Year LVIII, 2016, Single Issue, Page 3

 

 

Europe and the Great Transformations of the Digital Era

 

 

To borrow Virginia Woolf’s expression, decrying the confusion besetting Europe on the eve of the Second World War, Western society today seems to be increasingly disoriented by “discordant and distracted twitter”. To really get to the root of the growing climate of confusion now threatening to plunge our civilisation into social, economic and political chaos, and identify a common thread running through the various crises we are witnessing, we need to take, as our starting point, the transformations that, from the early part of this century, have begun to reshape political, social and economic behaviours within society. All these transformations are linked to the digital revolution that, through the Internet, now pervades production, administrative and financial processes, and influences economic behaviours.

It is becoming increasingly clear that the possibility of offering our continent the prospect of development and progress depends largely on how we respond to the challenge of controlling, governing and exploiting, rationally, the enormous development opportunities offered by the digital revolution. It must be appreciated that the necessary responses demand, first of all, a profound rethinking of the size of the state and of its role in promoting a reorganisation of the labour market, the system of wealth redistribution, and regional development, as well as more effective government of these areas. In this context, the state has a crucial role to play in ensuring that everyone, at different levels, has access to the digital network and the resources it provides. It must also be clear that the responses required need to be based on a careful analysis of the emerging socioeconomic setting – an analysis based on real facts rather than abstract or ideological ideas and models of government that belong to an era predating the scientific revolution.

* * *

Many aspects of today’s digital world were already taking shape prior to the advent of personal computers and smartphones. However, the digital revolution had the effect of dramatically speeding up thespread of certain phenomena that had been evolving gradually, over decades, and turning them into a powerful force of change.

Today, these effects of this change are already part of the daily life of every individual and every society. Yet around 50 years ago, they were only just being envisaged by those (like Radovan Richta and his working group) who had begun to analyse the political, economic and social implications of the scientific and technological revolution, and of the integration of production processes with those related to the transfer of information. In 2010, Yann Moulier-Boutang, in his book L’Abeille et l’économiste,[1]summarisedthe development logic of this aspect of the digital revolution, likening the functioning of a beehive to the mechanism by which the Internet creates added value. Bees do far more within the ecosystem than merely producing honey: they are responsible for pollinating numerous plants; indeed at least a third of global agricultural production depends on this activity. In the context of the Internet, through a similar process, the value of a product or application depends on the interaction, clicks and traces left by its countless users, who are constantly modifying and enriching it, and at the same time modifying and enriching the architecture of the network itself. We therefore need to be aware, in Moulier-Boutang’s view, that we are moving from an economy based solely on production and exchange to one that also relies on Internet-based “pollination” and collaboration mechanisms.

At this point, there are two circumstances, in particular, to be noted.

The first is the spread and establishment, over the past decade, of economic behaviours previously associated with small markets and barter-based economies. In the current digital age, one particularly popular alternative economic system is the sharing economy, of which Uber and Airbnb are the most famous and successful examples, albeit not the only ones. Through the sharing economy, which is based on the mechanism of collaborative consumption and the principle that everything can be shared at a reasonable cost, everyone today can become producers and consumers of goods and services. It is not the birth of a new economic behaviour that we are witnessing, but rather the emergence of the possibility of applying this behaviour, efficiently and reliably on both the supply and the demand side, outside the traditional local setting. Unsurprisingly, we are now seeing that not only private citizens but also large companies are investing in this approach.

The second circumstance is the considerable use of automation and robotisation in different areas of modern life, including manufacturing, surgery, the piloting of vehicles and aircraft, and legal and financial analysis. This is putting a great strain on the labour market management policies of the traditional welfare state, and indeed showing them to be inadequate in the face of today’s job creation and destruction rates and demographic trends. After slowing down for a period, which lasted until the early 2000s, the use of robots in society and in manufacturing is now increasing strongly once again. So much so that China, while certainly remaining a large labour pool, has become one of the world’s leading markets for industrial robots, alongside the US, Japan and Germany.

The political, social and fiscal implications of this phenomenon are obvious. Historically, governments have already faced similar momentous transitions, albeit less rapid and disruptive ones. One need only recall the work of the Blue-Ribbon National Commission on Technology, Automation and Economic Progress[2] set up in the USA by President Lyndon B. Johnson in the 1960s to study the employment consequences of the first phase of automation and address the fears, apparent even then, over the processes of changethat were evolving; or the trend recorded in Great Britain, the birthplace of the Industrial Revolution, where productivity – the unit of output per hour worked – has, on average, increased by one third per generation since 1800.

Returning to the present day, and to our own continent, the European Commission recently issued guidelines drawing the EU member states’ attention to the potential of the new collaborative economy (which in Europe yielded gross revenue of around thirty billion euros in 2015) and the need to regulate it, not ban it as some would like. Because new technologies, in themselves, do not eliminate work. Rather, they produce trends within the evolution of occupations – trends that need to carefully governed.

The problem is that whereas elsewhere in the world, the USA for example, governments are already working on the tax and insurance laws needed to safeguard producers and consumers in this new setting, and thereby facilitate the creation of wealth for the citizens, Europe still lacks the institutional tools to do this on a continent-wide basis. Furthermore, the European states continue to respond to the Commission’s indications in a random and contradictory manner, as shown by the reactions of Germany, France and Italy, and by the Spanish and Belgian governments’ appeal lodged with the European Court of Justice: they want the Court to decide whether Uber should be classified as a transport company or as a digital service.

* * *

It is an illusion to think that the huge transformations induced by the digital revolution, and by previous major innovations, can be stopped though a return to barriers and borders and through national security and regulatory systems. It is of course possible to try and maintain, at any price and for as long as possible, the status quo, if the objective is to defend specific interests or economic privileges, or to maintain a given political and social order. This is also the way to encourage an entrenchment and strengthening of the most reactionary and demagogic elements within society, and in Europe it would mean a return to the past and all its ills, and would certainly not protect the Europeans from the consequences of the spread of scientific and technological innovation.

To govern the transformations introduced by new technologies, it is therefore necessary to create a European federal system of government, legitimised before the citizens, thereby superseding the old system based on voluntary cooperation between national governments. There is no doubt that the political and historical responsibility for creating this government falls to the Europeans who have already relinquished their monetary sovereignty, because the battle between conservation and progress, both in political terms and terms of governing today’s new economy and society, can be won only through European integration.

The Federalist



[1] Yann Moulier-Boutang, L'abeille et l'économiste, Paris, Ed. Carnets Nord, 2010.

[2] http://www.presidency.ucsb.edu/ws/?pid=26449.

Share with