8/31/2013

THE THIRD INDUSTRIAL REVOLUTION AND CAPITALISM

Spanish



THE THIRD INDUSTRIAL REVOLUTION: UNEMPLOYMENT, EXCLUSION AND PRECARIZATION


Every increase in productivity, every invention or advance to reduce the necessary work, is converted into a danger to humanity. 'Creative destruction' has in fact been converted into 'destructive creation'.

Interview with Robert Kurz (2 September 2012)

What is it that distinguishes the current crisis from the others?

"Capitalism is not an eternal circle but a historical process. Every great crisis comes at a certain level of accumulation and productivity higher than the previous crisis" ... "Past crises were overcome because capitalism had not yet reached its maximum expansion. An interior space was still available for system development" ... "However, after the 3rd industrial revolution, capitalism has no longer room for a new real-accumulation phase"

In your opinion, capitalism is coming to an end. Are we, for the first time ever confronted with the possibility of overcoming capitalism?

"We for the first time in history confronted to the possibility of superseding capitalism? Was it so that capitalism had to develop its internal contradictions for that to be possible? Was this not possible before? 

The blind dynamic of capitalism deploys itself according to its own internal laws. This process is only ‘necessary” and determined insofar as the categories and the fundamental criteria of this mode of production and of life are not reassessed in practice. 

An appropriate intervention could have permitted to stop the march of capitalism at each stage of its evolution. The socialization of production would have then taken a form on which we can say nothing because it never took place. It is not a question of objective necessity, but of critical consciousness. Neither the revolts of the XVIII century or the beginning of the XIX century, nor the old workers’ movement or the new social movements of the last decades have been able to engender such a consciousness. On the contrary , the capitalist forms of abstract work, of the valorization of value and of modern Statism have been more and more internalized. But these here are just facts. It has not been that capitalism “had” to develop its internal contradictions to the point reached today, but it did it. 

We are thus confronted with the task of reformulating the critique of capitalist forms and to the one of their abolition given the level of contradiction they have reached. It is simply the historical situation in which we find ourselves, and it would be idle to cry on the lost battles of the past. If capitalism comes up objectively against absolute historical limits, it is nevertheless true that, given the lack of sufficient critical consciousness, the emancipation can fail today also. The results would not be a new spring of accumulation, but, as Marx has said it, the fall of everyone into barbarism."

Industrial Revolutions.


Amongst economic historians it is usual to talk of three industrial revolutions. The first 1760-1830, saw the development of steam energy and railways. In the second. which ran from the 1860's to WWI, the use of electricity, internal combustion, running water, internal bathrooms, communications, training, chemical products and petroleum derivatives were developed and generalised. The third which began in the 1970's, of micro-electronics and digitalisation in which the use of computers became general in all economic sectors and in homes, the internet, robotization and mobile telephones... Some analysts who study thr industrial revolutions related to ecological disasters associated with them, also underscore the industrialization of China as a substantive element of the 3rd Industrial Revolution.

Industrial revolutions and the crisis of overproduction


In capitalism, innovations, inventions and technical improvements which reduce work time, the appearance of new domestic machines which promise to make life easier... end up complicating life, reducing wages further, and worst of all removing work and excluding many and threatening unemployment and exclusion of the rest.

In all cases the introduction and proliferation of revolutionary technical innovations mean a qualitative increase in productivity of work and the consequent fall in prices of products. The increase in productivity reduces the number of workers necessary to achieve the same productive level. Over a short period of time many industrial plants and even entire sectors become obsolete and bankrupt. The enormous increase in unemployment forces wages down causing demand to collapse and setting off a spiral of overproduction. The first industrial revolutions generated the largest waves of emigration in history. Millions of workers expelled from European industry and agriculture found it necessary to emigrate to other continents to survive.

Although the industrial revolutions caused severe socio-economic upheavals on the other hand they reinforced the capacity for the system to expand. Capitalist formations advanced along the railway tracks and the new electricity lines to the furtherest flung parts of the planet and behind them came the emigrants to find work, earn wages, establish their families and to participate again as consumers in the system. The expansion of the markets compensated for the disastrous consequences of the industrial revolutions, which in the end, in spite of the set-backs would go down in the history books as milestones in human progress.

