1
Sophia N. Antonopoulou
THE PROCESS OF GLOBALISATION AND CLASS TRANSFORMATION IN
THE WEST
Article published in
Democracy & Nature, Vol, 6, No 1, March 2000
2
THE PROCESS OF GLOBALISATION AND CLASS TRANSFORMATION IN
THE WEST
The post-war period marks a new stage of development of the international
capitalist system, with its climax the current trend of globalisation. Western society is
gradually rejecting its traditional characteristics, entering a new era of transition
towards an as yet unclear future. Some hasten to salute the new epoch as one of
unprecedented opportunities for economic growth and global communication, which
the new technologies offer, the vision being the so called “global village”. Others see
in these developments, as we do, the culmination of the most ruthless characteristics
of capitalism, in a society which sees the welfare state as a useless luxury and
recognizes almost no other principle of economic and social organization than the free
play of the market forces and the unbridled antagonism, that the new philosophy of
neo-liberalism and the policies of economic deregulation inaugurated. Moreover,
international financial speculation turns the world into a vast global casino, sanctioned
by governments, technocrats and bankers throughout the globe. Present day Western
society is a society of uncertainty and agony for the ordinary man, the jobless, the
elderly, the weak; the society of the two-thirds. At the other end of the spectrum, are
famine and diseases for the masses of the Third World. But let us examine the social
and economic characteristics of the new era and the processes of capitalist
development, within which they were borne. When we have analysed these wider
processes, we will come to focus on the new class structure, which these processes
have brought to the fore.
3
I. The Global System
The post-war period marks a new stage of development of the international
capitalist system, characterised by the worldwide decentralisation of production and
finance, the preeminence of financial speculation and information technology. In what
follows we attempt to grasp these developments as manifestations of one and the
same process of capitalist development, the so-called process of globalisation.
During the post-war period, the export of capital from the advanced capitalist
countries to the rest of the world has increasingly assumed the form of direct, and
mainly industrial, investment undertaken by multinational corporations. This
developed on a significant scale especially during the 1960s and onwards, and has led
to the rapid industrialisation of the peripheral countries involved in this process.
Indeed, several countries of the periphery have been drawn by multinational capital in
the international market as industrial producers1.
The establishment of industrial plants in peripheral countries by multinational
corporations during this period was, in a number of instances, accompanied by the
parallel process of the shutting down of corresponding plants in the traditional
industrial sites of the advanced capitalist countries. Thus, taking into account both
sides of the phenomenon, we may say that it amounted to the relocation of part of
industrial production away from the advanced capitalist countries, or the ‘center’ of
the system, to the Third World countries, or the ‘periphery’2, as considerable amounts
1
.See W.K. Paik, United States Relations With the Newly Industrialising Countries in the Pacific
Basin, (New York and London : Garland, 1997). C. Bina and B.Yaghmaian, “Post-war Global
Accumulation and the Transnationalisation of Capital”, Capital and Class, No 43, 1991. G.J.R. Linge, ,
(ed), Peripheralisation and Industrial Change, (London : Croom Helm, 1988). F.E.I. Hamilton (ed),
Industrialisation in Developing and Peripheral Regions, (London : Croom Helm, 1986).
2
. By the end of the 1970s, the effects of this process, which has been described as the
“deindustrialisation” of the central capitalist countries, were acutely felt. See G. Matsumoto,
“Deindustialisation in the U.K.: A comparative Analysis With Japan”, International Review of Applied
Economics, 10(2), 1996. N.Crafts, “Deindustrialisation and Economic Growth”, Economic Journal,
106 (434), 1996. B, Coriat and P.Petit “Deindustrialisation and Tertiarization : Towards a New
Economic Regime ?”, in A. Amin and M. Dietrich (eds) “Towards a New Europe ?”, (Aldershot :
4
of European and American industrial capital migrated to the peripheral countries in
pursuit of cheap labour and so-called tax heavens, on the one hand, and penetration
of protected markets, on the other3.
As multinational corporations have developed into the centres of organisation
and control of world industrial production, selected branches of production, or
selected phases of the manufacturing process of one product, are assigned to each
country according to the ‘comparative advantage’ of each. This process has been
greatly facilitated by modern technological developments, and made possible by
cheap transport. Together these have rendered feasible the subdivision of the
production process to sub-operations that can be assigned and carried out
independently in different geographical locations. This geographical dispersal of
manufacturing production may also be described as the decentralisation of the
production process worldwide4. However, the design, engineering and marketing of
the production units located all over the world, are separated and concentrated in the
headquarters of the multinationals. Within this global organisation of production, even
small firms worldwide, formally independent, are in fact integrated into the network
Edward Elgar,1991). B. Blueston and B.Harrison, The Deindustrialisation of America: Plant
Closing, Community Abandonment and the Dismantling of Basic Industry, (New York : Basic Books,
1982).
3
. A characteristic case of the mobility of multinational capital in pursuit of cheap labour is the
American telecommunications company AT&T, that between 1970 and 1980 moved its telephone
assembly production from Louisiana USA to Singapore and by the late 1980s switched again this time
to Thailand. See A. Hoogvelt, Globalisation and the Postcolonial World, (London : Macmillan, 1997),
p.126.
4
. For some spectacular cases, see A.Hoogvelt, Globalisation and the Postcolonial World, pp. 125-8.
For the internationalisation of production see also, J. Kregel, Capital Flows: Globalisation of
Production and Financing Development, (UNCTAD Review, O (0), 1994). Also, United Nations
Conference on Trade Development; Programme on Transnational Corporations, World Investment
Report 1993 : Transnational Corporations and Integrated International Production, (U.N. Sales No
E.93. II. A. 14, New York : United Nations Publications, 1993). For an earlier exposition of this
process see the classic work : F.Frobel, et al., The New International Division of Labour, (Cambridge :
Cambridge Univ. Press, 1980).
5
of the multinationals, through subcontracting, licensing and similar agreements 5. But
decentralisation of production also takes place within the boundaries of one and the
same national economy, where formerly integrated plants are increasingly putting out
the manufacture of parts and components to subcontractors6.
