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Towards Post-Industrial Capitalism?

In 1973 Daniel Bell's seminal work, The Coming of Post-Industrial Society, was published. Its impact on the emerging discipline of socio-economic forecasting—or "futurology"—was considerable. But what exactly does a "post-industrial society" mean?

Robert L. Heilbroner in his Business Civilisation in Decline defined its core features as: the growing predominance of the tertiary (services) sector over the primary (agriculture and mining) and secondary (manufacturing) sectors of the economy; increasing emphasis on the role of knowledge-based inputs and education; and, finally, a decrease in the highly polarised class conflict of traditional (industrial) capitalism with the emergence of less hierarchical; organisational structures more suited to the socio-economic environment of the late 20th century.

This concept of a post-industrial society rests on the assumption that social development is essentially driven by technological change. The invention of the first programmable digital computer during the Second World War—to decode military messages—is seen as marking the start of what Alvin Toffler called the Third Industrial Revolution. Based on the application of ever more sophisticated information technologies, this revolution is now seen as gathering pace, precipitating a "general crisis of industrialism" and heralding what is exponents claim is a new kind of society.

It is tempting to draw parallels here with a Marxist scenario of social change. For Marx, it was development of the "productive forces"—roughly speaking, technology—that is the driving force of history. As these productive forces develop, they come into conflict with, and are increasingly held back by, the existing "relations of production"—the system of property relationships that define a particular mode of production. This ushers in a period of social revolution, of growing class struggle, in which the political victory of the ascendant class over the old ruling class establishes a new system of property relations more compatible with the developing productive forces, as exemplified by the transition from feudalism to capitalism.

However, there are significant differences between this and the theoretical model espoused by the exponents of post-industrialism.

Technological determinism

Firstly, the Marxist model gives primacy to the concept of the "mode of production". It is the mode of production which essentially defines the kind of society we live in and by this is meant the combination of relations and forces of production. Technological determinists, on the other hand, tend to focus on the "forces of production" but why did they downplay the importance of property relations?

One reason is the theory of "convergence" which gained currency among social scientists during the Cold War. According to this, industrial development would cause the Russian bloc countries and the advanced western economies to increasingly resemble one another in social structure and outlook. How then could one account for such similarities if—as it was assumed—the "communist camp" and "capitalist camp" represented two different modes of production? This led commentators to infer that the concept of the mode of production had little explanatory value.

By contrast, Marxists pointed out that the world was not divided into two opposing social systems each rooted in distinctive mode of production. There was instead a single world system based on a capitalist mode of production with so-called communist countries representing a variant of this mode of production—namely, capitalism run by the state, or "state capitalism".

Another reason has to do with the oft-stated claim that there has been a decisive shift in power from the capitalist class to a technocratic or managerial elite. Prominent advocates of this view include Burnham (The Managerial Revolution) and J.K. Galbraith (The New Industrial State). Toffler put it this way:

"Left-wingers are so obsessed with the idea of property—ownership—that they are often blinded to the actual facts of the matter. The very concept of property is turning itself inside out. The people who dominate advanced 'capitalist' countries are not necessarily those who 'own the means of production'. Increasingly, the people who dominate do so because they control the means of integration—they are the managers. In the US, which is supposed to be the heart of world capitalism, property has been losing its significance for a generation. Basic decisions about the future of our society in the United States have been, and are being, made by business executives who often have no ownership of capital or of machines, whatever" (Previews and Premises 1984, p. 101).

In a world in which the ten richest individuals own as much wealth between them as the combined national incomes of the 48 poorest countries put together, according to last year's UN Human Development report, such observations seem grotesquely inapt. But even if "basic decisions about the future of our society" are being made by individuals who may not themselves possess enough capital to qualify as capitalists, that is not the issue. What matters is the context in which, and in whose interests, such decisions are made. It is not the motivation of individual capitalists that concerns us but the logic of capital accumulation itself with its manifold consequences for the rest of us.

A second major distinction between Marxism and technological determinism concerns the relationship between technology and society. For Marxism, technological progress is not an autonomous process impacting upon and altering the nature of society from without; rather it both conditions, and is conditioned by, society. As Marshall McLuhan put it rather well, "we shape our tools and thereafter our tools shape us".

As Kortunov adds in his The Battle of Ideas in the Modern World, that while the "apologists for technological determinism" appear to borrow Marx's idea that the "development of the productive forces is the basis of historical development", they, in fact, "completely distort this idea inasmuch as they separate the productive forces from the relations of production and discuss them apart from their connection with (the) socio-political formation".

