The governor of the Bank of England, Mark Carney, recently hit the headlines for his predictions of what might happen when robots take over many labour market tasks from humans.
Carney argued that, if mechanisation led to lower living standards and greater inequality, “Marx and Engels may again become relevant.” There are quite a few conditional statements in that analysis, but it is not clear why the governor would want to stir up fears when deeper consideration would raise different but more important questions.
Carney compared the coming mechanisation with the first Industrial Revolution. In the early few decades of the first Industrial Revolution, he argued, labourers did not benefit fully from productivity gains arising from mechanisation. This apparently gave birth to the ideas of Marx and Engels.
This whole construction is somewhat bizarre. Living standards were not stagnant as mechanised looms replaced the cottage industries in the late eighteenth century. The Industrial Revolution gets a bad press. It is true that a relatively small number of skilled artisans suffered from mechanisation in the short term. However, the vast majority of people became better off, as the price of essentials fell when it became possible to produce them with less skilled labour and much more capital. It is true that, as people moved to the cities, poverty became more visible. Perhaps this is what spurred the writings of Marx and Engels. Nevertheless, incomes rose, and work, food and the other necessities of life were more secure.
Presumably, Mark Carney is of Irish extraction. It would not be surprising if his family moved away from Ireland because of the potato famine in the 1840s (like, I believe, one of my ancestors did). Before the Industrial Revolution and in countries that remained wedded to old methods of production, the poor were one bad harvest away from malnutrition or death.
Not only that, there was no spread of Marxist ideas of any consequence in Britain at that time. The first Marxist organisation in the UK was not formed until the 1880s, several decades after the period to which Carney is referring. Engels’ most important work was not even translated into English until 1885. Indeed, as the electoral franchise was widened, it tended to be the Conservatives who benefited. The countries in which Marxist ideas took hold were not those where the Industrial Revolution was taking place.
The past does not fit Carney’s description, but what about the future?
The Governor of the Bank of England suggested that mechanisation will lead to the stagnation of incomes amongst large groups of people, with the owners of capital receiving a much greater share of the national income. Mark Carney gave examples of middle class jobs being taken over by machines; hence, the analogy with the Industrial Revolution.