Carney: Tech will revive Marx

New wave of technology will create a world of increased inequality, warns Bank of England Governor

TECHNOLOGY in the workplace could bring about the rebirth of Marxism by forcing down pay and causing huge job losses, Mark Carney warned yesterday.

The Governor of the Bank of England said “Marx and Engels may again become relevant” with the expected automation of millions of blue and white collar jobs. Productivity soared 150 years ago as the industrial revolution accelerated manufacturing, yet average wages stagnated for decades as machines meant the jobs created were low-skilled. Recent years of weak wage growth could indicate this experience is being repeated “if you substitute platforms for textile mills”, Mr Carney told a conference in Canada.

THE Governor of the Bank of England has warned that massive job losses driven by technology could resuscitate Marxism in the West.

Mark Carney said that the expected automation of millions of blue and white collar jobs may lead to the ideas behind Communism winning new fans.

“Marx and Engels may again become relevant” if technology destroys jobs, forces down pay and pushes up inequality as a new elite of highly skilled workers and the owners of hi-tech machines reap the rewards of the new era, Mr Carney said.

Productivity soared 150 years ago as the industrial revolution took hold and new technology accelerated manufacturing, yet average wages stagnated for decades as machines meant the jobs created were low-skilled.

Recent years of weak wage growth could indicate this 19th century experience is being repeated now, Mr Carney said.

“If you substitute platforms for textile mills, machine learning for steam engines, Twitter for the telegraph, you have exactly the same dynamics as existed 150 years ago – when Karl Marx was scribbling the Communist Manifesto in the reading room of the British libraries,” Mr Carney told the Canada Growth Summit.

The Governor, who is due to step down next year, said there are also signs of “hollowing out” the jobs market as mid-level workers find computers increasingly able to do specific tasks.

Major law firms, for instance, are investing in artificial intelligence to scan documents to find and analyse key facts among written material – something traditionally done by legions of junior lawyers and clerical staff.

Banks are using data on customer queries and complaints and feeding it into machines. These can learn the common questions that clients ask, allowing the computers to answer questions directly – removing the need to employ customer service staff.

Services jobs such as driving taxis or lorries could also disappear as selfdriving technology improves.

The trends contrast with previous waves of technological change that have given more manual tasks to machines, freeing up workers to do more productive roles involving more brain than brawn, Mr Carney said.

But the new wave of technology uses machine learning and artificial intelligence combined with enormous volumes of data, which could render cognitive workers redundant.

While a large pool of workers could see their situation worsen, the small number with skills to match the new jobs can expect large pay rises. On top of that, more profits will go to those who own the machines rather than to workers, increasing inequality further.

“If this world of surplus labour comes to pass, Marx and Engels may again become relevant,” Mr Carney said. The solution is for companies, universities and governments to study the likely impact of new technology and prepare their firms and workers for the changes to come, he believes.

“There is a disconnect in expectations. In surveys, over 90pc of citizens don’t think their jobs will be affected by automation, but a similar percentage of CEOS think the opposite, in the number of jobs that will be materially affected,” he said.

The result could be that workers should prepare for jobs that require a higher emotional intelligence, the Governor said, in sectors such as leisure and care, as well as practical employment creating bespoke services and products.