hospitals and aged-care homes. The result would be a significant increase in economic activity, measured as an increase in GDP, and a reduction in the level of unemployment.

Surely investing in renewable energy and public transport can’t be bad for the environment?

And surely if building new coalmines creates jobs, then building new wind turbines and hospitals must create jobs as well?

The apparent ‘paradox’ that higher rates of economic growth can help both the environment and the unemployed is easy to resolve. What matters is not the amount of economic activity, but its composition. If it is the parts of the economy that do little or no harm to the natural environment that are doing the growing, then an increase in economic activity will have little or no impact on the environment. And if the parts of the economy that are doing the growing are more labour-intensive than average, then an increase in economic activity will help reduce unemployment. (Alternatively, if the kinds of economic activity that are growing rapidly are highly capital-intensive, or require only robots, then it is quite possible to have ‘jobless growth’.)

Put simply, if we want to help the environment without harming workers, then we need to focus not on the level of economic activity, but on how it is composed and distributed.

WE NEED A JUST ECONOMY

Less than 2 per cent of the world’s workers are employed in the extraction of fossil fuels. Even in mining regions, it is rare that direct employment in mining exceeds 10 per cent And in the decades to come, it is difficult to imagine that more than 2 per cent of workers will be directly employed in the production of renewable energy. To put those figures in perspective, in the United States the health sector employs around 11 per cent of the workforce, and manufacturing – which many believe has collapsed – employs 8.5 per cent.²⁸ And, as discussed, around 3 million workers are moving into and out of jobs in the USA each month. The same pattern of far more people working in health than in the manufacturing or energy sectors is common across nearly all developed economies.

The vast majority of people who lose their jobs in the coal and oil industries – either as a result of government policy or after being replaced by robots – will not be re-employed in green jobs, such as making wind turbines or solar panels. Like the vast majority of all workers, those who lose their jobs in these fossil-fuel industries will find new work in the 96 per cent of jobs that are unrelated to energy production.

Indeed, in twenty years’ time, far more of today’s coal and oil workers will work in industries that don’t yet exist than the number who will continue to work in the fossil-fuel or renewable energy industries. The same is true of the hundreds of millions of people who will lose their jobs – through no fault of environmentalism – in the finance, retail and transport sectors.

The visceral fear of unemployment felt by those who did not inherit significant wealth makes sense, especially in countries such as the United States, Australia and the United Kingdom, which have largely chosen to treat the unemployed punitively. But this fear cannot be allayed by the expansion of the fossil-fuel industry or any other industry that is causing significant social or environmental harm. There are only two ways to reduce the fear that so many people have of unemployment:

•Use expansionary macroeconomic policies (that’s econobabble for using budgetary policies and interest rates) that have been proven to cause economic growth and keep unemployment down.

•Provide generous support to those who are unemployed as a result of macroeconomic, regional, sectoral or personal circumstances.

The causes of and solutions for unemployment have been the source of at least 300 years of sustained economic debate and the debate is unlikely to be resolved in the next 100 years, or the next 100 pages. But in the whole history of economic debate the idea that a good way to create jobs is to allow, or to even subsidise, activities that do harm to people and the planet (sometimes called ‘goods with negative externalities’) is an entirely new one. I am even going to go as far as to say that the argument that harming the environment is a necessary or effective way to help the unemployed isn’t even an economic argument, it’s just complete bullshit.

Just as there is no way to deliver job security to all the world’s workers over the coming decades, there is no factory, industry or region which, if protected for long enough, will prevent economy-wide unemployment from occurring. Unemployment will arise when cultural and technological change mean that the people who were once required to make one type of stuff are no longer required make that kind of stuff. Fashion and cultural change destroy far more jobs than environmental regulations. Mass unemployment will arise when the amount of goods and services bought by people is not sufficient to create enough work for all of the people looking for work. When mass unemployment exists, governments can create a lot of work by paying people to do important things such as build renewable energy or look after the sick and the old. They can collect more taxes from people who can afford to spend a lot of money on conspicuous consumption, or they can borrow money to be repaid after the mass unemployment has been exhausted. It is politics, not economics, and not environmentalism, that prevents the implementation of the Keynesian policies that worked so effectively in both the post-war period and, in some countries at least, after the global financial crisis.

Some powerful people are opposed to the pursuit of such an approach to full employment. They fear that they might have to pay higher taxes, and they fear that without high unemployment workers might demand higher wages and better conditions. And some of them think that the last few decades have been the best the world has ever known. But rather than admit that they don’t see a problem with the way things are, many powerful people prefer instead to suggest that unemployment is the fault of lazy workers or greedy environmentalists. The most amazing thing is that, to date, they have gotten away with it.

