Abstract
According to the empirical data so far, the productivity effects from digitalization are modest and not comparable with earlier technological revolutions. They were evident in the early phase of the introduction of PCs and browsers (1994–2004) but fell to a conspicuously low level after the turn of the century, which continues to this day. This could change however if there was to be new phase of industrially oriented digitalization. If this were to happen and the growth rates, at least in the mature economies, were not sufficient to prevent a significant shrinkage of the volume of work, then the new leeway should be used for an expansion of lifelong learning, a more flexible change between family and gainful employment, for sabbaticals and more time sovereignty.
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When Detective Spooner first confronts the CEO of U.S. Robotics, the largest robot manufacturer in the world of I, Robot (Alex Proyas. USA, 2004), he can’t help but make a sarcastic comment: “I got an idea for one of your commercials. You can see a carpenter making a beautiful chair, and then one of the robots comes in and makes a better chair, twice as fast. And then you superimpose on the screen: ‘USR—shittin’ on the little guy.’ That would be the fade-out.”
Currently, there is much speculation about the changes an industry 4.0 would bring, in particular, the production of industrial goods where they are needed, on a data basis provided by internet communication. The basis of industry 4.0 should enable largely self-organizing production. Through the use of highly complex search enginesFootnote 1 and the interconnectedness of people, machines, logistics and production facilities complex value chains are to be made more efficient and thus—after mechanization through steam engines, mass production through assembly lines and the introduction of computers—a “fourth industrial revolution” is to be initiated. Whether this will actually happen, however, is written in the stars. Disruptive technological innovations of the past have not yet been initiated by political programs and goals, but digitalization may soon enter a new phase that will expand the previous, rather ephemeral character of this technology (its focus on communication and interpretation, but above all data usage for advertising purposes) to include the tangible dimension of digital, network-controlled manufacturing.
Before this concept has even taken on a concrete shape, its protagonists are already talking about the massive job losses that would accompany it. The World Economic Forum in Davos warned in 2016 that 7 million jobs would soon be lost in Europe, and some forecasts speak of the loss of 50% or more of all work processes, not only in manufacturing but also in the service sector. Some politicians, economists, and managers argue for a robot taxFootnote 2 to replace the loss of wages, while others advocate the introduction of an unconditional basic income in order to stem the social disruptions in time.
Such a fundamental restructuring of the welfare state—away from being tied to gainful employment and wage tax, toward basic security models financed by sales tax—is gaining more and more supporters given the expected further increase in the digitalization of the entire economy. Politically, this ranges from strong forces from employers and the associated economic institutes and business associations to left-anarchist supporters. The line of conflict “pro and contra unconditional basic income” does not follow a left-right pattern. Common to all proponents is the goal of a radical change of system: the various social security systems are to be replaced by a simple and (supposedly) fair model. For many, one of the attractive elements of the introduction of an unconditional basic income is that it would make welfare state institutions, bureaucracy, and administration largely superfluous.
At first glance basic income seems to be an appealing idea: while all the tedious work is taken over by robots that clean, cook, and make products for us, we can devote ourselves entirely to our interests and indulge in our pleasures. The sweet life would no longer be possible only for the rich, the digital land of milk and honey would be achieved.
In his 1567 painting, Pieter Bruegel the Elder presents us with his vision of the land of milk and honey as it might have looked before the first industrial revolution. People lie there relaxed on the ground, there is enough to eat and drink, class distinctions are abolished. A knight lies next to a peasant, who in turn lies next to a scholar. And yet this vision is appealing only at first sight. Taking a closer look, one realizes that the land of milk and honey is in fact a dystopian paradise that makes people fat and lazy. The message is quite clear: there is more to a good life than being fed.
A modern version of the land of milk and honey is provided by the film WALL-E. After the earth has become uninhabitable due to environmental catastrophes, people have evacuated earth and live on a spaceship that has been flying through space for decades. The people on board lack nothing, robots do all the work: they wake them up, feed them, drive them around, and steer the ship. WALL-E is a disturbing vision of a software operated paradise. On this fully automated ship of eternal holidays, people have become dull and apathic. Fat and unable to move, they either sit in automated cars or lie under sunshades on artificial beaches with an artificial sun. Their bloated faces stare at screens where they are being entertained by the on-board program.
