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Automation and Business Darwinism



At the beginning of the 1990s, defense cutbacks, corporate mergers, and global trade wars troubled America. In response American business turned to a particular social and economic philosophy to galvanize the corporation, make it “leaner and meaner,” and promote its survival in turbulent times. Although more widely known as “social Darwinism,” I prefer to think of it as “business Darwinism.” It held that business was a struggle for existence (profitability, market share) in which only the strongest (nimblest, leanest, best adapted) survived. To create the leaner, meaner corporation, business-Darwinist leaders began shrinking employment across the economy through a process that came to be known as “downsizing.”

Using the trade press, consultants, and associations, business leaders came up with one approach after another to prosperity in the global market. Total quality was stressed. Just-in-time production was introduced. But, most of all, in the “nanosecond Nineties,” firms began to automate. If asked to account for rising unemployment, business executives and economists pointed to the recessionary conditions they faced. But the impact of defense cutbacks was eventually overcome; corporate mergers calmed down for a while; and America seemed to pick itself up and succeed in the global trade war. In general, recessionary conditions seemed to lift after 1991.

Despite these changes, the return of good times brought fewer jobs, or lower-paying jobs, than expected. America watched with rising alarm the advent of what came to be called “jobless recoveries,” a name that described but did not explain what was happening. As downsizing spread, so did automation. As automation spread, so did downsizing. A peculiar relationship emerged between the two that had little to do with recessionary pressures. It began to be recognized that, whereas downsizing for simple cost savings could demoralize and overtax the remaining employees, replacing people with technology was a much cleaner solution. Whereas downsizing unto itself came to be seen as an evil, automating was seen as a good. It allowed the corporation to survive in the unforgiving global market, said its supporters. It allowed the company at least to save some jobs instead of losing them all. In search of the lowest-cost, highest-productivity process, factories, plants, labs, warehouses, and offices around the country began to use automated systems wherever possible to replace labor.

Assembly lines and process controls were automated. Management information systems funneled statistics to corporate executives. The microchip was applied to more and more productive situations, producing a dizzying array of acronyms: ATM, CAM, MRP, SAP, etc. In the office, automation ran at first in the background. Unobtrusive mainframes yielded to desktop computers as computing power multiplied. Desktops gained online, global access to each other. The computer became a vehicle and the world, a neighborhood. Allied technologies like bar codes, optical scanners, LANs, WANs, lasers, robots, biometrics, and a host of other tools continually extended the range of technology, as it accelerated in capturing erstwhile manual work or reaching out into new forms of commerce.

If I could imagine the spread of automation, I think it would form a J-curve, with a slow beginning and a rapid acceleration. My thesis here is that we have released a genie from a bottle, which does as much mischief as good. As long as we allow it, harmful automation has the capability of replacing more and more workers. It promises to leave us, not leisured, but idle and anxious, citizens.

In order to provide a snapshot of the automation of work, I chose to study a corporate travel magazine during the years 1996 to 1998 -- the Business Travel News or BTN. Trade magazines like it are all that are available to a contemporary researcher who wishes to follow corporate decision-making. Future historians will have access to the memoirs of corporate insiders and their correspondence, but we have only the pages of trade publications to give us hints of what is occurring. In most trade publications, one must interpret nuances, but BTN openly discussed the industry's plans to eliminate the corporate travel agent, a middleman, from the travel scene. In fact the magazine was a steady technology booster.

What we will hear in these pages is corporate travel decision-makers urging the automation of entire industrial occupations – the corporate agent and the airlines reservationist – both booking agents, though providing different mixes of services and working for different employers. In considering this scenario, I ask us to reflect on its deeper meaning. The displacement of the corporate travel agent and airline reservationist being discussed in the pages of BTN was not an unforeseen or unintended consequence of the automation process. It was foreseen and intended. In fact, corporate travel will be heard here to demand the tools that will bring to pass the demise of the corporate travel agent. Allowing the significance of this to sink in may take time. Beside this desire to dislodge whole job classifications from employment, the smaller events of the automation process pale.

