“The way capitalism is going is towards creating more and more low-wage, low-skill jobs. We face a choice – not only political but also a moral choice. Do you want to increase the amount of work for low-wage workers, or the decrease the amount of work altogether? I prefer the second option”, argues British journalist and author, Paul Mason.
Łukasz Pawłowski: When is capitalism going to collapse?
Paul Mason: By capitalism I mean a social system where the market is the prime driver of distribution. In most developed countries already 30 to 40 percent of the economy is run by the state. In some sense radical neoliberals are right. These ‘state-ized’ capitalisms are very unlike free-market utopias.
So maybe it’s already finished?
We will know that the capitalism is ending or is in its final phase when a large chunk of the economy is produced outside the market – either by the state or in a collaborative sector. My specific contribution is that I want to go with the collaborative sector rather than the state.
Because a state is a temporary thing. If the ongoing automation leads to an end of work, the state will not be able to support itself. It will need to become a provider of services paid for in some other way than taxation – by free labour, or by people interacting collaboratively.
If between 2050 and 2075 some developed states have complex and well developed “wiki-sectors” of their economies, where the infrastructure is created privately or by the state but the labour is done for free, collaboratively – that would be close where I’d like to be.
So capitalism is not going to end with a bang, a revolution in the traditional sense, but rather die slowly?
No, it will not end with a bang. The bang happened in 2008. Now we know, that should another crisis happen, governments will again simply print money in the form of quantitative easing. Since 2008 extra 15 trillion dollars have been printed. The states have pretty much decided that until something better comes along, capitalism will be on life support.
This life support is possible as long as globalization exists. If it breaks, the total amount of global debt would need to be shared and it would be not shared equally. That would be a global debt default war. The only bang yet to happen is the end of globalization and the forcible redistribution of debt obligations between the states. I hope it doesn’t happen.
In ‘Post-Capitalism’ you list three major causes behind the current crisis of capitalism. First of all, wage stagnation and the fact that for the last four decades they have not kept up with the GDP growth. The second reason is the so-called ‘financialization’ of our economies. It produces cheap credit which in turn allows people to carry on with their lifestyle despite stagnant wages. The third reason is technology which is fundamentally changing the labour market. You claim that in the future most ‘companies’ will function like Wikipedia, that means they’ll rely on voluntary work of people willing to engage in such a network. But that is based on an assumption that automation will significantly decrease the number of hours we need to work the way we do today. This assumption is highly problematic.
A month ago I met somebody who organizes trade unions at a warehouse. She was getting the minimum wage and worked on a zero-hour contract. The company could call her at any time on a very short notice, or not call her at all. One time they called her by accident. She arrived and they paid her for the exact amount of time it took to get there and then go home. She quit but not because of that, but because they asked her to wear a Go-Pro camera and a GPS unit on her arm to better manage her movements. This use of automation is crazy and it seems obvious that this warehouse could be entirely automated. People don’t need to do this work. They do because wage levels and trade union rights are so minimal in this country it is cheaper to employ a person rather than a machine.
How do you suggest we change that?
All you need are governments which would say: “Automation is good. It can help everybody by reducing the overall labour time around the globe. It can, we just need to rearrange the redistribution mechanisms in the society to enable it. And we – the government – will set the example by automating as many of our services as possible.” In that situation, I think we would see a pretty rapid fall in the necessary work needed on the planet.
But capitalism – if left to itself – will carry on creating these lousy jobs that don’t need to exist. 30 years ago the economy around here would have been productive. People would produce things which would later go to these two railway stations in between which we are now sitting. Now British economy is reduced to simple services. I’m pretty sure all these guys around you see right now are earning almost no money and have no prospect of being promoted. No matter how well this guy over there serves you your coffee, he can’t be promoted to a ‘chief coffee servant’ because there’s no such thing. The way capitalism is going is towards creating more and more low-wage, low-skill jobs. We face a choice – not only political but also a moral choice. Do you want to increase the amount of work for low-wage workers, or decrease the amount of work altogether? I prefer the second option.
Some time ago I had an interview with Tim Harford who offers a very different view of the process of automation and its consequences. He says that some jobs which seem to be simple – like cleaning toilets or hotel rooms – are in fact quite difficult to automate. He also gives an example of a warehouse, which uses a simple computer system called Jennifer. Jennifer tells the employees what to pick up from the shelves and plans their routes in order to make them most efficient. Yet the company still needs to employ people, because people have hands and eyes with which they see what product they’re picking from the shelf, and therefore know how to handle it. A machine is not that flexible.
This is a very short-sighted view of what the automation can do, trapped in an anthropomorphic understanding of automation. We keep asking what jobs will be replaced by machines instead of asking what processes will the machines invent to make a job redundant.
What do you mean?
There are hundreds of tall buildings in London. But almost everyone that I know of, created in the last 30 years, will never need to be painted, its glass will never need to be replaced and its steel will never corrode. Now, when you go to the Forth Bridge in Scotland – which is the longest iron bridge in Britain, built back in the 19th century – you can see a team of people continually painting it. People may ask – how do you automate the process of painting such a bridge? The answer is: next time we’ll build a bridge made of carbon and it will need to be painted at all.