The roots of the idea of an unconditional basic income go back to the nineteenth century. The most important ideological context is that of anarchism and utopian socialism. In recent decades, the ideology of the end-of-the-labor society has been added as a further ideological, sociological context. This ideology states that in view of rationalization processes, gainful employment is generally becoming a scarce commodity. According to this view, sources of income other than gainful employment are increasingly necessary. This idea, which has had numerous proponents from André Gorz to Jeremy Rifkin to Ulrich Beck and is based on visions by Herbert Marcuse (Marcuse 1964; Gorz 1999; Rifkin 1995), has until now proven to be false. So far, technological innovations have triggered massive shifts in the labor markets but have not led to a comprehensive dwindling of gainful employment.
Conceptions of unconditional basic income go hand in hand with the vision of an era of freedom: everyone can decide at any time whether they want to pursue gainful employment, take up other work (civic engagement, family work, etc.), or devote themselves to leisure. The unconditional basic income would for the first time remove the compulsion to work not only for a few but for everyone.
The first question that arises is whether digitalization has brought about a new situation that will give a late triumph to the old and hitherto false thesis of the disappearance of gainful employment in industrial society. The long-term analyses of productivity increases in the US economy through technological innovations speak against this expectation. Studies that forecast a high loss of gainful employment are therefore either just as wrong as those made decades ago for the car industry (in fact, more people work in the car industry today than in the past, despite largely deserted production halls). Also, it is to be expected that these losses will be compensated for by new labor capacities that will be created by digitalization.
We know from economics that a massive loss of jobs with moderately growing GDP could only occur on balance if the growth in productivity were significantly higher than the growth in GDP over many years. In fact, however, productivity growth has weakened rather than increased in the past years of increased digitalization; indeed, disappointingly, the third and fourth technological revolutions have not yet been reflected in productivity growth. As long as this remains the case, there can be no net job losses due to digitalization, at least not until there is a massive collapse in overall economic output due to digitalization—which no one seriously expects.
If, on the other hand, there should ever be a huge productivity boost from Industry 4.0 which would not compensated for by high growth rates, the volume of labor would shrink accordingly. For the sake of simplicity, let’s assume that productivity doubles within a decade, while the gross national product only increases by 50%. In this case, the volume of labor would decrease by a quarter with the same working time per capita, i.e., additional unemployment of 25% would result. A 25% decrease in working time per capita would even be compatible (without rising unemployment) with a 25% increase in real income over 10 years.
According to empirical data so far, the productivity effects from digitalization are modest and not comparable with earlier technological revolutions. They were evident in the early phase of the introduction of PCs and browsers (1994–2004) but fell to a conspicuously low level after the turn of the century, which continues to this day. It is by no means impossible that this will change in the so-called third phase of digitalization.Footnote 3 Certainly, the focus of digitalization led by US internet giants on communication, entertainment, and consumption in the second phase of digitalization is partly responsible for this disappointing development. This could change however if there was to be new phase of industrially oriented digitalization. If this were to happen and the growth rates, at least in the mature economies, were not sufficient to prevent a significant shrinkage of the volume of work, then the new leeway should be used for an expansion of lifelong learning, a more flexible change between family and gainful employment, for sabbaticals and more time sovereignty, and not lead to a division of society into highly paid and productive gainfully employed workers and unproductive workers who are supported by an unconditional basic income.
Even a modest unconditional basic income in the amount of the minimum wage of a full job would lead to very high taxes. The amount of taxes depends, of course, on the extent to which use is made of the unconditional basic income, i.e., how large the proportion is of those who then voluntarily leave the labor force, temporarily or permanently, partially or completely. Since an unconditional basic income in the amount of the average earned income is unrealistic for tax reasons alone, an existence on the basis of the unconditional basic income would only be attractive for parts of the population, including in particular younger people (in the phase after completing their education and before entering gainful employment) and those who can secure their standard of living above the unconditional basic income, for example, through intra-family transfer payments from earned income.
