Demographics, Automation, & Inequality: The Future of Capital

The following essay argues for the creation of revolutionary alternatives while preparing for the battles ahead, as the economic forecast over the next 10 years spells out more precarity and inequality.

The upcoming decade will be critical for aspiring revolutionaries and social movements. Already, the past ten years have been a series of social and political ruptures: the Great Recession, uprisings in response to police murders in the US, increased far-Right violence across the “Western” world, not to mention the continued destabilization in the once Fertile Crescent, and drastic increases in extreme weather events. As radicals here in the US, we’ve been fairly adept at responding and reacting to drastic situations, but the question remains: how do we build strong bases of solidarity and mutual aid across the geographic and social landscapes we inhabit, and turn that into collective political power that can ultimately challenge the State’s hegemony?

Elections continue unabated, though increasingly impotent as more and more people sit out, boycott, or just plain don’t care because they see these parades of spectacle for the thin veneers that they are.

• In the US, Trump and his administration are stumbling forward in attempts to implement austerity measures, namely for social programs in the housing and environmental sectors, while doubling down on military and other “security” investments. Midterm elections for Congress are scheduled for this fall, and despite renewed calls for voter registration and contacting your legislators in the wake of the Parkland, FL shooting, all anyone is really thinking is “will it even matter?”
• Angela Merkel in Germany is walking a tightrope as she tries to cobble together a coalition government from establishment parties no one seems to particularly like anymore anyway. Merkel’s center-right conservative Christian CSU and the center-left social democrat SPD both lost ground, while the far-right AfD surged to third place as the radical left and green parties were minor holdouts in Berlin. Germany has been looked to as a leader in European social and financial policy (you’re welcome Greece), and Merkel’s weakening position opens up the potential for insurgent politics both within Germany and the larger EU.
• Russia is having an election, and Putin is going to win his second term…again. Any questions? Well just one for now, what happens in 2024?
• Venezuela’s economy is in the shitter, people are absconding the country in droves, and Nicolas Maduro is poised to win a re-election, one that the opposition parties are just straight boycotting. Despite polarization, it’s not that citizens want to move back toward neoliberal capitalism, however, it’s more about how they feel Maduro is handling the situation. The US helped create the current crisis (as it has done time and again throughout Central and South America), encouraging Saudi Arabia to flood the market with cheap oil in 2014 in tandem with its own domestic increase in fracked oil and gas, which led to reduced revenues for the Venezuelan state (95% of VE’s export revenue is from oil), and then imposing financial sanctions cutting the country off from imports and straining its capacity to make payments on its debt. This has resulted in limiting the general population from accessing food and medicine, largely the source of public discontent.
• China recently held its 19^th Party Congress, reiterating its aspirations to take a larger role in global politics and economy as it comes out if its rapid-growth stage. The Pacific powerhouse has been methodically spreading its soft-power influence across the Asian, African, and South American (especially Venezuela) continents through financial investments, most notably for its Belt and Road Initiative. Xi Jinping has now worked to eliminate presidential term limits, opening the door for him to remain in power beyond 2023. Will China have a new emperor?

Trump pulling the United States out of the Paris Climate Accord claiming “America First!,” his visits to the Davos World Economic Forum, “really really good” negotiations around trade (see TPP & NAFTA), and general boorish protectionism continue to worry other heads of state and elites that we are entering what Ian Bremmer with the Eurasia Group calls a G-Zero World, “A world order in which no single country or durable alliance of countries can meet the challenges of global leadership.” Hence we see various members of the EU scrambling around, trying to individuate themselves in Hobbesian fashion, essentially saying “fuck you, pay me.” This G-Zero, a result of the waning of the power of American empire is part of what is opening the door for China’s increased power, though also allows the potential for non-state actors, both intra- and inter-national to make waves in how states are governed (or not).

We have begun to see this potential of non-state actors in popular movements around the world, both libertarian and fascist, not only in electoral situations, but also in the everyday civic and social arenas, from Mutual Aid Disaster Relief, Portland Anarchists fixing potholes and the Greek Rouvikonas collective vandalizing various state and media offices, to groups like Golden Dawn, PEGIDA, and Forza Nuova flailing in their attempts to rebuild social capital on the back of the Europe’s still uneasiness of the massive immigration from the mid-east and northern parts of Africa.

All of this is set within the context of the next great rransformation that will begin in the 2020s. Bain & Company, a management consulting firm, recently released this macro-trends report that predicts “economic disruption far greater than we have experienced over the past 60 years” based on the “collision of demographics, automation, and inequality.” This article is 6 chapters long but provokes some interesting thoughts if your eyes don’t burn out from trying to grasp the numbers flying around and the economic jargon (don’t worry, there are some charts). Essentially, these three forces: Demographics, Automation, and Inequality, are going to swirl together over the next decade or so to really fuck shit up.

Demographics

The baby boomers are getting older, and while many are working later through life, they’re also retiring in droves, reducing the overall size of the available workforce. However, capitalists are scared that the boomers’ increased spending will outpace the actual amount of cold hard cash available, sending their fragile house of cards tumbling down.

