We have grown accustomed to measuring a country’s wealth primarily with one figure, the Gross Domestic Product, or GDP. The major goal of economic policy is to secure continuous growth in GDP. The higher this rate of growth, the more successful a government considers itself to be. According to this simple formula, our lives are improved by whatever gives a quick boost to our GDP.
However, there is an increasing recognition that there are problems with this simple measure. Not only are all incomes earned in a country simply added up, while their distribution is completely ignored. Also, GDP includes not only economic activities that do in fact improve our lives, but anything that an economy produces as long as it can be assigned a market price. A booming financial sector, excessive arms production, or growing drug consumption are examples of economic activities that push up GDP but do not make a society better off.
Historically, reducing a country’s economic performance to a single measure is a recent phenomenon. This measure was firmly established by the middle of the previous century, while its method of calculation was by no means self-explanatory but highly controversial. The inventor of the GDP formula, U.S. economist Simon Kuznets, was in favour of using private incomes as the basis for the calculation. However, ultimately a conception won out that was developed for the express purpose of concealing the welfare reduction resulting from sharply increased U.S. arms production before and during World War II.
The trick was that instead of giving primacy to net incomes, which do in fact determine the standard of living, production was put at the centre of the calculation. This measure makes no distinction between the production of tanks and the production of cars. We work with this construct to this day.
The claim here is not that the Gross Domestic Product as a measure of welfare is completely useless. We can assume that most people in a country with an annual per capita GDP of 30,000 dollars will be better off than those in a country with 3,000 dollars. To this extent, ending poverty in poor countries will certainly be related to GDP growth. However, in wealthy countries in recent years we have witnessed a simultaneous increase in GDP and poverty.
Our economy grows when more goods and services are produced and sold. We can produce more if either people work more—i. e. if unemployment declines or the population grows—or if on account of new technologies we can produce more in the same time. This fact alone demonstrates that growth cannot be an end in itself. While declining unemployment is desirable, longer working hours for those already in a full-time job are not. Similarly, producing more and more of the same thing will not necessarily improve our lives. The need for goods is finite, at some point it will be satisfied. Capitalist enterprises will always have an interest in more since that ensures their growth. But this will not necessarily increase our wealth.
The creation of new things, products, and services that improve our lives and may even save resources—that is the meaning of real growth. This is why a categorical critique of growth is as erroneous as the belief that our supreme economic goal consists in producing ever growing quantities of what we already have. The purpose of labour-saving technologies is not to produce more of the same, say more cars and more refrigerators, with the same workforce. This may make a poor society wealthier, but in a wealthy society in which everybody owns a fridge and many own a car, it will not make for any significant gains. The welfare-enhancing effect of labour-saving advances is that society gains free time for other things—new products making life more pleasant, new services making life easier, or using more labour-intensive technologies in other sectors that are more sustainable, better for the environment or simply more humane. And let’s not forget: labour-saving advances create room for spare time in which we can do what we want.
Older cultures were more careful in how they dealt with the lifetime gains of labour-saving innovations. The introduction of the steel axe in a group of Australian aborigines, the Yir Yoront, did not result in more extensive production but rather in longer periods of sleep. Books describing the blessings of growth and capitalism occasionally refer to this example as a particularly curious one: Look what idiots, just going to sleep instead of increasing their economic performance. What is so bad about getting more sleep? Many people with twelve or fourteen-hour workdays would probably welcome more rest. And newly-won spare time can of course be used in other ways than more sleep. If it is true that humans are social beings, any additional time we are able to spend with our loved ones will probably represent a greater gain in quality of life than a faster and more comfortable car.
Growing prosperity generally does not manifest itself in consuming more of the same, but in being able to afford things that previously were not in our shopping basket. Let’s consider an example. A Michelin-starred restaurant is a rather labour-intensive and therefore expensive thing. The less time a society requires to produce all those things that make up the basics of modern life, the more starred restaurants it can afford to have. In other words, the more people will be able to afford going to such a restaurant.
Of course this is true only if technological progress really does benefit all, which under capitalist conditions is rather improbable. If the labour-saving innovation is not offset by quantitative growth, i. e. more cars or refrigerators, it often means for the affected workers that they lose their jobs and possibly experience a downgrading of their skills. If they do not find a new job with a similar wage, their standard of living will be worse than before, rather than better. Personally, technological progress does not make them wealthier but poorer. This is why workers in the early capitalist era turned against machines, and to this day there is a belief that the production is the better the more labour it requires.
