Early reports suggest that the reopening of indoor hospitality in England has driven a hiring surge as employers try to meet the expected demand across the sector. Job search website Adzuna has reported a trebling in the advertised vacancies since March but the impact of unlocking – and a much-anticipated surge in consumer spending – has spread well beyond the most tightly-restricted sectors. The monthly survey by the Chartered Institute of Personnel Development reports two-thirds of employers are looking to take on more staff, with just one in ten expecting to make redundancies. Over in the US, the combination of falling cases, a major improvement in vaccinations and the massive boost from the stimulus package – with more spending on the way – is having a similar effect, as employers report labour shortages across the economy.

All of this should be good news for those who work: other things being equal, tighter labour markets should mean better pay and conditions as employers seek to attract the workers they need. After a decade where incomes from labour have been severely depressed across the developed world – in the UK, average real wages and salaries are scarcely above their level a decade ago – this looks like a moment of hope for labour.

The “demographic reversal”

Intriguingly, it occurs at the point at which an interesting and important new book by two somewhat unorthodox economists, Charles Goodhart and Manoj Pradhan, argues that the 40 year period we have just lived through has come to an end. The great expansion of the global labour market since the late 1970s – in both the opening of Eastern Europe and, spectacularly, the opening of China – they argue saw the balance of power shift decisively in favour of capital, with wages and salaries forced downwards by the new abundance of cheaper labour across the globe. They argue that demographic changes are ending the period of cheap and abundant labour, heralding a future of higher pay (and higher inflation) as the balance swings back. It’s interesting, even optimistic, but not completely convincing: demography alone is rarely destiny, and it underplays the dimension of control over labour that – as much as pay alone has always been crucial to the real functioning of labour markets under capitalism. It is not only that you want to pay a worker to perform a task: it is essential that the task is performed in the way that you, the employer, expect it to be performed. Mechanisms for controlling labour have ranged from the firm-level imposition of management commands, to the economy-level presence of unemployment as a disciplinary threat, to the direct management of people, as China’s hukou system creates, and as migration controls often try to impose.

Covid as a disruptive factor

The issue of control brings us back to covid – a profoundly disruptive factor in the organisation and management of the economy. Whilst a number of countries that suffered most in the first wave, Britain amongst them, now appear to bringing the virus under control, global cases reached their peak only at the end of April, driven by the devastating surge in India. But even some countries that seemed to get through the first 12 months of the pandemic in better shape are now reporting surges in cases, with both Singapore and Taiwan hastily expanding social distancing measures.

Covax, the initiative to supply vaccines to the world’s poorest, co-ordinated by the World Health Organisation, has never been ambitious enough, with only a fraction of available vaccine supply being provided by the richer countries. But even this initiative is now struggling to meet its own targets. Fewer vaccines means more infections, and more infections raises the possibility of new variants spreading – as we have seen in England with one of the SARS-Cov-2 mutations first seen in India being placed on Public Health England’s “variants of concern” list. There are rumours of a return to lockdowns in England, perhaps on a regional basis – with local leaders like Andy Burnham understandably furious at economic damage this will almost certainly cause in already hard-hit parts of the country.

We are a long way from being out of this crisis, and further economic disruption should be expected – certainly whilst the production and distribution of vaccines remains inadequate. But for as long as this involves a disruption to how and where work can be performed – which is, at its core, the source of social distancing’s deep economic impact – we are likely also to see a struggle over how that work is conducted. A recent survey by German thinktank the Rosa Luxemburg Foundation found a growing number of labour protests, including strikes, with health and safety concerns at their centre, shifting away from the more usual focus on pay. Control of work may well come to define the new frontier for tensions and conflict between capital and labour: one side introducing a raft of new surveillance technology, for example, the other insisting on greater control over time and protection at work.

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Almost all “robots are coming” stories follow a tried-and-true pattern. “Shop Direct puts 2,000 UK jobs at risk,” screams a typical headline. Then, quoting from authoritative reports from prestigious institutes and think tanks, the article in question usually alarms audiences with extravagant estimates of “jobs at risk” – that is, percentages of workers whose livelihoods are threatened by high-tech automation. To quote another representative example: “A new report suggests that the marriage of [artificial intelligence] and robotics could replace so many jobs that the era of mass employment could come to an end.”

