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DIGITAL TRANSFORMATION: IN FAVOUR OF THE PROFITS OF CAPITAL OR THE NEEDS OF THE PEOPLE?
By Makis Papadopoulos
Note: The text was briefly presented by Makis Papadopoulos, member of the PB of the CC of the KKE, at an event on digital transformation held by the Attica Party Organization on 19 March 2023 at Technopolis City of Athens, after the train crash in Tempe.
After the recent tragedy, the crime in Tempe, many people wondered why the state and the governments, which are so quick to implement electronic foreclosure auctions, took so long, so many years, to install and operate a modern safety system on the railway.
In general, some people are righteously indignant when they see the enormous potential that scientific and technological progress offers us to live a much better life and compare it with our current condition. These are the people who learn that artificial intelligence (AI) has enabled quadriplegic people to walk and blind people to gain sight. It is the people who read about the great technological advances that ensure accurate medical diagnoses and surgeries while they experience months of waiting and postponement of their scheduled surgeries and medical examinations so that the collapse of the understaffed public hospitals can be averted.
All the parties of the system and the mouthpieces of the ruling class attempt to conceal the real culprit that hinders the utilization of this immense technological potential to meet our needs.
In order to hide the truth, they systematically promote a misleading narrative, which has two aspects.
On the one hand, they present rapid technological progress as an objective risk, as a culprit for the rise in unemployment rates and the restriction of our rights.
On the other hand, they present digital transformation as the magic wand that will pave the way for social prosperity and a pro-people transformation of the current inhuman system of exploitation and its state. An easy path, without class struggles and major social conflicts.
In particular, the responsible minister Kyriakos Pierrakakis has carried out a systematic propaganda campaign to convince us that digital transformation can have a crucial contribution to the re-planning of the state, focusing on the needs of the citizens, and that it does not have a class character.
And what proof does he provide to substantiate his claims?
The self-evident improvement in terms of the time needed to issue certificates, civil registrations and driving licenses from public services and the reduction in the long queues at the Citizens’ Service Centres (KEP).
He promotes the new digital face of the state with the creation of the gov.gr portal, which has already gathered more than 1,500 scattered digital services, and the fact that the digital transactions between the citizens and the state, including tax transactions, have exceeded €1.2 billion. He presents as an achievement the fact that the country has finally drawn up a digital strategy, with the “Digital Transformation Strategy (Bible) for 2020–2025”. In the same vein, a study carried out on behalf of the Hellenic Federation of Enterprises (SEV), indicates savings of €270 million in state resources over the 2020–2022 period, thanks to services now being delivered digitally, focusing on citizens’ time-saving.
However, all propaganda narratives sooner or later make a rough landing on the harsh ground reality.
Time-saving for citizens and civil servants in completing transactions with state services does not translate into an increase in their recreation and leisure time. On the contrary, it is utilized by capital to extend working time and flexible forms of employment, in accordance with the EU directive 2019/1152 (e.g. Chatzidakis’ Law). In essence, the business groups seek to have a free hand in reducing or increasing working hours according to their needs so as to increase the degree of exploitation. Meanwhile, citizens in their “free time” are obliged to digitally carry out a part of the work that was previously done by civil servants.
The possibility to electronically enrol children on nursery schools in a quick manner cannot change the unacceptable situation prevailing due to underfunding, shortages in buildings and school meals, high fees and inadequacy in relation to needs.
The 112 message alerts (Emergency Communications Service of the Ministry of Climate Crisis & Civil Protection) sent to our mobile phones have not been accompanied by a substantial improvement of civil protection. They have become a sad alibi for the extreme “selective incapability” of the bourgeois state to meet basic popular needs. This extreme incapability clearly has a class character. It is the other side of the coin, i.e. the state’s ability to serve the strategic interest of capital. Large areas of forest and people’s property have again been reduced to ashes from Evia to Mytilene and Thrace. Life itself proves that technological progress alone neither entails a risk nor provides a miraculous solution to our problems. The main question is who and for whose interests determines the development, orientation and utilization of new technologies and scientific research. Behind AI lie the choices of human intelligence and the particular class interests it serves.
The example of the health sector is very revealing for all those who continue believing in the government’s myth that the digital transformation of the capitalist state can overcome class barriers and pave the way for people’s prosperity.
What does the government claim?
That everyone can easily book an online appointment for their necessary medical examinations. Indeed, they can; however, does this mean equal access to healthcare services for all? We do not need any special knowledge to answer that question. Only the ones who can afford it will be able to enjoy complete medical examinations quickly and with ease.
What else does the current government, as well as the previous SYRIZA government, promote? The digital prescription of medicine and the digital health record. Indeed, this modernization can theoretically improve the quality of healthcare services. For example, it could help doctors refer to patients’ medical history and predict the adverse effects that the administration of a particular medicine may have in the case that they suffer from multiple diseases.
However, how is this technological achievement being exploited today by the capitalist state?
It is being utilized to limit and cut state spending on health and medicines in order to secure the budget surpluses that the ruling class and the EU demand.
And since the responsible minister likes to say that “you can’t deal with what you don’t measure”, let’s take a look at the official EU data.
They show that a large proportion, around 35% of total annual health care expenditure, is paid directly by households, on top of the heavy taxation, and that Greece ranks among the top countries in Europe in terms of unmet medical needs and waiting time.
Similarly, telemedicine, which is in the hands of the bourgeois state, instead of being used as a complementary tool for the enhancement of services remote from the centre, is used as a way of substituting the severe shortages of necessary scientific manpower.
THE CLASS CHARACTER OF DIGITAL TRANSFORMATION
The example of the health sector can help us understand that:
- Digital transformation cannot, nor does it intend to, change the objectives, the mission and the class character of the state within which it is applied.