Sometimes trade unions or states have engaged in attempts to artificially preserve technologically obsolete activities with the aim of saving jobs. The classic example is the stoker who was still aboard British trains even after the replacement of steam locomotives with electric engines. Prime Minister Margaret Thatcher put an end to this after defeating the trade unions. In technological terms she was right, yet in social terms it was a brutal decision, since the former stokers would basically never have another opportunity to find a new job with decent pay.
Based on a well-justified distrust of capitalism’s approach to labour-saving technology, the digital revolution tends to be perceived primarily as a threat to our wealth rather than an opportunity. Two scientists from Oxford University recently created a stir with a study arguing that by 2033, 47 percent of all jobs in the United States would be obsolete as a result of automatization and computerization.80 While their prediction may be exaggerated, the trend they describe is real.
It is predictable that self-driving cars will at some point replace the taxi industry, and urban trains and buses will no longer need drivers, either. Some people may well miss the chatty cab driver, and we will not necessarily feel safer on local transport without the presence of personnel. But perhaps we will get used to it. It is also quite probable that parcel delivery service will be taken over by small drones, while in supermarkets we will simply pass through electronic gates where all our shopping is scanned automatically, telling us what we owe. If the former cashiers, couriers, taxi drivers, and bus drivers are retrained and find a job somewhere else with a similar wage, they will probably not be missing their old work. Who does not want to spend their time engaged in more creative and demanding work?
The prospect of an increase in productivity resulting from digitalization could be a positive thing since it might free our lives from hard work and stress, while opening up new spaces for interesting kinds of work. But the problem is that in the context of existing economic and political power structures, this will not be the outcome. As long as the highest possible return rather than a good life is the measure of our economic activities, the replacement of labour by capital on a large scale will serve primarily to destroy livelihoods while further shifting power to capital owners. If former postal workers and taxi drivers, just like miners and steel workers before them, become hopeless long-term unemployed who cannot find other jobs, then digital technologies will make societies poorer rather than richer. It is thus the structure of the capitalist economy itself that keeps us from using technological progress for everyone’s well-being.
There is a further problem. Earlier, we referred to the incentive to adopt labour-saving innovations as the innovation engine of capitalism. But this incentive has no specific direction. Almost any labour-saving innovation that lowers production costs is worthwhile for the entrepreneur. Yet quite a few of these innovations are anything but a step forward.
For example, agricultural yields per worker can be pushed up by the extensive use of artificial fertilizers and pesticides, and in animals by the use of growth hormones and antibiotics. The smaller and more horrific the cages for chickens, the more eggs the facility will produce at practically the same level of work. Organic vegetables, at least those that are actually produced by organic farmers, are more expensive than industrially produced vegetables, since they require a much greater input of labour. Thus there are forms of saving labour that do not make a society richer but sicker, yet that nevertheless have a payoff, which is why economic lobbies try their best to prevent or undercut effective laws for consumer and environmental protection. Many production methods in industry requiring little labour come home to roost in the form of creeping environmental destruction, a short shelf life, or limited recyclability.
In addition, there are types of work we might not ever wish to be done by robots. From the viewpoint of capital exploitation, it appears as a major drawback that many areas of the service sector are so far not very capital-intensive and therefore not very suitable for capitalist production. Monopoly positions, such as in private hospitals or digital services, ensure high profits, but in many service sector industries, the market still functions while there is no room for productivity gains, automatization, or economies of scale. A haircut takes the same time today as it did 100 years ago, and the time required to teach a child basic literacy is also much the same.
Digitalization appears to open up new opportunities in these sectors. No doubt online services may be a helpful supplement to regular instruction and study. But no one should wish for an educational system in which online courses and tests replace a large portion of teachers and university professors. Very few people are able to acquire knowledge on their own and without any exchange. Nonetheless, this is a project that some actors in the digital economy are seriously pursuing. And if states under the neoliberal regime continue to lose revenue, the idea to make up for teacher shortages through online courses will before long find advocates in German and European politics. The predictable result will be a further decline in the educational system, further magnifying the differences between children with parental support and those without.
The vision of an instructor-free education system is topped by another idea from the digital chamber of horrors—cut-price care homes with a minimal staff, where fully automatized robots wash the elderly and supply their food and beverages. In certain areas today this is technologically feasible, and robots are in fact being employed in senior care—for washing, lifting, and even physical affection. This is in line with a dominant trend. Care work is cut into calculable portions so it could also be carried out by robots: minor clean-up, major clean-up, feeding support … What old people need at least as much as food and cleaning are affection and human closeness. There is already too little time for this today, and it would eventually be gone completely.