However, the other argument against automation eliminating a massive number of jobs say – and here again I’m quoting Harford – that machines never really take our jobs, they only take certain tasks. Here Harford gives an example of bank clerks. After ATMs were invented the number of bank employees not only did not decline. It increased, but their tasks have changed – instead of dispensing the money to clients, they sell loans or other financial products.
That’s not a proof. This only shows that companies are prepared to hold to labour instead of doing real automation. Capitalism, in general, is hostile to rapid automation. Let’s take companies like Zara and Subway – one selling relatively cheap clothes, the other cheap food. What you know is that the guy from Subway buys his clothes at Zara and the girl from Zara buys her lunch at Subway. Cheap, low-skill jobs in an inefficient economy support each other. What we need is an ethos at the level of government, policymakers, big business and academia which says that work is superfluous and we can use automation to our benefit.
A state is a temporary thing. If the ongoing automation leads to an end of work, the state will not be able to support itself.
Many, if not most people on the left say that automation is a tool companies can use against their workers to lower their wages even more. And you say that we should embrace it and that it can improve the lot of an employee?
The difference between me and traditional left is that my solution is not about work. Marxism was a utopia based on work, so is social democracy and trade unionism. I say that the left must pursue the automation rapidly and thus break the link between work and wages. That’s also the purpose of the ideas like universal basic income, or more broadly universal basic services – a set of elementary services provided to all citizens no matter what, free of charge.
The challenge for parties like Labour in Britain is to delink their thinking from the perpetual existence of long hours, arduous work. It’s just not going to be around in 50 years time.
This prediction is based on an assumption there’s a limited number of jobs to be done. But history shows that technological progress usually can create new jobs.
It can and it will – above all in green technology and automation itself. I don’t deny it. Look, there are already philosophers worried about artificial general intelligence. But long before we get there we have created a computer which recently beat the best player in go, the most complicated game in the world. What does this tell us? It tells us that if we could apply this technology to solving human problems, very rapidly it would come up with much better solutions than we have come so far. And we should take this opportunity.
Another example: half a million men in this country drive trucks. It’s a shit job, I know because my dad did it. It’s a shit job in the sense that all you’re doing is to follow a set of rules and the car almost entirely drives itself. Despite that when driving a car you can’t really do anything else – write, read, or listen to music properly. Why should we like humans to do this kind of job? I would prefer this half a million people to do something else.
There’s a whole alternative vision of the future in which we not only don’t work less but in which we work all the time – at a regular job and then, in our ‘free time’ for companies like Uber or AirBnB.
The precondition for that to come true is that these human microservices are provided by ever poorer people. But this does not need to happen. Let’s take Uber. I believe every city should have a platform cooperative taxi booking service. This should be regulated by the state and everybody wanting to provide a taxi service in this city should meet certain standards. That would eliminate companies like Uber.
I guess you applauded the recently taken decision to ban Uber in London?
Absolutely. Uber is among the most socially destructive companies in the world. My interpretation of what Uber is strategically trying to do is that its ultimate purpose is to be the application which mediates driverless transport in cities. As we move from regular to driverless cars it would be logical for cities to come up with an algorithm which would then be put into one supercomputer and regulate the whole traffic in a city. What I believe Uber wants is a million computers, one in each car and each negotiating with other artificial intelligencies how to move around town faster and cheaper than others. Only one future is commercializable – the one in which intelligencies sit at the level of the cars and not on the level of the city.
Marxism was an utopia based on work, so is social democracy and trade unionism. I say that the left must pursue the automation rapidly and thus break the link between work and wages.
You say that once people have more time they would engage in ventures like Wikipedia – giving out their free time, free work and share the results with others. Apart from Wikipedia you give an example of an operational system – Linux. But how do you see this model dominating so many other areas?
There are many examples on a city and local level – cooperative cafes, shops, even schools. In Berlin, there are now people working on an app that would map cooperative economy there. Then, there’s also the state. If people want to follow my advice, states should begin to turn state-owned companies into collaborative non-profit companies. The route to a ‘wiki economy’ does not necessarily lead through creating more Wikipedias. It’s also about turning the state into more collaborative than a centralized body.
Is the state supposed to give away its assets just like that?
In late 1770’s when the first factory in Britain was built everybody said that it might be an interesting thing, but it does not fit with the rest of the economy. At that time it was a big investment, probably equivalent to creating a supercomputer right now.
People kept asking “What’s the market for it?” and the answer was “We don’t know”. Are you good at it? We don’t know. But what did the state do? It actively encouraged the creation of factories – helped to get people expelled from their land, removed laws preventing people from moving areas, created state banks which helped banking system to develop. The first of 80 years of the industrial capitalism in Britain was a fight of factory owners to first take the state and then use its power to spread the factory system through.
But a company like Wikipedia is by definition transnational.
The state is only an enabler. Since we don’t know how in the end it will work, every state that engages in this process should do it carefully and non-prescriptively. Labour has said they were going to double the cooperative sector in Britain. That’s a good goal – but in what form should that cooperative sector be doubled and how? One has to experiment. The proponents of post-capitalism should understand that as we try to make this change, we might also make mistakes. We should try very intelligently to allow the wiki sector of the economy to unlock its own potential rather than impose a series of models on it.
