Thoughts on Technological Unemployment and Peak Oil
A C-Realm listener wrote the following in response to C-Realm Vault episode 166:
On your conversations with James Hughes re techno-unemployment, I’d like to hear you test these “machines replace humans” scenarios against a prominent theme in the writing of JM Greer that the economic advantages of employing machines to replace human labor hinge critically on the continued abundant supply of cheap concentrated energy, as we have had with fossil fuels. Greer discusses this at length in his book “The Wealth of Nature,” arguing that the decline in abundant cheap energy will make machine labor more expensive, looking at the whole life cycle from extracting the materials to build the machines, to implementing them and maintaining and operating them, thereby shifting the economic preference back to human labor. This may play out especially at the community level, where initiatives to enhance local economic and societal resilience create a new emphasis on social rather than monetized economic exchange. Seems to me if you explore this perspective it opens up some much more appealing potential scenarios.
It's interesting that the listener should single out John Michael Greer from the pack of peak oil and limits to growth thinkers. Right now, JMG is publishing a series of Retrotopia blog posts which explore a fictional North American continent in the latter half of the 21st Century in which the USA has broken up into a number of smaller states. In the narrative, a government official from the Atlantic Republic is visiting the Lakeland Republic, which is in the upper mid-west around the Great Lakes. The Atlantic Republic represents today's business as usual projected forward another half century. Their business practices and political orientation are high-finance, high-energy and high-tech. The economic inequality familiar to the present has continued to divide the population of the Atlantic Republic into a shrinking caste of wealthy elites and the growing ranks of the desperate.
In the Lakeland Republic, there is no internet. There are very few private automobiles, and farming is small-scale and mixed rather than the fence-post to fence-post style of corporate monocropping still practiced in the east. By choosing a model that is more labor-intensive and less dependent on energy inputs and automation, unemployment is not a problem in the Lakeland Republic.
In the seventh installment, Retrotopia: A Question of Subsidies, the narrator visits a streetcar factory in the Lakeland Republic. The lack of robots and automation strikes him as terribly inefficient, and he asks his guide, Elaine Chu, about that after the tour.
We went back into the business office, shed helmets and coveralls, and proceeded to her office. “I’m sure you have plenty of questions,” she said.
“One in particular,” I replied. “The lack of automation. Nearly everything you do with human labor gets done in other industrial countries by machines. I’m curious as to how that works-economically as well as practically-and whether it’s a matter of government mandates or of something else.”
I gathered from her expression that she was used to the question. “Do you have a background in business, Mr. Carr?”
I nodded, and she went on. “In the Atlantic Republic, if I understand correctly-and please let me know if I’m wrong-when a company spends money to buy machines, those count as assets; that’s how they appear on the books, and there are tax benefits from depreciation and so on. When a company spends the same money to do the same task by hiring employees, they don’t count as assets, and you don’t get any of the same benefits. Is that correct?”
I nodded again.
“On the other hand, if a company hires employees, it has to spend much more than the cost of wages or salaries. It has to pay into the public social security system, public health care, unemployment, and so on and so forth, for each person it hires. If the company buys machines instead, it doesn’t have to pay any of those things for each machine. Nor is there any kind of tax to cover the cost to society of replacing the jobs that went away because of automation, or to pay for any increased generating capacity the electrical grid might need to power the machines, or what have you. Is that also correct?”
“Essentially, yes,” I said.
“So, in other words, the tax codes subsidize automation and penalize employment. You probably were taught in business school that automation is more economical than hiring people. Did anyone mention all the ways that public policy contributes to making one more economical than the other?”
The narrator's answer, of course, is, "No." An effect of public policy is held up by those who benefit from that policy as a fundamental economic reality. Industrial monoculture is simply more efficient than organic, mixed-crop and animal farming. Industrial robots are more efficient than human workers. Efficient at what? Not feeding people or providing stable employment. These practices are more efficient at concentrating wealth.
John Michael Greer differs from the less rigorous and more sensational figures in the Doom-o-sphere in that he doesn't pick some future date and say that that's when all these unsustainable trends will all come to a sudden and catastrophic halt. Baby Boomer Doomers who aren't likely to live past 2030 don't seem to have much interest in future narratives in which the political, economic, and technological trends which bedevil us today are still creating turmoil into the second half of the current century and beyond.
Rome wasn't built in a day, nor did it crumble in a day. Officially, the Western Roman Empire ended in 476 when Odoacer deposed the boy-Emperor Romulus Augustulus, but Odoacer used the imperial bureaucracy to manage his new kingdom. His armies moved over Roman roads, former Roman subjects whose taxes once supported the Empire continued to pay taxes to the new King, and Eastern half of the empire, the political entity which historians call The Byzantine Empire but which they themselves called The Roman Empire, lasted for another thousand years. Over fifteen hundred years later, the actual City of Rome, still a functioning metropolis with 2.8 million inhabitants, stands as an inconvenient artifact for collapse fetishists.
Doomers peddling simplistic narratives either can't conceive of processes which don't culminate before their own personal expiration dates, or they realize that the potential audience for such narratives isn't as large, as passionate or as gullible as the audience for tightly contained prophesies of doom.
