Tech-Fuelled Inequality Could Catalyze Populism 2.0

Article by Kyle Hiebert: “Geopolitical crises, looming climate chaos and the relentless expansion of surveillance capitalism are driving the development of the technologies of tomorrow — artificial intelligence (AI), semiconductors, green energy, big data, advanced robotics, virtual and augmented reality, nanotechnology, quantum computing, the Internet of Things and more.

Each of these tools holds tremendous potential to improve lives and help solve the world’s biggest problems. But technological change always produces winners and losers by giving rise to new concentrations of power and novel forms of inequality. For example, a study by the US National Bureau of Economic Research found that between 50 and 70 percent of lost wages in America from 1980 to 2016 stemmed from automation — far more than from aggressive offshoring or the withering of labour unions.

However, automation has brought about new occupations as well, evidenced by the absence of mass joblessness in the United States over the same period. Despite the lost wages, the US unemployment rate from 1993 to 2019 stayed around or below seven percent when excluding a four-year recovery following the exogenous shock of the 2008 financial crisis. Productivity has also increased by nearly 62 percent since 1979. But the wages of American workers have failed to keep pace, rising only 17.5 percent, signalling a deep disconnect in recent history between new technologies being adopted and the average worker being better off as a result.

Similar circumstances across the democratic world have provoked severe political consequences over the past decade. Disaffected populations caught on the wrong side of economic transformations and alienated by the accompanying social changes spurred by globalization have aligned themselves with populists pitching simplistic solutions to complex problems. Polarization has skyrocketed; international cooperation has frayed.

As the so-called Fourth Industrial Revolution accelerates in coming years, upending how economies and societies operate, a new form of populism rooted in tech-fuelled disparities may eventually consume democratic nations. To avoid this outcome, governments must get serious about harnessing new technologies to make the democratic process more agile and responsive to voters’ frustrations…(More)”