- All the services of the current state, i.e. the state of the dictatorship of capital, are intertwined and serve the strategic interests of the ruling class in a uniform way, reinforce competitiveness and profits of domestic business groups, and shield the stability of the system of exploitation.
The digital transformation of the civil service serves this specific mission of the capitalist state. The principles of development of eGovernment and the technological means to implement it are defined based on these anti-popular objectives. There is no such thing as classless digital transformation that would equally benefit all citizens.
Let’s consider the objectives served by the digital transformation of the economic function of the bourgeois state.
It serves the economic policy that continuously drains the people and eats away at the popular income by every means to support the profitability and competitiveness of the large business groups.
It serves the policy that produces surpluses by cutting wages and pensions, imposing heavy taxation on the people and abolishing social security rights.
It serves the policy that leads to a constant increase in the unjust, indirect taxes that we all pay.
At the same time, it serves the policy that ensures that the business groups pay less than 5% of annual tax revenues and receive a raft of state support for their investments. The new National Plan for Energy and Climate alone includes investments that could reach €200 billion.
Projects amounting of €11 billion are to be allocated for digital transformation. Already 220 projects worth €2.3 billion have been put out to tender and €700 million have been awarded to Public-private partnerships (PPPs).
Who has every reason to celebrate this policy? A handful of business groups in every sector of the economy. For example, US groups such as Google, Amazon, Microsoft and Cisco, which are setting up data centres in our country. With 5% equity they can take advantage of the favourable conditions provided for by Law 4864/2021 on strategic investments.
The state is committed to providing them with and upgrading the necessary infrastructure concerning water, sewer and other utility connections, the construction of roads, etc. And at the same time, these groups gain access and control over data collection and processing for all Greek citizens.
Naturally, governments claim that they are taking technical measures to protect data etc. However, it is not difficult to understand that the capitalist state neither wants nor can ensure this protection. The very institutional framework of the EU opens the door to the business groups to collect, process and utilize this information.
In most cases, the notorious investments of the business groups concern the infrastructure projects that the state commissions to them. And, of course, this policy was not just recently introduced by the current Mitsotakis government, but it has been implemented continuously and consistently by all the governments of PASOK, SYRIZA and ND.
And they will continue implementing it in the future, based on the commitments to the EU and the Recovery Fund and on the recommendations of the OECD for further surpluses, so that the ruling class can achieve the notorious investment-grade status.
DIGITAL WAYS TO COMBAT TAX EVASION - BUT TAX EVASION BY WHOM?
Given the anti-popular direction of economic and tax policy, the government is promoting digital accounting records and invoices of enterprises through the myDATA online platform. The latter unifies all the electronic systems of the Tax Office and upgrades Taxisnet using a “digital taxman” that will guide accountants and taxpayers.
It promotes the utilization of AI for controlling the reliability of the submitted tax return forms and it claims that we will all benefit from the tackling of tax evasion and the facilitation of the drawn-out handling of tax affairs.
The government and the state claim that they aim to curb tax evasion - but tax evasion by whom? Will they combat tax evasion by big business groups, which already enjoy legal, provocative and colossal tax breaks? Banks have secured a deferred tax regime and shipowners a framework of “voluntary taxation”. Business groups can own offshore companies and legally transfer their capital to other EU and European countries. Will myDATA be able to detect smuggling of fuel, arms and drugs? We all know the answer to that.
The Independent Authority for Public Revenue (AADE) provided us with data so that we are not left wondering. Thanks to digital control, which easily identifies deviations from the average, AADE has already identified 240,000 out of the 1 million electronically registered businesses and self-employed persons submitting incomplete tax return forms and hiding their income.
A large part of them are small businesses and self-employed people who are driven to financial suffocation by the economic policy of the government and ruthless competition; businesses that in the future may be forced to shut down. The technological advancement of the state does not aim at supporting them but imposing heavy taxation on them.
This policy serves the EU direction to increase the size of enterprises through mergers and the centralization of capital, so that banks and the state can continue looting over-indebted enterprises, avoiding major shocks of mass and sudden closures.
Will the work of accountants get easier? Initially, they will be the ones to shoulder the burden of implementing the first phase of the project, i.e. to configure myDATA in each enterprise. Then, when accounting is largely automated, competition will intensify over how many people will continue being employed in these activities.
And of course the governments’ response in the face of difficulties, anxiety and uncertainty about the future is the notorious individual responsibility and decision of each self-employed person for their future.
INCREASE IN EXPLOITATION
The digital transformation of business groups and enterprises does not abolish the laws of profit and exploitation, i.e. the laws based on which capitalist economy operates.
In order for business groups to continue increasing their profits, they must continue increasing the degree of exploitation and bleeding the workers dry. They must extend the flexible forms of employment and working hours through the “working time arrangement”.
In the hands of capital, new technologies are utilized to increase intensification of work and the workload of those who continue to work. At the same time, the army of the unemployed is increasing.
The promises of plenty of well-paid and creative jobs in the age of digital transformation are also broken in the face of harsh reality and the profit-driven operation of business groups. And this conclusion is confirmed everywhere, in Greece and internationally, in enterprises in cutting-edge technologies.
The Hellenic Telecommunications Organization S.A. (OTE group) in Greece announced this year the highest profitability of the decade and investments of €3 billion. At the same time, with the help of the employer-led trade unionism, it abolishes earnings premium enjoyed by graduates and directly links wages to profitability, productivity and the performance appraisal of each department of the group. In essence, it further depresses the average real wage.
This is certainly not a Greek originality. Studies confirm that the gap between productivity growth and real wage growth has widened by a ratio of 10 to 1 in the US telecommunications groups from the 1980s to the present day.
