The Communist Utopia

Are we there yet?

Most people understand why Communism doesn’t tend to work – even in theory. By promising everyone an equal share of everything, people have less incentive to work harder (even with other motivations like altruism, guilt, obligation, pride and fear) – they wouldn’t get to personally enjoy the fruits of their labours. Moreover, they would actually have an incentive to work less hard because they will still be guaranteed an equal share of society’s wealth, regardless of how much they personally contribute.

This is one of the reasons the USSR failed. Personally, I think the main reason it lasted as long as it did is because the previous system in Russia – under Emperor Nicolas II – was so lousy for so many (and worsened by the pain and suffering of World War I) that any change of system would probably have been successful for a while. But once people hit that ‘wall’ where the broader economy started to slow, their living standards weren’t growing as fast, and/ or they weren’t being personally rewarded (or punished) for working harder (or less hard), the disincentives to production and innovation become a problem.

People need individual incentives. Every time a country tries to take away all (or just too many) private incentives and replace them with government – the USSR, Cuba, North Korea, China just a few decades ago – the whole system suffers. Don’t get me wrong – there is plenty wrong with Capitalism too, and most successful modern countries have realised that the middle ground – the ‘mixed market economy’ – is the ideal, not one of the two extremes – and I will discuss this further in future blogs. But a simple lack of private incentives is why attempts at Communism tend to fail.

BUT … I recently had a thought about how Communism could be made to work successfully – technology.

Many have long assumed (rightfully so?) that for every job that is replaced by technology/ automation, more than one new job will be created in another (new) industry – at least in the long term. This appears to have been true over the centuries.

For instance, employment in Britain’s manufacturing industry seems to have been under perpetual attack ever since the Industrial Revolution: ·        Britain’s ‘Luddites’ protested the loss of jobs in the wool and cotton industries during the Industrial Revolution thanks to inventions like the power loom (yes, this is where the term luddite – someone afraid of technology – comes from); ·        Britain’s manufacturing industry also came under pressure in the late 1800s due to the vast scale and mechanisation of manufacturing in the emerging US and German economies (see The Tariff Problem by WJ Ashley) – a period referred to as Britain’s ‘great retardation’ (no, I’m not kidding); ·        And since the late 1960’s, manufacturing employment has been declining in Britain in both absolute and relative terms, from an all-time peak of 9.1 million workers in 1966 to just 2.6 million in 2015 And yet, all these losses have been replaced with gains elsewhere – services, but also sometimes just other more sophisticated sectors of manufacturing – and then some. Otherwise British unemployment rates would have been trending upwards ever since the Industrial Revolution. And the size of Britain’s workforce wouldn’t have continued to get bigger over time. As it is, by 1966 Britain’s manufacturing workforce was roughly the size of Britain’s total population before the Industrial Revolution. So manufacturing jobs lost were being more than replaced by other manufacturing jobs gained – at least in the long term, and not to mention other growth industries. And even though British manufacturing employment really has declined since 1966, total employment in Britain has continued to grow – but this time driven by service sectors such as health care; retail and wholesale trade; professional services; administration services; education; and accommodation and food services. This means the losses have continued to be more than offset by gains. Similarly in Australia, broadacre agriculture has become so mechanised and automated – and individual farms so enormous in land area – that rural towns suffered at the hands of formerly-employed farm workers having to move to cities. Consequently, agriculture's share of Australian employment has been declining since 1984 (probably longer but this is as far as the data to which I’m referring goes), especially since the turn of the century where it started declining not just in share but in absolute number too. But total employment across Australia has almost doubled since 1984, driven by services such as health care; professional services; retail trade; accommodation and food services; education; and public administration and safety. Again, this means that losses to technology and automation are being more than offset elsewhere.

I know many people have probably said this over the centuries, but what if we are approaching the limit, where new jobs aren’t being created as fast as they are being replaced by machines. Studies are already predicting which industries will be replaced by machines first (generally administrative and routine manual labour roles first, and non-routine professional and vocational roles – those requiring higher level cognitive or social skills and/ or significant manual dexterity – last). But thus far, human ingenuity has always provided new employment opportunities. But if artificial intelligence is properly invented, and machines are capable of actually thinking and learning, machines will be able to replace human jobs faster than they can be created.

This will lead to mass unemployment – but this may not be a bad thing, as long as a sufficient amount of the wealth consequently generated by machines is transferred to the people who are no longer needed to work. This would imply an increasingly large welfare state (Communism!), but could be sustainable.

Even now, if a greater proportion of wealth were transferred from top to bottom (especially in the US, less so – but possibly still somewhat – in Europe and Australia), more generous social safety nets could be provided sustainably without jeopardising incentives to generate wealth (still a mixed market economy, rather than full Communism).

The point of technology and automation was never to replace humans and leave those humans with nothing – it was to find a way to complete the task without the need for humans. But the humans that were replaced by technology should still be supported by the wealth generated by those machines, unless and until they can reasonably find alternative work.

The problem is that too much of that wealth has transferred to the people that own the machines – the top end. This may have worked relatively well up until recently because new jobs were constantly being created so the structurally unemployed could still survive by finding new jobs, while the top end got immensely wealthy.

But if the creation of new jobs is slowing below the rate at which they’re being replaced, the welfare state would need to expand – big time – presumably up to 100% of the economy if all jobs (including future jobs) can be taken by artificial intelligence.

Communism should therefore be the inevitable result of humans no longer being needed to work – because everything can be done by machines. And presumably (hopefully), these machines would not possess the same passions and ambitions as humans and as a result, would produce all the world’s wealth without needing the incentives of Capitalism. Then, humans would just get to live. And those who want more will just have to find something of value that they can do for the world that grants them additional rewards – better food, cooler clothes, bigger houses, etc. – and that machines can’t do.

This assumes, of course, that the world is still dealing with the basic economic issue of ‘scarcity’ – where human wants and needs are infinite, but resources to meet those wants and needs are finite. If the issue of scarcity can be overcome, this could be another avenue to sustainable Communism.

Again, I’m sure many people have said this over the centuries – that employment is being lost through automation faster that it is being replaced – and turned out to be wrong. And while humans are still better than machines at so many things, and the economic issue of scarcity remains, Communism is simply not consistent with human behaviour. But surely it is true that if machines do become advanced enough, eventually, at some point in the future, it could happen – the Communist Utopia!