Robots don't take your job. Bosses do

A Lego Model of Technological Unemployment

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So far in our Lego Capitalism series we’ve covered the basic circuitry of a corporation, the basic circuitry of finance, and the more complex centrally-planned transnational circuits within corporations. In this episode we’ll delve into one method corporations use to undermine their workforces. Paying subscribers can access the audio version here

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There are many euphemistic phrases that corporations use to disguise their true nature. Take, for example, the idea that they ‘create jobs’. Amazon says this on its website:

It’s a heart-warming story. The executives want you to think that without Amazon these jobs wouldn’t exist, but the reality works both ways: Amazon wouldn’t exist either without these jobs.

We’re often told that Jeff Bezos ‘built’ Amazon (see The Stone Soup Theory of Billionaires), but would you pay him if Amazon was only an idea, without the parcels actually turning up? Of course not. Amazon is only a reality in our world because workers make it real by doing the jobs. Without people organizing the warehouses and delivering the parcels there would be no revenue, which means Jeff Bezos would make precisely zero dollars per day. He’d be like a beekeeper without bees, dreaming of pools of honey.

The reason why Bezos’ net worth goes up by $7.9 million per hour is because tens of thousands of workers are out there knocking on doors, getting into elevators, getting barked at by dogs and so on. Amazon creates jobs because it needs workers to create Amazon every day. If those workers could have their own website, we could imagine it saying something like this:

Our media, however, is often funded by the billionaire class, and has been for a long time, so we have a bias in our language. The newspapers will certainly talk about how a big company ‘creates jobs’ as it expands, but they won’t say that it ‘destroys jobs’ when the workers get fired. No. They create jobs on the way up, but on the way down they simply downsize, rationalize, or rightsize.

But here’s an anomaly. While corporations historically cannot exist without jobs, the managers within them also have a constant perverse desire to destroy those jobs. To understand this, you have to think of a corporation as a dense sub-system within the much larger system of interconnected people that we call ‘the economy’.

If we zoom into that single sub-system, we’ll see thousands of workers plugging into the corporate legal entity, inputting labour to operate the assets so that the entity can output products to customers, so that the financiers and shareholders that originally capitalized the entity can extract more money out of the circuit than what they originally put in. That’s what we covered in A Lego Model of Corporate Capitalism.

In the case of a company like Amazon, the assets will be things like delivery trucks, or data-centre cooling systems, and they will be inputted by external suppliers like car companies and coolant manufacturers, but those assets will remain dormant unless the workers activate them. It’s not like Bezos turns up to operate the data-centre, or to load up the trucks, or to programme the logistics software. So, whenever you see an Amazon delivery van driving past you, that’s someone activating the assets, which is what ends up making profit for Bezos.

Well, that’s the idea at least. To make profit, a company - whether it’s a tea manufacturer or an aluminium smelter - must sell outputted goods and services for a higher price than the input costs of labour and external suppliers. This means that if the managers wish to increase profit per sold good they have to antagonise one of two groups.

1. They either boost the price of the outputted products, which hits customers

2. Or they reduce the cost of the inputs, which might entail dominating over suppliers, or lowering wages for workers

The strategy they go for depends on who has power in the society

1. If the working class is in a strong position, the managers might have to fight for them and keep their wages high, so to keep profits stable for shareholders, the managers will seek to ‘pass costs on to the consumer’. This is a euphemistic way of saying ‘we don’t want to take a hit to our own cut, and we’re scared that our shareholders will pull out if we reduce profits, so we’ll just raise prices and hope that we have enough market power to stop customers leaving’

2. If, on the other hand, the working class is in a weaker position, the managers can screw them with lower wages

There are of course many variations possible (e.g. if the company is in a monopolistic position, it might raise prices and reduce wages), but there’s another classic strategy that can be played to undermine a strong working class. The managers can input machines in their place. This leads to another of those euphemistic phrases, which is the idea that ‘machines take jobs’.

Supplier takes job

Let’s cut through the bullshit and actually look into the circuitry to see what’s happening when a ‘machine takes your job’. What’s really going on is that bosses are just paying a new external supplier for a new asset - a machine.

But who is that external supplier? Well, normally it’s another corporation that outputs machines as its product. Let’s zoom into that machine manufacturer…

Like any firm, they have shareholders and financiers who capitalize them, and then the entity uses that money to hire managers who coordinate workers that activate tools and goods from suppliers, to make - in this case - machines. And, who are the customers? Well, another corporation, which is buying the machines. Let’s fuse the two circuits together.

For the buyer corporation, the machine manufacturer is a supplier, so let’s reorientate the image to see that perspective.

So, the phrase ‘machines take jobs’ really just means that the bosses of a corporation are pulling money away from their workers, and redirecting it to an external supplier. That money appears in the other corporate circuit as money entering in from a customer, and making its way to the managers, financiers and shareholders of that firm.

On net, what’s happening is that the boss is now paying the old worker salaries to the shareholders of the other corporation, who are hiring managers to hire machine builders who have the job of displacing the other workers. The boss class is essentially doing business with each other, enlisting one work-force to undermine another.

If you’re in a booming economy, it’s possible that the boss buying the new tech might use it to simply augment the existing workers, so rather than losing their jobs, they get to operate the new machines to output more with the same amount of labour. In other times, though, the firm will simply aim to output the same amount with less labour, which means the jobs get destroyed, or - to use the euphemism - ‘rightsized’. This phenomenon is called technological unemployment.

Repeat cycle

In a typical economic progress story, we’re told that the laid-off workers will eventually drift into a new position somewhere else, where they can operate the now more powerful assets (built by other workers) owned by the ownership class.