In this transnational organisation of production, the different plants in their
different geographical locations form mere links in chains of operations performed by
multinational corporations on a world level. In other words, the level of integration of
the production process is no longer the national economy, but the multinational
corporation functioning on a global basis. While in previous epochs an international
market of commodities existed, today a global system of closely interconnected
production units has been created as well. But while production itself is decentralised
worldwide, its management and control is centralised in a few headquarters in the
advanced capitalist countries. The formation of an international market for financial
capital parallels this process7. This global system of production, commerce and
finance, controlled by the advanced capitalist countries, is, according to our
definition, the economic base of globalisation.8
5
. See A. Hoogvelt, Globalisation and the Postcolonial World, p.127, where a characteristic example is
described: “The NIKE footwear company with annual sales of nearly $4 billion subcontracts 100 per
cent of its goods production. NIKE itself currently employs only about 9000 people, while nearly
75000 people are employed by its independent subcontractors located in different countries mostly in
the Third World……The subcontractors are all networked to the parent company”.
6
. See J.Thoburn and M. Takashina, Industrial Subcontracting in the UK and Japan, (Avenbury :
Aldershot, 1992).
7
. See L. Oxelheim, Financial Markets in Transition: Globalization, Investment and Economic
Growth, (London and New York : Routledge, 1996). E.Helleiner, States and the Re-emergence of
Global Finance : From Bretton Woods to the 1990s, (Ithaca and London : Cornell Univ. Press, 1994).
R. O’Brien, Global Financial Integration : The End of Geography, (London : Pinter, 1992).
8
. Cf. B. Fine, et al., “Addressing the World Economy : Two Steps Back”, Capital and Class, No 67,
1999. Globalisation, which became in the 1990s the explanatory concept of social change, has been
defined in various ways. See I.Douglas, “Globalisation and the End of the State ?”, New Political
Economy, vol. 2, No 1, 1997. R.J. Barry Jones, “Globalisation versus Community”, New Political
Economy, vol. 2, No 1, 1997. P.Hirst and G.Thompson,, Globalizaton in Question, (London : Polity
Press, 1996). J.Diskin, and T.Koechlin, “Liberal Political Economy and Global Capitalism”, Review of
Radical Political Economics, vol. 26, No 3, 1994. R. Mansel, “European Telecommunications,
Multinational Enterprises, and the Implication of ‘Globalisation’”, International Journal of Political
Economy, vol. 23, No 4, 1994. For the term “internationalisation” instead of that of “globalisation”, as
more pertinent to disclose the rule and predominance of the market in the present day global economic
6
The process of globalisation has been greatly boosted by the liberalisation of
the markets, the gradual removal of all sorts of “restrictions” upon the free movement
of capital and commodities worldwide, especially during the last two decades, when
no-liberalism and monetarism have been universally adopted9. Integral to the
worldwide mobility of capital today, is the preeminence of financial speculation in the
advanced capitalist countries, especially in Europe, the USA and Japan. According to
the Bank of International Settlements, speculation in buying and selling tradeable
currencies reached in 1998 the volume of USD 1,5 trillion on average daily. This
means that on an annual basis this volume surpassed USD 300 trillion. In the same
year the value of world trade reached the volume of USD 5,3 trillion10. In other
words, the turnover of speculation in the international currency markets was more
than fifty times greater than the volume of world trade in 1998. In this context, it is
not accidental that today the most important factor determining exchange rates are
transactions in the international currency markets rather than trade or service
transactions11. In 1997 the value of the Gross Domestic Product (GDP) of the USA
reached the volume of USD 7,8 trillion, while that of the OECD countries as a whole
reached the volume of USD 34,6 trillion12. That is to say, the turnover of speculataion
in the international currency markets was more than thirty five times greater than the
value of the GDP of the USA and more than eight times greater than the value of the
GDP of the OECD countries as a whole in 1997. The volume of speculation in the
international currency markets grows from year to year by leaps and bounds. Thus,
according to the Bank of International Settlements, this volume reached the amount of
and political situation, see T.Fotopoulos, Towards an Inclusive Democracy, (London and New York :
Cassel, 1997) pp. 3-60.
9
. See T.Fotopoulos, Towards an Inclusive Democracy, esp. pp. 33-36 and 41-46.
10
. IMF,
International Financial Statistics, (April, 1999).
11
. See H.Ungerer, “The European Monetary System and the International Monetary System”, Journal
of Common Market Studies, v. xxxvii, 3, 1989, p.235.
7
USD 590 billion on average daily in 1989, USD 820 billion in 1992, USD 1,19
trillion in 1995 and USD 1,5 trillion in 1998. Thus, between 1989 and 1998 it grew by
254%. Speculation in equities and bonds is added to that in currencies. In 1995 the
value of equity trading in the European stock exchange markets amounted to 2,7
trillion ECU, while that of bonds amounted to 14,9 trillion ECU13. In the same year
the foreign trade of the European Union reached the volume of 1,1 trillion ECU14.
It is also striking that a growing proportion of capital flows from the advanced
capitalist countries to the developing countries in the 1990s represents “portofolio
investment”, that is speculation, as compared to foreign direct investment (FDI). Thus
in 1994, net portofolio investment from the advanced capitalist countries in the so
called emerging capital markets of the developing countries reached the amount of
USD 84 billion, and FDI the amount of USD 70 billion. Portofolio investment may
change significantly from year to year, according to the conjuncture in the world
capital markets. In 1996 the relation between speculation and FDI reversed.
Nevertheless, portofolio investment reached the amount of USD 45 billion as
compared to USD 91 billion of FDI 15.
Therefore, financial speculation has attained unprecedented dimensions in the
advanced capitalist countries, putting the stamp of parasitism on the economies of the
West. This is precisely the base of what has been described as casino capitalism16.
As several countries of the periphery are being drawn by multinational capital
into the international market as industrial producers, and manufacturing production is
decentralised worldwide, the traditional division of the world between a relatively few
12
. OECD, National Accounts, vol. I (1999).
. Federation of European Stock Exchange, European Stock Exchange Statistics, (December, 1995).
14
. Eurostat, External and Intra-European Union Trade, No 6 (1997).
15
. M. Knight, “Developing countries and the Globalization of Financial Markets”, IMF Working
Paper, 98/105, 1998, p.6.