The disasters of the third industrial revolution


As was the case in the preceding revolutions, the brilliant post-modern illusion which attended the Third Industrial Revolution in which new forms of 'immaterial work' would blossom in a the new 'information society' based on new relations between capital and labour, with an increased 'self-determination' for workers... turned out, as one would expect under capitalism, in reality to be a dark world of massive unemployment, underemployment, self-exploitation and generalised precariousness.

The Third Industrial Revolution, by its very nature of high mechanisation and robotisation, means that an ever growing proportion of of the population end up excluded from the production process, whilst those who remain in employment accept less and less remuneration owing to the fear of also being excluded. The Third Industrial Revolution has made labour costs increasingly irrelevant in the final production costs (a first generation iPad for $500 includes labour costs of about $33 of which the final assembly in China represents only $8).

In the same way as the textile factories crushed the old hand -loom weavers and the Model-T Ford put the animal transporters out of business, digital technologies have shaken the communications sector, have destroyed intermediary businesses and retail selling, have emptied the offices of administrators and decimated the factories sowing unemployment and exclusion everywhere.

In contrast to the previous revolutions, this third revolution has taken place at t time when additional expansion to the system is impossible. The system is confronting totally insurmountable barriers. One of them is internal (it is impossible to expand further than 'globalisation') and the other external (depletion of resources, serious problems of pollution and biological and environmental catastrophes).

Techno-utopias and fundamentalism of the market


Nevertheless techno-utopias and postmodern illusions of the Third Industrial Revolution do not seem to have receded: “The factories of the future will not be full of machines and men in blue overalls, Many will be absolutely clean and remain almost empty. As is already occurring in many cases (hydroelectric plants...) the majority of the jobs are not located at the factory itself, but in the nearby offices which will be full of designers, engineers, computing and logistics experts, marketing personnel and other professionals. The fabrication of the future will require greater abilities. Many of the boring repetitive tasks will become obsolete.”

This brilliant analysis avoids an internal contradiction which is becoming increasingly evident to everyone. If human labour is becoming less important in the production of goods, and the wages represent ever smaller quantities of capital destined to production (the threat of exclusion forces wages down , including those of the famous “designers, engineers, computing and logistics experts, marketing personnel...”). Who exactly is going to buy these products and with what wage? How are people going to survive in a capitalism without work?

The techno-utopians also have the answer to answer to this. The present capitalist situation is capable of redirecting itself:

Internet is making commercial participation possible along social distribution networks. This combined with the perfectionism of 3D printing and the possibility of free modular fabrication could represent an opportunity for the excluded to return to small scale mercantile production and artisan work in which the workers again possess the means of production. Modular manufacture, peer to peer, open and easily replicable in practice, which would produce on a local basis and in response to the needs of a specific community and which could be extended to many other areas such as the production of automobiles, furniture or clothes. With the growth of these new modular technologies delocalised jobs would come back home.


But in these dissertations there is a key and determinant factor which is never mentioned: the monopolies, creatures which put on weight during industrial revolutions and above all during the crises of overproduction which they generate. The Third Industrial Revolution and its associated crisis, have facilitated transnationalisation and the rapid growth of monopolies in a way in which scarcely any area can escape its penetration and control. In contrast to computers the restart button does not work with capitalism.

In the same way as has taken place with the production and commercialisation of organic-ecological food (the monopolist megastores already have their respective sections operating to capture this particular section of the global market) under capitalism the most likely scenario is that these techno-utopias end up conforming to a new system of sub-contracting and self-exploitation as seen in the 'putting out system' (for example in the case of genero de punto in the area of Modena) under the control of some monopolist multinational.

Marx or Schumpeter?


The harsh reality of these industrial revolutions has already been observed by Marx. It was Marx and not Schumpeter who highlighted for the first time the phenomenon of 'creative destruction' in industrial society, observing that in the British census of 1861, the new industries of the Second Industrial Revolution, employed comparatively fewer people than their predecessors of the First Industrial Revolution. Marx studied cases in the gasworks, telegraphs, photography, steam ships and railways. In all cases the advances in mechanisation and automation of these industries had reduced employment from 1000 000 to no more than 100 000 employees.

