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The Fourth Industrial revolution and the case for equitable distribution of income

The Fourth Industrial Revolution And The Case For Equitable Distribution Of Income

Instead of rejecting the emergence of the fourth industrial revolution, labour movements and progressive thinking people should argue more forcefully about fundamentally altering the ownership pattern of the means of production so that income distribution becomes more equitable.

By Lufuno Marwala and Mandla Nkomfe

Karl Marx in the Communist Manifesto wrote: “Owing to the extensive use of machinery, and to the division of labour, the work of the proletarians has lost all individual character, and, consequently, all charm for the workman. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him”

In formulating his theories Marx had been a keen observer of the British industrial revolution which today will be referred to as the first industrial revolution. He observed that the role of the worker would be minimised and trivialised by the introduction of advanced machines; but that German sage did not stop there, he further speculated about what is today called the fourth industrial revolution. In Grundrisse, Marx speculated about the production process saying that:

“Invention then becomes a business, and the application of science to direct production itself becomes a prospect which determines and solicits it. But this is not the road along which machinery, by and large, arose, and even less the road on which it progresses in detail. This road is, rather, dissection – through the division of labour, which gradually transforms the workers’ operations into more and more mechanical ones, so that at a certain point a mechanism can step into their places.”

Although not stated explicitly, Marx could only have been speaking about intelligent robots.

The first industrial revolution began in the late 18th century in Britain and was symbolised by the mechanisation of the textile industry. Hand weaving, then a very labour-intensive process, was replaced by the cotton mills which astronomically increased production output at lower production costs. This was followed by the second industrial revolution which came about when Henry Ford introduced the assembly line in the early 20th century and mass production became a norm. Furthermore, oil began to replace coal and electricity was developed during this period. The third industrial revolution was mainly driven by the development of the internet. Internet revolutionised the global communication system and it culminated in the convergence between software systems and communication technologies now called information and communication technology (ICT).

ICT is a paradigm shift from analogue to digital systems and as result of the shift certain industries became extinct. For example, at the height of its power, Kodak had a staff complement of 120 000 with a net worth of $28 billion but today it is bankrupt. People today prefer digital photography on Instagram which had 12 employees AT its inception and is now worth billions.

Science and technology has advanced to a stage where machines with cognitive abilities, albeit limited, have become a reality and are on the verge of replacing workers, including blue collar workers.

In light of this coming revolution, could there be a case to be made for a society that lives by the Marxist principle: “…to each according to his needs”? It is hard to think about future artificial intelligence without a feeling of optimism as well as a sense of apprehension. Optimism arising from the potential triumph of scientific understanding of how the human brain functions. And apprehension stemming from the possible negative implications that artificial intelligence (AI) could have on human existence.

In some way AI presents a kind of fork on the road whose paths’ destination are yet unknown. Artificial intelligence is inspired by what is thought to be how the human brain functions which is still very much misunderstood. However, scientists have developed the computational model of the brain which is largely responsible for the direction artificial intelligence research has taken.

The origins of AI go as far back as the work of the English Mathematician Alan Turing. In a paper written in 1940 called, “Can machines think?”, Turing speculated that in time a thinking machine would be devised, with the ability to deceive humans into believing they were interacting with another human being. This is what is today called a Turing test. What sets AI machines apart from earlier automation systems, is that AI machines can learn new tasks and information by themselves which means they can get smarter over time; they can make decisions with incomplete information sometimes better than humans; and they can communicate amongst themselves (internet of things) and with humans. The emergence of AI is a step along the vector pointing towards revolutionising forces of production. The rapid development of productive forces through innovation is the engine that Marx attributes to the sustenance of capitalism. Rejection, fear, caution and excitement are some of the responses that technological advances that have a potential to cause a paradigmatic shift in production have elicited in the past and AI is no exception. Thus AI critics, luddites and researchers alike have been highlighting the dangers that it poses. The first group’s view is that the AI research programme should be abandoned and the latter group is encouraging humans to start developing coping mechanisms to cope with the advent of super-intelligent machines.

In a paper written by a group of AI researchers, called “Research priorities for robust and beneficial artificial intelligence”, the economic impact of AI is cited as one of the most important research areas. They consider, for example:

Labor market forecasting: When and in what order should we expect various jobs to become automated? How will this affect the wages of less skilled workers, creatives, and different kinds of information workers? Some have argued that AI is likely to greatly increase the overall wealth of humanity as a whole. However, increased automation may push income distribution further towards a power law, and the resulting disparity may fall disproportionately along lines of race, class, and gender; research anticipating the economic and societal impact of such disparity could be useful”

The major concerns raised in this extract focus firstly on the relations of workers, wage labourers, to the production process after machines become a dominant part of labour provision. Secondly, it raises the issue of equitable wealth distribution amongst the different groupings in society. There is, amongst AI researchers, scientists and economists, a fear that intelligent machines will enrich only the few, following what is called the power law economics -– a concept to which we will return later.

There is, amongst AI researchers, scientists and economists, a fear that intelligent machines will enrich only the few, following what is called the power law economics.

The change in the production process from labour-intensive to a more automated process is taking root in all spheres of production. The combination of ICT, AI and 3D printing will lessen the need for human labour. Adidas has recently announced that it is building a new shoe and clothing factory based on the concept of industry 4.0 in Germany. The factory will combine the latest digital technology with the automation possibilities of big data and new production methods.

Manufacturing of shoes and clothing had been outsourced to low-wage countries because it was a hand labour-intensive industry. This move by Adidas can only mean a rise in unemployment in low-wage countries. This type of factory manufacturing will go back to Europe, and according to Adidas, “the goal is a whole network of new sites that use intelligent robot technology that will exchange data with each other”.

