UJ’s Prof Tshilidzi Marwala explores whether democracy will survive 4IR


UJ’s Prof Tshilidzi Marwala explores whether democracy will survive 4IR


Publishing Date: 10/1/2018 9:00 AM

The Vice-Chancellor and Principal of the University of Johannesburg (UJ) and the author of the upcoming book Handbook of Machine Learning, Prof Tshilidzi Marwala recently penned an opinion piece, Will democracy survive the fourth industrial revolution? published by City Press, 30 September 2018.

Will democracy survive the fourth industrial revolution?

The scandal of Cambridge Analytica, which harvested data from Facebook, Twitter and Google to help the Trump Campaign win the US elections, brings to the fore the fragility of democracy. More so in an era where personal data can be used to influence the outcome of an election. Democracy, as explained by the USA President Abraham Lincoln at Gettysburg, is "…government of the people, by the people, for the people". Lincoln went further to proclaim that such a democratic government "shall not perish from the earth". Many governments have proclaimed that they work for the people. China is officially called the People's Republic of China and North Korea is called the Democratic People's Republic of Korea. Whether these governments are there to serve their people is a matter of debate. Given the ability of the technology of the fourth industrial revolution (4IR) to influence elections, is democracy in danger of perishing?

Democratic countries derive their legitimacy from the will of the people. Any process that undermines democracy breaks the bond between the government and the people and causes instability in the country. There are various ways to undermine democracy. One way is to rig an election. Joseph Stalin once said that "it is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything". Therefore, a tactic to rig an election is to influence those who count the votes. These vote counters can be bought or they can be threatened to give a particular outcome. Another tactic of undermining democracy is to keep the population uneducated, uninformed or confuse them with all sorts of irrelevant things. Historically, this used to be called propaganda but today it is called "alternative facts". The aim of this is to make the people think about everything else other than holding their governments accountable.

In the 4IR era, voting is often done electronically; meaning the elections is prone to hacking, which can be used to influence the outcome of the polls. This is the reason why cyber-security is so central in the 4IR. Those nations that do not have the means of protecting themselves from cyber-warfare risk having their democracies and their societies undermined. As South Africa, do we have the necessary skills sets and infrastructure to protect our government and companies from cyber-attacks? Are our universities geared towards producing world-class cyber-soldiers than can protect us from cyber-warfare? The cyber-attack in June on the insurance company Liberty, where customers' data were stolen poses a serious question on whether we have or are producing world-class cyber-soldiers. The other way of undermining democracy is to create "alternative facts" and spread them on the internet using software robots, i.e. bots, using social media. This is almost akin to what the Nazi criminal Dr Joseph Goebbels did to the German population during the Second World War. The 4IR offers modern propagandists the electronic tools to influence, confuse and misinform the public in order to undermine democracy. Are our universities producing social scientists who understand the 4IR with the aim of creating a society that is ready to defend our democracy from cyber-warfare? To have a society that is vigilant in its defence of our democracy, people need to be economically active or be in the employment service.

However, the 4IR is changing the world of work. Artificially intelligent machines now perform tasks that were traditionally performed by human beings. The consequence of this change is that the world of work is shrinking. Our factories are employing fewer people than before as machines increasingly perform jobs. The consequence of this is that in the post-work era, permanent jobs will disappear as the demand for human-based labour decreases. Those with adequate capital to buy industrial robots will produce more with fewer resources and will become very wealthy while the rest will be relegated to irrelevance and to the margins of society. The consequence of this post-work era is that inequality will increase. The increase in inequality will result in social instability that in turn will undermine democracy. This will result in the market-based economies facing a crisis.

The resulting crisis is that there will be anybody to buy these produced goods and services because people will not have jobs and thus will not have income. The market capitalist economic system is based on the laws of demand and supply. While the robots will mainly take care of the supply side who will take care of the demand side if a large number of people are unemployed and therefore have no means to buy? The entire consumer economy will collapse and on the demand side, only robots requiring replacement parts will remain. One of the ideas proposed to deal with the demand side of the equation is to introduce the universal basic income. This is a socialist solution to a capitalist problem and capitalism as we know it shall therefore fundamentally change. Will the universal basic income be enough to sustain a market-based capitalism? The universal basic income relies heavily on adequate collected taxes. If many people who used to pay taxes are out of employment who will fill in the tax hole they will leave? One suggested way is to tax intelligent robots. However, intelligent robots are so ubiquitous that it is difficult to decouple them from a normal machine or process. For example, Microsoft Word is part of an intelligent robot because it is able to correct spelling and grammar errors and this used to be done by humans.  In fact, taxing robots is just a sophisticated way of increasing corporate taxes.

Historically, the world was divided into two types of economic systems. These were the socialist based economies and the capitalist based economies. The capitalist based economies, e.g. the United States and Japan, were based on the laws of demand and supply to organise the economy and allocate resources. In this system, resources were allocated based on the markets. Adam Smith described this way of organising the economy the "invisible hand". The socialist economies, e.g. the Soviet Union and China, were organised through central planning. Because societies and economies are complex, it is difficult to implement central planning and consequently, countries that followed this mode of production were generally inefficient and did not achieve economic growth that matched market economies. Consequently, the Soviet Union collapsed and China adopted the Socialist Market Economy (which is also called Socialism with Chinese characteristics). Socialism with Chinese characteristics was introduced by the Chinese leader Deng Xiaoping after the stagnation of Maoism to advance economic productivity. Socialist market economy is effectively state capitalism and government plays a more prominent role in the economy using the principles of demand and supply rather than the fully planned economy. The question that this paper seeks to address is whether state capitalism or market capitalism will be able to survive the 4IR?

One of the principal functions of any nation in the post work era of the 4IR is its ability to redistribute wealth. In market capitalism, the majority of wealth resides in private hands, whereas in state capitalism the majority of the wealth resides in government. In a market economy, as the inequality widens, private citizens who hold the majority of the wealth will seek tax havens so that they can avoid distributive policies. This, consequently, will make market capitalism unstable. In state capitalism, where governments hold much of the wealth, the state will have a distributive leverage making these societies more stable. Therefore, nations such as China will be more stable than nations such as the United States in the era of the 4IR.

Lessons for SA

What lessons should we draw from this analysis as South Africa?

  • Firstly, those countries that have a stronger hand in the economy shall be more stable in the 4IR.
  • Secondly, that we should increase technical competence in the state to be able to participate in the economy.
  • Thirdly, that we should seriously tackle the problem of corruption in the state and private sector to increase the capacity of the state in the 4IR to distribute resources. The alternative path shall be dire to all of us.
  • Fourthly, that to protect our democracy, education is crucial. As the former president of Harvard University Derek Bok put it; "If you think education is expensive, try ignorance".

In conclusion, without distributive leverage democracy will not survive the 4IR.

The views expressed in this article are that of the author/s and do not necessarily reflect that of the University of Johannesburg.