Since the onset of the Great Recession middle class earnings in the UK have shrunk significantly. Professional jobs across many sectors have become insecure and are paying less in real terms. Experienced, well educated and well qualified workers are struggling to make ends meet with many turning to self employment or living off scraps of part-time work for meagre returns in a desperate effort to avoid the dole queue. Is this a temporary blip which will soon be corrected as the economy “returns to growth” or is the slide of the middle class something more permanent? Is the middle layer of society currently experiencing a decline of fortune just like that suffered by the working class when the industrial sector collapsed some 4 decades ago? This is the question pondered by Rohan Silva in a segment on BBC Newsnight (11/9/13, posted here on Youtube). Silva, a former senior policy advisor to David Cameron, notes that the economy has recently started to grow again however the new wealth being created is not being enjoyed by the majority but is flowing exclusively to those at the top. Job creation has stalled, incomes have stagnated and some believe the middle class is dying off. Silva believes the adoption of labour saving technology is behind this trend, stating “if the last century was about technology replacing brawn, this century could be about technology replacing brains.” Silva’s thesis is heavily influenced by the thinking of Tyler Cowan, Professor of Economics at George Mason University. Cowan notes that computer programmes are getting better and better at carrying out tasks traditionally performed by white collar workers, including within schools and universities, law firms, media outlets and hospitals. He concludes that this trend is set to continue with automation ultimately leading to the destruction of countless previously secure jobs throughout the economy. With the number of well paid positions in decline a greater proportion of the workforce is being employed in low paid menial jobs that remain beyond the reach of automation. As Rohan Silva notes 4 out of 5 new jobs pay less that £8 per hour and zero hour contracts are becoming increasingly common. The result is growing inequality as many struggle to afford life’s necessities while the already rich pocket the additional wealth created by the application of new technologies. This is a somber prognosis and Rohan Silva is right to identify it as the dominant economic challenge of his generation. However the remedy tendered by himself and Professor Cowan offers precious little in the way of solace. Cowan’s advice is to seek retraining in programming, machine learning and artificial intelligence to develop the high tech skills needed to ensure one stays on the right side of the dividing line between benefactors and victims of technological progress. Silva holds up the example of Singapore’s prosperous innovative economy built on a foundation of high quality education in mathematics, science and technology. Realistically though, how many of us will be able to retrain in the way advocated and earn a decent living in this new economy? Surely we won’t all be able to be employed building robots for each other. At best this remedy only offers safety to a relatively small proportion of the workforce and is therefore no solution at all for the rest who seem destined to continue to struggle to keep their heads above water. Large numbers of well educated, capable and motivated individuals are in effect deemed “surplus to requirement” and are being thrown on the proverbial scrap heap. This realisation leads one to take a big step back and look critically at our economic system as a whole, to question its very purpose. Are people supposed to serve the economy, or is the economy supposed to serve the people? What does it mean to be human when the economy prescribes that, despite our talents, we must flip burgers in order to scrape by? These are existentialist questions. I’m minded of Lindy Davies’ musings on the subject of Jobs in which he asks “what is a job, really? What does it mean to have one, or to not have one?” In a similar vein Buckminster Fuller once quipped “We should do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian Darwinian theory he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.” Lindy Davies concluded that “the obsessive focus, in our political discourse, on “jobs” is a clever way of diverting our attention from our true economic problems: unused land, wasted capital, huge fat gobs of monopoly privilege, and tax burdens that hinder enterprise. When the resources that workers need to make a living are kept from them by monopolists, then “a job” becomes the best they can hope for. The extent to which we focus on “jobs” is a good barometer of how unjust and wasteful our economy truly is.” He is alluding here to Georgist economic principles including the relationship between rent and wages and the effect of monopoly privilege on the distribution of wealth. Henry George clearly explained the mechanism whereby increased riches from the adoption of new technologies will inevitably flow as unearned income to the owners of land and natural resource monopolies. Rising rents will swallow up any rise in wages thus leaving those who have to live from wages alone bereft of any lasting benefit. Understanding these principles and taking them on board is essential if we are to find a true solution to the dilemma we are facing. The middle class is often considered the glue in society and it is this segment that is now in the firing line. Could this be the trigger for a long overdue reappraisal of the assumptions that underpin our economic system? As university academics start to feel the squeeze might they be shaken from a seemingly blinkered acceptance of the current failing paradigm and finally start to grapple with the true root cause of the problem? One can only hope this will usher in the adoption of an economic model that values all people and ensures everyone benefits from the wealth we have all had a hand in delivering – an economy centred on the principle of Earth Sharing.
Earth Sharing and the destruction of the Middle Class
Posted by petersmithconsulting on September 13, 2013