AI

All the acrimonious arguments that pervaded the last celebration of May Day are probably obsolete. They resemble a debate on the Titanic moments before it hit an iceberg.

The biggest threat to labor is neither capital nor contractualization. It is Artificial Intelligence (AI).

Over the next few years, faster than we can even imagine, AI will wipe away millions of jobs from the face of the earth. It will make existing business models obsolete by the day. It will create economies without workers, a world without the proletariat.

Nowhere in Karl Marx’s long and boring Das Kapital did he anticipate the working class extinguished by technology. A specter haunts the communist faithful. It is the specter of utter obsolescence.

Unfortunately for the communists, their language, their categories and their faded utopia prevent them from understanding what lies on the economic horizon. That is their tragedy.

Enthralled by their own agitprop, the militant unionists fail to appreciate the world changing right under their feet. Enraptured by their worn out ideological propositions, they fail to see that Jack Ma has long replaced Marx and Lenin as prophet of the world a-birthing.

While the unionists want to make the labor market as rigid as possible, new entrants to the labor force understand that in order to thrive in the new economy, they must be prepared for gigs and not for jobs. A rigid labor market will only backfire on the working class. It will prevent enterprises of the old mode from becoming more nimble and more adept at changing.

Instead of fighting the ghost of contractualization, the working class must fight for new things such as the absolute portability of retirement accounts and more accessible pre-need plans. Workers must be investors as well. Their future wellbeing depends on their investment accounts properly hedged.

In a word, the working class must surf the waves of change instead of resisting them by implanting rigid economic arrangements.

Revolution

We are now in the midst of what is called the 4th Industrial Revolution.

The 3rd Industrial Revolution was a revolution in communications. It made economies increasingly information driven. It made the relationship between broadcaster and viewer a more interactive one. It eliminated distance as a cost of production.

This revolution happened barely a generation ago.

By contrast, the 4th Industrial Revolution is driven by the rise in AI. Its vanguards are transport companies that do not own a single vehicle, retail giants that do not have a single showroom, the rapid development of 3D printing and highly personalized health care accessible remotely.

AI has made possible the return of agriculture to the core of cities in the form of vertical farms managed by robots. It opens the door to factories without workers.

When IBM’s Big Blue routinely beat the best chess grandmasters there are, we knew this was the beginning of something big. When another machine defeated the best Go players of a more nuanced game, this is probably the tipping point. Today, AI is capable of learning. The possibilities are mind-boggling.

Only a few years ago, we took comfort in the thought that machines will never be capable of handling fuzzy logic. Today, something as common as high-speed elevators operate on fuzzy logic, anticipating the floors where they might be needed.

Today, even as our hopelessly stubborn jeepney drivers threaten a strike at every mention of modernizing our transport system, many cities elsewhere are preparing for the imminent preponderant of autonomous vehicles. In the very near future, autonomous vehicles will become the new King of the Road. They will be abundant and safe. No one will ever think of buying a car for himself ever again.

Unions

Trade unions are creatures of the 1st Industrial Revolution.

In the primitive age of mass manufacturing, the mode of production required a disciplined army of workers to man assembly lines and produced uniform products. This disciplined army of workers was romanticized by Leninism as the vanguard of a future (totalitarian) society, performing their work in perfect cadence and living in communities where everything was uniform.

In the succeeding industrial revolutions, uniformity died. Products became increasingly tailor-made. Individuality became more assertive. Diversity, and therefore the freedom to be different, was celebrated.

But Leninism was slow to die. The ideal society where each one looked exactly like the next and thought no different from the group remained a fascination. The militant unions are stragglers from another age where conformity and repetitiveness were idealized.

Recall the Great Proletarian Cultural Revolution where men and women, party officials and the party rank and file looked exactly the same. That was Leninism’s golden age – and also its last gasp.

The succeeding industrial revolutions undermined highly centralized and hierarchical production organizations. Instead of polarizing, labor and capital fused. Corporations flattened. Workers had to be investors as well to thrive.

The rapid pace of technological change will radically alter the way production is organized. Therefore, it will radically alter the way societies are organized – and governed.

For want of a better term, we are now seeing the rise of the Gig Economy. In that economy, people work sporadically. They work with teams rather than bosses. They work for projects rather than companies.

Independence, innovation, creativity and flexibility all enjoy premiums in the new emerging economy. Innovations in financial technologies (fintech) make transactions not only instantaneous but also frictionless.

This is not science fiction about some distant technological future. This is happening now. Ask your Grab driver who, by the way, owns his means of production.