No one knows what the future holds for any particular industry, region or occupation. But science tells us quite clearly what will happen if we fail to rapidly reduce our global greenhouse-gas emissions. Just like the workers who will inevitably lose their jobs in the coalmines (if only because of the robots), those workers who lose their jobs because of technological change, cultural change, regional decline or simple bad luck deserve to be treated with dignity, supported financially, helped with retraining or relocation, and made to feel like valued members of the community.

Such an approach would not be unprecedented. Countries such as Australia once prided themselves on having this type of society; countries such as Sweden, Norway and Denmark still do. If we treated all unemployed people with generosity and dignity, workers would have no reason to fear change – and that, of course, is why those seeking to maintain the status quo are determined to keep them scared.

Jim Stanford

Work. It’s a four-letter word. And it certainly feels that way on Monday mornings, as we drag ourselves out of bed and off to our jobs. Yet it’s a necessity of life for almost all of society – for the simple reason that most of us have to work, just to support ourselves.

This love–hate relationship with work is as old as humanity. After all, productive human labour – using our brains and our brawn – to produce the goods and services we need to survive and thrive, has been the driving force of our economic progress since we first descended from the trees. Of course, work has changed constantly through the eons: how we work, the tools we use, what we produce and – crucially – how we organise our work. But ‘work’, broadly defined as productive human effort, has been a constant, and will remain so.

Recently, many have been concerned that work as we know it is disappearing. For some, this is due to a new wave of automation (including machine-learning technologies that allow the application of machinery to a wide range of non-standard and creative tasks). For others, it reflects the rise of digital business models, which enable employers to extract labour through temporary ‘gigs’ rather than lasting ‘jobs’. Still others worry we have to cut back on work, to reduce the damage we’re doing to an already polluted environment.

In my view, none of these factors will lead to the elimination of work. They can’t. Because work is the fundamental source of value-added: it’s the only thing that can transform the materials we harvest from nature (hopefully sustainably) into the full range of goods and services we need to live a full life. Not just big-screen TVs and throw-away dollar-store products. But also food, clothing and shelter; education and health care; entertainment, culture and community. All of it takes work.

Even in a highly automated economy, work is still the essential driving force of production. After all, it takes human labour (mental and physical) to invent the machinery, engineer it, manufacture it, operate it and maintain it. To be sure, new vistas in automation will eliminate many jobs currently performed by humans in the same way that tractors once displaced enormous numbers of farm labourers. At the same time, other jobs will be created through automation, including jobs doing new tasks we’ve never thought of before. There’s no guarantee there will be enough new work, that it will be fairly distributed, that it will be decent work. (I am actually more concerned about the negative impact of technology on the quality of jobs, than on the quantity – given the current power of bosses to unilaterally implement and manipulate technology in ever-more exploitive and degrading ways.) But there will certainly be work.

Workers in digital ‘gigs’ (like Uber or Airtasker) are still workers. They’re just not getting paid as well, or treated as fairly, as they would have in previous business forms. There’s nothing new about exploitation. And there is nothing new about the need for new forms of regulation to protect workers in new forms of employment. Workers have banded together before to drive such change, in the face of both technological and social change. And while it’s never easy, they can do it again.

As for the relationship between the need for work and the need to protect our natural environment, it’s more obvious than ever that we actually have a lot of work to do to protect the environment: building green energy systems, public transit, implementing energy conservation and cleaning up all the pollution and harm that’s already been done. The big question isn’t whether there will be any jobs, but rather, how do we want work to be organised and motivated? How will the people performing the work be treated? What will we produce, and what will we do with it?

In recent decades we have grown accustomed to the idea that such questions will be answered by the owners of private, for-profit business. But that profit-led model leads to all kinds of problems, including unacceptable treatment of those doing the work and unacceptable environmental side effects from production. But this isn’t the only way to organise work. In fact, we can imagine different ways of motivating and compensating work – to better ensure the work we do is useful, and the people doing it are treated fairly.

The deteriorating quality and stability of work typical of the modern precarious labour market is not inevitable. And it is not driven primarily by technology. It reflects the power of employers – in a context of inadequate work and weak employment regulations – to compel desperate people to work for less, under increasingly unfavourable and demeaning conditions.

Ultimately it is the collective choice of our society how work is going to be organised and compensated. There will be plenty of work to do in the coming century, but whether there are plenty of good jobs working to meet important community goals, and fair distribution of those jobs, is up for grabs. Through unions, community activism and legislative change, workers in the first half of the twentieth century reshaped their workplaces and communities. With effort and strategy, we can do so again this century.

Jim Stanford is an economist and director of the Centre for Future Work, and author of Economics for Everyone: A Short Guide to the Economics of Capitalism.