13
8
countries specialising in industrial production, with the rest of the world concentrating
on agricultural and raw materials production appears no longer valid. However, while
this has been widely recognised17, the concrete content of the new international
division of labour has not yet been defined. Our analysis so far, makes it possible to
proceed to a definition according to which, the international capitalist system is
gradually moving towards a division of the world between a few countries mainly
preoccupied with the economic management and control of the world capitalist
system, as well as with production of knowledge and technology, tending in the long
run to retain mainly the production of industrial products with a high content of
advanced technology, and the rest of the world involved mainly in raw-materials,
agricultural and industrial mass production. It is worth quoting here the words of a
German manufacturer, which express in clear and practical language the above
trends:
“…What we need is the consensus of all those involved –government, trade
unions and firms- on the economic benefits of overseas involvement by
firms…In the long run we can only retain highly sophisticated technology in
the Federal Republic, that is, the manufacture of products with a high
technology content. Simple mass production will become unprofitable here as
16
. See S.Strange, Casino Capitalism, (Manchester : Manchester Univ. Press, 1997). R. McIntyre,
“The Political Economy and Class Analysis of International Capital Flows: US Industrial Capital in the
1970s and 1980s”, Capital and Class, No 43, 1991.
17
. See A.Hoogvelt, Globalization and the Postcolonial World. H.Mittelman, “Rethinking the
International Division of Labour in the Context of Globalisation”, Third World Quarterly, vol. 16,
1995. A.C.Robles, French Theories of Regulation and Conceptions of the International Division of
Labour, (London : Macmillan, 1994). S.Folke, et al., South-south Trade and Development :
Manufacturers in the New International Division of Labour, (New York : St. Martins Press, 1992). G.
van Liemt, Bridging the Gap :Four Newly Industrialising Countries and the Changing International
Division of Labour, (Geneva : International Labour Office, 1988). J.Henderson and M. Castells, (eds),
Global Restructuring and Territorial Development, (Sage, 1978). R. Jenkins, “Divisions Over the
International Division of Labour”, Capital and Class, No 22, 1984. F. Frobel, et al., The New
International Division of Labour.
9
wage costs are becoming too high. Everything under this threshold will have
to be transferred abroad”18.
However, this division of the world is currently only a trend. Whether it will
mature into a clear-cut division understandably depends on a number of economic,
social and political factors and processes. For instance, if the working masses in the
peripheral countries succeed in organising themselves politically and claim better
terms of remunaretion and conditions of labour, then as far as labour cost is
concerned, the ‘comparative advantage’ of the peripheral countries will be
diminished. But under the present circumstances this is extremely difficult, given the
totalitarian regimes in power in many peripheral countries, on the one hand, and the
widespread unemployment that scourges these same countries, on the other. Indeed, in
most of the peripheral countries, unemployment creates an almost inexhaustible
reserve army of millions of people struggling for sheer survival.
As capital is accumulated on an ever increasing scale in the centre of the
system, the world is more and more divided beween a few countries appropriating
capital, means of production, and the rest of the world appropriating mere labour. The
transfer of surplus value from the periphery to the centre more and more takes the
form of an immediate hiring of peripheral labour by metropolitan capital invested in
the periphery. The capitalist mode of production having expanded to the whole world,
has now reproduced on a global scale its fundamental contradiction - namely, the
separation of the producer from the means of production, the division between capital
and labour.
II. The Role of Information Technology in the Functioning of Global Capital.
18
. Cited by F. Frobel et al., The New International Division of Labour, p.282.
10
The execution of economic management and control on a world scale needs
precisely information
technology, that is, computers and modern high-tech
telecommunications, which embrace the whole globe with an effective network and
allow rapid transmission of information worldwide19. The transmission of information
has been greatly facilitated by the development of digital and optic-fibers
technologies that both increasingly improve quality and quantity, and that lower the
cost of cable or satellite transmission of information of every kind (text-soundmoving pictures, separately or in combination-multimedia)20. As M. Castells and J.
Henderson note, ‘...Only through an integrated system of telecommunications and
computers is it possible at one and the same time both to integrate and to decentralize
production, distribution and management, in a worldwide, flexible, interconnected
system. The new telecommunications technologies are the electronic highways of the
informational age, equivalent to the role played by railway systems in the process of
industrialisation’21. The Annual Report of 1982 of the Westinghouse Corporation
highlights the significance of information technology for its worldwide operations:
“An integrated worldwide strategic planning process was put in place, linking
products and country planning efforts. A global communications center is
being established to provide timely and detailed information for every part of
the world. This centralization of planning and intelligence will give
19
. G. Duysters, The dynamics of Technical Innovation: The Evolution and Development of
Information Technology, (Cheltenham U.K., Elgar, 1996). Dertouzos, M., “Communications,
Computers and Networks”, Scientific American, (September 1991).
20
. See G.Dourakis, “Information Technology and Structural Reconstruction of Enterprises”, in
G.Chajiconstandinou (ed.), The Human Labour in Cross Roads, (in Greek), (Thessalonika : Paratiritis,
1996), p. 95. T.Forester, High-Tech Society, (Oxford : B.Blackwell, 1987) pp. 81-130.
21
. J.Henderson and M.Castells, (eds), Global Restructuring and Territorial Development, (Sage,
1987), p.6.
11
Westinghouse a competitive edge in the worldwide deployment of its
resources”22
The rapid transmission of information is especially indispensable for financial
operations, that is, banking and trade of currencies, shares and bonds - operations
which, as we saw above, dominate in the economies of the West. Information
technology provides the network that closely interconnects the markets of stocks,
bonds, foreign currencies and finance and that allows the rapid transmission of
information worldwide on a 24-hour basis. For instance, in the currencies trade
millions of dollars may be turned over in only a few minutes in the foreign-currency
markets, making the rapid transmission of information of enormous value. Indeed, the
Vice-president of the Bank of America has observed : ‘the value of financial
information is fast approaching that of money itself’23. To give an example of the
velocity and scale of these operations : in August 1993 the well-known speculator G.
Soros earned USD 1 bn overnight by speculating on the pound. This example
illustrates the significance of information technology for the performance of modern
economic operations that are globally integrated through a worldwide network
controlled by the advanced capitalist countries. This is precisely the essence of the socalled information society and information economy.
But information technology has also been introduced into the production
process in the form of what is called flexible manufacture24. Flexible manufacture
represents modern technology at the level of production, where it introduces
computerised programming of machine tools, so that they can vary their movements,
Cited in F. Webster, “The Politics of the New Technology”, in R.Miliband, et al., (eds), The Socialist
Register, 1985/86, (London : Merlin Press, 1986), p.396.