In the past 20 years, these US business groups have had earnings growth twice as fast as the average economy, before the negative signs for their profitability appeared.
Now, in the context of increased productivity, companies are reducing their staff and proceed to mass lay-offs. Most recently, in 23 January 2023, Google laid off 12,000 employees and saw its stock rise 5% again. Last year, tech giants such as Amazon, Microsoft and Meta announced mass lay-offs of over 150,000 employees. Meta has sacked 13% of its staff as it has seen a steady decline in profits in the past 4 quarters.
There are also well-known examples in Greece, such as the hundreds of redundancies in BIT, which was presented as a successful start-up. The recent Twitter’s change of ownership was accompanied by the dismissal of thousands of employees over an e-mail.
And of course new technologies are exploited by capital to enforce the intensification of work, from modern surveillance cameras to systems that inform the employer of how long each employee takes to serve a customer, whether they are working intensively or browse on their computer, etc.
Today’s speech does not intend to examine all cases in detail, for example the workers who are paid very low wages to sort texts, photos and videos to train AI algorithms, or the workers who have been dubbed self-employed “partners” on platforms like Uber taxis.
eGOVERMENT AND DIGITAL PROFILING
The digital transformation decisively contributes to the interconnection and intertwining of all the functions of the capitalist state in order to serve the strategic interests of the ruling class in a unified and more effective way.
This can easily be confirmed in all directions of eGovernment and the repressive and judicial functions of the bourgeois state.
The National Administrative Procedures Register – Mitos aims to record all the interactions between citizens and businesses and the state. In other words, the state maps itself on the basis of its digitized services (e.g. the National Cadastre).
At the same time, the first AI version of gov.gr is being prepared, which will allow citizens to converse with Mitos in natural language and pose questions to it.
The digital interconnection of state services and the digital register of citizens now enables the creation of a single file containing all our data, from our medical history to our financial situation, our debts and our criminal record. It also allows the multifaceted processing and utilization of this data.
This nightmarish ability of the dictatorship of capital is hidden behind innocent proclamations about the benefits of reducing bothersome procedures at the registry offices, modernizing electoral registers, etc. The government’s proclamations that “the entire state will fit in our mobile phone” are tantamount to the ability of the state and other centres to collectively and individually exert pressure and manipulate us, since they can process all our data, such as how much money we owe and to whom, what kind of offences we have committed, what kind of health problems we face, etc.
A comprehensive set of EU directives under the misleading title “Area of Freedom, Security and Justice” ensures the permanent legal digital profiling and processing of data of all European citizens, ranging from fingerprints to travel. Huge databases of personal data are being compiled and updated preemtively, which include, but are not limited to specific criminal activities.
They are not limited to the surveillance and wiretapping of certain politicians or government officials. They take place legally and systematically by invoking the national security of capital against the internal enemy, i.e. the people, as well as by criminalizing the spread of the radical ideology of violence under the misleading title of preventing terrorism. And in this field, a number of technological applications are being promoted and funded, for example, the project initiated under the SYRIZA government and financed from the European Internal Security Fund, so that the Hellenic Police can access personal data and match it with information from Facebook, Instagram and other social media.
Through the digital processing of metadata concerning mobile location information, camera footage, etc., the police were able, for example, to investigate who participated in the banned demonstrations of the Polytechnic uprising during the pandemic.
All bourgeois parties are complicit in the adoption and implementation of this reactionary EU institutional framework. Just as they are complicit in the cover-up of the continuous wiretapping and surveillance of the headquarters of the CC of the KKE in Perissos, from 2016 to date.
And of course not only the intelligence services of the states engage in profiling and processing of data. Business groups also do it, both legally and illegally. After all, the trade in spy software has also been legalized.
Similarly, the digital register of the public sector human resources can collect the performance appraisals, mobility, participation in strikes and personal data of all civil servants in a single digital file.
There will be a mandatory individual digital card for each civil servant containing their full service profile. A Human Resource Management System (HRMS) will be operated in the Ministry of Interior, which will integrate the information of the existing HR register, performance appraisal, mobility and recruitment planning.
In the present circumstances, it is a useful weapon in the hands of the administrations to discipline civil servants to zealously implement the government policy.
This does not pose a vague future risk. Just look at the legislation on the performance appraisal of teachers, the orders of the Minister of Interior to collect data on striking civil servants, and the recent judiciary intervention to declare illegal the strikes by workers in local authorities, even when the mayors do not take the matter to court.
In this context, the performance appraisal of supervisors is utilized to promote the objectives of capital’s strategy, as reflected in the government policy, along the lines of the performance appraisal of executives in multinationals. Reactionary social reflexes are also ignited with citizen-customer feedback mechanisms used for example in hotels (e.g. Tripadvisor), where the citizen-customer rates the result without investigating the cause of problems, e.g. the lack of the necessary staff or infrastructure.
The EU’s e-Justice programmes and action plans also aim at the effective support of capital at the expense of the people. Their priorities do not include easier and cheaper access to justice for the popular strata nor the improvement of the working conditions of court officials and the vast majority of self-employed lawyers (e.g. by publishing judgments electronically).
What are their priorities as regards the development of projects (e.g. the European e-justice portal) and the implementation of technologies such as the decentralized e-codex network linking the corresponding national systems?
It is the interconnection of national digital registers in critical areas for investment and the common market, e.g. land registers or insolvent companies registers.
It is also the speeding-up of the implementation of judicial decisions relating to the profitability of capital, such as electronic foreclosure auctions, and the shielding of the repressive role of the bourgeois state.
The use of AI methods in the administration of justice has a class character. And we are not talking about the distant future.
