Industry 4.0 political economy

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The characteristics of Industry 4.0 can deepen the systematic crisis of peripheral capitalism

The recent small industrial parks that use automation and the internet of things in their production models demonstrate that the new industrial revolution is already approaching Brazil. However, with globalization and the international division of labor already in full swing in the world, Brazil will have the role of receiving industry 4.0 through foreign companies.

One of the characteristics of industry 4.0 is the reduced need for qualified employees, which puts it against the grain of industry development up to the current stage of technological development in the world. With the reduction in the qualification required of employees, the tendency is for wages to fall in the productive sector of the economy. The immediate consequence of this problem is the drop in wages in commerce and services as well, as it is the increase in worker productivity in the productive sector of the economy that makes collective bargaining for higher wages possible. As commerce and services need workers as much as the productive sector of the economy, there will be a relative equalization of wages in the labor market as a whole.

A lower total income of the working class leads to a lower demand in the economy, which results in an economic downturn. This crisis of demand for a reduction in wages accompanied by an increase in the general productivity of production can be mitigated through taxes on profits accompanied by income distribution through government programs.

It turns out that only in the central countries of capitalism is such a corrective measure possible, since these countries are the headquarters of companies that are on the technological frontier of the world. In peripheral countries, industry 4.0 and its regression in the qualification of workers will lead to a migration of existing industrial parks in countries like Brazil to poorer and more technologically backward countries.

The so-called industry 4.0 is also characterized by the verticalization of the production process, which is also a countertrend to the movement towards specialization and horizontalization of industry production that has been taking place in recent decades. This feature reduces the need for large local infrastructure for the implementation of industrial parks and favors this new stage of globalization, taking industries from poor and middle-income countries to even more economically backward countries in the world.

If this process occurs, there will be a drop in labor income in Brazil and, consequently, a demand crisis. However, unlike the center of capitalism, in Brazil and in peripheral countries the loss of their traditional industries will not only reduce wages, but also the general productivity of the national economy, which makes it impossible to correct the demand crisis by replacing wages. by income from social programs financed by taxes on profits.

The profit rate increased by industry 4.0 will only be acquired by companies from central countries, which hold the patents and the know-how technology and by the property-owning class of the poorest countries that will be introduced to industrial capitalism with this probable change in the industrial parks that are currently located in peripheral and middle-income countries such as Brazil.

The only solution that will emerge in peripheral countries will be reindustrialization via national companies. Peripheral countries that have an industrial park like Brazil will have to adopt developmental strategies to resume labor productivity in the national economy as it was before the loss of their industrial parks. This political process will certainly not take place through the neoliberal and social-liberal parties that dominate most of parliamentary politics in peripheral countries. Since the national elite will never abandon its profitable model of economy based on agriculture and banks. In addition, the social crisis resulting from this new deindustrialization will lead to more extreme and radical political programs, giving space to both fascism and socialism.

In the Brazilian case, the reduced class consciousness of the population accompanied by its low politicization, largely resulting from ideological propaganda in the mass media that have dominated the country for decades, puts in check the possibility of the growth of socialism in Brazil, and opens the door to doors for a new Brazilian neo-fascist government. However, unlike the last one, such a supposed fascist government will put the productive development of the economy ahead of finance, and with that, it will be able to gain strong popular support. However, it is worth remembering that a fascist government that governs against the economic interests of the backward national elite will only be able to remain in power with strong popular support in the streets and the declared support of the Armed Forces.

On the other hand, a systematic crisis of Brazilian capitalism would certainly be a strong boost to the socialist movement in Brazil. Not only the defense of industry, but the agenda of defending the working class against the national economic elite and, above all, the agenda of combating inequalities and the exploitation of labor can lead to Brazilians adhering to socialist ideas. However, it is necessary to bear in mind that nowadays we are closer to electing another neo-fascist government than a socialist government.

*Bruno Machado is an engineer.

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