Contemplating the death of capitalism in as little as thirty years

by Jehu

Facing the radical implications of the anachronism of value is not just a problem for Marxists. It turns out bourgeois simpletons can’t get beyond the premises of a society founded on wage labor either.

I have been reading Calum Chace, The Economic Singularity. The book explains, within the limits of bourgeois political-economic reasoning, just what Postone means when he argues value is anachronistic. The book reads like a report to the Department of Defense. Projecting present trends on automation thirty years into the future.

Chace thinks automation will soon replace human labor in most areas of the economy. He thinks nothing will prevent this from happening because companies and governments have a strong incentive to make a completely automated economy a reality. There are technical issues, of course; but these problems will be solved in due time. We will all soon be having sex with our AI “friends” in our own little virtual reality worlds.

Chace’s conclusion is pretty stark: capitalism cannot survive the current phase of automation; the fascist planners will need a plan B. Thus, I expect to hear rumblings in favor of UBI from a lot of DoD connected think tanks.

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Humans in production are obsolete. Machines can do what we do better than we do because that is the way we designed them. For most of society, the prospects of never having to punch a clock again in this life should be a matter of great joy.

But why then do I get the feeling Chace realizes this less with a sense of the opportunities for early retirement and more like a victim of some wasting disease for whom all hope has evaporated. The reason may be that this development has far-reaching implication for what Chace calls “income redistribution”:

“If and when societies reach the point where we have to admit that a significant proportion of the population will never work again – through no fault of their own – a mechanism will have to be found to keep those people alive. And not just scraping by on the poverty line: they will have to be provided with an income which allows at least the possibility of a decent life by the standards of the societies they live in.”

Given that the vast majority of wealth and income are monopolized in a few hands, once folks start wondering how they are going to eat, folks like Bill and Melinda Gates will be looking more and more like Louis and Marie.

Guillotines all around.

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Chace makes an important distinction, seldom acknowledged, between what he calls a technical singularity and the economic singularity.

A technical singularity occurs at the point where the complete abolition of human labor in production has been achieved. This, he assumes, will still take “quite a few decades”. By contrast, an economic singularity is the point where billions of people all over the globe will no longer be able to make a living by selling their labor power.

This latter event, he believes, may be no more than three decades away at most.

Long before all human labor finally has been eliminated in production, the labor of billions will essentially be superfluous to the production of material wealth. The complete elimination of labor in production may take as much as a hundred more years, but long before that human labor will be unnecessary to most areas of production. This leaves us facing decades where a very large mass of people will not be able to find work in a society where consumption is still founded on wage labor.

This obviously is a recipe for mass poverty and social unrest as Chace notes:

“As DeepMind co-founder Demis Hassabis likes to say, humanity’s plan for the future should consist of two steps: first, solve artificial general intelligence, and second, use that to solve everything else. ‘Everything else’ includes poverty, illness, war and even death itself.”

Chace argues, without any evidence, that most of the world’s social ills linked to wage labor cannot be solved by anything short of the complete abolition of human labor in production — an event that remains ‘quite a few decades’ off. Thus, somewhere between the next thirty years and “quite a few decades”, (let’s call it a century), a very large and increasing population of folks around the globe will have to face “illness, war and even death itself” without being able to sell their labor power and thus with no means to live.

Think about it this way: How many generations can live in nana’s basement? What happens when millennials aren’t simply living in their parents’ basement, but raising their families down there as well?

The way I read this passage from Chace, for the next one hundred or so years the over-riding problem of advanced capitalist states will be managing (muddling through) the widespread disintegration of civil society. Chace thinks the graduates of West Point and the other military academies should give greater attention to the finer points of martial administration and governance.

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The prospect that large numbers of people will become redundant to the production of material wealth long before the need for human labor in production is completely eliminated forces Chace to concede the inevitability for some sort of large-scale income support that is not tied to employment: universal basic income.

The problem with this idea is that, according to Chace, this is not a cyclical problem; the jobs are never coming back. Basically, Chace is proposing to pay some sort of universal income forever. Why? What possible sense does it make to pay out a universal income until the heat death of the universe?

If, as Chace seems to believe, it is likely that we are now standing on the horizon of an unprecedented post labor society — and that this is an irreversible event — what possible reason is there to propose a program like income support to an ever growing mass of people who will not be able to find employment?

Let me put this another way: advocates for (bastardized) Keynesian and supply-side policies argued for state policy intervention because they thought unemployment was cyclical; eventually jobs would be coming back. The state’s role was to provide some sort of temporary stimulus to help the economy along the path to full employment. However, Chace offers no such warranty. The jobs lost to automation are gone for good and mostly will not be replaced by new jobs.

Spend more time with your family and friends, get a hobby, folks. There is no possible state program that will ever make it profitable to employ wage labor to produced widgets again.

Then Chace turns around and offers what is at best a niggardly, short-term income support program for a problem he argues will be a permanent new state of society.

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Moreover, Chace thinks it will soon become all too clear to the rest of us that production for profit is dead. When that happens all hell will break loose as people start to dump their assets:

“Unless we switch quickly and smoothly to UBI, it seems likely that the price of assets typically owned by these middle class people, such as suburban houses and mass-produced cars, will slide as their owners try to replace lost income by liquidating their property. This could happen quickly, as people look ahead, see what is coming, and decide to cash in before the slide starts in earnest. Asset prices are notoriously hard to predict because they depend on events which cannot be foreseen, and also upon perceptions about what may happen, and perceptions about those perceptions. This is another good reason why we should be thinking seriously about these matters sooner rather than later.”

In their essay, “Systemic Fear, Modern Finance and the Future of Capitalism”, Bichler and Nitzan made pretty much the same argument:

“Suppose for argument’s sake that capitalists, instead of expecting capitalization to continue indefinitely, believed that the process would cease to exist at some future point. At that point, with capitalization gone, their assets would have a nil value, by definition; and with future prices being zero, current prices would have nowhere to trend but down.”

Once it becomes obvious that production for profit will not continue indefinitely, capitalist asset prices will start to plummet and they will continue to plummet until they reach zero. Meanwhile, unemployment will jump to 100% relatively quickly as capital markets unwind.

There is no way a universal income program will fix this. At best UBI will only delay the inevitable.