The WEF’s Founder and Executive Chairman, Klaus Schwab, gave this succinct summary of the issue:
“The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”
At first sight this ‘revolution’ would seem to open the way to a huge advance for mankind, raising the possibility of thousands of dangerous, unhealthy or even just boring jobs being performed by computers and machines, and workers being freed to enjoy more leisure time and live life to the full.
However, much of the reaction to the ‘Fourth Industrial Revolution’ shatters any such optimistic illusions by, quite rightly, focussing on the negative implications – the potential massive loss of jobs and the widening of inequality.
A study titled: “The Future of Employment: How Susceptible Are Jobs to Computerisation?” by two Oxford University academics, estimates that an incredible 47% of jobs in the USA are at risk of being automated in the next 20 years.
In Africa the study predicts that 85% of jobs in Ethiopia, and more than half of those in Angola, Mauritius, South Africa and Nigeria could be taken over by automation. South Africa will be particularly hard hit because it already has one of the world’s highest levels of unemployment which these new developments would make even far worse.
And this ‘revolution’ will also widen inequality. A report by the Swiss bank UBS has warned that the richest stand to benefit most. It predicts that not only will inequality increase between developed and developing countries, but it will also increase within countries themselves as the rise of automation squeezes out unskilled and semiskilled workers.
So a ‘revolution’ which ought to improve workers’ lives is likely to throw millions more into unemployment and poverty. Even the arch-capitalist Schwab concedes:
“The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth … is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.”
He concedes that government ‘regulation’ is likely to be ineffective:
“Current systems of public policy and decision-making evolved alongside the Second Industrial Revolution, when decision-makers had time to study a specific issue and develop the necessary response or appropriate regulatory framework… But such an approach is no longer feasible. Given the Fourth Industrial Revolution’s rapid pace of change and broad impacts, legislators and regulators are being challenged to an unprecedented degree and for the most part are proving unable to cope.”
But what is missing from this defender of the ‘free market’ capitalist economy is any understanding that this crisis exposes a fundamental contradiction at the heart of capitalism. Schwab fails to recognise that the problems he warns about are caused by the very system he wants to preserve.
The sole source of the capitalists’ profits is the value added by the exploitation of the workers’ unpaid labour and the value that this adds to the commodity they produce or the services they deliver, along with a market of consumers who can afford to buy them.
Marx and Engels brilliantly explained the underlying contradictions which developed during the ‘first industrial revolution’ which are even more evident in today’s ‘fourth revolution’. In order to compete with each other, companies always look for ways to reduce labour costs, and so replacing workers with machines seems an obvious solution. The first companies to do this can make a big and quick profit by undercutting the prices of their competitors. But soon the competitors are forced to follow suit, and, because the surplus value added by fewer workers is smaller, the rate of profit tumbles.
Meanwhile the thousands of workers who have been replaced by the machines do not have the money to buy the goods and services the machines are churning out. As Nicolas Yan quipped in The Future Society: “After all, machines don’t consume like humans do—a burger-flipping bot cannot enjoy a Big Mac, nor would a droid on the factory floor ever desire to purchase the iPhone that it assembles”. This leads to over-production of goods which further pushes down prices and profits.
As Engels wrote in his 1891 introduction to Marx’s Wage Labour and Capital:
“The division of society into a small, excessively rich class and a large, propertyless class of wage-workers results in a society suffocating from its own super-abundance, while the great majority of its members are scarcely, or even not at all, protected from extreme want. This state of affairs becomes daily more absurd and – more unnecessary. It must be abolished, it can be abolished.”
All Schwab can offer as a solution is the now commonplace capitalist appeal for all classes to work together to establish “a new collective and moral consciousness based on a shared sense of destiny”. He expects the millions of unemployed and impoverished workers to help to bail out the very class and economic system which has caused their misery. It is a global version of the South African National Development Plan’s call for “a social compact for growth, employment and equity”.
The only real ‘solution’ is exactly the same as that advocated by Marx and Engels during the first industrial revolution – the abolition of capitalism and a socialist society in which the world’s wealth is owned by the workers who create it and planned so that society as a whole reap the benefits.
But will capitalism be able to survive the fourth industrial revolution as they did with the first, second and third? Will ‘the market’ sort out the problem?
Firstly we should remember that capitalism did not survive those earlier revolutions without resistance. Even the earliest types of automation – weaving machines – were smashed by weavers fearing for their jobs. Exactly 100 years ago the Russian workers did overthrow capitalism and in many other countries workers rose in revolt. The biggest capitalist crisis was only ended by the mass destruction of productive capacity in the 1939-1945 World War.
And throughout these revolutions capitalism survived by pillaging the resources of the colonial world and used their workers as an abundant source of cheap labour.
This new crisis will be fundamentally different from the previous three. It will simultaneously affect every corner of the world and affect not only the industrial working class but many white-collar workers who see themselves as ‘middle-class’.
There are already clear signs of workers becoming angry and demanding change but unfortunately often misdirected by racist demagogues like Donald Trump to target not the capitalist exploiters but fellow-victims, particularly immigrant job seekers.
The urgent task is to follow this advice that Marx and Engels gave in The Communist Manifesto:
“The first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy. The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.”
In South Africa this means building the new revolutionary, socialist workers’ party, and uniting the working class around a socialist programme to overthrow monopoly capitalism, fully implement the Freedom Charter, and use the ‘fourth industrial revolution’ to create an abundance of all the commodities which people need which is now absolutely possible provided that we escape from the shackles of a capitalist system based on exploitation of the majority in order to enrich a tiny minority. DM
Patrick Craven is a former National Spokesperson of Cosatu and Numsa and a supporter of the Movement for Socialism which aims to build a new revolutionary socialist workers’ party.