The empirical evidence that prolonged absence from employment drastically reduces earning capacity is overwhelming. This means that graduates must be integrated into the labor force quickly after completing their training or studies, otherwise their qualifications lose value. The long-term unemployed are difficult to integrate into working life even if they have good qualifications. Incentives to stay out of the labor force for many years are therefore irresponsible. They lead to a division of society into the permanently employed and the permanently unemployed, even if they are provided with an unconditional basic income.
The introduction of an unconditional basic income would deepen the already existing cultural division of society into the occupationally integrated and the occupationally non-integrated, whether through precarious and frequently changing employment or through unemployment. The introduction of an unconditional basic income would be tantamount to capitulation. Instead of a strategy of integration and inclusion in the working society, the final and then soon irreversible withdrawal from the working society would be rewarded. The bold justification of the thesis “Why Surfers Should Be Fed” (Van Parijs 1991) by the most important theorist of an unconditional basic income, the Belgian economist and philosopher Philippe Van Parijs, is to be taken quite seriously. Whereas up to now, such a form of existence has only been an option for most people during transitional phases of their biography, it would become a widespread phenomenon in the future, the quantitative dimension of which would depend on the amount of the unconditional basic income. The already observed prolongation of adolescence in the sense of dependent forms of existence in Western societies would receive a further boost, and entry into working life would not be accelerated as at present, but delayed, for many probably to the point where they voluntarily stay away from work.
It is likely that the apocalyptic vision that has accompanied all disruptive technological innovations is also unfounded in our times of digitalization. All comparable upheavals have led to job losses in certain industries and professions; just think of the rural exodus in the nineteenth century, triggered by the use of machines in agricultural production, which at the same time enabled a huge increase in jobs elsewhere. In the case of digitalization, there is much to suggest that the economies of the future will use the resources freed up by rationalization to satisfy cultural interests, for example. Already today, for example, the production of digital games and virtual realities is one of the fastest growing industries. The cultural sector as a whole is a growth driver in all Western economies. Increasing digitalization need not and must not result in an exit from the working society. Such a development is economically undocumented and culturally undesirable.
At the end of WALL-E, the spaceship with the last remaining humans on board heads for Earth. As life has become possible again on Earth, people can now return to their old planet after centuries in barren space. When the hatches open, the fat humans, who have forgotten how to walk in the meantime, crawl outside. Wide-eyed, they stare at the huge skyscraper skeletons lying destroyed in front of them. The air is dusty and dry. They know there is a lot of work ahead of them to make the Earth beautiful and habitable again. And yet the captain smiles. The supposed land of milk and honey has come to an end and life has meaning again.
Notes
- 1.
The most complex search engine is the software system Watson produced by IBM, which—at least that is what IBM hopes—will one day be used on a large scale as a word and image recognition program.
- 2.
In 2016, Luxembourg MEP Mady Delveau-Stehres first brought the idea of a robot tax to the EU Parliament in the form of a draft report. While Bill Gates, for example, supported the idea, it was mostly negatively received at the time.
- 3.
The first wave of digitalization (1985–1999) is understood as the development of the Internet and the creation of a new infrastructure. The second wave (2000–2015) refers to the time when Facebook, Google, various apps, etc. become an integral part of many people’s lives. The third wave of digitalization, i.e., the time we are now at the beginning of, refers to a time of the “Internet of Things,” i.e., a ubiquitous and comprehensive digital interconnectedness of devices, sensors, and products.
References
Gorz, André. 1999. Reclaiming Work: Beyond the Wage-Based Society. Cambridge: Polity Press.
Marcuse, Herbert. 1964. One-Dimensional Man. Studies in the Ideology of Advanced Industrial Society. Boston: Beacon Press.
Rifkin, Jeremy. 1995. The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era. New York: Putnam.
Van Parijs, Philippe. 1991. Why Surfers Should Be Fed: The Liberal Case for an Unconditional Basic Income. Philosophy and Public Affairs 20 (2): 101–131.
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Nida-Rümelin, J., Weidenfeld, N. (2022). Socio-economic Aspects of Digitalization. In: Digital Humanism. Springer, Cham. https://doi.org/10.1007/978-3-031-12482-2_18
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