When the Bank of England starts worrying about Marxism and robots... What's the Alternative?

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Strange but interesting times. There's been a flurry of stories around a presentation in Canada, made by Mark Carney, the Canadian Governor of the Bank of England. Carney warned - with large images of the Communist Manifesto behind him - that economic and social conditions could become as ripe for Marxist-style rebellion as they were in their original form, in the 19th century. 

The key parallel, said Carney, was the spectacle of technology making industry ever more productive, but reducing human incomes and jobs at the same time. "Substitute platforms for textile mills, the telegraph for Twitter, an machine learning for steam engine, and you have exactly same dynamics at before... with Karl Marx scribbling away in the reading rooms of the British Library". 

Listen to the whole speech - we've embedded it at the end of this blog, here's his slides - and you hear very plainly that the masters of the universe (or this one, at least) are quite worried. Their usual consolation, as they look over history, is that we've been here before.

This may well be the fourth industrial revolution (see our friends at the Fourth Group for this). But the previous three (farm to factory, factory to services, services to computers) proceeded predictably, in retrospect. New ways of being productive may have meant lost jobs in the short term. But in every revolution, those jobs have been replaced with new tasks - and desires - in the long-term (or in "aggregate", to use economist-speak).  

Yet Carney concedes that this latest, fourth shift - where it's "cognitive" tasks that are being automated - may be qualitatively different from previous shifts. The disruption may be as much to do with the speed of change. It took half a century for the steam engine to really catch on - but it takes only a decade for a digital platform or device to take hold. The graph below shows how the Bank of England anticipates certain kinds of jobs rising and falling. The quickness and magnitude of our imminent shift is obvious.

Carney lays it out pretty dispassionately: nations and continents need to take collective measures to manage this transition. Unchecked, the growth in jobs will be at the very low and the very high expertise ends, with a huge amount of routine bureaucratic occupations just being dissolved. What will they do with themselves? (Carney notes that 70% of what he did in his banking job 20 years ago is now utterly automated.)

He suggests that there will be a rise in "non-cognitive" jobs - caring, crafting, creating: the "hand" and the "heart", over the "head". But this might need an entirely new form of middle-aged reskilling and re-education systems (Carney coins it "quaternary" education - what comes after primary, secondary and tertiary). And it will have to be supported by the state, as a collective provision. People in their late 30s or early 40s can't be expected to drop family commitments to go back to school.  

In the Q&A, Carney gets pretty close to a socio-economic vision: "The economy could become much more distributed, smaller scale, enterpreneurial, bespoke, and it can be more creative and empathetic. That's an exciting, interesting, varied, diverse economy - if you help people get it right", by means of this new "mid-life education... which has to be comprehensive, it can't be too directive about the jobs of the future, it must be catholic". 

From an Alternative UK perspective, we're somewhat scratching our heads at this proposal. It seems to point to part of what we hoped our "laboratory" process will do. Which is to give communities the opportunity to decide how they want to shape their own futures, in the light of major forces like technology.

There is a problem though. Carney seems to be pointing pretty strongly at the state (but to some degree employers too) as the ones who will build these "enabling" institutions. Yet nowhere in his economist's vision does there seem to be any role for bottom-up and horizontal forces, civic society or local communities. No space where people might deliberate and act on their future, rather than just adapt to it.

Indeed, in citing Singapore's educational grants as a model, Carney makes it clear that government's job is mostly to compel an "attitudinal shift... that this tech brings opportunities, it's not just about taking your job away. The glass half full". 


How successful have our states been recently in compelling "attitudinal shifts"? It strikes us - not very. We note this "faith in the top-down state" even in the response to Carney's speech from the IPPR's brilliant young economist Mathew Lawrence (left). 

Lawrence's "three strategies to ensure automation works for the common good" are resolutely top-down and regulatory: 

  1. "Managed acceleration of automation to reap the full productivity benefits and enable higher wages and living standards", by means of industrial strategy and a new partnership body, Productivity UK
  2. Post the Facebook scandal, "An Authority for the Ethical Use of Robotics and Artificial Intelligence to regulate the use of automating technologies"
  3. To answer the question "who owns the robots" (because whoever does controls the economy), he proposes a "Citizens’ Wealth Fund that owns a broad portfolio of assets on behalf of the public and pays out a universal capital dividend". And also laws to create "employee ownership trusts... to give workers a stronger stake in the firms for which they work – and an ownership claim on the value they help create."

All to be supported as grand policies - but all presuming the kind of state that has the confidence and power to regulate and legislate within its "jurisdiction", as Carney might put it. That is, one assumes, a Corbyn Labour majority in the Westminster Parliament. 

We (and perhaps you) might be forgiven for thinking that a lot can happen in four years to a next election. What a waste, at the everyday and community level, to simply campaign for the parties that will - the next time round - install the large institutional policies around automation and the fourth industrial revolution. 

However what can be done NOW with these technologies? The promise of blockchain or social currencies as a way to keep value in the community; the possibilities of local energy generation, and creative forms of land use; the idea of creating digital and cultural "commons" as resources for localities. We've been charting various initiatives trying to put these into practices over the last year or so. 

But we feel that it's important for citizens to feel they directly and viscerally can shape these forces to their benefit - not just having their "attitudes shifted", but their agency exercised. Mark Carney, as you'll see below, is a charming and evidently very smart guy. But from his Olympian position, he needs to be surprised a lot more than he evidently is. He seems to be expecting another Karl Marx to arrive. We wonder whether the theories of change will start to come from all over the place...