The roots of the present discontent

Terracotta Army, Xi’an

Two years ago, Mark Carney, the then governor of the Bank of England warned that pervasive automation and AI are responsible for the current wage stagnation that is like that of the 19th century, which gave birth to communism.

“If you substitute platforms for textile mills, machine learning for steam engines, Twitter for the telegraph, you have exactly the same dynamics as existed 150 years ago when Karl Marx was scribbling The Communist Manifesto”, Carney said.

In reality, the disruptions and the dangers are much more serious now than 170 years ago. The new computer and robot technologies are replacing both brain and brawn and many jobs will disappear forever. Furthermore, the concentration of manufacturing in China has created a great scarcity of jobs elsewhere, which has become one driver of mass migration that is leading to conflict between groups that have very different views on life and reality.

In my view, the danger is not from a communism like that of 20th Century but one that has anarchist tendencies and a desire to pull the entire system down. The reason for this difference is that a hundred years ago the revolutionary believed in science and the future, whereas the revolutionary of our times has no faith in science and has lost hopes for the future.

There is rage amongst the youth for they feel that the prospects at the end of the expensive college education are grim. For example, the starting salary for an English professor with a Ph.D., if such a job can be found, can be as low as in the forty-thousand-dollar range, which is not much higher than that of a nanny. For those who don’t go to college there is wage stagnation.

The future looks scarier. Imagine the disruption in society if self-driving cars, not outside the realm of near-term possibility, come into the marketplace, for an estimated one-third of the people will be left without jobs.

The dynamics set in motion by AI has been speeded up by the response to the Covid pandemic that has ruined small businesses and the tourism industry. The biggest corporations have taken advantage of the lockdowns and made their stockholders rich, and the gap between the rich and everybody else has only increased.

Technology has made it possible to work remotely that is accelerating labor arbitrage. Rather than worry about workers in the United States, jobs can be seamlessly off-shored to other countries where there are no minimum wage regulations. The college education system in the West located often in small towns will be devastated as virtual education becomes widely accepted.

The uncertainty about the future is driving events all over the world. First of all, it is creating a sharp polarization between the globalists and the nationalists. The common man has seen this change coming for several years and one can understand the election of Donald Trump to the presidency as a result of this dynamic.

As a rule, the nationalists are reactive and they lack the organizational sophistication and the power of the globalists. The leftist revolutionaries, on the other hand, have a trans-national network and the support of intellectuals.

The forward march of the globalists in the West faces the increasing power of China, which as a mercantile nation wants as large a piece of the world economy as it can. It remains to be seen how the globalists deal with the Chinese communist party that is intent on wresting world political leadership. Time is on the side of China since its economy appears to have already overtaken that of the US.

Estimated nominal GDP in 2030

Technology and organization

History teaches us that even more than the vision of individuals, it is technology and organizational skills that are drivers of large events.

Rome’s primacy for nearly a thousand years was owing to its superior organization. Europe’s colonial empires were built on the foundation of superior technologies of transportation and war.

The West may be far advanced in scientific research and technology but in a globalized world such advances cannot be kept away from other nations. So, to hope that this will be enough to allow the West to maintain its lead over China is unrealistic.

An individual can be made to lose agency by the fear of surveillance, ban on social media and forfeiture of financial instruments. Elites in the West complain that these tools are strengths that the Chinese possess.

Imitation is the best form of praise, and many have concluded that use of digital control is the way to run the economic race. The recent banning of dissenting voices on the social media may be seen as an expression of this idea.

The danger that lies here is that the discontent may bypass digital networks and use new forms of Samizdat. Political and economic leaders worry that the new movement, perhaps a hybrid of nationalism and communism, may spread. Some are talking of universal basic income to all, but that doesn’t address the roots of the present discontent.

सुभाष काक. Author, scientist.

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