Magazine of Socialist Action in Australia

Automation, unemployment, and the ‘End of capitalism’

Reading Time: 8 minutes

“Machines will take your jobs”: In a period of global financial turmoil and worsening economic prospects for Australian capitalism, this worrying message is now appearing almost daily in the media.

The quickening pace of job losses due to automation has led to some very different responses on the part of both capitalist commentators and thinkers on the left. These range from blind optimism about technology-driven job creation, to simple catastrophising. But some have suggested that these new technological developments hold within them the seeds of the end of capitalism. All these ideas need to be explored and answered.

‘An army of robots’

A June report by the Committee for Economic Development of Australia predicted that 40% of existing jobs will disappear within two decades due to technological advancements. This report echoes a 2013 Oxford study that forecasted that 47% of current jobs in the US could be taken over by computers by 2033. Similarly, studies suggest one-third of jobs in the UK will be made redundant by automation in 10-20 years.

Many of the jobs that have already been automated in Australia are in traditionally ‘blue-collar’ industries like manufacturing and mining. Cox Industries, a Queensland-based manufacturer, recently boasted that buying three robots had allowed the company to reduce its team from sixty welders to only one (who now apparently just does ‘odd jobs’). Mining giant Rio Tinto already uses driverless trains, trucks and drill rigs in its Pilbara operations.

This, however, is changing. Department of Industry modelling found that the occupations most at risk of full computerisation in the near future included bank tellers, clerks, bookkeepers and pharmacists. Jobs that will be impacted include teachers, doctors, pilots and architects. Around 79% of the jobs at risk require at least a bachelor’s degree. A Foundation for Young Australians report found that despite increasing education costs, a shocking 60% of Australian students are currently training for jobs that will be much less needed or simply will not exist at all in the future due to automation. Department of Industries Chief Economist Mark Cully said the safest jobs were those that did not require advanced education, such as waiting tables.

This phenomenon is not limited to Australia, the US and the UK. Chinese President Xi Jinping has called for a ‘robotics revolution’, and big business is well and truly listening. iPhone manufacturer Foxconn has announced plans to employ a one-million-strong ‘army of robots’ (it currently employs 1 million people). Foxconn predicts these robots will perform 70% of its assembly line work within three years. At least one of its operations in Chengdu is already a fully automated, ‘lights out’ factory that runs 24 hours a day with no humans.

Japan, which is already seen as an automation pioneer, is now in fierce competition with China in terms of robotics. Prime Minister Shinzo Abe has also called for a robotics revolution, declaring that companies must ‘spread the use of robotics from large-scale factories to every corner of our economy and society.’ Japan’s Robot Revolution Initiative Council plans to expand the use of intelligent machines in manufacturing, construction, health care, retail and other service industries. The robotics industry is now worth 600 billion yen ($6.4 billion) but the Council predicts this will increase to 2.4 trillion yen by 2020.

Economist Jeremy Rifkin has predicted that if the worldwide loss of jobs in manufacturing due to automation continues at the current rate, global factory employment – which ten years ago accounted for 163 million jobs worldwide – will drop to a just few million by 2040.

New jobs?

Some voices in the mainstream are cautioning against panic at these predictions. They argue that every major technological advancement – such as the building of railways in the nineteenth century or the development of agricultural machinery in the twentieth century – has changed the types of jobs that exist in society. They insist the ‘robotics revolution’ will merely create different sorts of jobs.

Industry representatives promised the US Congress in March that automation will create an extra 1.5 million jobs by 2016. This, they insisted, was just the tip of the iceberg, as automation would re-shore jobs that had been sent abroad. Forbes business writer John Tamny summed up this optimistic view when he wrote in the same month that ‘far from forcing us into breadlines, the destruction of certain forms of work occurred alongside the creation of totally new ways to earn a living. Robots promise a beautiful multiple of the same.’

This argument completely ignores the realities of the current global economic crisis. In a world market wracked with uncertainty, big business is hording its profits, not re-investing them. Capitalists are sitting on mountains of cash, waiting for guaranteed profitable opportunities. In this situation, the introduction of labour-cutting technology is not opening new job prospects but merely adding to the ranks of the unemployed.

While new technologies have opened up some employment opportunities in recent years – for example tech jobs in Silicon Valley – the numbers don’t come close to compensating for the jobs lost. As popular Marxist economist David Harvey put it in his YouTube lectures, ‘steelworkers cannot become computer programmers overnight.’

The Global Financial Crisis has seen mass, structural unemployment become a reality of life in many parts of the advanced capitalist world. In the US in many neighbourhoods unemployment is between 30% and 50%. In Spain and Greece youth unemployment has been roughly 50% for years. Even if a section of those forced out of work due to automation in the next few decades find new employment somewhere, many will not. Wide-scale automation will only exacerbate this long-term mass unemployment.


Such a development will not only be disastrous for ordinary working people but it also poses problems for the capitalists as well. The economic crisis has already created social problems and movements aimed at resisting attacks on living standards. Worsening unemployment has the potential to see those social movements spread.

So if automation on the scale being proposed will increase mass unemployment and potentially present challenges to the capitalist system, why are capitalists so determined to replace workers with robots?

Seattle’s socialist city councillor Kshama Sawant holds office in one of the hi-tech capitals of the world. She recently described how ‘the story of capitalism could just be told in contradictions…. on the one hand, the entire ruling class and multi-billionaire class is completely united in suppressing the interests of the working class. But amongst themselves, they’re in intense competition. A lot of what Microsoft, Apple, Google and Amazon do is decided by competitiveness.’