“As people retire, they will be liquidating savings en masse. Financial savings are only backed by the real output potential of the economy, so the practical consequence for capital markets is likely to be too much capital drawdown chasing too little real capacity”

Social Security, pensions, and general retirement savings will all be squeezed at the same time, making banks more likely to raise rates and reduce lending. So much of our economy is based on credit and debt, access to real money may become harder and harder to come by for everyday people.

Automation

The capitalists aren’t too worried about the shrinking workforce though, ‘cuz Bezos and his boys are ‘bout to crack open a cold one, and it’s full of robots. Automation is becoming cheaper and more widely applicable. According to the report, “analytical, administrative or clerical service sector jobs with highly repetitive or rule-based tasks are surprisingly easy to automate” and “migration to e-commerce is just automating retail services—replacing an entire suite of human functions from the floor salesperson or cashier with a web-based storefront and a payments-processing app,” something we’ve been saying for years.

Combined with growing gig, freelance and remote work, the economic landscape is changing rapidly, and much faster than the previous economic transformations. The report acknowledges that geography, industry, and speed of automation will vary the impacts on different demographics, but one thing’s for certain, some will win big, while most of us will lose.

Inequality

We already know that inequality is severe in the US and around the world, but that doesn’t mean it’s going to get any better. In fact, it will likely only get worse. The first two forces play a significant role in how inequality levels will continue to play out according to Bain’s report. Firstly, workers with higher levels of formal education tend to work in higher paying jobs and work more hours per week. These types of “high skill” jobs tend to rely less on the physical ability of the worker, and more the mental and analytical skills. These jobs which have higher barriers to entry will become more valuable, thus individuals already working in those areas will continue working there for longer, exacerbating income inequality:

“The trend toward longer, healthier lives is likely to continue to benefit higher-income individuals disproportionately since it extends the span of earning years and time to accumulate assets… ongoing medical advances are likely to continue increasing the lifespan of higher-income individuals faster than those at the lower end at least through the next decade”

As far as automation’s impact on inequality, I think we already see where things are headed. The report sums it up well:

“As automation technologies spread, we expect employment and wage growth to be concentrated in jobs that require high social and analytical skills—jobs that are already relatively highly compensated today. Workers in mid- to low-skill roles who rely on physical labor or analytical skills vulnerable to automation are at higher risk of losing their jobs or facing pressure on wages. If recent history is a guide, those who lose their jobs may face lower incomes throughout their career after being reabsorbed into the workforce, and some may choose to drop out entirely.

“In addition to job loss and wage suppression, automation may also increase income inequality by increasing the share of income going to profits vs. wages The share of income produced by labor already is declining, and with automation, it likely will fall further. By 2030, we estimate that operating costs at an industry level could decline by as much as 10% to 15%, depending on the industry’s current cost structure (the share of costs that labor represents) and the level of automation expected in the base-case scenario time frame. Under those conditions, increased profitability would largely flow to owners of capital and further reduce the share of national income allocated to labor.”

The report continues with several caveats, alternative scenarios, and predictions of how governments may react and intervene as effects of new economies and social realities set in. But rather than opine on how governments and the state may react, given the “G-Zero” environment we increasingly find ourselves in on a global scale, and the decline of American bureaucracy’s ability to operate itself fully, I feel this provides an opening for anarchists, anti-state communists, autonomists, and anti-capitalists to prove the effectiveness of our ideas and programs, not to govern or be governed, but to liberate ourselves and each other. We can leverage the disruptions and contradictions inherent in the system to break open new worlds of being.

How do we continue to increase capacities to provide for ourselves and each other’s everyday needs? Housing, food, water, education, energy, healthcare. The reactionary tendencies that have infused into American activism, whatever the ideology, over the past 20 years have trapped many an activist into endless marches around central business districts, hopeless internet petitions, clicktivism, and sidewalk shouting matches across police lines. I don’t mean to discredit marches or counter-demos per se, but I do believe we should be more strategic in when, where, and how we use our energies.

What is going to challenge the balance of power? The Black Panthers became the most dangerous organization in the US, according to the FBI, because of the implementation of the free breakfast program. In October 2017, SWAT forces raided the Mutual Aid Disaster Relief base of operations in Guaynabo, Puerto Rico attempting to repress the organizing efforts of relief workers and community members. This isn’t a coincidence.

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We must continue to build and demonstrate, through our praxis and experimentations, the ability and efficacy of community-based support. We are conditioned to depend on the state and capital in all its forms, but it is possible to create survival networks and economies outside of the state. It is necessary to have platforms and infrastructure in place so that when the insurrections do come, our neighbors will be there with us, building barricades, cooking food, providing care, and making a whole lot of trouble. We cannot dismiss the steps between now and the abolishment of State and capital.

The Kurdish experiment in Rojava, Black Rose Anarchist Federation, Revolutionary Abolitionist Movement, Mutual Aid Disaster Relief, and Anti-Racist Action/Torch Antifa, to name a few, along with all sorts of collectives, cooperatives, and the like, provide different models of organizing and acting across geographic and social locations. Let us continue our experiments and our building. We cannot wait for the ashes to build anew, we must live and fight at the same time. We must continue to act in the now, and use the results to shape the futures we dream of.

Buzz currently resides in colonized Powhatan territory and engages with a variety of environmental, antifascist, and anarchist projects