Reinventing capitalism to address automation: Sharing work to secure employment and income

Abstract

Accumulating evidence suggests that automation is on an exponential growth path and it is projected to lead to massive technological unemployment. This paper proposes a conceptual framework within which to view automation and technological unemployment. The overarching conceptual framework pertains to the concepts of optimal and just factor shares. Within this framework, the issues associated with technological unemployment including the non-neutrality of technology, the subsequent inevitability of automation, the mechanisms via which this impacts work and the case for a re-invention of capitalism are explored. Sharing work is proposed as a modest institutional reform. The specific policy proposals within the broad area of sharing work are work-sharing and shortened work-week. The theoretical literature on the sharing work concept and the empirical literature on the two specific reforms are then reviewed. While these reforms are incremental and hence perhaps the most politically acceptable, they nonetheless represent a reinvention of capitalism if broadly implemented. It is argued that such re-inventions are well rooted in history during crises periods such as the one technological unemployment is likely to lead to based on the evidence provided. It is further argued that taxing capital to pay for these reforms, to the extent that they are not self-financing, is socially just.