Lean production

In his historical survey of changing production techniques in chapter 7 of his The End of Work, Jeremy Rifkin describes how in craft production highly skilled workers using hand tools crafted their products to the design specifications of individual buyers, the essential characteristics of this form of producing being its high degree of flexible but low level of output. With industrial production, based on the moving assembly line, the very opposite is true: high volume production alongside an inflexible technology. The "American method", as Rifkin dubs it, really began in Henry Ford's automobile factories in the early 20th century. The design function was effectively separated from actual production with the worker being reduced to the status of an unskilled appendage to the machine, routinely assembling standardised products for the mass market. The need to maintain continuous production to justify investment in such costly machinery necessitated a hierarchical system of management characterised by a pyramidal command structure through which information flowed up and decisions flowed down.

Then in the early post-war years a new system emerged, called "lean production". Originating in Toyota's factories in Japan, this differed from both craft production and industrial production in its ability to combine the flexibility of the former with the high volume output of the latter. Underpinning this new approach was the increasing application of information technology, such as automated robots, and the "flattening out" of the traditional management structure. Hierarchical decision-making was largely replaced by multi-skilled teams with groups of workers collaborating at every stage, from design to quality control, with each team member contributing to a process of continual improvement ("Kazen") while simultaneously being allowed access to all computerised information generated within the company.

From a socialist perspective, this development is an interesting one, presaging the "polytechnic worker" Marx saw as the mainstay of a socialist system of production. It also confirms our belief in the link between motivational commitment and a more egalitarian approach to decision-making. However, it would be naive to separate such a development from its capitalist context. Its internal repercussions for the enterprises concerned are a sharp contraction in the number of workers employed, significantly longer hours spent working, and increasing levels of stress arising from the pressure to conform to work schedules dictated by the team; externally, it has meant an increasing emphasis on "out-sourcing"—contracting out work to often poorly paid, part-time or temporary workers in the interests of "greater flexibility".

This shift from craft production to industrial production and finally "lean production" today cannot simply be viewed as an autonomous technological development; at every stage it was driven by the need to accumulate greater profits by driving down unit costs. This meant employers searching for more effective ways to exploit their workforce. The current trend is away from the kind of heavy-handed coercion associated with traditional management towards a system of "management by stress" which simultaneously allows firms to better utilise the "knowledge assets" of their workers. Hence the growing emphasis placed on education by governments.

Initially, when the more traditional kind of enterprises began to invest heavily in information technology the results proved rather disappointing. However, as Rifkin points out, by the early 1990s, this picture began to change with many major corporations in America registering sharp increases in productivity. What made that possible was precisely the "re-engineering" of corporate structures, enabling such corporations to make more profitable use of the technology at their disposal.

This process along with its associated "downsizing" of the workforce is now sweeping through every sector of the economy. Unlike in the past, when job displacement in the primary and secondary sectors was largely cushioned by the growth of the service sector, that sector is now itself succumbing to structural unemployment brought on by automation. According to Rifkin, with no new sector on the horizon capable of generating more jobs we face the prospect of steadily growing unemployment, albeit masked by the growth of part-time work.

With ever fewer opportunities for formal employment and with governments increasingly constrained by market pressures to curtail their welfare budgets, how, it might be asked are increasing numbers of workers to obtain a livelihood? The oft-mooted concept of a universal "social income" does not really address this problem since what is being proposed is little more than a glorified form of social welfare which governments could not afford and which moreover would tend to undermine the capitalist work ethic now being reinforced by the system of "lean production".

The dilemmas that this scenario presents have led commentators like Rifkin to talk tentatively of the "Dawn of the Post-Market Era" and the growth of voluntarism as an alternative to paid employment, all of which is music to the ears of socialists. But we would be neglectful if we did not add a word of caution: capitalism is not going to disappear of its own accord. Not that such commentators envisage its complete disappearance, but if that is what we desire then this has of necessity to be the work of a politically conscious socialist majority.

This brings us finally to a third major distinction between Marxism and technological determinism: the notion of human agency. Whereas Marxism sees human beings as the makers of history, technological determinism sees history as the outcome of a technological imperative. Whether or not that imperative will lead to the dramatic decline of the "global labour force" now being prophesied, bringing us to the very threshold of a post-market society, it is for human beings themselves to finally cross that threshold. Insofar as we have that choice, our future has not already been decided.