Review: The Fourth Industrial Revolution

by Mike Palacek
Canadian Union of Postal Workers president

Schwab-book-cover-360I was recently recommended a book on the way the world is expected to change as a result of emerging technologies. The Fourth Industrial Revolution by Klaus Schwab reads like a poorly-written dystopian science fiction novel. As the founder and executive chairman of the World Economic Forum, perhaps we should not expect much else from Professor Schwab. Nevertheless, the challenges presented in the book, as well as some glaring omissions, are worth responding to.

Schwab is quick to explain that tremendous disruption is coming to the lives of millions of workers around the world and coming quickly. The development of artificial intelligence, self-driving vehicles, 3D printing, the internet of things, the on-demand economy… all of these are among 23 deep shifts identified by the author that are expected to turn the world upside down. Schwab argues that replacing people with machines is simply replacing labour with capital. And in this he sees opportunity.

The book is clearly written by and for the economic elite. This comes out in multiple ways, from excited pleas for private industry to destroy jobs with a sense of urgency, to the complete disconnection to the harm such actions will cause in peoples’ lives. In what can only be described as Orwellian doublespeak, Klaus actually tries to argue that eliminating jobs will create jobs. While such absurdities may help the economic elite sleep better at night, there is certainly no guarantee that the millions of workers set to lose their jobs in the coming decade will find new meaningful employment. Klaus argues that destroying jobs frees people up to create other jobs. If this were the case, the rust-belt would be a hive of economic expansion today.

He furnishes as evidence of this that at the beginning of the 19th century, 90% of the American workforce was working in agriculture – today this is only around 2%. “This dramatic downsizing took place relatively smoothly, with minimal social disruption or endemic unemployment.”

This example is preposterous on many levels. To begin, there were approximately 3.9 million Americans working in Agriculture in the USA in the year 1800. While noting that many of these people were slaves, it is also important to recognize that today there are about 3.9 million Americans working in agriculture. Klaus presents us with historical fiction to rationalize the radical, reckless program he advocates. To state that the industrial revolution that took place throughout much of the world was somehow the consequence of redundancies in agriculture is not only wrong, but plainly absurd.
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The long process of global industrialization Schwab refers to created severe social and economic conflict culminating not only in two world wars and a great depression, but also the actual overthrow of the capitalist system in much of the world. This, our author considers “minimal social disruption”.

Considering the vast attacks on working people that are presented as inevitable in this book, it devotes very little time to the prospect of social unrest that will be created by this agenda. Aside from the brief concern that the hyper-connectivity of the digital world “disenchantment with the established elites and structures, perceived or real, has motivated extremist movements and enabled them to recruit for a violent struggle against existing systems.” Schwab dedicates almost no time to the troubled waters he is sailing into. He argues that the solution to problems of inequality are to be found in tolerance of differences – as if tremendous wealth inequality is actually just wealth diversity that should be celebrated.

“Today, the on-demand economy is fundamentally altering our relationship with work and the social fabric in which it is embedded. More employers are using the ‘human cloud’ to get things done. Professional activities are dissected into precise assignments and discrete projects and then thrown into a virtual cloud of aspiring workers located anywhere in the world.”

The elitist view on which the book is predicated is on full display in the above passage. Precarious work, low pay and the end of job security are considered innovation. A “human cloud” of “aspiring workers” are waiting for assignments: in other words, there is a rapidly-growing class of dispossessed people who are so desperate for work they will do any odd job they can get. This may be a good development from the perspective of the elites at the World Economic Forum, but for the rest of us it is bad news.
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The downward pressure on real wages created by such a scenario must be countered by collective action from workers themselves. The old traditions of the labour movement will come back to the fore as working people struggle for improved living standards. As always, the only effective response to organized greed is organized labour.

Having explained away any responsibility for the damage he seeks to create, our author is now free to pontificate about other great moral questions. For Klaus Schwab, the only moral dilemmas present have to do with designer-babies, or the privacy of personal information. Schwab also worries, “the more digital and high-tech the world becomes, the greater the need to still feel the human touch, nurtured by close relationships and social connections. There are growing concerns that, as the fourth industrial revolution deepens our individual and collective relationships with technology, it may negatively affect our social skills and ability to empathize.” One is left to wonder if too much time spent with the world’s billionaires and powerbrokers can have the same effect.

Schwab even goes so far as to point out that Karl Marx “expressed his concern that the process of specialization would reduce the sense of purpose that we all seek from work”. He seems to have missed most of Marx’s other points, one of which our friends at the World Economic Forum should take note, was that the capitalists would create their own grave-diggers.

Technological innovation also presents many challenges to government. Schwab is concerned that governments will slow down innovation if they can’t change laws and regulations fast enough. In Schwab’s world laws are there to serve business, and if they’re not doing that they need to change. Even if, he insists, that means breaking the social contract established with citizens of various countries.
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Conspicuous in its near-absence in our plan for world domination is the greatest challenge facing humanity: climate change. The best idea our author could churn out was using social media for an “adopt a tree” campaign. This would be laughable if the results were not so tragic.

It is difficult to see how anyone outside of a corporate board room could see anything good in the best-laid-plans of the founder of the World Economic Forum. This book however, represents the dominant view among the strategists of capital. An offensive against working people the likes of which we have never seen is being prepared, globally.

The founder of the World Economic Forum may be able to open up space for discussions such as this to take place among the powers that be, but they should not be so arrogant as to believe this program can be dictated to the world. Working people will resist, as we always have, any attempt to attack the living standards of workers. The cost of civil unrest, bitter labour disputes and outright revolt must be added to the cost-benefit analysis of any such plan.

There is no doubt that the emerging technologies contained in this book will constitute an industrial revolution, of sorts. The question is, whose revolution? If the likes of Klaus Schwab get their way, the benefits of this great technological advance will land solely in the laps of the billionaires. Schwab, like all capitalists, believes that creating profit is the principle purpose of the economy. From his perspective the profit motive is not only what drives economic development, but is in fact the only real objective.

The rest of us seek an economic system where the needs of the population are taken care of and the principle concern of the economy is providing a decent standard of living for all. While the capitalists seek to hoard the benefits of every technological development, we seek to insure that working people share the gains from emerging technology. If millions of jobs are going to become redundant, there should be a corresponding reduction of working hours, without loss of pay, to insure full employment.

Despite all his bluster about a fourth industrial revolution, the issues raised by Klaus Schwab are nothing new. Capitalism is capitalism. The bosses will always seek to maximize the exploitation of their workforce. The collective action of workers is the only counter-balance to this insanity.

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