Tech­no­log­i­cal change and so­cial dis­rup­tion

The Sun (Malaysia) - - SPEAK UP - By Azeem Fazwan Ahmad Farouk

HU­MAN­ITY is wit­ness­ing an­other great dis­rup­tion. The cre­ative de­struc­tion is linked to the fourth in­dus­trial revo­lu­tion. We are told that the fourth revo­lu­tion is fun­da­men­tally dif­fer­ent from the pre­vi­ous three be­cause it is es­sen­tially a com­bi­na­tion of cy­ber-phys­i­cal sys­tems, the in­ter­net of things, and the in­ter­net of sys­tems.

It has also been pointed out that the fourth in­dus­trial revo­lu­tion or In­dus­try 4.0 will change the way we live, and that change we must.

Tech­no­log­i­cal progress such as steam and wa­ter power, and later on com­put­er­i­sa­tion is re­ferred to by eco­nomic his­to­ri­ans as a gen­eral pur­pose tech­nol­ogy – a state whereby ad­vances in the tech­nique of do­ing things can be used to do things more ef­fec­tively.

The first three in­dus­trial revo­lu­tions had shaped how our mod­ern job evolved, shaped by the rise of man­u­fac­tur­ing. The sec­ond in­dus­trial revo­lu­tion, for ex­am­ple, handed to us a tem­plate for mod­ern life that con­tin­ues to sup­port our con­sump­tion econ­omy. While the first three revo­lu­tions had ush­ered in an era of un­prece­dented growth and wealth, it came at a tremen­dous so­cial cost.

The shift from an agrar­ian econ­omy to an in­dus­trial one was wrench­ing, break­ing up com­mu­ni­ties and mak­ing hard-learned trades re­dun­dant. In Western Europe and its off­shoots, the in­dus­trial revo­lu­tion in­creased so­cial mo­bil­ity but it also widened the so­cial divide.

In Europe, whose lower so­cial or­ders had never had it as good as the Amer­i­can colonists, the in­dus­trial revo­lu­tion was so so­cially wrench­ing that it in­spired the first co­her­ent po­lit­i­cal ide­ol­ogy of class war­fare, Marx­ism, which cul­mi­nated in vi­o­lent rev­o­lu­tion­ary move­ments that would even­tu­ally in­stal com­mu­nist regimes in Rus­sia, Eastern Europe, and China.

The com­mu­nists had shat­tered the Western bour­geoisie’s con­fi­dence, and many proxy wars were fought be­tween the West and the Soviet Union to ad­vance their ide­olo­gies. Nev­er­the­less, the fall of the Soviet Union had placed cap­i­tal­ism firmly as the en­gine of tech­no­log­i­cal and eco­nomic ad­vance­ment. That too came at a high so­cial cost.

Today, the two pow­er­ful and un­stop­pable forces shap­ing our economies are glob­al­i­sa­tion and tech­no­log­i­cal revo­lu­tion. To­gether, they con­sti­tute a trans­for­ma­tive ca­pac­ity that dwarfs the power and scale of the first three in­dus­trial revo­lu­tions. The fourth in­dus­trial revo­lu­tion, how­ever, has yet to cre­ate a surge in eco­nomic growth for the West that is com­pa­ra­ble to that of the first. What the fourth revo­lu­tion has done is to en­able an in­dus­trial revo­lu­tion in much of the rest of the world.

Coun­tries such as China, India and some parts of the de­vel­op­ing world are go­ing through their own eco­nomic and tech­no­log­i­cal trans­for­ma­tion. Eco­nomic growth in China has in­creased twelve­fold. The global eco­nomic and tech­no­log­i­cal change is un­prece­dented in its scale and im­pact. What is less dis­cussed is the neg­a­tive ex­ter­nal­i­ties of the growth-cen­tred econ­omy that does not pay close at­ten­tion to an in­creased so­cial divide.

The twin forces of eco­nomic shift, glob­al­i­sa­tion and tech­no­log­i­cal revo­lu­tion, have se­verely im­pacted so­cial, eco­nomic, and po­lit­i­cal re­la­tions. It has cre­ated a great eco­nomic chasm be­tween the 1% of the su­per class and 99% of the rest. While the econ­omy and cor­po­rate earn­ings are grow­ing, wages for the mid­dle and lower classes have stag­nated.

The tech­no­log­i­cal revo­lu­tion, glob­al­i­sa­tion, and the Wash­ing­ton Con­sen­sus have con­trib­uted to the re-emer­gence of so­cial and eco­nomic in­equal­ity. Among stu­dents of in­come in­equal­ity, there is a fierce de­bate about which of the three is the most im­por­tant driver of the rise of the su­per class. Whatever the start­ing point of the de­bate, the eco­nomic and po­lit­i­cal im­pli­ca­tions of the rise of the 1% are very clear.

Glob­al­i­sa­tion and the tech­no­log­i­cal revo­lu­tions have al­lowed the 1% to pros­per but as they have been get­ting richer and more pow­er­ful, the tax laws in many rich and de­vel­op­ing coun­tries have taxed and reg­u­lated them less.

We are es­sen­tially re­turn­ing to the rob­ber barons era not only be­cause of the twin revo­lu­tion but also due to the fact that the rules of the game are writ­ten in favour of the 1%. We tend to for­get that the fourth in­dus­tri­al­i­sa­tion will not be able to trans­form so­ci­ety un­til so­ci­ety has learned how to live with its many dis­rup­tions.

To deal with the great dis­rup­tions that were of­ten as­so­ci­ated with the first and sec­ond in­dus­trial revo­lu­tions, Western coun­tries set up a gen­er­ous so­cial wel­fare sys­tem. A win­ner takes all ap­proach in deal­ing with the fourth revo­lu­tion will cre­ate a lot of losers but to make good use of tech­no­log­i­cal ad­vance­ment would re­quire poli­cies that can en­sure a more eq­ui­table dis­tri­bu­tion of wealth, and the de­vel­op­ment of ro­bust pri­mary school­ing sys­tems, and uni­ver­si­ties that are in sync with the latest tech­no­log­i­cal change.

Re­mak­ing so­ci­eties is not easy, and if not done right, the fourth in­dus­trial revo­lu­tion can also be an im­pe­tus for rev­o­lu­tion­ary move­ments of the 21st cen­tury.

As­so­ciate Pro­fes­sor Dr Azeem Fazwan Ahmad Farouk is di­rec­tor of the Cen­tre for Pol­icy Re­search and In­ter­na­tional Stud­ies at Univer­siti Sains Malaysia. Com­ments: let­ters@the­sundaily.com

Glob­al­i­sa­tion and tech­no­log­i­cal revo­lu­tion have cre­ated a chasm be­tween 1% of the su­per class and 99% of the rest.

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