Cooking the Books: But Who Owns the Machines?

‘STEPHEN HAWKING Says We Should Really Be Scared of Capitalism, Not Robots’ wrote Alexander C Kaufman, the Business Editor of the Huffington Post, last 8 October. Hawking didn’t actually use the word capitalism but he might as well have done:

‘If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever increasing inequality.’

In one sense we are already in this position of being able to produce ‘everything we need’. Not that machines operated by robots could now produce this on their own, but  in the sense that machines operated by human labour could. But the outcome will depend on who owns the machines.

Hawking is envisaging what might happen, with ever-increasing mechanisation, in a society where the income of those who don’t own machines derives from working for those who do. One scenario is that, as production becomes more  mechanised, fewer workers will need to be employed and so more and more people will have to depend on miserable state hand-outs to survive instead of on not so miserable wages.

He also offers an alternative scenario where the machine-owners are obliged to share their income, presumably though taxation, to provide an income and services for a growing number of non-employed. There are already groups advocating this but it is not going to happen because it goes against the economic logic of the system where production is geared to  making profits with a view to accumulation as more capital rather than to satisfying people’s needs.

How likely anyway is the first scenario of growing mass unemployment? This has been predicted many times but has never actually come about. Production and employment have continued to expand over time, even if in fits and starts. The growth in productivity resulting from mechanisation is not as fast as is often thought, only of the order of 1 to 2 percent a year; which is slow enough to allow the labour displaced to be reabsorbed in other activities (including machine building).

Also, if increasing mechanisation were to lead to steadily growing unemployment this would have the effect of slowing down the introduction of machines. The mass unemployment would exert a strong downward pressure on wages and make it profitable for the machine-owners to employ workers rather than machines.

A minor example was reported in the Times (14 December):

‘Garage owners said that the number of car-washing machines has more than halved in the past 15 years because they are struggling to compete with migrants doing the job by hand…. [T]he number of automated “rollover” car washes in Britain has more than halved, from about 9,000 to less than 4,200 in 2015. It is estimated that the number of dedicated handwashing sites has ballooned from 4,000 to at least 20,000 over the same 15-year period.’

So, while the effect of mechanisation under capitalism might not be as bad as some predict, the full benefits of it will not be able to be enjoyed until the machines are owned in common by society as a whole. Then, and only, then will they be able to be used to turn out plenty for all, to be distributed in accordance with the principle of ‘from each according to their ability, to each according to their needs’. This will never happen under capitalism, however much people lobby for (or against) it.