A sombre idea, but one that would make economic sense and that would therefore fit well into our deeply commercialized society. Wealthy seniors will of course continue to be able to afford homes where they are cared for by people. However, public insurance systems could save considerable amounts of money if robot care homes were introduced for the less well-heeled clientele. It is therefore quite easy to predict that unless current social priorities and power realities change, this is what the future will look like.
In an economy that makes sense, the application of labour-saving technologies in sectors where they can be used constructively should create space to focus our work on other areas—such as health care, daycare for children, or even schools and universities. But this can be done only if the profits from growing productivity do not exclusively benefit those industries where the profits are made. Why is it more important for us nowadays to manufacture top-of-the-line cars than to ensure quality early childhood education and exemplary senior care? Because top-of-the-line cars can turn a high profit from which employees for the most part benefit as well. Wages for activities, on the other hand, that no robot can (or should) make more profitable, are often appallingly low—for the educator playing with our children, the primary school teacher from whom they receive their first formal education, or the caregiver who helps our sick or elderly relatives.
In a society in which status and respect are essentially defined through money, it means that those who build cars or maintain machines enjoy a higher social standing than someone earning their money by lovingly caring for other people. As long as this doesn’t change, we should not be surprised that a great deal more social creativity will be focused on the question of how to improve the performance and design of our sports cars than on how to make possible a beautiful childhood for kids and a dignified old age for seniors. The question is: is this what we want? Are those really our priorities? We should not let this question be decided for us by the commercial sector.
Even in the manufacturing sector not every unit of labour saved represents progress. The profit motive is also a strong incentive to favour technologies that de-professionalize work. The work of craftspeople, which requires specific skills, or other forms of qualified skilled labour, are being replaced as much as possible by activities that require barely any qualifications. This too may make economic sense, since unskilled labour can be had more cheaply. As long as the price of labour, like that of potatoes or cars, is determined by the market, it will be proportionately lower the more competition there is for a particular job. And for simple jobs that in principle anybody could do, competition will be much greater than for jobs requiring special skills and training.
In a growing number of sectors, capitalism has replaced crafts-based quality production with industrial mass production, thus devaluing existing knowledge and skills. In many sectors this could be done without a loss in quality and can be a step forward. The spinning jenny, the first industrial spinning machine, devalued the laboriously acquired artisanal skill of weavers overnight. Nevertheless, no one would argue humankind would have done better to stick with the spinning wheel. Moreover, new technologies also gave rise to new qualified jobs—engineers did not exist in the past and prior to the digital age there were no computer scientists. However, there are sectors in which mechanization occurs at the price of quality loss, and de-professionalization represents a clear step backwards.
The cheapest way to produce residential space, for instance, is the high-rise made of standardized concrete slabs, while the cheapest way to furnish a place is to buy cardboard cabinets that you have to put together yourself. Yet most people would probably prefer living in a stylish building with a small number of units, high ceilings and elegant wooden furniture. There will always be times when it is important to build as many flats as quickly as possible because people who are freezing need a roof over their heads. But this applies to emergencies, and only then.
This is the same situation we encountered with the Michelin-starred restaurants. The more we leave what can be standardized to automated devices, the more time society should have to build really nice flats not only for high earners, and to manufacture decent furniture for people with average incomes—in short, to invest more labour where we need well-trained and qualified personnel.
You might respond that people should be able to buy whatever they like. No one is forced to shop at the cheap stores. For every cheap product, there is a premium version available. We are free to have a qualified cabinetmaker construct a custom-made bookshelf for us.
Well, anyone who can afford it. The fact that many people cannot afford it in spite of the productivity gains of the past decades is also a result of a power shift between working people and capital owners that has put downward pressure on wages. Furniture manufacturing, for example, in the past included the assembly of a desk or wardrobe as a matter of course. Nowadays the average consumer receives a box full of individual parts from which, huffing and puffing, you have to build a usable piece of furniture in your spare time. Only for those willing to pay a hefty surcharge or who frequent very expensive stores will this work be included.
Whereas in the past it was normal even for the average earner to purchase furniture, household appliances, etc. fully assembled, nowadays it is a luxury you have to be able to afford. The infamous Ikea culture has shifted part of the labour process from the manufacturer to private households, i. e. from experts to voluntary or less than voluntary do-it-yourselfers. Those who used to do this work professionally no longer have a sought-after qualification and their jobs have been rationalized away.
