A World Without Work, written by Daniel Susskind, is a book that anyone interested in macro-economic policy should read. It deals with the “Growth” Event – that has carved human history into two unequal hemispheres: a long economic stasis dominated by low-tech, labor intensive subsistence agriculture, followed by an extraordinary upward surge in productivity and output, driven by waves of technological transformation, that has created the “modern world” as we know it.
Susskind focuses on the series of disruptions to the labor market, where manufacturing displaced agriculture as the dominant segment of the workforce in the late 19th and early 20th centuries, and was in turn displaced by service industries in the second half of the 20th century. Agricultural employment fell from over 50% in 1870 to just a little more than 1% today. Manufacturing employed about 30-35% of the workforce in 1950; it now accounts for about 7%. Where have the jobs gone? Nearly 80% of working Americans were employed in the service sector in 2021.
Susskind’s thesis is that technologization is now beginning to impact and erode employment in the service sector. Advanced technologies (computers, electronic communications networks, artificial intelligence, “all things digital”) are transforming work in finance (the largest economic sector today), health care (the 2nd largest), and other service industries, automating service jobs and confronting policy-makers with the problem of “technological unemployment.” Two generations ago, most elevators were manned by human operators – “service providers” – who of course no longer exist. Susskind views this as a paradigm for a looming Great Extinction for workers in a wide range of service industries. In this impending “world without work,” many new social, economic, and political challenges will surface, calling for a wide range of new public policy initiatives. It’s the bad side of good news. Technology-driven economic success — affluence, abundance – will obviate the need – indeed it will eliminate the opportunity – for a majority of the population to work at all.
The book is divided into (1) a diagnosis of all these issues (the first 9 chapters, which are superb), which I have covered in the previous column, and (2) a set of prescriptions (the last 3 chapters) arguing how we should respond to the problems of widespread “economic uselessness” – workers more or less permanently displaced by technology.
Unfortunately, the What-Is-To-Be-Done section is less convincing.
After his impressive analysis of the problem – a tour de force – Susskind’s policy ideas are surprisingly conventional. His overall thesis is encapsulated in his use of the phrase “The Big State” to describe what, in general, is required now. He proposes a range of measures to combat the problems of technological employment, all of which involve a reliance on the central government to put things in order.
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These measures fall into three categories:
- Traditional liberal/progressive “big government” policies, which are within the scope of western democratic tradition
- Policies derived from authoritarian models, which lie largely outside that tradition but have been implemented elsewhere
- Utopian proposals, of the statist sort, which are novel (untried)
Traditional “Big Government” Proposals
Fundamentally, Susskind is after a system where the “economically useless” who are displaced by technology will not be forced the suffer the traditional consequences of unemployment – low standards of living, social and psychological malaise, political marginalization, etc. Funds must be raised, and distributed. Tax and spend. Or as Susskind likes to put it, share.
- “The Big State will perform two main roles. It will significantly tax those who manage to retain valuable capital and income in the future. And…it will share the money that is raised with those who do not.”
His solutions are thus familiar ones. It is an expanded version, we might say, of the New Deal, and has resonances with much of the current platform of the Democratic party here. Specifically, he proposes:
- Massive revenue raising through heavy taxation – up to a 70% rate on income (“economic theory says that this is the best tax rate to impose on the most prosperous,” he assures us), as well as higher capital gains taxes, higher corporate taxes, drastic inheritance taxes, and a general wealth tax –
- Distribution via some form of standard or “universal” entitlement scheme, with payouts not dependent on “need,” and so cleansed of the taint of “welfare”
These measures are familiar insofar as they have been tried before. The U.S. has experienced high marginal tax rates (up to 90%) on income, and much higher rates on capital gains. Other advanced democracies have wealth taxes in place. While the politics of expanding taxation are always difficult, there is no fundamental novelty involved. Welfare programs are also controversial, but widespread, and some of the designs seem to have successfully avoided the standard criticisms. (One thinks of an expanded Social Security as a model here, although oddly he does not mention it.)
Borrowings from Authoritarian Systems
Then there are measures that have been tried extensively only in authoritarian and non-democratic states (e.g., China, the Soviet Union, though also occasionally during some of the more extreme socialist episodes in a few western nations). They are challenging to implement in any democratic framework, and anathema in the U.S.
- Government-run Labor Unions, in what Susskind calls the “Labor Supporting State” – “stepping in to support workers, to make sure that whatever jobs remain are well-paid and high-quality…to intervene to influence wages… to encourage new forms of organized labor”
- Government (Partial?) Ownership of Industry – Susskind calls this the “Capital-Sharing State” – not only does the Big State carry out its “primary role…to tax and share out income” – it will also “share out the valuable capital itself, the source of that income in the first place.” Expropriation, then, which he rebrands as… “endowment – giving people not a regular flow of cash, but their own stock of traditional capital to hold onto.” Of course, the people can’t be expected to manage this capital on their own – “In practice, most people do not have the knowledge” – and so he would again turn to the Big State to act as a trustee for a “Citizen’s Wealth Fund.”
- A Political policeman – he calls this the “Political Power Oversight Authority” – which would exercise control over the presumed political influence of large private sector entities, especially “Big Tech” (think Facebook, Google, et al), in a manner that he sees as analogous to the monitoring of anti-competitive behavior by the Federal Trade Commission: “it will inspect particular companies and scrutinize their technologies to determine whether political power is excessive or being abused…”
Government run labor unions and sovereign wealth funds of various sorts are not unknown, of course, even in western democracies. The proposal to regulate corporate political power might be harder to envision in practice – except that is is exactly what we see emerging today in China’s program to rein in its tech giants like The Ant Group, and Didi.
Finally, there are ideas that lie at the outer edge of plausibility.
- A Leisure Policy – “to shape how jobless adults actually spend their spare time” – this idea, like many utopian flyers, is not fleshed out very much, but it clearly bothers Susskind that, left to their own devices, people watch a lot of TV. He is bold enough to ask: “Should people be left alone to choose how they spend their leisure?” And bold enough to answer: “I am not so sure.”
- A novel form of welfare, with strings attached, which he calls “Conditional Basic Income”: “It is a UBI [Universal Basic Income, a more familiar idea] but one that requires its recipients to do something in return. It means that, in the future, the daily lives of those without work are likely to be divided in two: between activities that they choose and others that their community requires them to do.”
- A “Meaning-Creating State” – “if free time does become a bigger part of our lives, then it is likely to also become a bigger part of the state’s role… In a world with less work, we will need tools to influence our free time…. We want a meaning-creating state to step in…”
A Strange Vision
Well, you get the idea. Like many liberal/progressive analyses, going back decades (think muckrakers), A World Without Work offers a compelling diagnosis of the problem… and a rather conventional set of remedies, ranging from the politically difficult to the utterly impractical –– all of which seem to fall back on the assumption of an apolitical, competent and honest administrative state capable of addressing the failings of market-capitalism without falling prey to the traditional shortcomings of government-run operations (the “DMV” problem, for short – as in the Department of Motor Vehicles, which is synonymous in the U.S. with obtuse and intractable inefficiency). Still, one must admire the thoroughness of Susskind’s analysis and the forthrightness with which he puts forward his “Big State” agenda — without seeking any sort of rhetorical cover in the euphemisms and intellectual chicanery that often dress up such proposals. In short, he is clear as to what he wants us to consider – and that has merit, even if we disagree. I still say, buy the book.