There has been growing speculation about how the Covid-19 pandemic might change the world or, as I refer to it, the global political economy. There are divergent views. Many are cautiously optimistic. Some suggest we can return to conditions ex ante, with minor adjustments, like preparing for the next pandemic.
Naturally pessimistic, I come out on the side that verges on sheer horror. Loath as I am to make predictions, I believe Milton Friedman was right when he said the only social responsibility companies have is to make profit. I believe the next world — the post-pandemic global political economy — will deliberately avoid establishing an eco-socialist order driven towards a global common good, and preservation of common pool resources. Not while there is money to be made.
It should not come as a surprise if we see a more aggressive, more brutal (and efficient) capitalism driven by increased use of robotics and artificial intelligence, and less “use” for people on assembly lines, production and distribution lines or the knowledge production industry. This would be a world of dispensable people. For now, the pandemic has placed us in a liminal space. That liminality means the next step we take may determine our long-term future as a human race.
Before the severity of the pandemic was fully understood, especially for the way it ravaged the political economic and financial infrastructure of the world, we were presented with a binary option. We could either follow what was discussed in this space in March as the conflict between “liberal capitalism” (led by the US) or “state-led capitalism”, led by China. I am starting to believe that is too simple a set of options.
Corporations will continue to place profit as their main objective and turn increasingly to technology. Workers, as inputs, will become irrelevant (dispensable, sadly) in the sense that in some sectors they will be “unneeded”. More and more people will need the things they don’t make themselves, and make things fewer and fewer people need.
Machines are immune to pandemics. Once they’re installed in assembly lines, manufacturing plants, industries and call centres, and as humans increasingly interact with machines (bank tellers, post office workers), shop online and have drones deliver products, humans may no longer be needed. As discussed in this space in about October 2018, we should expect moral or ethical behaviour from humans, but machines are exempt.
What we have seen, even before the pandemic, is more and more people working on short-term contracts, or no-contract employment, and in the case of severance employees may have to sign nondisclosure agreements. This is an extension to blue collar workers of the way in which white-collar workers, such as lawyers, have been muzzled once they are “released”.
Amazon is probably the standout example of what happens when companies offer “no contract” or limited contracts to workers. When the company closed a large warehouse in Kansas, US, in 2015 hundreds of employees lost their jobs. One warehouse worker who was laid off showed a news outlet a clause in her severance agreement that warned her to “fully comply” with a non-competition agreement. She was in effect barred from transferring the knowledge she gained from one job to another.
That was before the pandemic. Fast forward to a few years later. Reuters reported in 2019 that Amazon was running trials of new technology across its warehouses that can package orders five times faster than humans. Workers place items on a conveyor belt and machines build boxes around them, processing up to 700 orders an hour. At the time of reporting, a year ago, Amazon was considering installing these machines in many of its warehouses.
“The plan”, Reuters reported, was to replace workers with “automation” (machines) to increase efficiency. In the meantime, as the pandemic spread (between March 18 and April 10) more than 22-million people lost their jobs in the US, while “over the same three weeks, US billionaire wealth increased by $282bn”, according to the Institute for Policy Studies in Washington. Since the start of the year Amazon CEO Jeff Bezos’s personal fortune increased by about $25bn.
And so, thrilled as I am by science and technology, by artificial intelligence, robotics and physics, there seems to be little hope for a post-pandemic order with greater social justice. Already there are machines that can think faster and better than the smartest mathematicians, and software is being developed to provide canned lectures for institutions of higher learning. Under these conditions, no job is safe and nothing is sacred.
The liminal space the world occupies at the moment is, truly, an opportunity to create a better world, one that is less driven by utility maximisation, excessive individualism and a culture of consumer capitalism. But I have serious doubts.
• Lagardien, a visiting professor at the Wits University School of Governance, has worked in the office of the chief economist of the World Bank as well as the secretariat of the National Planning Commission.
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