The Compas system, which investigates the likelihood of a criminal’s recidivism, is applied by the criminal courts in some states in the USA. It is an algorithm that evaluates defendants’ responses to a questionnaire and a series of data from their criminal record. The methodology of Compas is a trade secret and is not accessible to the defendant’s attorney. This system has been already criticized for leading in practice to biased treatment against African Americans and is just one of many examples of how new technological advances can be used when in the hands of capital.
A similar example is the use of AI for predictive policing and prevention of offences relating to data, in the processing of personal data, which relies on and helps to legitimize the proactive targeting of specific individuals without having committed an offence.
The same conclusions will be reached if we examine the digital transformation in the economy.
THE EMBLEMATIC EXAMPLE OF THE BANKS
In current conditions, the inhumane face of capital will easily emerge from whichever sector of the economy we look at. In the banking sector, digital transformation has been implemented very rapidly. 4 million users use ATMs, APSs and e-banking services, while the number of active POSs in businesses exceeds 700,000.
Have the changes brought about by digital transformation stopped banks from operating in favour of capitalist profit? Whichever side we look at, we can easily spot the same anti-popular and class character. We will spot it in the wide gap between the high interest rates on lending to the popular families for mortgages and consumer loans and the deposit rates that remain almost zero, while inflation has skyrocketed. We will spot it in the multifaceted support for the banking groups from the capital state under all governments. This support includes provocative tax breaks with reduction of the tax rate on corporate profits, the deferral of tax liabilities (deferred tax) and the €55 billion state guarantees with the Hercules I and II packages, which ensured the banks got rid of the huge volume of non-performing loans (NPLs) at minimal cost. The state, through the Hellenic Financial Stability Fund, bore the operating losses of the banks in the previous period and, as soon as profitability was achieved, it initiated the “disinvestment” of the stakes it holds in the National Bank, Piraeus Bank and Alpha Bank.
What did the employees gain during the period when the digital transformation took place in the banks? There was a dramatic 51% reduction in the number of bank employees over a 10-year period, from 63,408 in 2010 to 30,998 in 2021. Similarly, there has been a dramatic reduction in the number of bank branches and ATMs available, from 4,005 in 2010 to 1,560 in 2021.
It is easy to see the increase in the intensification of work for those who remain employed due to a skyrocketing in the number of residents to be served per bank employee, and the increasing difficulty of the elderly population forced into digital transactions. At the same time, the degree of exploitation and the reduction in the real income of bank employees has increased. The new Collective Agreement signed by the leadership of the Federation of Bank Employees’ Organizations of Greece (OTOE) based on the “resilience and sustainability” of the banks includes cumulative nominal increases of 5.5% until 2024, i.e. it does not even compensate for the new income losses from the soaring inflation in food.
Additional burdens were placed on the popular families and residential mortgage borrowers due to the ECB’s continuous interest rate increases over 2021–2023, as well as due to the increase in electronic foreclosure auctions. Since 2019, at least 25,000 cases per year have been posted on the corresponding online platform, which this year skyrocketed to 52,000.
However, despite the increase in the degree of exploitation, the fact that workers are bled dry and that people’s income is being eaten away in every sector of the economy, it is revealed that system cannot address the huge problem of over-accumulation of capital in the long run.
THE NEW UPCOMING CRISIS
Digital transformation cannot cancel out the scientific laws of the capitalist economy, which lead to the periodic outbreak of the crisis of over-accumulation of capital. On the contrary, it expedites concentration and increases the over-accumulation of capital, which cannot find investment channels with a satisfactory profit rate. The German economy, which is the engine of the Eurozone, is already in recession. The risk of recession in the Eurozone overall is increasing. Eurozone GDP has been in contraction since the last quarter of 2022. Eurosystem experts forecast that Eurozone GDP growth will slow down from 3.5% in 2022 to 0.9% in 2023.
As regards the G7 bloc, the economies of Italy and Canada are also in recession. Furthermore, China’s economy is in a slowdown phase, with a serious possibility of a crisis in the real estate sector and construction in general. In addition to the distressed real estate market, there is already a decline in consumption and in Chinese exports.
Most reports by international organizations and rating agencies are sending out a risk signal of a marked slowdown in the international economy in 2023, highlighting the negative impact of accelerating interest rate hikes by Central Banks, while inflationary pressure has not abated yet. The growth rate of global GDP and international trade in goods and services is already on a slowdown path at the international level.
Recent developments in US banks confirm once again that the crisis is born out of the normal operation of the capitalist system. It is in its DNA. Long before high-tech companies started withdrawing their deposits from banks like the SVB, there was a drop in their profit rate. The shares of these companies were plummeting in 2022. The over-accumulation of capital that cannot be invested at a satisfactory profit rate also increased in the USA. Groups like Amazon, Meta and Google made thousands of workers redundant.
In the new technologies sector, the ratio of modern media and technology to the workforce is changing to a greater extent and this brings about an increase in the organic composition of capital and ultimately a reduction in the rate of profit. Contextual factors also played a role, such as the decline in demand for companies like Amazon and Netflix after the lifting of the pandemic restrictions.
The spread of telework, which began during the pandemic, had a major negative impact on the commercial real estate leasing sector and construction. The largest commercial offices leasing companies, such as WeWork, have seen their shares plummet. Many US banks have large exposures to the commercial real estate sector.
Bourgeois staffs have deployed all their weapons to avoid the outbreak of a deep crisis.
The Central Banks have secured cheap credit to the states and “more money” to provide the large packages of state aid. The result was soaring inflation, which was compounded by the US-EU energy war with Russia.
To deal with inflation, Central Banks then raised and continue to raise interest rates. But a remedy for one symptom may turn out to be poison for another. Rising interest rates and expensive borrowing aggravate the slowdown and recession in capitalist growth.
