Today, all walks of life are passing through rapid changes set off by advances in science and technology. Changes in the economic structure of societies are usually accompanied by those within social and political structures as well.
Thus, it is very necessary to make sure such changes are consistent and do not conflict with society’s various components. Undeniably, contradictions are evident more in developed societies than in underdeveloped ones due to the progress achieved in all areas.
There are many transformations underway all over, but one of the most exciting - and persistent - is the “yellow vests” movement in France and the subsequent protests against pensions reform plans, which have affected all segments of society. This in itself reaffirms that social relations are being restructured based on economic and technological transformations and which have profound implications on the structure of developed societies.
Limits to reforms
With regard to the protests in France that have unified all social groups, there are 42 pension systems and institutions currently operating there. The nature of their work varies according to the system and the capabilities of each, but these systems, some of which depend on government support, suffer from mounting deficits that hinder their obligations towards retirees.
This prompted Emmanuel Macron’s government to intervene and introduce reforms at the expense of pensioners. This, not too surprisingly, was met with widespread rejection and set off instant protests.
The root cause lies in the technical changes the world has witnessed over the past three decades. Advances in healthcare services, for example, have resulted in raising life expectancy in developed countries to more than 80 years. So, to reduce the financial gap that pension funds suffer from, some European countries have raised the retirement age from 60 to 65 years.
No place for retirees
On the other hand, the revolution in technology and artificial intelligence has led to shrinking job opportunities and increasing dependence on robots to complete automated work. This creates another gap between workers and retirees. Sure, and as robots need no contributions to retirement funds, the income generated goes only to investors or employers. This further deepens the crises for pension funds and social insurance.
It is plausible to say this contradiction will deepen, meaning the collision between the two sides of this equation is inevitable. Some Scandinavian countries try to avoid this by modifying tax and social benefits system, and have made some progress in this area, such as Finland.
Meanwhile, in the centre and south of the European continent, it is different. Investors and employers have not made any concessions to respond to the requirements brought on by technology, leading to profit gains at companies amid a deterioration in living standards and dismal returns for pension funds.
This reflects one aspect of inconsistencies in society. This requires understanding and compromises from all parties, and should be consistent with ongoing transformations. This is to preserve social harmony and ensure the continued development of society’s many structures in line with innovations.
Yet, to preserve the structure of society and its progress, any compromise should be similar to that in the aftermath of major industrial transformations more than two centuries ago.
This is the best solution to this emerging contradiction. There is no doubt there will be other paradoxes that affect more than one field. Some of these will become clear at the end of the current French protests, which will show how willing the two parties are to arrive at a solution. This will have repercussions on the rest of the world.
Dr. Mohammed Al Asoomi is a specialist in economic and social development in the UAE and the GCC.