For example, in the 1800s home delivery might have been done by horse-cart. In the early 1900s the riders might be displaced by auto-mobiles - produced by auto workers hired by an auto-mobile company, and bought by the postal company - but as the vans propagate around the system, we end up with newer generations of workers operating them, like our Amazon delivery driver.

According to the standard argument, even if workers are still taking a small relative cut of a firm’s revenue, it will equate in absolute terms to more stuff than before. Over the decades, workers get chased from one job to the next, but it’s imagined that - as a class - they’re also ‘upgrading’ to a higher productivity world and higher standard of living, because the absolute output of society is increasing as automation spreads.

It’s another one of those heart-warming stories, but the thing about economic growth is that it’s not just an increase in stuff. It’s an increase in needs. This is why all the upgrading over hundreds of years hasn’t truly led to any higher level of security for workers. When you look across the globe, with its mass output, you don’t think ‘oh what abundance, ease and relaxation we live in’. No, you think, I better fucking keep up or else I’m screwed.

People are as stressed and strung out as they’ve ever been, because managers just rinse and repeat this cycle forever. In a capitalist system, they always have this requirement to try drive down input costs, and to convert new tech into higher output relative to labour input. You might think the managers will allow you to use automation to have a more chilled job, but that’s a fantasy - they’ll either fire you or require you to produce more in the same amount of time.

To compete as a worker you will always have to be ‘keeping up’ with the latest technology standard. An old horse-cart driver could live a moderately decent life in the 1800s on a fraction of the things you now require to compete in the lowest end of the job market. If you tried to use the same absolute amount of stuff as them, you’d experience a terrible poverty that they didn’t experience with that amount of stuff, because your needs are much higher.

Contradictions of Capitalism vs. Billionaires

In recent years, the managerial class is starting to experience an internal contradiction. That’s because there’s a whole new class of companies that hire machine-builders to create machines - like AI - to replace lower and middle management type functions. They can sell that to the senior management and shareholders of other corporations.

Ah, but it’s not like these machine-builders are safe either. The irony of ironies is that their bosses can hire other machine-builders to build machines to replace machine-builders. That just happened with Meta. Zuckerberg is prepping up to replace his mid-level programmers with AI, created by other programmers.

There’s really only one class of people that cannot be displaced by tech. The ownership class (commonly known as ‘capitalists’). Machines, robots and AI can certainly do work, but cannot own things. Human-created objects - whether a hand-carved walking stick or a powerful datacentre - have no legal rights, so they can’t become machine capitalists that can dislodge the human ones.

So, do you want to know why those big owners of capital - like Bill Gates and Sam Altman of OpenAI - are so interested in universal basic income (UBI)? Well, if you zoom out from the particularities of specific corporations, and look at the big picture, you’ll see that the acceleration of automation tech is destabilising the capitalist meta-circuits.

If you view the economy in the abstract as one singular process in which people contribute to one singular product - like a giant soup - and then get handed vouchers (money) that allow them to claim portions of that product back to consume, you’ll see some interesting patterns.

Historically, the ownership class (who hang around the financial and managerial sector) pays workers less to produce stuff than society as a whole will pay back to buy the resultant stuff as consumers, leaving a big residual to the big owners of capital, who end up with a much higher claim on the stuff - hence them being billionaires.

I know that sounds a bit mind-bending, but here’s the takeaway: in the situation in which the workers are totally cut out from that circuit (i.e. where the massive owners of capital end up with machine empires that produce ‘soup’ for them alone), the workers who built those empires for them don’t just stand there and starve. They take up arms and rebel, and destroy the billionaire class.

This is why some of that class have found themselves thinking about UBI. They see it as a means to redistribute some of the vouchers back to quell rebellion (I mean, they won’t say that, but that’s what’s going on).

This circuitry also might help you to understand a few more things in the news. For example, if you were a strategist hired by billionaires to prevent an uprising against them, what might you suggest? Well, here are some options:

1. You can go down the draconian route, and suggest using the technology to quell rebellious movements. For example, here’s tech billionaire Larry Ellison talking about using AI to monitor and control edgy populations

2. Perhaps you might suggest promoting crypto and day-trading, to offer gambling as a way out of the economic trap (see The Inner Civil War). Combining a get-rich-quick salvation story alongside a libertarian message that poverty is solely your own fault is a powerful combination

3. You can go down the xenophobic route to redirect worker anger towards other groups of workers, to distract them

4. You can combine that with jingoistic nationalism, aimed at convincing workers that they’re on the same side as their local billionaires, standing together as a team with the common goal of ‘beating’ other nations - e.g. Team USA vs Team China

Of course, some billionaires can’t help but try to have their cake and eat it too. Perhaps they exploit that nationalistic fervour to get the government to massively subsidize AI infrastructure for the billionaire class - to win the AI ‘arms race’ against another team. Having won it, the billionaire class of course will also own it, and can then use it to truly fuck the workers of the world.

You see, in the final analysis, the deep and lasting battle isn’t between the US and China. It’s between the ownership class across countries and those who operate the owned assets. Do you think a CEO in Wisconsin, Frankfurt, Johannesburg, Tokyo or Dubai really has some deep allegiance to Team USA’s OpenAI rather than Team China’s DeepSeek?

No, when they decide which of those suppliers they will input to their operations, they mostly care about profit optimization. OpenAI and DeepSeek might have a battle with each other, but the global boss class as a whole doesn’t really care who wins. What they care about is for the winner to cut their costs for them, and we know what ‘costs’ mean in this context: people.

See you next time.