Some banks in the USA faced the risk of withdrawing deposits. To compensate for the losses, they sold government bonds they had acquired before the rise in interest rates. As a result, they sold them at a loss. The mass selling of US bonds by China and Japan has further depressed their value.
Now the USA claims to guarantee all deposits. However, it is an over-indebted state, which has already exceeded the “red line” of the maximum permanent sovereign debt ceiling. The US public debt has exceeded $31.5 trillion and 120% of GDP, having sparked a dispute between Republicans and Democrats over the need to cut state spending, which has resulted in a temporary compromise.
A survey published by the Wall Street Journal cites dozens of US banks in distress. The damage from an immediate massive sale of US bonds is estimated to exceed $620 billion.
The crucial issue is that no measure or injection from the state can address the root cause of the over-accumulation of capital. There is no shortage but an excess of capital in the markets. State measures and the concentration of larger market shares in the strongest banking groups can only temporarily postpone the onset of the crisis. The next crisis will be deeper.
NEW FIELD OF SHARPENING CONTRADICTIONS BETWEEN THE IMPERIALIST CENTRES
The race to consolidate supremacy in the technological sector, especially in the sector of AI, as well as in the exploitation of the digital transformation of the capitalist economy and state, is today one of the main fields of sharpening inter-imperialist contradictions.
As is the case in the economy as a whole, the technological sector is dominated by two powerful poles competing for supremacy: The USA and China. The two protagonists have an edge over the rest as regards their ability to collect and process big data and deep learning. The USA has the powerful GAFAMI quintet (Google, Amazon, Facebook, Apple, Microsoft) and China has the BHATX (Baibu, Huawei, Alibaba, Tencent, Xiaomi).
The USA, which is currently the technological leader, is promoting a strategy that mainly aims to both contain China’s momentum and gain advantage over the EU.
It is, therefore, imposing restrictions on the export of advanced technology chips, i.e. faster and more energy-efficient ones, used in AI computers in China, and on the export of hardware and software technology in general. It is pushing for and has secured a certain amount of EU-Japan convergence in this direction. Moreover, US and Taiwanese companies have accused their Chinese counterparts of industrial espionage (e.g. TSMC’s legal actions against the Chinese SMIC).
At the same time, powerful US and Dutch companies, which have been financially harmed by the restrictions, are trying to circumvent them by exporting advanced generation technology products (e.g. ASML exporting DUV rather than EUV lithography systems, and Nvidia currently exporting low-end chips to the Chinese market).
Furthermore, the USA is generously subsidizing domestic monopolies in this sector. The Chips and Science Act (passed by the Democrats and a section of the Republicans) secured $52 billion in aid to increase the low US share of advanced semiconductor manufacturing and another $200 billion over a decade to boost scientific research. In parallel, the Biden Green Transition Package, worth $360 billion, is also in operation, offering preferential treatment to any European business group setting up in the USA. Thus, for example, Apple, which owned manufacturing plants in China, has been moving production out of it.
However, according to Bloomberg, US companies are at a disadvantage as their production of goods is 50% more costly and 25% more time-consuming compared to respective factories in Southeast Asia.
The EU initially aligned itself with the US on export restrictions to China, thus facing internal frictions, particularly in Germany, where a large part of 5G networks have been built by China’s Huawei and ZET and where Mercedes has major partnership agreements with China’s CATL.
The EU has formulated its own programme of support for European business groups, namely the European Chips Act, with the aim of doubling its lowly share of the global market by 2030, from 10% to 20%. However, most analysts believe that €43 billion is not enough to bridge the large gap that now separates it from the USA.
At the same time, in an effort to strengthen its independence, the EU has concluded agreements to host 6 powerful quantum computers on European soil in Germany, France, Italy, the Czech Republic, Spain and Poland. This is an infrastructure that significantly increases the computing power to support applications in industry and scientific research.
Special controls and restrictions on the export of 23 types of microprocessors to China have also been announced by the Government of Japan. Japan has some of the largest processor manufacturing groups, such as Nikon and Tokyo Electron.
In April 2023, the World Bank warned that the trend of “technological decoupling” of the world’s two largest economies is undermining innovation and the supply of scientific knowledge internationally, and is hence harming international capitalist growth.
For its part, China has set the goal of becoming the world’s leading digital power by 2030. To this end, it is increasing state support for the Chinese microprocessor industry. YMTC alone received $7 billion in aid in 2023 to upgrade equipment and production, while Chinese investment (with a focus on high technology) in 2023 exceeds $32 billion in the 147 countries included in the Belt and Road Initiative.
At the same time, China is placing restrictions on the export of minerals of strategic importance for digital transformation and the “green transition”, such as germanium (optical fibre), gallium (integrated circuits-satellite communications), lithium, cobalt, etc. China currently has a great advantage in meeting international demand for these minerals, particularly in the EU and the USA. This is why the struggle over control of regions in Africa, Asia and Latin America possessing similar mineral wealth is intensifying. In retaliation to the US measures, the Chinese state has launched an investigation into the leading US company Micron Technology regarding the security of China’s information infrastructure supply chain, which has already had a negative impact on its profitability. US-based Nvidia also publicly expresses discontent over the extension of US sanctions.
ON THE “TECHNOLOGICAL MIRACLE” OF THE ND GOVERNMENT
Furthermore, the ND government, propelled by US propaganda, presents its performance regarding digital transformation as enviable for other EU countries.
The truth is that Greece in 2022 continues to hold 25th place in the EU in the Digital Economy and Society Index (DESI), with a score of 38.9 compared to the EU average of 52.3. It is ahead of only two other Balkan countries, Romania and Bulgaria. However, it has slightly improved its position in telecommunications infrastructure (22nd place out of 27 countries).