Sometimes it’s about very simple solutions. In Denmark, there’s a thing called Bybi which puts beehives on roofs of some buildings. It’s a very simple co-op, which produces some honey and the people who look after the bees are migrants from Syria. This is how a new economy can be born.
You announce the dawn of a zero marginal cost economy. In other words, the new economy will be based on information, and the information is very cheap both to copy and spread. You give an example of iTunes store where a song costs 99p despite the fact that the actual cost of storing and coping this song is close to zero. In a traditional economy, a price of a good was determined by the supply of and demand for it. In the new economy supply is unlimited, so you argue it must destroy the market mechanism.
What in my view you fail to acknowledge is that to produce a song or any other piece of information still costs a lot of money. Sharing it may be easier than at any time in history, but costs of production are still there.
The cost of production is a real thing and that sets the floor of what the cost of a given thing should be. But the production cost is also being undermined because information is at the heart of so many things. The production cost of a movie soundtrack is a lot lower today than 20 years ago because instead of using a real orchestra one can use electronic instruments which are far more controllable. Now take aircraft manufacturers – here also the engineering process has been transformed by information technology. If one can test the aircraft or engine virtually million times on a super-computer, the first time it flies it’s going to fly without defects. Information technology makes producing even ‘real’ things a lot cheaper. The cost of DNA sequencing has fallen exponentially. If information only made information goods cheaper, capitalism could probably survive. But it also makes real goods cheaper.
You know perfectly well that the cost of production is not what determines the final price of a product. You give an example of Nike and its products. There’s an added value to it – clients pay more because they want to have shoes or t-shirts with Nike logo on them.
There’s a brand aura surrounding let’s say Apple products and clients may be willing to pay for it. But there’s another part of what we’re paying for – intellectual property defended by lawyers. Certainly, that is the case with some high-value consumer goods. What I’m saying is that quite often the price is artificially maintained by the creation of a brand monopoly. That’s not the same as creating high-value by high-utility or high-quality. I’d argue that more and more of our economy is monopoly profit, a rent.
Would you abolish intellectual rights or significantly curtail them?
The easiest thing would be to time-limit it. Over the years music and literary copyrights have been pushed more and more into the future. You’ve got two of my books before you. In a couple of years after a book comes out it’s already in second-hand bookshops. Why should I have 50 or 100 copyrights for my writing? I think it should be 10-12 years maximum. Norbert Wiener the inventor of cybernetics once said that the whole idea of embodying the information in a static format is crazy because information is by definition what is new.
Picketty’s solution is a beautifully simple one but it will never happen. Ultimately it would be easier to automate the world and create an universal basic income than to tax the wealth of the rich.
How did you like the reactions “Post-Capitalism” has produced. It was very often, very harshly criticized.
If I wanted to make a lot of money I’d leave out chapter one which is an attack on neo-liberalism and just write about the future. But this chapter is essential to me. The main claim of the book says that the crisis of neo-liberalism is the first sign of what is coming in the next 50 years. This was the part of the book I always expected people not to like – and they didn’t.
Because its implications are pretty strong. It says there’s no way out for neo-liberalism. It’s finished. It implies that the capitalism is also transitional, temporary. This is completely mind-bending. If you’ve been to a university in the last 30 years, you’ve been told first of all that neo-liberalism is permanent, secondly, that capitalism is forever and thirdly – that nothing better can be imagined.
As I go around the world speaking about it, every time a businessman or a politician stands up and says – ‘I see the problem, but I just can’t accept that capitalism will not innovate with higher-value goods and skills. It always has.’
To which you reply?
‘It always has but there’s no guarantee it will’. Which brings me to my second point. Nobody has disproved my central thesis that information technology causes a collapse in prices, and the reaction is monopolization which creates a fake capitalism where ownership is simply reimposed through lawyers. As far as I’m aware this central thesis has actually gained strength since the book was published in 2015. Currently, lots of people are talking about basic income, robotization and automation. The book, I think, showed people that there’s a solution which is not Luddite or nationalist.
“Post-Capitalism” came out the same year as Thomas Picketty’s “Capital in the 21st Century”. The interesting thing about Picketty is that his aims are mainstream economics. I’d also say that his solutions are more utopian than mine.
A global wealth tax? In Britain, the Labour Party – which I support – in June 2017 went to the elections with a big programme of traditional taxation which was supposed to bring extra 50 billion pounds. Of that, around 45 billion were straightforward transfers of income from rich people and companies to the poor. Only 5 billion would come from an attempt to tax wealth – that is to do what Thomas Picketty tells us to do. When Labour politicians met financial investors, or City people the one thing they would always hear was ‘Don’t touch wealth. Because if you do, we’re going to leave the country. Tax personal income, tax corporate income, but not wealth’.
Picketty’s solution is a beautifully simple one but it will never happen. Ultimately it would be easier to automate the world and create a universal basic income than to tax the wealth of the rich.