Later Marx showed that the industries of the Second Industrial Revolution in britain had hardly absorbed any on the expelled labour. Hence their expectations of a secular disminuacion trajectory of demand for labor. Unemployment forced down wages and demand as a result of the consequent crisis of overproduction.

The industrial revolutions increased productivity and productive capacity. This hyper-capacity met with the reduced consumption capacity of the population (the excluded or those with low wages) and generated a crisis of overproduction which expelled and excluded entire sectors of the population from the productive system as obsolete human material.

Schumpeter also observed this phenomenon but argued that this 'creative destruction' during the crisis was  capable of compensating the destruction of jobs by creating new employment in the growth of new industries. Clearly Schumpeter's theory required a continuous expansion of the system.

In the phases prior to the present globalisation the system was still capable of making use of the new technical capacity for expansion into and depredation of the periphery (appropriation of land, buildings, natural resources, fisheries, forestry, enlavement of the population...), combining coercion with violence, according to the circumstances, ripping out precapitalist modes of production, destroying their economies and their social and political systems (imperialism).

With steam engines, steam ships and the railways capitalism launched an assault and sacking of the planet disguised as civilising colonisation and assistance to development. The other face of the industrial revolutions was the crisis of overproduction, mass emigration, colonialism and imperialism.

Destruction is not creative


According to Schumpeter, 'creative destruction' favours monopolist concentration and this is good for capitalism. The First Industrial Revolution favoured the appearance of monopolies in the most dynamic sectors of the economy (steel, iron, and coal ...). With the Second Industrial Revolution and the Great Depression of the 1930's monopolies advanced taking over many sectors which had resisted until then. With the Third Industrial Revolution monopolist concentration has become generalised in each and every sector of the economy including sectors (retailing, messenger services, editing of books and magazines, internet, hotels) which nobody would have imagined only a few decades ago.

The global monopolist hyper-concentration means that capitalism has reached an internal systemic barrier which it is unable to pass. Without growth, those excluded by the Third Industrial Revolution will not be reabsorbed. The majority of the population will remain progressively excluded and definitively marginalised, without access to the revolutionary advantages of technology and productivity.

The same 'creative destruction' has ceased to function. In past industrial revolutions, the crisis of overcapacity forced the disappearance of the less competitive leaving the field free for more productive, modern and aggressive initiatives. It was a sort of rejuvenation which favoured the further expansion of the system.

At present the destruction necessary for the rejuvenation of the system no longer takes place. When one sector is shared between two corporations (duopoly) there are no marginal firms susceptible to destruction. When the recession arrives, the duopoly simply simply stops investing , fires the workers and maintains its overcapacity waiting for better times.


Under these conditions any glimmer of recuperation comes up against the impassable internal barrier given that everything is already globalised. Monopoly globalisation means that expansion outside the system is no longer possible. The railways destroyed the animal transport sector, but this exclusion was compensated by inclusion generated by the planetary expansion of railways. With the digital revolution and robotisation the same thing does not occur. There are no longer geographical zones or virgin areas available for capitalist expansion. Destruction is no longer creative it is just destruction pure and simple and the people excluded do not find and will not find a place within a system which is already global. This includes the famous stars of the techno-utopias. 'designers, engineers, computer and logistics experts and marketing personnel' who also find themselves on the street.

The signs 'for sale ' or for rent' are eternal and forever in the majority or urban areas and industrial zones throughout the planet.. Every increase in productivity, every invention or advance to reduce the necessary work , is converted into a danger to humanity. Creative destruction has been converted in fact into destructive creation.

The illusion of 'new undertakings' and the end of the SME's (Small and Medium Enterprises)


In all cases the industrial revolutions created the illusion of a better world, easier and more comfortable in which work would be reduced thanks to improvements in productivity.

With the Third Industrial Revolution the illusion consisted in that computing would imply new types of 'immaterial work', in an information society with a greater 'self-determination' for workers.