Enterprises in particular have reached 70% of the average digital maturity of the 27 EU Member States. Only 58% have assigned future digital transformation plans to an executive. Barely 10% has fully switched to the Cloud, while the use of AI for decision making is no more than 3%, i.e. it is used only by some monopoly groups. In short, the domestic bourgeoisie has not enhanced its position in the international arena of competition.
The digital transformation intensifies the pressure on small businesses, which cannot compete with the business groups in e-commerce in terms of brand name goods, prices and shipment.
Furthermore, according to Eurostat data, Greece has the lowest share of IT specialists in total employment, only 2.5% compared to the EU average of 4.6% in 2022. A study by the Federation of Hellenic ICT enterprises (SEPE) estimates an additional demand of 15,000 IT specialists per year by 2030 (including different levels of specialization), i.e. an additional 150,000 scientists and technicians in information and communication technologies are needed.
The small domestic market and the country’s lagging behind in the context of uneven development in the EU also affect infrastructure development. For example, in “white areas”, i.e. geographical locations outside television coverage, public mobile and Internet networks have been set up since 2018 but remain inactive, because none of the providers wants to operate them since they will not yield profit.
The state is again lavishly subsidizing the business groups (OTE, Grid Telecom - TERNA) to realize optical fibre investments that will ensure very fast Internet connections to 800,000 businesses and households, through the “Gigabit Voucher Scheme”.
Let’s summarize. In the hands of capital, the digital transformation of the economy and the state is being used to increase the degree of exploitation of workers and repression, and to generalize the digital profiling of the people, while leading to deeper crises and a greater sharpening of inter-imperialist competition. It contributes to the increase in social inequalities, digital and energy poverty, and the rise in long-term unemployment.
THE ERA OF AI
These trends are being reinforced as digital transformation has provided a springboard for AI, which has been developing rapidly since the beginning of 2010 thanks to the convergence of three scientific and technological advances: The ability to process huge amounts of data resulting from the use of the Internet, i.e. big data; the ability of computers to train themselves with sophisticated algorithms, i.e. machine learning (neural networks and deep learning); and the ability to enhance the capacity of modern supercomputers and quantum computers.
In simple words, modern machines are acquiring even more human abilities such as self-training, and the working people, i.e. the primary productive force, are operating increasingly complex machines. At the same time, the “learning machines”, the robots, the data centres that collect and process huge volumes of data, are in the hands of a few monopoly groups, mainly in the US and China, but also in the EU and Japan.
In this context, the responsible minister summarizes capital’s strategy for Greece as follows: “We are called upon to build the backbone of the country and connect its various registers so as to be able to possess a large amount of data and, eventually, proceed to the training of algorithms (...) At the same time, we are focusing on machine learning, that is, a strategy on how we will manage to integrate these applications of AI into our economy” . We have already explained the consequences of this direction for the people.
Of course, this is not the first time that a technological revolution has multiple applications that are not limited to production, but affect the whole spectrum of the society. Let us recall the rapid changes brought about by the advent of steam engines, electricity and the utilization of nuclear energy.
However, it is a fact that the development of AI in the context of capitalist relations of production exacerbates well-known problems, such as the rise in unemployment. It also and raises new, original issues that require reflexion at the level of political economy and philosophy, particularly in regards to changes in the relationship between the main productive force, i.e. the working social human, and the modern machines, i.e. the means of production.
The scientific debate focuses on the rapidly expanding ability of machines, which learn and self-train to replace a large part of today’s human labour. Initially, the estimate was that this scope would be limited to replacing much of the routine manual and intellectual work, the occupations that require repetitive, routine tasks in a standard environment.
The most reliable bourgeois analyses on this topic, which were carried out a few years ago, assured that professions demanding genuine creativity and a response to unpredictable environments are beyond the abilities of AI. However, it turned out that the neural networks of “learning machines” can develop different capabilities by analysing a large amount of data. They gain the ability to achieve complex goals. They now have the ability to acquire new knowledge and then apply it to a specific domain. AI is even penetrating into artistic creation, such as painting and cinema.
In a recent discussion hosted by Brookings Institution, the view was expressed that we can no longer rule out the possibility that all the jobs that skilled workers do today may be replaced by machines. Professor Geoffrey Hinton, who laid the foundations for building AI systems, recently resigned from Google and sounded the alarm about the unintended consequences and the uncontrolled development of systems by powerful business groups. At the same time, 1,000 technology leaders signed an open letter on its unforeseen negative impact. They are certainly not “technophobes”, nor are they “Luddites”.
The truth is that many of today’s jobs will disappear and the nature of others will change. However, this does not amount to the abolition of the role of the working human as the main productive force. The decoding of some of the neural processes that take place in the human brain and the study of the countless synapses of nerve cells that form the biological basis of human cognition is progressing. However, the development of human cognition is a much more complex phenomenon and is not limited to the cognitive skills of an individual.
The human brain, as an organ of thinking and forming consciousness, grows and develops historically in the process of social work and social life in general. Social work is carried out within the dominant relations of production, whether feudal, capitalist or socialist. There, humans form their capacity to reflect reality in a generalized way with concepts, judgments and reasonings. They acquire the ability to develop scientific knowledge; to set goals; to construct, set in motion, and utilize the means of production. The social human beings can make plans, set goals, organize and implement actions to achieve them, and predict the final result of their actions. They are the main productive force in every mode of production.
AI does not think in a comprehensive and complex manner like humans. At present, it mainly transforms some data quickly into other data. In essence, supercomputers are faster and more efficient for specific tasks. They cannot think politically and set general goals with a social content, e.g. the goal of changing the system and the mode of production. They can quickly process measurable, quantitative data based on specific criteria set by social human beings, in the framework of the dominant relations of production.
