Singapore is passing away

Singapore is Passing Away

The vision of Brexit is that once free of hampering EU regulations British entrepreneurs will create a dynamic economy, a Singapore-on-Thames.  It is an illusion.  History is a swiftly moving river ever flowing away, and those who cannot ride its surge  are left behind mouldering relics on the banks.  Singapore- style capitalism is already fading into the past.

Capitalism is the most successful instrument for the improvement of human welfare that has ever been invented.  Its engine is ever cheaper raw materials and ever cheaper labour that create ever greater profits.  The competitors who can find the cheapest labour reap the highest rewards. In time those profits trickle down and turn yesterday’s generation of helots into today’s middle classes, affluent enough to buy ever more of the products that capitalism produces, thus creating yet more profit.  As manufacturing industry becomes more automated, labour moves into the ever-expanding service industries that capitalism’s profits can finance, which in turn create yet more wealth.  It is a virtuous circle.  But as with every other social and economic system that has been known to mankind it is passing away.  Times change.

The first generation of helots were the African slaves who worked the sugar plantations in the West Indies.  But just at the point that more profits could now be made from investing in factories in Manchester, slavery was abolished amidst much moral self-congratulation, yet the only recipients of government compensation for the abolition were not the former slaves but their former owners, and the vast profits the slaves had produced were used to finance the industrial revolution.  The next wave of helots were the wretched poor who had been driven off the land by enclosures, whose only resource was the wretched life on offer in early nineteenth century Manchester, the horrors of which were so vividly described by Engels.  The next generation were the poor Irish driven out of Ireland by the potato famine.   But in time they too became prosperous doctors and solicitors.  Then it was the coolies of the British Empire.  As the costs of empire began to exceed its profits, Britain divested itself of its former colonies, amidst much trumpet blowing about opportunity and freedom, for the purpose of empire had never been to make money but to bring civilization to the benighted heathen who, under the guidance of their loving mentors, had now happily come of age, and Britain joined the EU. Many of the former colonies, unable to compete in the open markets of the world, sank into destitution but not all.  In East Asia, former peasants were put to work in electronics factories in particular and the tiger economies of Malaysia and Singapore were born. Next up were the former peasants of China. But here too living standards have risen rapidly. In 2015 the minimum wage was increased by no less than 40% in some provinces, although it has fallen back since.  As wages rose and China became less profitable for western entrepreneurs, so they have begun to move to Bangladesh.  There women work ten hours a day for less than a dollar in pretty much slave conditions, making  the clothes of rich westerners who loudly proclaim their offended distaste for racist language used by other people.  Black lives do matter.  So where will the hunt for profit go next?

Matching the benefits of cheap labour were ever decreasing costs resulting from the constantly improving automation of industry.  The raw materials of nature could be extracted at an ever lower charge, particularly in agriculture, and cheaper food meant lower labour costs.  Increased profits in turn financed ever expanding and more prosperous service industries.  Workers who had lost their jobs through automation became accountants, attendants at safari parks and waiters in restaurants, benefits for which the middle classes that had been created by capitalist industry, and even a better off working class,  could pay.

But this time automation will be different.  The machines are becoming so sophisticated they will not only take over a huge swathe of employment in manufacturing industry, dwarfing by far anything that has occurred before, they are taking over the service industries as well.  In Japan sushi bars and coffee bars are already fully automated.  Even insurance firms are run by machines that will calculate your level of risk and politely inform you of your premium.  There is a programme called statsmonkey that can write vivid on- the-spot sports reports.   Baxters, updated heirs of the original robots manufactured by IBM, will be everywhere in hospitals, taking temperatures and emptying bedpans and comforting the ill in machine language as nurses are taught to do today. Exams will all be marked by robots that cannot themselves read in any intelligent sense.  Employment in the transport industry – all those taxi drivers and delivery persons –  is likely to be decimated by self-drive vehicles. Currently dying is especially labour intensive. Nano-technology will enable ten thousand t-shirts operated by one technician to change colour at the flick of a switch.  3-D printers will build a house in a couple of weeks.  Most people are going to be unemployed.  What effect will this have on capitalism?

It will be halted in its tracks.  The competitive quest for ever cheaper labour creating ever greater profits will cease, for all you will have to do to manufacture is to buy machines that will cost the same for everybody.   Nor will there be ever cheaper raw materials but ever dearer.  We could soon be running out of the earth metals used in computers and mobile phones, making them not ever cheaper but more and more costly.  According to the Soil Association, climate change, over-cropping and chemical agriculture are making soil degradation so severe the world is losing the equivalent of two soccer pitches of top soil every minute, let alone the loss of much of the world’s most fertile land to rising sea levels.  Food will be dear.  Nor will there be markets provided by an ever more affluent middle class.   In defiance of Say’s law, machines don’t buy what they produce and don’t in time become affluent doctors and lawyers, and unemployed people will have little disposable income. There will no longer be profitable markets.  The costs of repairing the damages wrought by hurricanes and droughts will absorb a huge percentage of the world’s income.  Burdens of this magnitude will be too great to be borne by the private sector, and states will have to raise taxes to a level that will stifle adventure capital.  In any case, unlike car and electronics factories, such repair jobs will not be productive of much profit.   Capitalism has flourished by creating ever new things, not patching up old ones.  The WHO is warning us that even if we succeed in finding a vaccine for Covid -19, more pandemics could be on the way,  because our invasion of the natural world is exposing us to new diseases to which we have no immunity.  The economic devastation wrought by covid-19 might be a grim pattern for the future.

We are all going to have to learn to live in a new age that is already coming about with extraordinary rapidity although few can see it.  Covid-19 is its menacing and darkly hooded harbinger. The world will never be the same.  We shall be much poorer, but if we can manage the perils of embracing it we can, nevertheless, create a future that could  be happier and more humane. But, unlike the bananas that have produced so much corporate wealth, it will not grow on trees.  There is, nevertheless,  a future there for the taking but we have to take it.  Lab cultured meat and  nuclear fusion could be just round the corner.  We have to be alert to changing times and create that future,  but  will a capitalism that belongs to a passing era be capable of taking it?  I think not, for markets will be too limited,  labour, ironically enough, too cheap, and raw materials too expensive.  Philosophers of Brexit like Daniel Hannan see themselves as the far-seeing prophets of a coming golden age.  According to Jacob Rees-Mogg, we may not see the benefits of Brexit for fifty years.  In fact, these optimists are blind to the future because they are hopelessly sunk in the past.  There will never be a Singapore-on-Thames for its time is done.  But what they are doing is leading us into a disaster fantasy land that is distracting us from preparing for the much more modest Surbiton-on-Thames in which we might all happily live –  but only if we stop dreaming about prosperous futures created by risk-taking  capitalist  entrepreneurs and prepare for the quite different reality that is now so rapidly coming.

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