23
. Cited by G. Locksley, “Information Technology and Capitalist Development”, Capital and Class,
No 27, 1986, p.87.
24
. A.Raouf and M.Ben-Daya, (eds), Flexible Manufacturing Systems: Recent Developments, (New
York and Oxford : Elsevier, 1995).
22
12
adapting to varying product designs - that is, without change in the structure of the
machine (general-purpose machine tools). In contradistinction, traditional machine
tools, known as purpose-specific machine tools, can produce only products with a
standard design. The new type of technology is better known as computer-aided
manufacture (CAM) and it is also applied to the designing of the product (computeraided design, or CAD). Information technology has also revolutionised the execution
of desk work, and more generally the various services, making it possible for them to
be executed automatically (the “electronic office”)25.
Information technology has been introduced both in large-scale and smallscale manufacture. Of course large-scale manufacture was mechanised long ago and
by the early 20th century it was transformed by Fordism, a technical revolution that
introduced the moving assembly line into the manufacturing process. Nevertheless,
the assembly of the product’s components remained to a great extent labour intensive.
Modern information technology, however, has transformed this last domain of craft,
that is skilled labour by introducing robots - and more generally, automation - into the
process of the final assembly of the product. Robots mimic the flexibility and
responsiveness of the human worker. Robots have been introduced especially in the
automobile industry, but also in other branches of large-scale production26. For
instance, General Electric has introduced long ago a computerised system of
information control and coordination that enables robots ‘to communicate with each
other’, and that links all machines into an integrated system, whose remote parts can
be connected by satellite links27. Automation is today replacing craft labour in
25
. See, T. Forester, High-Tech Society, (Oxford : B.Blackwell, 1987), pp. 195-217.
. J. Patchell, “Composing Robot Production Sustems : Japan as a Flexible Manufacturing System”,
Environment and Planning A, 25 (7), July, 1993.
27
. F.Murray, “The Decentralisation of Production – the Decline of the Mass-collective Worker”,
Capital and Class, No 19, 1983, p.89.
26
13
virtually all branches of industrial production, such as steel, chemical, extractive,
refining, household appliance, textile industries, etc28.
Small- and medium-scale industry has also applied information technology29.
Here it is useful to make several clarifications. Small- and medium-size firms survive
competition with large-manufacture in cases in which the product has a limited
market, as compared to the mass market of large-scale industry. In these cases it is
not profitable for big capital to invest in products for which the demand is limited.
Another facet is that small- and medium-size firms are more flexible than large firms,
in the sense that they are more responsive both to variations in product demand and
product design. In other words, because they do not specialise in the production of a
standardised product destined for a mass market, they easily shift from one design to
another, and consequently to varying conditions of demand - indeed, they often
produce customised products. Due to these characteristics, small- and medium-size
industry still retains a high degree of craft labour, since human labour can adapt to
varying designs of the product, while the machine, until recently, could not.
Information technology has revolutionised even this, by introducting general purpose
machine tools - that is, machine tools which can adapt to varying product design via
computer programming. In this way craft labour is to a great extent replaced by
machinery in the small- and medium-scale industry as well. For instance, in the
garment industry, traditionally labour intensive, automatic microprocessor-controlled
cutting machines have been introduced, that can minimise wastage and change
. See J. Rifkin, The End of Work, (New York : G.P.Putnam’s sons, 1995), pp. 128-40.
. M.Levy and Ph.Powell, “SME Flexibility and the role of Information Systems”, Small Business
Economics, 11 (2), 1998. R.L.La Rovere, “Small and Medium Sized Enterprises and Information
Technology Diffusion Policies in Europe”, Small Business Economics, 11 (1), 1998. B.D.Phillips, “The
Increasing Role of Small Firms in the High-Technology Sector : Evidence from the 1980”, Business
Economics, 26(1), 1991.
28
29
14
patterns on command, and that can be integrated into automated sewing machines
similarly designed and controlled30.
As information technology serves the centralised control of the worldwide
system of production and finance, as well as production itself, an increasing part of
investments in the advanced capitalist countries is expended on nonmaterial inputs,
such as software, planning, research and development. This trend has been described
as the softening of the economy31.
III. The Transformation of the Class Structure in the West.
The processes analysed above entail the accelerated increase of services in the
advanced capitalist countries, services organised around world economic management
and control, services related to the production of knowledge and technology, as well
as those related to the distribution of commodities and consumption. The growth of
services and the contraction of the industrial sector in the West have given rise to the
so-called postindustrial society32.
These developments are clearly reflected in the composition of the working
population of the advanced capitalist countries. The USA, Canada and Australia are
ahead in these tendencies. Employment in manufacturing in these countries is today
only 16%, 15,5% and 13,5% respectively, while employment in services reaches the
amazing figure of 73% of the total active population. The United Kingdom follows
. See G.Lockslay, “Information Technology and Capitalist Development”, Capital and Class, No 27
1986, p. 102.
31
. See T.Morris-Suzuki, “Robots and Capitalism”, New Left Review, No 147, 1984.
32
. See J.B.De Foucauld, “Post-Industrial Society and Economic Security”, International Labour
Review, 135 (6) 1996. K.Kumar, From Post-Industrial to Post-Modern Society : New Theories of
Contemporary World, (Oxford : Blackwell, 1995). D.Champlin and P. Olson, “Post-Industrial
Metaphors : Understanding Corporate Restructuring and the Economic Environment of the 1990s”,
Journal of Economic Issues, 28 (2), 1994. F.P.Romo and M.Schwartz, “The Coming of Post-Industrial
Society Revisited :Manufacturing and the Prospects for a Service-Based Economy”, in R. Swedberg,
(ed), Explorations In Economic Sociology, (New York : Russel Sage Foundation, 1993).
30
15
closely with 19% of the active population employed in manufacturing and with 71%
employed in services. Similar percentages are observed in the rest of the centres of
capitalism, with Japan and Germany, however, somehow ‘delayed’ as regards these
developments. Employment in the manufacturing sector is relatively higher in these
latter two counties, 22% and 25,5% respectively, and employment in services is
relatively lower, 62% and 60% respectively33. These figures clearly reflect the
contraction of industrial production and the augmentation of services in the advanced
capitalist countries. We may say, that the proletariat is no longer the spine of the
working masses in these societies.