As Max Tegmark points out, it is “a similar discrepancy between how well a tractor can do the work of a Formula One race car and vice versa”. At the same time, the complementary relationship between humans and “intelligent machines” can provide the working humans with new assets to enhance their own productive power.
Let us consider the abilities that a doctor can acquire by utilizing diagnostic and therapeutic algorithms and by quickly making use of large volumes of modern scientific data.
Let us consider the use of sensors to increase the capacity of human senses and the possibility of direct interaction and merging with “smart machines” in the future.
All this does not mean that we should become complacent, but rather focus on the real problem, i.e. the currently dominant capitalist relations of production. Let us consider, for example, about the increased possibilities of the powerful groups mentioned above to permanently and directly influence and manipulate the consciousness of the workers in the case that the installation of brain implants in humans become legalized.
THE CLASS CHARACTER OF THE DEVELOPMENT OF AI
AI today does what capital wants it to do. This applies to production, education, culture and all areas of social life. Its exploitation for the sake of capitalist profit can lead to a large increase in long-term and permanent unemployment, to the exclusion of a significant part of the population from production and to their condemnation to live on the “guaranteed minimum income”, i.e. to survive on an allowance of extreme poverty.
Forecasts and estimates vary according to the political objectives of those who make them. Some argue that, as in any technological revolution, many new professions will be created to absorb the losses (e.g. software and AI application developers, cyber security specialists).
In 2021, the World Economic Forum predicted that 97 million new jobs will be created and 85 million jobs will be eliminated by 2025 due to the change in the division of labour between humans and machines.
The McKinsey report predicts that between 2035 and 2075, 50% of today’s jobs will be eliminated globally, while generative AI will add up to $4 trillion a year to the global economy. Several related studies are in the same vein, e.g. by PricewaterhouseCoopers.
Major analysts point out that, based on the index of employment in the US, the first job created by computer technology occupies only the 21st place. The momentum of losses will be significantly greater than the momentum of creation of new jobs.
The problem will be exacerbated in the coming years. According to the International Federation of Robotics (IFR), over the last 30 years more than 75% of jobs in the steel industry have already been replaced by conventional robots and automated processes And that was before modern robots, which can replace workers in creative cognitive tasks, even appeared.
However, this development is not a one-way street. It pertains to the decisive influence of capitalism on the priorities in the development of technology, the organization of production and education.
Similarly, there is no classless development of scientific research and scientific work. Capital today controls the flow of scientific knowledge, the ways and methods of its utilization it, the priorities and the norms. Competition between business groups and patents are putting the brakes on the deeper socialization of scientific research.
In general, there is no such thing as neutral technological applications that are developed regardless of which class holds the reins of power and the keys to the economy. Powerful monopoly groups and imperialist centres decide in practice which data is collected digitally, by which criteria and procedures, which information is extracted and for what purpose.
Many were impressed, and rightly so, by the application of the Chat GPT AI, which was spread and became known in a very short time. It is advertised as an impartial interactive language model that can answer our questions directly.
We asked its original version whether the Soviet Union was a democratic regime. It replied that it was not, since there was no multi-party system, free elections and tolerance of opposing political views. It added, however, that there may be different ideological views and criteria.
This system has obviously been “trained” with material imbued with the dominant bourgeois ideology. Some school and university students are already using it as a tool for their exams and assignments. A heated debate has already been sparked off over the limitation of its use in the academic community and the negative consequences that its indiscriminate use may have in reducing the user’s critical faculties.
However, the main negative effect of the capitalist system concerns the obstacles it places in the way of the development of the main productive force, i.e. the working human. Instead of technological progress being used for the all-round development of the workers’ personality, mental and physical abilities, it is used for capital’s attack on their rights. On the one hand, it is used to increase the intensification and exploitation of the labour power of workers and, on the other hand, to increase the army of permanently unemployed and impoverished, and to render the labour power of a significant part of the population obsolete. It erodes in many ways the physical and mental health of workers and the unemployed, who live in uncertainty and insecurity about the future. It increases the alienation of workers from their fellow human beings and triggers competition.
The capabilities of automated machines to coordinate with each other and with workers and to perform complex tasks have advanced considerably. At the same time, as we have already mentioned, the content of many tasks and the need for continuous retraining are changing. The demands on human intellectual labour are rising, including demands for continuous retraining, teamwork, quick adaptation to new experiences and work tasks.
THE HERALDS OF SOCIALISM
Think of the radical difference between the way that capitalism and socialism address these problems. Under capitalism, it is the workers’ individual responsibility to rapidly adapt to new tasks and upgrade their knowledge, for fear of being unemployed and uninsured.
Socialism, on the contrary, can unlock and release the creative abilities of the workers and their initiative, because it brings them to the forefront of the historic course towards social emancipation.
In socialism, the purpose of production and the role of workers change. The purpose of production is the satisfaction of the needs of society, which are constantly expanding. The workers, freed from the yoke of wage slavery, play an active, daily role in the making and control of decisions. The keys of the economy and the reins of power pass into the hands of the working class. The driving force of progress is no longer competition, but the power of collectivity at work.
Water, energy, health, communications, transport, education, and labour power itself cease to be a commodity. Land and the means of production, factories, data centres, ports, airports and infrastructure are state social property.
“Can all this be done?”, many people ask us in a well-intentioned manner.
It was done, dear friends, in the Soviet Union in the 20th century. The scientific central planning and the socialization of the means of production accomplished significant achievements that capitalism never will.
Unemployment and energy poverty were abolished. The people gained free access to high-quality health and education services. Enormous strides were made in technological progress, such as the conquest of space.
Of course, there was also negative experience, when the principles of socialist construction were gradually abandoned and undermined, and the policy of market socialism prevailed, paving the way for its overthrow.
