close
Thursday March 28, 2024

At workers’ expense

By Sam Pizzigati
November 10, 2021

The vision currently driving automation comes from our high-tech corporate giants, mostly in the United States and China, that are now laying out two out of every three dollars spent globally on the artificial intelligence right at the core of modern automation. These tech giants, [Daron] Acemoglu explains, operate on a business model that rests “not on creating jobs but automating them.” Automation, for Big Tech, serves to primarily provide an “easy way of reducing labor costs.”

So Big Tech automates away, even if the tech they introduce makes little contribution to significantly raising productivity. And that has become Big Tech’s dirty little secret: Much of what passes as high-tech ‘progress’ today merely substitutes tech for people. Google is employing, Acemoglu points out, less than a tenth of the workers that General Motors used to employ.

This approach pays off sweetly – for Big Tech execs. Eight of the world’s ten richest people, the Bloomberg Billionaires Index reminds us, owe their fortunes to high-tech.

The rest of us, meanwhile, are subsidizing – through the tax code – Big Tech’s profiteering approach to automation. Firms that substitute machines for people pay less in federal payroll and income taxes. Throw in the ‘generous depreciation allowances’ and other sorts of tax subsidies now on the books, adds Acemoglu, and we have a situation where software and equipment get taxed close to zero.

“This generates,” notes the MIT economist, “a powerful motive for excessive automation,” the automating that replaces workers without appreciably – or at all – enhancing productivity.

Technological progress doesn’t have to play out this way. Indeed, technological progress didn’t play out this way back in the middle of the 20th century. Back then, government-funded research drove technological progress, and government, for the most part, set the research agenda.

“The transformative technologies of the 20th century, such as antibiotics, sensors, modern engines, and the Internet, have the fingerprints of the government all over them,” notes Acemoglu.

These transformative technologies didn’t aim to replace workers. They aimed to seriously increase productivity and, in the process, created new job opportunities. One example: The automation of the decades right after World War II, Acemoglu told Congress, “created millions of jobs and achieved broadly shared prosperity.”

Today, by contrast, the federal government has essentially handed oversight over technological research to Corporate America. Instead of directly funding research that promises broadly shared economic benefits, the government is bestowing upon Corporate America hefty tax breaks and subsidies to do whatever research top execs would like to pursue.

Excerpted: ‘Can We Automate Inequality Out of Automation?’

Counterpunch.org