On your conversations with James Hughes re techno-unemployment, I’d like to hear you test these “machines replace humans” scenarios against a prominent theme in the writing of JM Greer that the economic advantages of employing machines to replace human labor hinge critically on the continued abundant supply of cheap concentrated energy, as we have had with fossil fuels. Greer discusses this at length in his book “The Wealth of Nature,” arguing that the decline in abundant cheap energy will make machine labor more expensive, looking at the whole life cycle from extracting the materials to build the machines, to implementing them and maintaining and operating them, thereby shifting the economic preference back to human labor. This may play out especially at the community level, where initiatives to enhance local economic and societal resilience create a new emphasis on social rather than monetized economic exchange. Seems to me if you explore this perspective it opens up some much more appealing potential scenarios.
It's interesting that the listener should single out John Michael Greer from the pack of peak oil and limits to growth thinkers. Right now, JMG is publishing a series of Retrotopia blog posts which explore a fictional North American continent in the latter half of the 21st Century in which the USA has broken up into a number of smaller states. In the narrative, a government official from the Atlantic Republic is visiting the Lakeland Republic, which is in the upper mid-west around the Great Lakes. The Atlantic Republic represents today's business as usual projected forward another half century. Their business practices and political orientation are high-finance, high-energy and high-tech. The economic inequality familiar to the present has continued to divide the population of the Atlantic Republic into a shrinking caste of wealthy elites and the growing ranks of the desperate.
In the Lakeland Republic, there is no internet. There are very few private automobiles, and farming is small-scale and mixed rather than the fence-post to fence-post style of corporate monocropping still practiced in the east. By choosing a model that is more labor-intensive and less dependent on energy inputs and automation, unemployment is not a problem in the Lakeland Republic.
In the seventh installment, Retrotopia: A Question of Subsidies, the narrator visits a streetcar factory in the Lakeland Republic. The lack of robots and automation strikes him as terribly inefficient, and he asks his guide, Elaine Chu, about that after the tour.
We went back into the business office, shed helmets and coveralls, and proceeded to her office. “I’m sure you have plenty of questions,” she said.
“One in particular,” I replied. “The lack of automation. Nearly everything you do with human labor gets done in other industrial countries by machines. I’m curious as to how that works-economically as well as practically-and whether it’s a matter of government mandates or of something else.”
I gathered from her expression that she was used to the question. “Do you have a background in business, Mr. Carr?”
I nodded, and she went on. “In the Atlantic Republic, if I understand correctly-and please let me know if I’m wrong-when a company spends money to buy machines, those count as assets; that’s how they appear on the books, and there are tax benefits from depreciation and so on. When a company spends the same money to do the same task by hiring employees, they don’t count as assets, and you don’t get any of the same benefits. Is that correct?”
I nodded again.
“On the other hand, if a company hires employees, it has to spend much more than the cost of wages or salaries. It has to pay into the public social security system, public health care, unemployment, and so on and so forth, for each person it hires. If the company buys machines instead, it doesn’t have to pay any of those things for each machine. Nor is there any kind of tax to cover the cost to society of replacing the jobs that went away because of automation, or to pay for any increased generating capacity the electrical grid might need to power the machines, or what have you. Is that also correct?”
“Essentially, yes,” I said.
“So, in other words, the tax codes subsidize automation and penalize employment. You probably were taught in business school that automation is more economical than hiring people. Did anyone mention all the ways that public policy contributes to making one more economical than the other?”
The narrator's answer, of course, is, "No." An effect of public policy is held up by those who benefit from that policy as a fundamental economic reality. Industrial monoculture is simply more efficient than organic, mixed-crop and animal farming. Industrial robots are more efficient than human workers. Efficient at what? Not feeding people or providing stable employment. These practices are more efficient at concentrating wealth.
John Michael Greer differs from the less rigorous and more sensational figures in the Doom-o-sphere in that he doesn't pick some future date and say that that's when all these unsustainable trends will all come to a sudden and catastrophic halt. Baby Boomer Doomers who aren't likely to live past 2030 don't seem to have much interest in future narratives in which the political, economic, and technological trends which bedevil us today are still creating turmoil into the second half of the current century and beyond.
Rome wasn't built in a day, nor did it crumble in a day. Officially, the Western Roman Empire ended in 476 when Odoacer deposed the boy-Emperor Romulus Augustulus, but Odoacer used the imperial bureaucracy to manage his new kingdom. His armies moved over Roman roads, former Roman subjects whose taxes once supported the Empire continued to pay taxes to the new King, and Eastern half of the empire, the political entity which historians call The Byzantine Empire but which they themselves called The Roman Empire, lasted for another thousand years. Over fifteen hundred years later, the actual City of Rome, still a functioning metropolis with 2.8 million inhabitants, stands as an inconvenient artifact for collapse fetishists.
Doomers peddling simplistic narratives either can't conceive of processes which don't culminate before their own personal expiration dates, or they realize that the potential audience for such narratives isn't as large, as passionate or as gullible as the audience for tightly contained prophesies of doom.