In reality, ' the information age ' brought with it mass-unemployment, underemployment, and precariousness in labour relations. The supposed 'self-determination' has driven a compulsive 'self -exploitation' in the purest tradition of the 'putting out system' (such as Bimbo making its drivers 'autonomous workers'.) The supposed 'new entrepreneurs', 'autonomous businessmen of the workforce ' or 'managers of their own human capital' are in reality aggressive forms of flexi-exploitation that leave the workers completely at the mercy of of the conditions of capitalism in crisis.

The ludopathic hope of the majority of the new entrepreneurs is to find or develop some new niche of value to sell as soon as possible for a good price to the monoplist and retire for life.


In a medium dominated by monopolies, it seems sensible to seek work as a supplier to these monopolies setting up SME's. However, supplying to a sole buyer (monopsony), capable of dictating prices and conditions means precarisation, poverty or closure for the majority of the SME's caught in the trap. These same monopsonies recommend fusion and consolidation to their suppliers (economies of scale) to reduce their costs ad libitum. SME's which are trying to operate in areas which have not yet been monopolised find that these sectors are are reducing daily even in the most far.flung geographical areas and the most unexpected fields. The figure of the octopus with which the American West denounced the railway monopoly corresponds perfectly with the monopolist ability to make use of and exploit every nook and cranny, which has been perfected in the Third Industrial Revolution.

Tertiary becomes third world


Traditional economic doctrine links the development of three sectors (primary, secondary and tertiary) with the development of successive waves of advance of productivity, the industrial revolutions.

It is clear that, from a technical and material point of view, the productivity resulting from the Third Industrial Revolution would permit humanity to spend only a small portion of its time on agricultural or industrial production and to occupy itself  all with training, education, caring, medicine culture etc.

The neoliberal techno-utopias dazzle us with a supposed progressive tertiarisation. The improvements in productivity will translate into 'a society of culture, education, caring and leisure' in an equal society which would generate a use of new services and new jobs to to improve health, education, the environment, care of the elderly and incapacitated etc,

In practice, the first part of the argument is implacably coming into effect: every day there are fewer people occupied in the primary and secondary industries. Capitalism, however, will never allow the second part of the programme to be put into effect.

In reality what is being imposed in the First World is the well-known tertiarisation of poverty habitual in the Third World. A handful of high-tech executives living in exclusive areas, going around in the latest cars and yachts, surrounded by a multitude of sycophantic waiters, bodyguards, lawyers, cooks, tailors and servants. The workers expelled from the agricultural and industrial sectors have to seek work in in other sectors which become more and more precarious or give up altogether succumbing to exclusion. Social polarisation generates an extensive range of precarious sub-jobs in which those who are expelled serve the rich or those who manage to maintain their jobs, the precarious serving the precarious (servants, drivers, waiters, escorts, prostitutes, drug-dealers etc.) following the model of Third World tertiarisation.

The apostles of tertiarisation claim that these tertiary services are bearers of the future growth of the system. In practice, however, the demand of consumers who are able to pay for these services is less every day, and the Third Industrial Revolution is already getting rid of the middle classses. The multitudes who fail are excluded from the system by the ever more exclusive appropriators of the profits of productivity. There is no capitalist future for thousands of millions of human beings.

Socialist tertiarisation


The neoliberal revolutionaries, until recently, proclaimed the coming of modern tertiarization just around the corner in glowing tones: governments prepared for the future, reducing their field of action to the improving of schools for an active, qualified population, limiting itself to laying down clear rules and a level playing field to facilitate the upsurge of new tertiary enterprises of all types. Today the weight of empirical evidence has stopped their voices and turned their words to dust.

Nevertheless, at present,with the extraordinary level of productivity reached, tertiarization constitutes the only socio-economic possible structuring  for the majority of the population.

The possibility of a future tertiary society requires a new vision of the social world, to counter an irrational system, whose absurd mechanical and organic reductionism is leading inexorably towards social and ecological catastrphe.

Premodern agrarian society was not based on the monetary production of goods. For that society, the change to an industrial society represented a break with the forms of personal dependence which were replaced with contractual and impersonal capitalist forms. In the same way, the transfer of an industrial society to a service society requires a break with the capitalist system of production and the formation of a qualitatively new and different order.