The U.S. Nobel laureate Paul Samuelson has described the effect of globalization on our wealth, i. e. the shift of labour to low-wage countries, as follows: “That we can get certain things 20 percent cheaper does not necessarily outweigh wage losses which have occurred because these things are now manufactured in China.”81 A shift in the location of production does not necessarily make for lower quality products, it just means that the work is done somewhere else. Whether or not quality will decline, those who had jobs in the affected sectors are earning less today or can’t find a new job, so the demand for cheap products will in any case go up. It is a self-reinforcing process.
Following the same logic, skilled jobs may be destroyed by new technologies without any new jobs or just low-wage jobs taking their place. Under those conditions as well, it is highly probable that quality will decline. If such developments are occurring in a number of industries at the same time, ultimately the income losses resulting from a devaluation of skills and professional qualifications will ensure that there will be a demand for new cheap products. The more skilled workers lose their job and the greater the number of well-paid jobs lost, the greater the problem for the remaining high quality producers to sell their products. In the end this is not only a way of destroying individual wealth. An economy’s capacity to produce high-value products will also decline. As a result, things that in the past many people were able to afford are once again becoming a luxury for the few.
Saving labour is thus not everywhere a desirable goal. Particularly in the case of skilled labour, we should take a closer look at the implications before applauding an innovation that purports to replace such labour with an automated device. This is especially true for the apocalyptic horror scenarios that Silicon Valley is trying to sell to us as a desirable future. Ultimately, they boil down to the end of qualified labour.
In future, according to this upbeat message, everybody will be able to do everything because no one can do anything properly anymore, since no one gets paid for their abilities. The only qualifications that remain will be the software and algorithms analyzing the endless stream of big data and making our decisions for us.
Who needs a banking consultant if the algorithm knows so much more about us and, like divine judgment in its inscrutable ways, is able to determine whether we are creditworthy or not. Who needs journalism if the algorithm extracts from millions of news items those with the most clicks, presenting them to us in an attractive and organized fashion. But, one might object, someone has to write these news articles and put them online. No problem, there are enough people who put things on the Internet, they just shouldn’t expect to be paid for it. Who needs a Michelin Guide when the Internet is full of user reviews, and anyone who has made an online restaurant reservation through a digital provider will not be left alone until they have submitted their review. Who needs encyclopaedias in the age of Wikipedia with its large number of unpaid contributors? And why should health insurance pay for consultations with professional physicians in case of minor problems when we have so many health blogs on the Internet where you can do a search for your little aches and pains and receive from the net community many well-intentioned suggestions for their treatment?
Don’t get me wrong: This is not to dismiss the often highly qualified contributions people post online without asking for any compensation whatsoever. This is not to deny that Wikipedia is an excellent aid for many questions and can be much more up-to-date than any encyclopaedia published in book form. There are highly informative blogs that are written for free. And it should not be denied that restaurant or hotel reviews by guests may be helpful in avoiding a disappointing night out or a spoiled vacation. The point is that such services cannot replace professional ones. And if the latter are no longer able to finance themselves, they will disappear. To be sure, rather than progress this would be a huge loss.
The potential of 3-D printers is at the centre of the debate about the future of professional skills. The most audacious advocates of the digital economy believe that, in future, the manufacturing of the whole spectrum of consumer goods will shift to our homes. Owning such a printer and the corresponding software will enable everyone to construct and produce their own individual house, car, and sofa according to their personal preferences.
As a matter of fact, such printers are already being used in certain areas, and it does appear that they actually will contribute to individualizing automatic production by taking into account specific customer preferences. Of course it is a far-fetched idea that products such as cars, which are developed and constructed based on highly specialized knowledge and skilled labour, in the future will be magically created by do-it-yourselfers. What is not so far-fetched, however, is that even in this sector super cheap products may indeed crowd out quality work. It may well be that one day such printers will indeed spit out drivable boxes that look like inflatable children’s toys. If one day such monsters do populate our streets in large numbers, while an elegant automobile with genuine high technology and the latest safety features has become a rare sight, we can be sure of one thing: The reason will not be that a majority of people all of a sudden find the Google car more attractive and more comfortable than an Audi or a BMW.
There are areas where 3-D printing makes sense and where production will undoubtedly increase, whereas there are other digital horror visions that would ultimately imply an application of the Ikea model to all areas of life. Why should a surgeon with the ability to do excellent knee surgery have to program some printer to deliver her consumer goods? This is as absurd as expecting a Ph.D. candidate who is working on a new mathematical proof that she herself should put together the shelves for her personal library of specialized books. Division of labour, specialization, and professionalization have been the foundation for humanity’s growing wealth over past centuries. The levelling of professional skills would certainly not extend our freedom and quality of life, but would be a step back.
