Friday, December 23, 2016

PEAK ROBOT: Accumulation and its Dis-contents

Jared Bernstein is wrong. The "robots did it!" story DOES NOT require an acceleration in productivity growth, as conventionally measured. Dean Baker, who shares Jared's certainty about the relationship between robots and productivity measurement, is also wrong. Mike Beggs is wrong. James Livingston is wrong. And Larry Kudlow is wrong. Everyone is wrong!
Why are they all wrong? The answer is to be found in a portentous passage in an article by Martin J. Sklar, "On the Proletarian Revolution and the End of Political-Economic Society," published in 1969 in the SDS journal, Radical America:
In consequence [of the passage from the accumulation phase of capitalism to the "disaccumlation" phase], and increasingly, human labor (i.e. the exercise of living labor-power) recedes from the condition of serving as a ‘factor’ of goods production, and by the same token, the mode of goods-production progressively undergoes reversion to a condition comparable to a gratuitous ‘force of nature’: energy, harnessed and directed through technically sophisticated machinery, produces goods, as trees produce fruit, without the involvement of, or need for, human labor-time in the immediate production process itself. Living labor-power in goods-production devolves upon the quantitatively declining role of watching, regulating, and superintending.
Except, there is no "gratuitous" force of nature. Sklar's "gratuitous force of nature" did for his argument exactly what he criticized Herbert Marcuse of doing, naturalized the historical. Forces of nature were treated as gratuitous within a particular historical mode of production.

What does this have to do with Jared Bernstein -- or for that matter with Larry Kudlow? (Not to mention Mike Beggs, James Livingston and Dean Baker).

Let's start with Kudlow, an SDS activist at the University of Rochester in the late 1960s and favorite of Sklar, according to Livingston. For Kudlow, tax cuts function as a "gratuitous force of nature" -- or more precisely as the removal of fetters on a gratuitous entrepreneurial "energy" that will subsequently be "harnessed and directed through technically sophisticated machinery" etc. etc.

You can take the ex-SDS activist out of the Grundrisse but you can't take the Grundrisse out of the ex-activist. Or, to paraphrase Trotsky, Kudlow may have forgotten about disaccumulation but disaccumulation does not permit Kudlow to escape from its net.

So much for Kudlow, how does this criticism apply to Livingston, Beggs, Bernstein or Baker?

I'll take Livingston first, since his aversion to "full employment" is most compatible with my own view. Livingston advocates "detach[ing] the receipt of income from the production of goods." This is a sensible idea in that most income today is already detached from all but symbolic connection to the production of goods. Unlike Kudlow, Livingston explicitly ties this imperative to Sklar's disaccumulation thesis:
But the bottom line is this. Most jobs aren’t created by private, corporate investment, so raising taxes on corporate income won’t affect employment. You heard me right. Since the 1920s, economic growth has happened even though net private investment has atrophied.
Can you spot the gratuitous force of nature in Livingston's argument? "Since the 1920s, economic growth has happened even though..."

Mike Beggs takes issue with the sort of income detaching solution that Livingston advocates. Beggs challenges the underlying notion of technological unemployment with the age-old refrain that new jobs "always come along" to reabsorb the workers displaced by automation:
But the idea that machines are about to supplant workers is a trope as old as capitalism itself. It always looks plausible because so many particular tasks are always in the process of being automated, and new wonders are always just around the corner. And yet new jobs have always come along.
Beggs admits those new jobs are not always as remunerative as the old ones. "Almost all net job growth in the United States since 1990 has been in low-productivity growth sectors: construction, retail, hospitality, health care, education, government, and finance." For the last decade, you can leave out construction. Net job growth has been confined to "sectors with average hourly pay and weekly hours much lower than the economy-wide average."

"But," Beggs argues, "there is no technological reason that such jobs be low paid and insecure." To explain why not, Beggs digresses at length on the history of Milton Friedman's "natural rate of unemployment" and the "awful but more literal 'non-accelerating inflation rate of unemployment."

The upshot of all this is that liberal policies for full employment "are predicated on labor's weakness." The left "should be calling [the] liberals' bluff". Beggs doesn't specify exactly what full employment policies should be advocated by the left but he does cite Dean Baker's and Jared Bernstein's Getting Back to Full Employment.

Baker and Bernstein's prescriptions include improving the trade balance, public investment, public jobs and work sharing, all of which sound like good ideas. But here our old repressed nemesis, disaccumulation, returns in the form of denial that "robots and other new technologies will diminish the need for human labor in the years ahead." "History is littered with such predictions," B&B, recite, in a trope as old as capitalism itself, "and there are many aspects to today’s version that don’t hold up to scrutiny." Why doesn't today's version hold up to scrutiny? Because, they explain, job displacement by robots would "imply an acceleration of productivity growth in recent years, but that has not occurred." Is that so?

Let's go over that again because it is subtle. Beggs agrees with Baker and Bernstein that history is littered with the old trope about automation displacing workers. But Beggs's claim that net job growth since 1990 in the U.S. has been in low-productivity sectors contradicts Baker's and Bernstein's assertion that the displacement of workers  by automation would imply faster productivity growth economy wide. Why not faster productivity growth in sectors that are declining in relative importance being more than offset by the expansion of low-productivity sectors?

I would side with Beggs on that later point but argue further that this discrepancy between Beggs and Baker and Bernstein arises from a fundamental flaw in the claim that "new jobs have always come along." Where have those new jobs come along from? From the same place that "economic growth has happened even though." A gratuitous force of nature has produced new jobs and economic growth "as trees produce fruit."

Isn't it time that we gave a name to this allegedly gratuitous force of nature? In the late 17th century, that name was "African slaves." In the 19th century, it was "wage labor and coal." In the disaccumulation phase of capitalism, it is "fossil fuel."

A century and a half ago William Stanley Jevons linked the consumption of coal and the creation of jobs in a way that has been overlooked by most commentators on the infamous Jevons Paradox. "It is wholly a confusion of ideas," wrote Jevons in The Coal Question, "to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth." He went on to explain:
As a rule, new modes of economy will lead to an increase of consumption according to a principle recognised in many parallel instances. The economy of labour effected by the introduction of new machinery throws labourers out of employment for the moment. But such is the increased demand for the cheapened products, that eventually the sphere of employment is greatly widened. Often the very labourers whose labour is saved find their more efficient labour more demanded than before.
The new jobs have come along from the increased demand for the more efficient labor, which has been brought about by the introduction of new machinery, which has increased, rather than diminished the consumption of fuel.This is fundamentally different from what I will call the naïve Jevons Paradox,  the idea that fuel efficiency per se leads inevitably and directly to an increase in the consumption of fuel.

That is the good news.

The bad news is that the same reservation applies to the naïve, policy-induced resurrections of "Say's Law" in both its demand-side and supply-side variants. Those panaceas perform either a tacit or an overt denial of climate change and resource limits.

This is admittedly unfair to those proponents of a "green new deal" with its emphasis on eco-technological modernization. They are not so much tacitly denying climate change and resource limits as "watching for the card so high and wild that they'll never need to deal another." Just because such a breakthrough is conceivable, doesn't make it imminent, though -- or, for that matter immanent.

In practice, job creation requires increased fuel consumption. Robots require a fuel source. An unplugged robot neither liberates nor displaces workers.

Yes, Virginia, there is no gratuitous force of nature.

1 comment:

Owen Paine said...

Humans hours as inputs are like petroleum as inputs

Un unique exchange value status for human productive activity ?

Accept that and you can build a monistic model of exchange like Jevon's


there is a mystical substance at the end of that unwinding thought trail
or a rabid nominalist ambush somewhere around the next curve