Sometimes, this bleak outlook is softened by distinguishing between “jobs” and “tasks.” Only the routine parts of jobs, it is said, will be replaced. In these more upbeat assessments of the “future of work,” humans will complement machines, not compete with them.

This sanguine scenario is based partly on what has happened in the past: over time, mechanization has created more jobs at higher wages than it has destroyed. It is also based on more sober assessments of what robots can do now (though there is disagreement on what they will eventually be able to do). Moreover, automation, some optimists believe, will raise the average level of human intelligence. And a richer and aging population will require ever-larger armies of human carers, nurses, cleaners, trainers, and therapists.

But there is an important caveat to all this: left to the market, the gains from automation will be captured mainly by owners of the technology companies and highly educated “knowledge workers,” leaving the rest of the population unemployed or in physical and intellectual servitude. (The need for expert lawyers, consultants, accountants, psychiatrists, and human relations experts will be greater than ever.)

So, the prevailing narrative warns, the process of automation must be carefully managed to avoid massive redundancies and/or widening income inequalities. The analyses usually then conclude with a ringing affirmation that more “creative” jobs and exciting new products such as driverless cars are waiting in the wings. Provided that we can learn as we earn, a utopia of satisfying work and prosperity beckon to all.

If not, the ecstatic prophecies turn dark: professions or countries that fail to embrace automation with sufficient enthusiasm face economic and cultural extinction. In short, while automation is a threat to work, it is a threat that can and must be overcome within the existing wage-labor framework.

There is little echo in this narrative of the older view that machines offer emancipation from work, opening up a vista of active leisure – a theme going back to the ancient Greeks. Aristotle envisaged a future in which “mechanical slaves” did the work of actual slaves, leaving citizens free for higher pursuits. John Stuart Mill, Karl Marx, and John Maynard Keynes comforted their readers with the thought that capitalism, by generating the income and wealth needed to abolish poverty, would abolish itself, freeing mankind, as Keynes put it, to live “wisely and agreeably and well.”

Likewise, in his essay “The Soul of Man Under Socialism,” Oscar Wilde claimed that with machinery doing all the “ugly, horrible, uninteresting work,” humans will have “delightful leisure in which to devise wonderful and marvelous things for their own joy and the joy of everyone else.” And Bertrand Russell extolled the benefits of extending leisure from an aristocracy to the whole population.

None of these nirvanic muses disdained work. On the contrary, all of them were workaholics. What they objected to was “working for hire.” But, today, “working for a living” has come to be viewed as humanity’s moral destiny, while leisure is implicitly linked to doing nothing. The Protestant work ethic still has us in its grip (and not only in the West).

Economists have always been ambivalent. On the one hand, they regard paid work as a cost for consumption. Machinery lowers the cost of work. As people become more productive and therefore prosperous, they will work less. More precisely, they will have the choice to work less for the same income or as much as before for more income. The historical pattern has been that they “traded off” time and money, so hours of work have fallen as income has risen.

But the concept of growing abundance, articulated by Keynes and others, has been over-ridden by economists’ commitment to inherent scarcity. People’s wants, they say, are insatiable, so they will never have enough. Supply will always lag behind demand, mandating continuous improvements in efficiency and technology. This will be true even if there is enough to feed, clothe, and house the whole world. Poised between the profusion of their wants and the paucity of their means, humans have no option but to continue to “work for hire” in whatever jobs the market provides. So the day of abundance, when they can choose between work and leisure, will never arrive. They must “race with the machines” forever and ever.

There is a way out of this trap, but only if we make two crucial distinctions: between needs and wants, and between means and ends.

The distinction between needs and wants was central to the older thinkers. But in contemporary economics, preferences are taken as “given,” and therefore are not subject to further investigation regarding their value or source. The older thinkers distinguished between the “needs of the body” and the “needs of the imagination,” emphasizing the irreducible character of the former and the malleability of the latter. If we can be induced to want whatever the advertisers put before us (now online), then we will never have enough.

The older thinkers also distinguished between means and ends. The products of machines are what the economist Alfred Marshall called “the material requisites of wellbeing.” Human wellbeing is the end. We invent machines to achieve it. But in order to control these inventions, we must have ends that are more compelling than merely wanting more and more products and services. Without an intelligent definition of wellbeing, we will simply create more and more monsters that feed on our humanity.

This piece was originally published at Project Syndicate. You can find the original article here. Photo credit: Flickr / Lukas Pohlreich

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