It should give pause to the advocates of an unconditional basic income that their concept originates in the same school of thought. If skills no longer count and special abilities and qualifications no longer result in monetary compensation, you will still have to survive somehow. But such a future is not inevitable, and we should do what we can to prevent it from happening.
If such visions were pure fantasy, we could simply ignore them. Unfortunately, they describe a real trend. The de-professionalization of the U.S. economy is far advanced. Aside from the digital economy and the financial industry, the only other sector currently still booming is the weapons industry. Europe is not quite as far advanced yet—the discussion in Germany is still about a lack of skilled workers. But we shouldn’t deceive ourselves. Contrary to what this discussion suggests, in Germany there are currently more than 2 million skilled workers as well as 280,000 individuals with postsecondary education who work in what is called a “mini-job” (a monthly wage below 450 euros)—which is to say, they are de facto unemployed. And this is the case despite the fact that the education system makes sure that only a very small number of new skilled workers are trained. In other European countries the situation is even worse. It is therefore not improbable that the future scenarios of Silicon Valley will be coming true since they are consistent with the trends in today’s financial and information capitalism.
The idea of an economy in which most people will not have any specific qualifications does not only imply that we would be losing a great deal of our wealth. What is much worse is that individuals in such an environment would be deprived of an essential part of their self-respect. Aristotle already knew that people do not just want to have their basic needs satisfied, but that they want to use their innate or acquired talents, and that they will be the more satisfied with their work the more challenging or complicated it is.
It is because humans are humans that we want to be not only well-fed but also recognized. The more sophisticated an activity and the fewer other people are capable of doing it, the greater as a rule will be the recognition for it. This is why the obsolescence of stupid, boring and unchallenging jobs as a result of digitalization is a step forward rather than a catastrophe. However, precisely because there will be fewer and fewer unqualified jobs, it will be all the more important to allow each of us to develop our own talents through education and training so that we will become capable of doing some thing particularly well and in a professional manner.
Incidentally, there is empirical proof that virtually anyone with a good education is capable of good performance in a particular field. The proof lies in the fact that most children of wealthy parents make it. Unless you want to go out on a limb by arguing that parental wealth is an indicator of the children’s particular intelligence, you have to admit that the graduates of expensive private schools are randomly selected—they are those children that happen to have been born into a wealthy family. Of course occasionally you find among them complete failures, but they are remarkably rare. Especially in light of the fact that someone who can look forward to an inheritance of tens or hundreds of millions is clearly less motivated for high achievement than a young person whose future wealth will depend exclusively on her own performance. Thus we can assume that with top education for all, the number of failures will be even lower than among the graduates of the most expensive private schools and boarding schools.
Clearly there are limitations to what education can do. Einstein would probably not have made a good tenor and Luciano Pavarotti perhaps might have made a poor computer scientist. It is also doubtful that the autistic mathematician and game theorist John Forbes Nash would have made a good director of romantic movies. The question is not whether anybody might be capable of anything given a good education, but rather that virtually everybody has some talent that would make them capable of above-average performance in a particular field.
Such a perspective should get us quite a bit closer to a good life than the proposal to lead a nondescript existence as an eternal dilettante sustained by a basic income. A basic income admittedly would be preferable to the tribulations of a Hartz IV welfare recipient or the daily humiliations of many low-wage jobs today, but as an ideal it is completely inadequate. This conception would only be convincing if the assumption was correct that a considerable part of humanity cannot be educated and is not capable of professional work. This is not only an unattractive view of humanity, it is also and above all false.
A good life is therefore not a matter of abstract growth figures. Not GDP, size of the capital stock, monetary assets, or even productivity are ultimate measures for a society’s prosperity. In general terms we might say the following. Technologies replacing monotonous, boring and repetitive work tend to make us richer, since the less time a society needs to spend on supplying goods for the satisfaction of basic needs, the more time it has for other things. However, the more modern technologies free us from monotonous and boring activities, the more professional qualification and specialization we need. This, at any rate, would be the progressive counter-proposal to the idea of excluding the majority of people from the opportunity to achieve recognition and respect in a particular job, goading them with the prospect that they will be able to contribute their two cents on the Internet on whatever matter they want.
And what if some day technology will reduce the necessary volume of professional work as well? All the better. Who says that we should pursue our profession eight hours a day forever? If four or five hours are sufficient to provide what we need for a good life—great. Then we’ll finally have more time for all those other things that in addition to meaningful work are indispensable for a happy life—for our loved ones and our friends, for reading good books or going to beautiful concerts, for jogging, bicycling, playing soccer, or simply lying in the sun listening to birdsong and the humming of the bumble bees.