The prevalence of services in Western economies combined with the potential
that the new technology bears, gave rise to theories that conceive the information
technology as the vehicle of revolutionary economic and social change, epitomised in
the so-called information society. The most prominent exponent of the information
society is D.Bell. A. Toffler, J. Naisbit, Y. Masuda and other writers promoted the
idea, picturing it in utopian colours34. The ideas of these writers have been extensively
propagated and popularised by the mass media, especially the press and popular
journals, giving rise to great expectations about the coming of a new egalitarian
society, and the “rise of a new civilization”. The central concepts of these theories
are35:
33
. OECD, Labour Force Statistics, 1998.
. See, D.Bell, “The Social Framework of the Information Society”, in J.Forester (ed), The
Microelectronics Revolution, (Oxford : B.Blackwell, 1980), pp. 500-49. A Toffler, The Third Wave,
(New York : Bantam Books, 1981 and A.Toffler, Powershift, (New York : Bantam Books, 1992).
J.Naisbitt, Megatrends :The New Directions Transforming Our Lives, (New York : Warner Books,
1984). J.Naisbitt and P.Aburdene, Megatrends 2000, (London : Sidgwick and Jackson, 1990). T.
Stonier, The Wealth of Information : A Profile of the Post-Industrial Economy, (London : Thames
Matheum, 1983). Y., Masuda, The Information Society as Post-Industrial Society, (Bethesda, M.D :
World Futures Society, 1981), and Y.Masuda, “Computopia”, in J.Forester (ed), The Information
Technology Revolution, (Oxford : B.Bklackwell, 1985), pp. 620-634. P.Drucker, The Post-Capitalist
Society, (London : Butterworth-Heinemann, 1993).
35
. For an extensive presentation and a critique of these theories see K.Kumar, From Post-Industrial to
Post-Modern Society. New Theories of the Contemporary World, pp. 6-35.
34
16
(a) Knowledge and information are becoming the strategic resource of growth
and wealth, as well as the main transforming agent of modern society. Knowledge and
information are thus conceived as the central socioeconomic entities of the
information society, predominating over material capital and labour. (b) Under the
above circumstances there emerges a “new service class” and the “knowledge
worker”, or the “information worker”. Knowledge and information upgrades the
content of work in modern society. Skills, professionalism, knowledge are attributes
of the new worker, the “knowledge worker”, who will eventually, come to
predominate in the information society. (c) Knowledge and information are also the
“new coin of power”. As the information technology diffuses knowledge and
information throughout society, it restructures the distribution of power. The new
society will be more democratic, more egalitarian, more knowledgeable, and more
affluent. J. Naisbitt argues that the information technology demolishes the hierarchies
of the centralised, industrial era and transforms the vertical form of organisation into a
horizontal one, “which has its roots in the natural egalitarian and spontaneous
formation of groups among like-minded people”. As he puts it: “the computer will
smash the pyramid”36. Y. Masuda with his “computopia” goes so far as to argue that
“the future information society…will become a classless society, free of overruling
power, the core of society being voluntary communities”37.
These theories exercised broader influence within the social science
community. Moreover, some of their core concepts have been adopted by official
institutions and agencies, and become instrumental in the way the latter collect
36
. J. Naisbitt, Megatrends : The New Directions Transforming Our Lives, pp. 281-2.
. Y. Masuda, “Computopia”, p. 629. For a critique of these theories see D.Lyon, “The Roots of the
Information Society Idea”, in N.Heap, et. al., (eds), Information Technology and Society, A Reader
(London : Sage, 1995), pp. 54-73 and N., Wintheford, “Autonomist Marxism and the Information
Society”, Capital and Class, No 52, 1994. For a moderate critique see M.Castells, The Rise of the
Network Society, (Oxford : B.Blackwell, 1996) pp. 203-206.
37
17
information38. The influence of the information society theory endures within the
context of recent dramatic developments, such as the collapse of the Soviet Block
and the retreat of the Marxist theory. The blurring, in turn, of the boundaries
between right and left, the evolution of the left parties in the West, where it is now
difficult to trace the difference of their policies from those of the right wing parties, as
monetarism and neo-liberalism is adopted throughout the West and throughout the
globe as well39, and the voting tendencies of the electorate shifting from one party to
the other, contributed to skepticism as to whether political and social behaviour is
nowadays associated with class determinants. It is often argued that the category of
class is today irrelevant for social and political analysis. Some writers explicitly
proclaim the “death of classes” in contemporary capitalism, without, however,
denying social inequality. “The most advanced societies”, they say, “are no longer
class societies”40. The growing critique of the class concept and class analysis by the
end of the 1980s was followed by a growing alignment, particularly within the
sociological perspective, with the thesis that the stratification mechanism in Western
societies has shifted from capital ownership, production systems and market relations,
to cultural values, lifestyles, patterns of consumption, occupational status,
“credentialism” and professionalism. Different writers give different emphasis to one
or more of these stratification-creating categories41.
38
. See, for instance, OECD, Global Information Infrastructure-Global Information Society (GII-GIS) :
Policy Requirements, (OECD Working Papers, No 82, 1997), where it is characteristically argued :
“the driving force behind economic growth and development in such a networked economy
[Information Economy] will not be natural resources of physical goods, but based on information..”,
p.6. The American Bureau of Labour Statistics defined the “information sector” as a “fourth economic
sector”. See D. Lyon, The Information Society, Issues and Illusions, (Cambridge : Polity Press, 1988),
pp. 45,46.
39
. See T. Fotopoulos, Towards an Inclusive Democracy, pp. 36-41.
40
. J.Pakulski and M. Waters, The Death of Class, (London : Sage, 1996), p. 4.
41
. See J.Pakulski and M. Waters, The Death of Class, pp. 24-26, 28-46, 114-131. For a critical
exposition see R. Crompton, Class and Stratification. An Introduction to Current Debates, (Cambridge
: Polity Press, 1993).
18
But let us turn, first, to information technology. Instead of upgrading the
knowledge content of the work in contemporary Western society, information
technology leads to a massive deskilling of both manual and service work, as we
shall see below. It should be pointed out that deskilling, degrading of the knowledge
content of work is nothing more than the manifestation of a tendency inherent in the
capitalist mode of production, which characterised it throughout its historical course.
Namely, it is the manifestation of the incessant deepening of the division of labour.
