An end to facile optimism about the future by Martin Wolf

Dear Martin,

The increasing commoditization of labour by globalism and automation (robots) is leading to an economy that has fewer and fewer jobs, and that no longer is the place where many will find meaning or sustenance. 

Periods of great technological upheaval such as when the plough was introduced lead to massive social change. The plough ‘liberated’ many from toiling, they moved to cities where jobs really weren’t so easily available. But the availability of such masses of cheap labour led to manufacturing, trade, and the adventurism of imperialism and colonialism. Cities grew by leaps and bounds on the shoulders of technological change, foremost among which was the printing press which lead to the dissemination of religion, ideology, information and skills on an until-then impossible scale.

What is different now is that the very fundamentals of the economy are being replaced. No longer is the human being the key measure of productivity, entire factories run without many of them and several billion dollar companies exist on the internet that employ relatively very few employees. The wealth flows to fewer and fewer people.

The underlying social dislocation gives rise to a new need: for increasing numbers of people to find meaning, wealth and appreciation without being productive in an economic sense.

Karl Marx talked about a phase where companies would increasingly centralize and workers would increasingly alienate. Even though technically he was not capable of identifying current market actors, he did point to a vital trend. I think Brexit and the general discontent with the ‘elite’ is a sign of such alienation. The elite does not, by definition, live among the alienated and so is always behind and reactive when it comes to cushioning the social effects of technological change by means of policy.