A Chinese company, Changying Precision Technology Company, which produces cellphones, has automated its factory and it is now operated by robots; this resulted in a reduction in its employees from 650 to 60. A Japanese company has developed a robot named Pepper. They sold all 1000 copies in one minute. According to the manufacturer “Pepper is designed to read emotions as well as recognise tones of voice and facial expressions in order to interact with humans.” But most importantly, Pepper tries to make people happy. Moley Robotics has introduced a robot chef which is able to learn and mimic the movements of a human chef in order to cook a meal from scratch8. The meals it prepares are more consistent in quality than those produced by a human chef.

According to Karl Marx, under capitalism workers experience alienation. He de ned alienation as the estrangement of the commodity product from the worker who produced it, the result of which is the enslavement of the worker to a system of production, namely Capitalism. If it is correct that all humans are born with the natural impulse to think and to create, it therefore stands to reason that we all have a natural inclination to pursue activities which help our lives to be bearable. It is because of need, the need to reproduce ourselves, that many are forced to expend their labour in producing commodities, under severe exploitation, that lead to their immiseration and alienation. With the advent of robots, the production floor of the future will be populated by things that will not experience alienation unless programmed to do so. A decent working environment and decent wages will no longer be a concern for the owners of capital. One hardly requires prophetic powers to guess the fate of unionism.

A factory of the future, for example, will have machines on the production floor, supervised by other machines. In this factory the maintenance department will be run by machines fixing other machines, failing which they will instruct other machines to do a 3D print of the machines that are beyond repair. Machines will not only replace blue collar workers but they will replace people at all levels. For example, a paper recently published by Marwala and Hurwitz9 has shown that an intelligent machine agent in the market can outperform a human agent because the use of machines will reduce information asymmetry between buyers and sellers. Consequently, markets will become more efficient and the quality of the products in market will also improve.

An analysis of the economic impact of AI and other new technologies by Erik Brynjolfsson, Andrew McAfee, and Michael Spence in 2014 10 includes the following statement:

Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation. Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.

The distribution of income for this creative class typically takes the form of a power law, with a small number of winners capturing most of the rewards and a long tail consisting of the rest of the participants. So in the future, ideas will be the real scarce inputs in the world – scarcer than both labor and capital – and the few who provide good ideas will reap huge rewards. Assuring an acceptable standard of living for the rest and building inclusive economies and societies will become increasingly important challenges in the years to come. The cheap labour theory of growth is particularly important for the African continent because of its growing young population. Economists have looked upon this growing population as a blessing for the continent, potential labour power waiting to churn out massive amounts of manufactured commodities. However, as Brynjolfsson, McAfee, and Spence have predicted “the real winners of the future will not be the providers of cheap labor….” As exemplified by Adidas, the profits of its new factories will only accrue to the shareholders.

In the same paper by the AI researchers, they also register their concern about intelligent machine control, “how to enable meaningful human control over an AI system after it begins to operate”, as one of the challenges that needs to be looked at seriously. However, their concern for control is only limited to technical control. Critical to this concern is the danger posed by machines in that they will evolve to a point at which humanity will not be able to control its own creations, leading to the demise of our entire civilization. Elon Musk, Bill Gates and Stephen Hawking have been in? the forefront of raising this concern, mentioning the use of autonomous military systems as one of the greatest threat to humanity.

We believe that, from an economic perspective, the issue of control needs to be expanded to include control over what machines produce. This means ensuring the distribution of income derived from intelligent machines does not take the form of a “power law”. Instead of rejecting the emergence of the fourth industrial revolution, labour movements and progressive thinking people should argue more forcefully about fundamentally altering the ownership pattern of the means of production so that income distribution becomes more equitable.

The fourth industrial revolution, as it is called, is not a distant destination to which we still have to travel, it is here. Physical robots, just like a computer device today, will, in time, become readily available to all; but it is what we do with the robots that will matter the most. In this vein, “ideas will be the real scarce inputs in the world” which means that it will be those with ideas on how and what to produce with the robots who will bene t the most.

In a knowledge driven society education, good education, is a fundamental requirement. Free universal education is critical if we are to ensure that in South Africa no one is left out of the fourth industrial revolution.

In his book, Zero Marginal Cost Society, Jeremy Rifkin says that new technology “…frees up human beings from the market economy to pursue nonmaterial shared interests on the Collaborative Commons.”11 And he adds, that “The very idea that a human being’s worth was measured almost exclusively by his or her productive output of goods and services and material wealth will seem primitive, even barbaric…”. With the rising productivity individuals will have time for full development so that they will be able “to hunt in the morning, sh in the afternoon, rear cattle in the evening, criticize after dinner…”. As it now stands, millions are facing a future of joblessness and poverty and it is only through a change in ownership patterns of the means of production that equity will be achieved. A new social compact should be developed amongst the social players in order to create a new society ready to embrace the fourth industrialisation. ■

This article originally appeared in The Thinker and has been republished with permission.

Lufuno Marwala and Mandla Nkomfe

Dr. Lufuno Marwala is a senior lecturer in the faculty of engineering and built environment at the University of Johannesburg. He holds a PhD in Engineering and is associated with the Institute for Intelligent Systems at the University of Johannesburg.

Mandla Nkomfe holds a Masters Degree in Public Management and Development policy as well as a BA in Politics. He is a former Gauteng MEC of Economic Development and Finance.

The Fourth Industrial revolution and the case for equitable distribution of income