The separation of knowledge and conception from execution, has been the production
principle of capitalism since its very beginning42. Knowledge and science, applied and
transformed to technology is incessantly being transferred to and absorbed by the
machinery, not by living labour. This is indeed the trade mark of capitalist production.
At the beginning of this century Fordism and Taylorism rationalised and further
enhanced this tendency inherent to the functioning of capital 43. Modern information
technology, the computer, the robots and “artificial intelligence” are nothing but the
present day culmination of this process.
As shown above, flexible manufacture, alias computer aided manufacture
(CAM) has transformed the production process and has, to an unprecedented extent
replaced craft labour via computer programming. As CAM tends to be applied in
almost every sphere of material production, as well as in both large-scale and smallscale manufacture, that is, as it tends to be generalised, an ever increasing amount of
the remaining skills of the manual workers are being absorbed by modern, computer
. See K. Marx, Capital, Vol. I, (London : Lawrence and Wishart , 1970), Ch. XVI: “Division of
Labour and Manufacture”, Ch. XV : “Machinery and Modern Industry”.
43
See H., Braverman, Labor and Monopoly Capital. The Degradation of Work in the Twentieth
Century, (New York : Monthly Review Press, 1974). Braverman’s central thesis is that Taylorist modes
of organisation of the contemporary capitalist enterprise involves the routinisation and deskilling of all
aspects of work, manual and white-collar, managerial work being therewith no exception. The
argument, therefore, of the “upgrading” of the occupational structure, concomitant to the growth of
services in Western societies, put forward by the earlier propagators of the “post-industrial society”
thesis, was misguided.
42
19
directed machinery. At the same time, automation puts millions of manual workers
out of work. The more this process develops, as ever more “intelligent” robots are
being constructed and introduced into the production process, the “automatic factory”,
that is the almost workerless factory, does not belong to the distant future.44
Nowadays, information technology touches upon the higher ranks of
the service occupations to the same effect, namely that of deskilling. Most important
of all, information technology has intruded upom the very administrative structure of
the capitalist enterprise. The latter has hitherto been based on a complex, multiple
hierarchy, splitting into various directions, creating hierarchies within hierarchies of
lower, middle and higher management and the corresponding intermediate specialised
functionaries within the various departments of the corporation (finance and
accounting, marketing and advertising, research and development departments).
Today, information technology substitutes the work of lower and middle managers, as
well as the jobs of intermediate functionaries, with computer networks, that undertake
the vertical and horizontal flow and processing of data and information, as well as the
coordination and control of the various operations of the larger enterprise. This
process has been described as corporate “re-engineering”, whereby companies
eliminate several layers of management, flattening their organisational pyramids45,
replacing the lower and middle traditional manager with the so-called “silicon
44
. Already by the middle of 1980’s the Japanese machine tools factory by Jamazaki employed 65
computer-controlled machines and 34 robots linked via a fiber-optic cable with the computerised
design center in the headquarters of the company, from where it was directly run. The plant employed
215 workers helping to produce what would take 2500 in a conventional factory. See G. Bylinsky and
A.H.Moore, “Flexible Manufacturing Systems”, in T.Forester, (ed), The Information Technology
Revolution, (Oxford : B.Blackwell, 1985) pp. 288-9. By the middle of 1990’s the famous FANUC plant
in Japan employed only six people and had 101 robots to produce ten thousand servo motors a month.
See P.Kennedy, “Robotics, Automation and a New Industrial Revolution”, in N.Heap, et al.,
Information Technology and Society. A Reader, pp. 107-8.
45
. It is worth referring to a couple of characteristic examples : Eastman Kodak has reduced its
management levels from thirteen to four. Intel has cut its management levels hierarchy in some of its
operations from ten to five levels. Cited by J. Rifkin, The End of Work, p. 105.
20
manager”, that is computer networks, and along with him extinguishing hundreds of
job categories. J. Rifkin gives ample evidence of the effects of corporate “reengineering”, which is as yet in its initial phases. It is estimated that “up to 80 percent
of those engaged in middle management tasks are susceptible to elimination”.
According to the Wall Street Journal, “across the entire U.S. economy, corporate reengineering could eliminate between 1 million and 2,5 million of jobs a year “for the
foreseeable future”. By the time the first stage of re-engineering runs its course, some
studies predict a loss of up to 25 million jobs in a private sector labour force that
currently totals around 90 million workers”. In Japan, it is estimated, that as many as
860.000 management jobs will be eliminated in the next wave of corporate reengineering. In Europe corporate restructuring is beginning to have an equally
profound impact.46
Furthermore, information technology has the same effect, namely the
deskilling and potentially putting out of work many professionals. For example, the
skills and knowledge of the civil engineer are increasingly being absorbed by software
programs capable of accomplishing the entire static study of buildings, or other
constructions. The ordinary civil engineer tends to become a computer data feeder, a
job that can be undertaken by a person with much lower skills and knowledge than the
traditional civil engineer. Therefore, his job is susceptible to elimination. Only a
relatively small number of civil engineers with top expertise will be required to direct
the work of semi-skilled workers in the profession. Architectural, industrial and other
forms of design are also increasingly being undertaken by software programs in the
wider field of Computer Aided Design. Artificial intelligence gradually absorbs
expert knowledge and skills in almost every field of professional work, such as law,
. J. Rifkin, The End of Work, pp. 7, 199. See also H. Blair, et.al., “A Pernicious Panacea : A Critical
Evaluation of Business Re-engineering”, New Technology, Work and Employment, No 2, 1998.
46
21
medical diagnosis, financial advice, education, etc47. As K. Kumar points out, “most
notably of all, the continuing development of computers has taylorised the computer
professionals themselves. Computer work has followed the familiar pattern of the
separation and splitting of tasks, leading to increasingly routinized work for the mass
of workers and highly specialized work for a small group of designers and
researchers”48.
Information technology has been introduced and it has radically transformed
work in all areas of services, notably banking, insurance, communications, wholesale
and retail trade etc, tending at the same time to replace massively, as it develops by
leaps and bounds, all categories of service workers, substituting them with computer
networks49.