People are applying automation elsewhere and its effects are equally severe. I could have examined the automation of the medical lab and the demise of the lab technician, or the automation of the pulp mill control room and the demise of the process control staff, or the automation of printing and the demise of the printing trades. I could have looked at so many occupations today and the number of endangered occupations will grow daily.

The jobs that are lost -- the occupations that are lost really -- are lost permanently. They do not return with good times. Corporate travel agents will not simply move from one company to another. They will wake up one week and find their occupation gone, "no longer needed.” They will be obliged to retrain and re-enter another occupation. Those without means may find they must accept work at a lesser pay. Some may tumble down the economic ladder. Obsolescent people will find themselves competing with more and more displaced workers, many of them training to enter fields that are already beset by automation. This ripple effects will further weaken general employment conditions and benefits and slacken demand for workers as it builds what was once called “the reserve army of labor” (that is, the ranks of the unemployed).

If we are fully to rouse ourselves from our fascination with computers to see some of their harmful side effects, we must stop a minute and consider two paradoxes that lie at the heart of technology. Here is the first paradox of technology: computers do have the power to help or harm, cause gain or cause loss. But how we use them determines whether they will benefit or injure us. People can be found who rave about them. Others can be found who curse them. Seldom do we consider that both arguments have merit. At best, we see technology from one vantage point only: we are boosters or critics. Like so many paradoxes, this one can only be resolved by us holding its two conflicting sides in our minds at one and the same time. Seeing only how they help us, we remain blind to their damaging side effects. Seeing only how they harm us, we fail to understand why automation continues to be used and the appeal it has for so many. Avid technology boosters and reckless Luddites equally miss arriving at a wise and appropriate solution to the problem that automation presents us. Eventually, as a society, we shall have to devise standards by which to judge what automation is wise and appropriate and what is not.

To hold both sides of the equation in one’s mind for understanding is not to countenance harm. Technology does harm some workers, as we shall see below. In a free democracy, the right of someone to act is restrained exactly at that point where one’s actions harm another. Although technology has helped us and will continue to help us in the future, when it harms another, it too must be stopped.

We escape from the paradox that technology is when we acknowledge that it can help or harm, and that when it harms it is being used unwisely and inappropriately. This look at BTN shows men and women discussing an inappropriate use of automated technology. Let it be the first photograph pinned to the “missing persons” bulletin board: technology here has injured the corporate travel agent and airline reservationist; that harm and its continuance must be addressed and stopped.

The second paradox of technology concerns its social impact. At first, automating processes makes corporations more profitable. A bank can accomplish many more previously-manual operations using automated teller machines and pay no wages, pensions, benefits, employment insurance premiums, and so on. But eventually firms are “hollowed out.” Pay levels remain static or decrease. Employee morale wanes. The debt-ridden young cannot find any but dead-end jobs at low pay. Many people at the peak of their career or nearing retirement are dislodged from work. Employment insurance payments are used up and still no work is found. A growing gap opens up between rich and poor. Consumption levels drop and then businesses begin to feel the pain as well. Some businesses fall as consumer demand declines. The combination of business Darwinism and the automation of work will bring widespread suffering to the automated and the automater alike.

To be sure, automation remains only one cause of the dislocation we face; there are many more. As a globe, entire regional economies like Southeast Asia are under stress; entire nations like Japan and Indonesia are affected by official and criminal corruption, sometimes at the highest levels. I am not claiming that automation is a single-factor explanation for our woes or that by addressing it we have found a silver bullet. I am saying that automation, if it continues to be applied inappropriately, will capture ever increasing amounts of work until large numbers of us will be left unemployed, employed only on contract or part-time basis, or overemployed and underpaid on several low-paying jobs. Automation will bring stress to both the idle and the overworked. It promises not to enrich the greatest number of us; it threatens to impoverish us.

The situation I describe is serious. My cast of mind in approaching it is serious. Nonetheless, as you will see at the conclusion of this study, I am an optimist about the future. I have full faith that our democratic institutions will right themselves before grave damage is done. Please allow the corporate-travel process typified here to stand for the automation process in general. Let the suffering ahead for the corporate travel agent and airline reservationist speak to you on behalf of all who suffer from obsolescence and displacement. Join me then in listening to the corporate travel sector discuss how to “bypass the middleman.”