Labour and the rise of the machines

Technology is already transforming our homes in ways we could not have dreamed of only a few years ago, and these same technologies are altering how we work and interact. The impact of the automation of jobs and mechanisation has created increasing uncertainty surrounding the employment prospects of white-collar workers previously immune to such problems. At conference, Ed Balls was right to say that “across the developed world, rapid technological change is replacing traditional skilled jobs too – in banking and offices as well as on production lines.”

 At present, the unemployment rates in many advanced countries are too high and economic policies, at the margin, have only served to create lacklustre and volatile growth. It is increasingly evident that the quickening pace of technological advance is one of the most critical challenges facing Britain and the world today. For the left, holders of capital alongside those able to find high-wage work and the beneficiaries of rising corporate profit margins will continue to prosper. By contrast, those with low skills will continue to experience reduced demand for labour and falling earnings. Labour needs to portray itself as the party that understands the way the world is going and how technology can be used to implement our values to foster social justice.

Without addressing these fundamental issues – and without admitting that innovation in the short run can create many losers alongside the winners – we cede more political ground to parties that wish to rewind the clock. As these structural changes in the labour market only accelerate, these questions surrounding technological change cannot be avoided, and can be viewed as the next immigration-style issue that could further alienate low income workers and force them towards UKIP and others. We must be robust against the Luddite suggestion that we can persuade the electorate to resist modernity; this is a false and ultimately impoverishing choice.

Labour must emphasise, if managed properly, how technology is a great engine of social improvement. It is encouraging to see these questions posed in recent books edited by Chuka Umunna and also Liz Kendall and John Woodcock. In the future, Labour needs to become more explicitly political about the use of technology and its imperative to improve social welfare. The challenge for Labour and the left is to help people manage the process of change; by showing people that the party understands and will help to achieve their aims and ambitions. Governments cannot afford to be ambivalent and a strategic approach is needed to develop businesses with an emphasis not only on their ability to create wealth but also job creation.

Technology can be a great way of distributing power to those who lack it. Often technological progress and mechanical invention has freed people from toil, constant manual labour and drudgery that had allowed humanity to grow and flourish. By using technology to our advantage and not as our enemy, we can reconcile economic progress and social justice to the benefit of all. The fact is that digital technologies will continue to accelerate but our skills, organisations and institutions are lagging. In this second machine age, business as usual is not on the agenda and the outcomes we receive are dependent on the choices we make. Owning the future starts with the belief that nothing is inevitable.

Oliver MacArthur works for the investment team at a charitable endowment researching global equities and funds.