Yesterday, we started unpacking the story behind a picture recently shared widely on Twitter. It was a piece of scrawled graffiti, saying: “F*** IMIAGRUNTS” (albeit not the “lite” version I’ve printed here). But those two words tell a story for our times.
This story certainly doesn’t stop with immigrants. In fact, it’s all going to be about the rise of the robots – even if the writer didn’t realise. (Below, we’ll pick out some robotics firms leading this revolution.)
Unfortunately, automation means that the tensions behind the illiterate graffiti are going to get worse – far worse, in fact, than at any time in recent history. Your investments need to be ready for the coming storm.
Let’s start by looking at the here and now. It’s obvious that someone who can barely read and write is of little use in a knowledge-driven economy. There’s a mobile global workforce for employers to take advantage of. People who have little or no capacity for white-collar skills are going to be the first to feel the pressure. If our outraged chum had a well-paying job, they’d probably not have the time to scrawl on a wall. But when Poles with Master’s degrees pick vegetables in British fields, it’s very difficult for those with little education to compete.
Outrage at the resulting dislocation is driving a wave of populist politics. But the flipside of immigration is automation – and that’s what we’ll be unpacking in depth, today.
If you’re worried about the effect of immigration on employment, just wait until you’ve seen what robots will do. As our wall-sprayer might argue: it’s them robots, what are comin’ over ‘ere and takin’ all our jobs.
The graffiti writer may have previously been able to get a blue-collar job, in industries such as agriculture. However, in the modern world, such tasks are frequently carried out by machines – or, increasingly, by robots. Our ancestors would have only seen men with brooms sweeping the streets. Nowadays, small machines are doing the same job – but faster. In a decade, these carts will be robots.
Let’s look at the technology that is ready to make low-paid workers redundant. Already, some firms use Knightscope’s Dalek-like robots, instead of security guards. The Chinese have a beefed-up version for riot control. It’s called AnBot and it comes complete with Taser-like weaponry.
Similar moves are afoot to replace soldiers with robots. China’s HIT Robot Group is now showcasing military robots, armed with guns and grenade launchers. It’s full-on Terminator stuff. You can therefore add law enforcement and military jobs to the long list of careers threated by automation. Right now, that list is already pretty long, including everything from truck-driving (Otto) to picking berries (Dogtooth Technologies).
Not only are the working class at risk, but also there are threats to traditional white-collar roles. Threats are apparent in fields as diverse as immigration law (DoNotPay), bookkeeping (Wave accounting) and medical diagnostics (IBM). Although the middle classes aren’t immune to robots, they’re nevertheless more readily redeployable. The less well educated will bear the economic brunt of this robotic transition.
The result is a rise in “men without work” – to quote the trend identified by Larry Summers. The former US Treasury secretary has identified a cohort of people who aren’t counted as unemployed. They don’t claim benefits or show up in official labour statistics. They’ve checked out of the economic system entirely, on a temporary or permanent basis. These people typically live with relatives (usually parents). They have an inexpensive, digitally-dominated existence. If you can live in a spare room, and survive on a few pounds’ worth of mum’s food per week, then why bother trying to compete with a robot for a job? Indeed, why sign on for jobseeker’s allowance – when all you get is a few paltry pounds and lots of back-to-work bullying? Many low-skilled “workers” have weighed up that choice and checked out.
Automation is, however, not a one-way street. The price advantage of labour vs machinery, whether physical or intellectual, may change over time. Before the credit crunch, I used car washes filled with machinery. Nowadays, it’s more usual for me to get my car washed by “imiagrunts”. They may not have taken all our jobs, but they have taken many of our car washes.
Of course, this soaking-up of labour opportunities at the margins of the economy is not limited to readily-automated vehicle valeting. Everything from building-site labouring to cafe service, has been taken over by a new immigrant class. It’s at this end of the economy that our graffiti-spraying friend would traditionally have worked. They are likely now economically stranded and socially threatened. Over time, automation will creep into more and more of these roles. Instead of the Devil and the deep blue sea, they will be trapped between globalised labour and automation.
In Japan, they have a word for these people: “herbivore men” – a group without the prospect of economic advancement and the prospect of family life that comes with it. That social change is one of the reasons why Japan’s fertility rate is currently a terrifying 1.4 births per woman. Extrapolated, that will shrink the size of a generation to around a sixth of current levels, in just a century.
I’ve often thought the description “working class” has become inappropriate. In the early part of the 20th century, being a member of the working class was a description of nobly industrious employees. In modern times, “working class” has ironically come to describe people who do not work. Increasingly, it may end up being a description for people who cannot work – the people in the economy for whom there are no jobs. Not now, not ever.
Perhaps, we need to call them what they are: the useless class. This phrase, used by historian Yuval Noah Harari, is a deeply-uncomfortable description for a large section of society. Nevertheless, it may be a necessary one, if we want to have an honest debate.
What does this widespread uselessness mean for our society?
Sadly, the signs aren’t good. Ever since the rise of farming gave storable wealth there has been a history of unequal societies, within which a powerful elite grows ever wealthier. When these elites continue to enjoy enrichment in the face of impoverishment of the rest of society, a revolution often follows. Ignorance or indifference to the embittered masses is typified by Marie Antoinette’s (apocryphal) quote, “Let them eat cake.”
In our modern digital and industrial economy, this tendency to concentrate wealth has only accentuated. We don’t call our economic victors “robber barons”, as Carnegie and his ilk were termed. But we’ve still got our Uber-rich: Bill Gates, Warren Buffett and Elon Musk – and our media are a little kinder to them. That’s fine, while the rest of society is working well. But if you’re tempted to graffiti your opinions about “imiagrunts”, it’s probably a sign that your society is in trouble. Young people without jobs, hopes, prospects or even food are easy to tempt into unrest. London saw this explosion of youthful rage a few years ago, as our own version of Paris’ economically-segregated banlieue burst into flames.
“Imiagrunts” or not, the rise of the robots mean that we’re now all-but guaranteed to be stuck with a “useless class”. If we don’t look after them, their resentment will grow – until they rise up and overthrow the society that has left them behind.
It’s potentially easy to profit from investing in robotics, and we’ve listed some interesting firms in this article. But how you profit from a divided and increasingly hostile world is harder to work out, and that could be a much bigger play. In the short term, you might see a boost to defence and security stocks. In the longer term, the trick may be to guess what’s actually left to invest in.
I’d love to hear your opinions on this difficult and controversial subject. Whether you’re useless or not, please do write in: email@example.com.