However, this negative experience also highlights the superiority of socialism, which is growing in the 21st century.
Because now we can make use of the great new possibilities for socialist construction generated by information technology, digital technology, robotics and AI, which are the heralds of socialism.
A number of technical and scientific limitations that restricted the capabilities of central planning and socialist construction in the Russia of 1917 and the Soviet Union of 1930 no longer exist. Now the degree of socialization of labour and automation of production has increased considerably.
Think of the new possibilities existing today to increase the leisure time of workers thanks to the increase in productivity and the level of socialization of production, once capitalist profit ceases to be the criterion for decisions in the economy.
Think of the new possibilities to improve the general educational level of workers and the creative content of their work so that they can play an active role in decision-making and control on a daily basis. Think of the superiority of socialism in shaping the social human beings, who can exploit the opportunities provided and meet the demands of the age of AI.
Think of the technological potential of scientific central planning to rapidly collect and process large amounts of data to make quick and optimal decisions on complex problems.
Think of the potential of interdisciplinary research to predict future needs in time and to develop technological applications quickly, once it has been freed from the shackles and constraints imposed today by the law of capitalist profit and market competition between business groups.
Think of the potential of using AI, IT and robots to improve civil protection, large-scale accident management and health services.
Think of the possibilities of interconnecting and coordinating production units, since the myDATA of socialism will not connect enterprises competing with each other for profits and market shares or trying to evade taxes from the state.
Think of the possibilities for automated damage prediction and ordering of spare parts.
Above all, think of the material possibilities for the rapid elimination of all forms of individual and group ownership.
This is the path of digital transformation and the exploitation of AI for the benefit of the people’s needs that the KKE illuminates with its revolutionary Programme. Of course we already struggle based on this Programme without wasting any time.
We are stepping forward to organize the great, popular counter-attack that will open the path to the overthrow of the barbaric system of exploitation.
Today, we are at the forefront of the struggle to reduce working time, and demand 35-hour work week (7-hour work, 5 days a week), with substantial increases in wages and pensions.
We are at the forefront of the struggle against the EU’s liberalization policy that gives rise to energy and digital poverty. We struggle for safe, fast and cheap communication and transport. We struggle to abolish the reactionary EU framework that allows the preemptive digital profiling of all citizens. We struggle for the utilization of new technologies to improve civil protection. We struggle for exclusively public and free health and education.
Today, when all the conditions for a much better life are in place, we have no reason to entrap ourselves into choosing the lesser evil. We have no reason to side with one bourgeois government or another and end up losing again, so that capital can reap the profits.
We can and must condemn all the culprits who have led us to the current situation. We can and must join forces with the KKE. We must strengthen the KKE everywhere; in the workplaces, in the neighbourhoods, in the electoral battles, in order to strengthen the popular opposition inside and outside the parliament, in the face of the difficult times ahead and the imminent crisis.
In the age of AI, we can and must struggle to live the life we deserve.
We wish you strength!
 After the parliamentary elections in 2023, K. Pierrakakis was replaced by Dimitris Papastergiou.
 This was followed by this summer’s major wildfires from Rhodes to Thrace and the flooding of Thessaly, which confirmed the tragic gap in Civil Protection.
 EU report “State of Health in EU - Greece Health Profile 2021” and Doctors of the World study on healthcare in Greece (2020).
 “OTE secures €3 billion investment in fast networks”, www.businessdaily.gr, 21/2/2022.
 “Google to cut 12,000 jobs”, Naftemporiki newspaper, 20/1/2023.
 Section of Justice and People’s Freedoms of the CC of the KKE, “Dictatorship of Capital, the true face of the contemporary bourgeois rule of law”, Ed. Synchroni Epochi, and Shoshana Zuboff, “The Age of Surveillance Capitalism”, Kastaniotis Ed.
 For a more general academic discussion of the subject, see for example the collective work, “Can an algorithm...?”, Crete University Press.
 In August 2023, the Purchasing Managers’ Index (PMI) showed a decline to the lowest point in 33 months, both for manufacturing output and for other sectors, which bourgeois statistics describe as “services”.
 “The IMF sounds the alarm: the slowdown of the global economy continues”, Imerisia newspaper, 9/12/2022.
 In August 2003, Fitch downgraded the US credit rating, while yields on 10-year US Treasury bonds reached their highest level since 2007, increasing the cost of managing US debt.
 In the summer of 2023, Moody’s downgraded ten medium-sized US banks and put some large ones, such as Bank of New York Mellon and US Bancorp, on watch.
 For example, P. Roumeliotis, “The US-China AI war”, Economic Chronicle, No 168.
 In September 2023, it was published that China has decided to create a new state investment fund (Big Fund) and to finance new investments for the development of semiconductors with $41 billion. At the same time, it unveiled Huawei’s new smartphone with high-performance operating system and microprocessors, proving that it can cope with the blockade from Western technology.
 K. Pierrakakis, “We are starting from the basics and are actively participating in developments”, Economic Chronicle, No 168.
 For example, Max Tegmark, “Life 3.0”, Ed. Travlos.
 See the interview with Professor Luciano Floridi in Kathimerini, 2/8/2020.
 Erik Brynjolfsson and Andrew McAffe, “The second machine age. Work, Progress and Prosperity in a time of brilliant technologies”, Ed. Kritiki.
 G. Stournaras, “Technological developments and the future of work”, Ta Nea newspaper, 23–26/12/2021.
 Ideological Committee of the CC of the KKE, “Socialism, the answer to the 21st century”, Ed. Synchroni Epochi.
 See W. Eichhorn, A. Bauer, G. Koch, “The dialectic of productive forces and relations of production”, Ed. Anagnostidis, and E. Ilyenkov, “On idols and ideals”, Ed. Odysseus.