Russia would like the EU to vanish. Carl Bildt

Pleasure before Business

We shouldn’t worry about automation taking away our jobs – we should welcome it. If labor vanishes, we get to do the important things in life: self-chosen work and more real leisure!

Jobs are not disappearing. More people are in jobs than at any time in history. But the nature of jobs is changing – and many types of job are moving away from rich countries towards poorer ones. More of the available jobs are paying less. More are insecure, leading nowhere for those doing them.

Europe is not facing a jobs crisis due to automation. While technological advance, including automation, displaces some jobs, it creates others. Rather, the crisis is the result of a global transformation.

When neo-liberals wrested control of economic and social policymaking in the 1980s, liberalization policies opened up a global market system. Almost overnight, global labor supply trebled and more than a billion workers in China, India, and elsewhere started to be used in competition with workers in Europe and other rich countries.

As Europe made its labor markets more flexible – and more insecure for the new mass class, the precariat – there was downward pressure on wages, enterprise benefits and labor-based state benefits. Governments knew that liberalization would create greater inequalities and economic insecurity for millions relying on labor. Two courses were open.

They could have decided that those receiving income from profits and stock markets – the principal beneficiaries of liberalization – should share the gains with the rest of society. That would have prevented the emergence of a plutocracy of billionaires. Instead, governments made a Faustian bargain with their citizens. To disguise falling incomes, they financed an orgy of consumption with cheap credit, labor subsidies and tax credits. But in 2008 it ended, as every Faustian bargain must.

Social Unrest Will Follow

Since then, the austerity era has seen all countries make beggar-my-neighbor cuts in wages, benefits and protections against insecurity, as all of them try to become more competitive than others.

Meanwhile, a great convergence is under way. A global labor market is raising wages and social income in emerging market economies, while accelerating their decline in the industrialized world. Average real wages in Europe, Japan, and North America will not return to anything like their peak. Some workers will experience improvements. But average earnings for the majority will decline.
The growing precariat faces a future in which jobs will provide only low incomes, while those receiving income from capital will gain ever more. And if social security systems continue in their 20th century molds – social insurance, enterprise-based occupational benefits, and means-tested state benefits – the precariat will face chronic economic insecurity. Anger is spreading; social unrest will follow.

There is an alternative. However, it will require a struggle, and recognition that most of us risk joining the precariat or seeing family or friends doing so. Social protection must be reformed on the principle that everybody has a right to basic economic security, an unconditional basic income on which to survive in dignity. There are three standard objections.

Critics say it is unaffordable. This is untrue. Vast subsidies are given in handouts to corporations, the middle-class, and special interests, costing far more than providing everybody with a basic monthly grant. Moreover, after the financial crash, governments paid out billions to rescue the banks, enabling bankers to resume their lavish lifestyle. Instead, they could have provided their citizens with modest monthly stabilization grants, which would have revived growth much more effectively.

Moves towards a basic income should also be accompanied by construction of democratic sovereign capital funds, somewhat like the Alaska Permanent Fund or the Norwegian Fund. As industrialized countries are becoming rentier economies (receiving much of their income from abroad), a mechanism is needed to pool some of the profits from financial capital and multinationals that gain from control over scarce resources.

Less Labor, More Leisure

Critics say a basic income would give people ‘something for nothing.’ This is hypocritical; the wealthy receive something for nothing every time they inherit. Many have obtained their wealth not by brilliance but because policy changes have provided astronomical rewards for certain types of skill.

There is an ethical response too, which stems from reasoning by Thomas Paine. Society’s wealth depends far more on the contributions made by our forebears than anything we do ourselves. But we cannot say whose ancestors made which contributions. As inheritors, it would be fair if we all had a share of the proceeds of their collective investment, a sort of social dividend.
Critics say a basic income would induce laziness. This insults us as human beings. Almost everybody wants to better him or herself and would not be content with a basic income. And if there were a few idle people, it would scarcely matter; identifying and coercing them into jobs would cost more than letting them be.

Psychologists have shown that people with basic security are more altruistic, tolerant, and productive. A basic income would also give us more control over time, which we lack today. Let us revive respect for reproductive work, which is currently crowded out by the pursuit of jobs and labor. Aristotle argued that to be civilized, we need aergia, laziness, so that we can reflect, deliberate, and take part in political life. We also need more time to do the work of caring for others, our community, and our environment. So, less labor, more self-chosen work and more real leisure! Basic income would help achieve that.

Read more in this debate: Bo Cutter, Robert Solow, Gary Swart.

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