We may conclude that these developments tend to single out a small elite of
top managers, highly specialised professionals, computer designers and researchers,
scientists in research and development and educators, workers of the so-called
“knowledge sector”, those otherwise described as “symbolic analysts”. These same
processes tend to push down the social ladder, or throw out of work altogether all
sorts of categories of hitherto high occupational status. J. Rifkin points to the decline
of the middle class in the USA and comments:
“While the first automation wave had its greatest impact on blue collar
workers, the new re-engineering revolution is beginning to affect the middle
echelons of the corporate community, threatening the economic stability and
. See M.A. Boden, “The Social Impact of Thinking Machines”, in T.Forester, (ed), The Information
Technology Revolution, pp.98-9.
48
. K. Kumar, From Post-Industrial to Post-Modern Society, p. 22.
49
. See J.Rifkin, The End of Work, pp. 141-157. C. Lloyd and H.Newell, “Computerising the
salesforce; the introduction of technical change in non-union workforce”, New Technology Work and
Employment, No 2, 1998, pp. 104-115. See also, A. Tickel, “Restructuring the British financial sector
into the twenty-first century”, Capital and Class, No. 62, 1997, pp. 13-9, especially Tb.1, p.15, where it
is shown that between 1989 and 1993, employment in the financial sector of G.Britain has fallen by 7,4
%.
47
22
security of the most important political group in American society – the
middle class”50.
We may now come to the low level employees, the routine non-manual
labourers, that execute orders and move the gears of the economic machine, notably
handling the computer. They may have the technical capacity to run the computer, but
not knowledge. They handle a tool, just as the traditional mass worker handled the
factory tool and the machine. He or she needed a technical capacity for this too. Little
training is required for handling the computer and feeding it with data. We may name
this category of working people the “new mass worker”. Exactly as the traditional
mass worker (manual worker) was and still is a “slave” to the machine, the new mass
worker is a “slave to the computer”51. Moreover, exactly like the traditional mass
worker, the new mass worker has virtually no comprehension, or knowledge of the
overall plan and the economic structure his/her work fits into. Of course the new mass
worker must read and write competently, as papers, computer screens and satelites
deliver information world-wide. Apart from this fact and the better environment of the
office, or work place when compared to the old factory, the work of the new mass
worker is devoid of meaningful content, as was the work of the traditional mass
worker52.
Meanwhile, long-term unemployment in all categories of work
persisting in the economies of the West, especially in Europe, as well as the
50
. J.Rifkin, The End of Work, p.170.
.This phrase, “slave to the computer” is often used for the contemporary clerical workers. For the
deskilling and the “proletarianisation” of the clerical workers, see R.Crompton and G.Jones, WhiteCollar Proletariat: Deskilling and Gender in the Clerical Labour Process , (London : Macmillan,
1984).
52
.This situation has been reflected in a number of new “class maps”, that identify a working class
which cut across the conventional manual/non-manual boundary, proposed by authors maintaining the
category of class as an analytical and theoretical tool. Within this perspective the working class of the
late twentieth century is taken to include routine non-manual workers, that is lower-level clerical and
service employees. See, R.Crompton, Class and Stratification. An Introduction to Current Debates, pp.
191 ff.
51
23
dismantling of the welfare state since the early 1980’s, have given rise to the
marginalisation of considerable sections of the population, the so-called “underclass”,
the “new-poor”, the homeless and the destitute. In addition to this, information
technology is today in the process of replacing massively employees in the service
sector, the main employment-creating sector of the Western economies since the
second World War. Furthermore, automation and the shifting of the core of the
manufacturing industry from the centers of capitalism to the rest of the world, has
already hit manual workers in the West severely. The slackening, finally, of social
controls upon the labour market has given rise to a new kind of workers increasing
today rapidly in numbers, the disadvantaged labourers in part-time and temporary
work, marginalized workers in insecure employment53. The societies of the West are
becoming “societies of the two thirds”, as it has succintly put.
Let us now, comment briefly upon the other argument of the information
society theorists that the information technology will “smash the social pyramid”.
Apart from what has already been said about the deskilling effects of this technology
upon various categories of middle and upper service occupations, let us be reminded
that this technology serves the concentration of management and control of the world
economic system in a small number of headquarters, in the advanced capitalist
countries, as analysed above. As we have demonstrated, information technology also
serves the worldwide transactions in the financial markets, themselves controlled
from a few headquarters in the advanced capitalist countries. A colossal concentration
of economic power and control over the world means of production and resources,
unprecedented in the history of capitalism, has taken place. This means at the same
. See T.Fotopoulos, Towards an Inclusive Democracy, pp. 33-41. K.Coates, “Unemployed Europe
and the Struggle for Alternatives”, New Left Review, No 227, 1998. J.Rifkin, The End of Work, pp. 3,
9-11, 166-7. For an extensive examination of unemployment, poverty and the “underclass” in western
53
24
time the concentration and intensification of control over the world labour force, both
manual and white-collar. F. de Benedetti, managing director of Olivetti, characterised
information technology as “a control tool for capital” and commented: “Information
technology is basically a technology of co-ordination and control of the labour force,
the white-collar workers, which Taylorian organization does not cover”54. There is
also a growing tendency towards substituting the human supervisor with the so-called
“electronic supervisor”. “According to a 1987 report published by the Office of
Technology Assessment, entitled The Electronic Supervisor , between 20 and 35
percent of all clerical workers in the United States are now monitored by sophisticated
computer systems. The OTA report warns of an Orwellian future of “electronic
sweatshops” with employees doing “boring, repetitive, fast paced work that requires
constant alertness and attention to detail, where the supervisor isn’t even human”, but
an “unwinking computer taskmaster”55.
As for the thesis of the information society theorists, that “knowledge and
information predominate over material capital and labour” in this society, it suffices
to point out that modern information technology requires huge capital investment to
be applied, as IT multinationals, such as IBM in computers, AT&T and IT&T in
telecommunications,
etc,
demonstrate.
Capital
controls
and
commands,
it
“predominates over” information technology and its functionaries, such as computer
specialists, scientists etc, not vice versa.
It is, therefore, entirely misleading to describe late twentieth century Western
societies as classless societies. The control over the means of production and labour
societies since the 1970’s, see F.Gaffikin and M.Morrisey, The New Unemployed. Joblessness and
Poverty in the Market Economy, (London : Zed Books, 1992).
54
. Cited in K.Kumar, From Post-Industrial to Post-Modern Society, p. 20.
55
. J.Rifkin, The End of Work, p. 188. See also, C. Wright and J.Land, “‘Under the Clock’ : Trade
Union Responses to Computerised Control in US and Australian Grocery Warehousing”, New
Technology, Work and Employment, No 1, 1998, pp. 3-15.