This competitiveness, this drive to remove workers from the production process, or in other words to reduce the costs to the capitalists, actually has the unintended consequence of reducing the rate of profitability.

Capitalists are obsessed with the sort of labour-cutting technology being introduced at breakneck speeds today, and at first glance it seems obvious why. In the case of Queensland Cox Industries, three robots worth $150,000 each mean the company now employs one person for every nine that it used to. In the words of the owner, ‘they paid for themselves very quickly. ’That saving (the difference between what paying eight extra workers would have cost and how much the machines cost) is what has every capitalist salivating. But this raises some problems.

The main source of new value in capitalism is human labour power. Someone working an eight hour shift might make back the cost of their wages in four hours or probably less. But they can’t just go home – they work the remaining four hours essentially for free. Profit (or surplus value) is this unpaid labour. That’s why the length of the working day, lunch breaks, the minimum wage, ‘productivity’ and so on, have been the sites of such fierce struggle between workers and bosses over the years: the rate of surplus value (in other words how much unpaid labour a capitalist can get out of workers) determines the success of a business! Machines might ‘pay for themselves very quickly’ as the Queensland capitalist boasted, but unlike human labour power (which Marxists call variable capital because it is exploited to varying degrees of success) they are not producing any new value.

The pressure of competition in the global economy today has compelled capitalists in the US, the UK, Australia, China and Japan to continually, manically revolutionise the means of production and to increase productivity. They’re spending more and more of their capital on machinery and less on labour power. But given that labour power is the only real source of profit, this means the rate of profit, which is what capitalists have been chasing this whole time, actually falls!.

Robotics industry bosses promote automation as removing the drudgery of work from human lives. In the abstract this could be true, but in capitalism the very opposite happens. To deal with the problem of a falling rate of profit due to automation, capitalists have to work out a way to get more hours of unpaid labour out of the workers who are left. They can do this by lengthening the working day, cutting wages below their real value, or raising the intensity of exploitation.

Capitalism is absolutely riddled with contradictions: striving for profit the capitalists are investing in robots which forces workers onto the scrap heap. But human labour power is the only real source of profit! Robotics could in theory shorten the working day and lighten the load. In reality capitalism means that people ‘lucky’ enough to have a job in a new era of automation will actually work longer and harder and be poorer for it.


Some on the left are equating the quickening pace and widening scope of automation with the imminent end of work altogether. Jacobin editor Peter Frase suggested recently that ‘taken to its logical extreme, this dynamic brings us to the point where the economy does not require human labour at all.’

This idea, that technological development is changing the foundation of society from capitalism to something else, has found expression on the academic left in the idea of ‘postcapitalism.’ Jeremy Rifkin’s The Zero Marginal Cost Society, Paul Mason’s Postcapitalism and Nick Srnicek’s Inventing the Future: Postcapitalism and a World Without Work are some prominent attempts to explain this idea.

These thinkers argue that the massive development of technology is seriously undermining the nation state and capitalist private ownership of the means of production. They argue that the increased global networking and collaboration made possible by information technologies mean that new cooperatives that don’t operate on capitalist lines will emerge. If fostered, they suggest, these cooperatives will be the basis of a new type of society, ‘postcapitalism.’

What is most notable about their argument is that they think the end of global capitalism and wage labour is an organic, spontaneous process that has already begun and does not require conscious organisation on the part of the working class or ordinary people. They imply that the move away from factory labour in advanced Western countries means that in effect there isn’t really a working class at all anymore.

Mason and his co-thinkers deride Marx and socialists as naïve to think the working class could organise effectively against capitalism. But in some ways they parrot the naïve idea (mistakenly attributed to Marx) that we just need to wait for capitalism to destroy itself. In fact Marx argued that while capitalism is filled with self-destructive contradictions and creates conditions conducive to its own demise, it would take conscious organisation on the part of workers to finish it off.

While the postcapitalists’ starting point – that capitalism’s drive to develop new technologies is actually threatening the whole system – is correct, their conclusions are purely utopian. What’s more, their ideas are not really new! In the nineteenth century utopian socialist Robert Owen built a movement that argued that they could change society by creating cooperatives, so-called ‘islands of socialism in a sea of capitalism.’ The idea was that these would gradually just replace the capitalist mode of production. These ideas were found wanting. The only time capitalism has even come close to ending was when mass movements of workers consciously organised around socialist ideas, wrested control of the major parts of economy out of the hands of big business and used them to benefit everybody.

What Mason, Rifkin and Srnicek are right about is that the material basis for a new type of society already exists. There are enough resources and wealth to provide for everybody on the planet and more. There is also absolutely the technological capacity for machines to take on the backbreaking and mind-numbing tasks of millions of people toiling away in factories, mines and offices.

But there is a big barrier to the resources and technology that exist today being used to benefit everyone and to free people from drudgery. That barrier is the private ownership of the means of production by the capitalist class, who will not casually give up the reins of power.

Instead they must be overthrown, which will require a revolutionary movement that is conscious of this task. Workers in offices, IT, the tech industry, call centres, warehouses, restaurants, cafes, shops, schools, transport, factories, mines and the so-called ‘precariat’ – the growing numbers of young, unskilled and casually employed workers who move constantly across different industries – will need to be the backbone of this movement.

Technology is inherently neutral, but in today’s world has to be seen in relation to the disastrous capitalist use of it. Only when we change the capitalist basis of society can we move towards a world where things are run not for the profit of a tiny few but by the majority for the majority. And only then will we be truly able to harness mankind’s full creative potential and develop technology to its fullest extent.

By Chris Dite


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