25
by capital, enhanced nowadays to a level unprecedented in the history of capitalism,
defines the distribution of wealth and power, as well as the division of labour within
countries, and across the globe, as analysed above. The distribution of wealth and
power and the division of labour in capitalist society is the basis of its class division,
it constitutes its stratification mechanism. Modern information technology, the current
day means of organisation and control of both material and service production by
capital, allocates work and determines its content. It tends to push various categories
of middle and upper service occupations down to lower levels of the social ladder, or
to throw them altogether out of work. At the same time, it transforms the mass worker
in contemporary Western society to an appendage to the computer. It is clear that the
class structuring mechanism, that is to say the stratification mechanism, stems today
from the predominance of capital over society, as it has always been the case through
the entire history of capitalism. Therefore, the argument that the stratification
mechanism has shifted from capital to other stratification creating factors is
unacceptable. We may conclude that classes are present in Western societies 56. No
miraculous emergence of a peculiar capitalism without classes is taking place.
Conclusion
We may summarise the main points of the analysis in this article as follows:
While in previous epochs an international market of commodities existed, during the
post-war period a global network of closely interconnected production units and
financial institutions has been created as well. At the same time financial speculation
has acquired disproportional dimensions. But while production, finance and
commerce are decentralised worldwide, their management and control is centralised
. For the relevance of class and class politics in the West today, and beyond see J.Moran, “The
Dynamics of Class Politics and National Economies in Globalisation : The Marginalisation of the
Unacceptable”, Capital and Class, No 66, 1998. A.Danford, “The ‘New Industrial Relations’ and Class
56
26
in a few headquarters in the advanced capitalist countries. A colossal concentration of
economic power and control over the world means of production, resources and
labour force, unprecedented in the history of capitalism, has taken place. Concomitant
to these developments is a new International Division of Labour. The international
capitalist system is gradually moving towards a division of the world between a few
countries preoccupied with the centralised management and control of the world
economic system, as well as with production of knowledge and technology, tending in
the long run to retain mainly the production of industrial products with a high content
of advanced technology, and the rest of the world being charged mainly with
agricultural, raw materials and industrial mass production.
On the other hand, the universal adoption of neo-liberal and monetary policies,
during the last two decades, has completed the liberalization of the markets, removing
the remaining “restrictions” upon the free movement of capital and commodities all
over the world, slackening at the same time the social controls upon labour markets.
The economic philosophy supporting these policies dictates that the free play of the
market forces and unrestricted antagonism should be left alone to organise national
and international economy and society, the market itself assumed to be the best
mechanism to allocate resources. For the brutal economism of this dogma politics are
almost irrelevant for both the national and the international economy. The directors of
the world orchestra should be the economic technocrats and bankers. But the
liberalisation of the market forces leads to an intensification of economic antagonism,
that destroys, among other things, the small and medium-scale economic units in all
spheres of economic activity, which have been the main source of employment in the
private sector of Western societies. More widely, the process of globalization leads to
Struggle in the 1990s”, Capital and Class, No 61, 1997. A.H.Yun, “Industrial Restructuring and the
Reconstitution of Class Relations in Singapore”, Capital and Class, No 62, 1997.
27
the over enlargement of certain firms (multinationals) and to the redistribution of
wealth to the detriment of the weaker social classes and income groups, as well as the
weaker countries internationally. It leads, in the end, towards an economic, so to
speak, totalitarianism.
Finally, the prevalence of services and the information technology has
radically transformed work in Western society and changed therewith the features of
its class structure. The rapid expansion of information technology applied in all areas
of economic activity has replaced all kinds of craft labour. It has, at the same time,
given rise to the “new mass worker”, the routine non-manual labourer, who works as
an appendage to the computer. Information Technology and Artificial Intelligence has
also affected all kinds of professional and managerial work. It is, lately, in the
process of pushing considerable numbers of middle and upper service occupations
down to the lower levels of the social ladder, or to throw them altogether out of work,
along with low-level service employees. It singles out a small elite of the privileged
top managers, highly specialised scientists and professionals, computer designers and
researchers. Information technology amplifies, therefore, unemployment rather than
creating new jobs, frustrating expectations in the opposite direction. At the same time
the welfare state is being dismantled and long term unemployment persists. Western
societies seem to be driven towards the marginalisation of large sections of their
population and the society of the two-thirds appears to be already a reality, not
merely an alarming exaggeration.
It seems that the information society, inaugurated by contemporary capitalism,
will turn out to be an inhuman society, subordinated to the logic of global
accumulation of capital, realised by the vertiginous speed of information technology.
However, the processes that we analysed above involve major contradictions, such as,
28
for instance, the ones that crop up almost endemically with the recurring turmoil of
the international financial markets, endangering the stability of the world system,
haunting the international society with the repetition of the great “crash” of 1929. It is,
then, more than plausible to say that these processes do not describe a one way path to
the future. By the same token, it is reasonable to anticipate that the peoples of the
West and world-wide will resist this menacing spectre of a new “Middle Age”. Via
what paths? History is unpredictable.
Biography
Sophia N. Antonopoulou is Assistant Professor of Economics at the National
Technical University of Athens. She is the author of the books : The Political and
Economic Thought of Rosa Luxemburg. The Critique of Marx’s Capital, (Athens :
Papazissis, 1998). The Post-war Transformation of the Greek Economy, 1950-1980,
(Athens : Papazissis, 1991). The Marxist Theory of “Development” and its
Convergence with the Conventional Theoretical Paradigm, (Athens : Papazissis,
1991). She has also published articles in scientific journals and the economic press.
Abstract
In this article the contemporary international capitalist system is examined and a
rising New International Division of Labour is defined. It is argued that while in
previous epochs an international market of commodities existed, during the post-war
period a global network of closely interconnected production units and financial
institutions has been created as well. But while production, finance and commerce are
decentralised worldwide, their management and control is centralised in a few
headquarters in the advanced capitalist countries. A colossal concentration of
economic power and control over the world means of production, resources and
labour force, unprecedented in the history of capitalism, is taking place. Information
Technology is shown to be the current day means of centralisation of organisation and
control of both material and service production by capital. It, at the same time,
29
allocates work and degrades its knowledge content. Coupled with the prevalence of
services in Western society, it changes the features of its class structure.