Each of these proposals britles with difficulties, and none can be recommended without a great deal of further study. What is depressing, however, is that (at least as far as I am aware) they are really not being adequately studied in any country today. I would be very happy indeed to be proved wrong on that point.
A fourth solution which is, very naturally, beeing advanced in many quarters to the problem of unemployment is work sharing. Here I believe we have to separate two elements. A deliberate policy of dividing the available work between more people seems to me to have very limited scope for resolving our present problems, if only because of the increasing costs it would involve – unless, which seems very unlikely, those sharing jobs are prepared to accept a commensurate (corresponding in size or degree) reduction in wages.
On the other hand there is obvious scope for taking people out of the workforce by earlier retirement, or by prolonigng pre-work training – provided it is recognised that by so doing we are merely shifting the incidence of joblessness between age groups (for which there may well be sound reasons). In other words, this is a palliative not a solution.
In any event, it seems inevitable that as we move through the 1980s there will be progressive reductions in the working week, with earlier retirement, longer holidays (including quite possibly mid-career sabbaticals) and restrictions on overtime. Whether this will create significantly more jobs is open to question, but that it will improve the general quality of life is very probable. The problem for employers will be to see that the reduction in hours does not push up unit costs excessively.
So far as can be judged from rather inadequate records, normal working hours in the mid-nineteenth century averaged around 65-70 hours per week. From then until 1939 there was a steady reduction to around 40-45 hours. Normally one would have expected the trend to continue downwards. But the demand for labour in the post-war boom arrested the trend, and average hours woked did not start to fall again until the early 1970s. Since then they have been dropping slowly but steadily, so that today average hours worked in industry throughout the Western world are probably around 38-40 (allowing for overtime an short-time).
My guess is that by 1990 this fiugre will have fallen to around 32-34 hours, and effectively we will move from a five day to a four day working week. This will have a number of radical effects on society. It will greatly increase the scope for “moonlighting”, enabling people if they wish to hold down two jobs; it will greatly boost the hidden economy, in which the second job will normally be worked. At the same time it will create major opportunities for new leisure industries to be developed, and one’s guess is that the leisure sector (including, hopefully, expanded education and training) will be among the most buoyant growth areas of the post mannufacturing economy. Whatever else it is, the world of the 1990s is likely to be one in which work plays a smaller part in the totality of people’s lives, and leisure a greater part, than today. Hopefully, also, the present sharp divisions in our lives between work and leisure will become more blurred, as work becomes less aruous and disciplined and leisure more purposeful and creative (for those who wish it to be).
So the prospect for mankind in the post-manufacturing era is one of challenge and opportunity. The risks are obvious, the opportunities immense. But in order tor grasp the opportunity, society has to become much better at coping with change -which will be occurring at an ever accelerating rate. We have to make our institutions, particularly our political institutions, much more creative and much more flexible. The present widespread disaffection regarding our institutions -the pervasive view that “small is beautiful” and “big is ugly” – is not necessarily the most appropriate set of attitudes for approaching the post-manufacturing era. We cannot exist without institutions, and if our present institutions are thought to be incapable of dealing with today’s problems – let alone tomorrow’s – that is an ominous sign. Our institutions cannot be ignored. They have to be reformed. We cannot sit back, as some advocates of the post-industrial society have suggested, and wait for technology to resolve our present tensions and lead us complacently towards a golden, affluent future. Technology has not solved society’s problems so far. For every problem it has solved it has tended to create a new one. Why should the future be any different?
Technology, in short, is a tool to be used, not a magic wand to be waved. In the end society will be what we want it to be and are prepared to make it. The solutions in the end rest, as they always have done, with us. In this sense tomorrow’s Garden of Eden will be no different from that described in Gensis. It will be up to us to give the story a happier ending.
Category Archives: Work and Employment in Post-Manufacturing Society
Each of these proposals britles with difficulties, and none can be recommended without a great deal of further study. What is depressing, however, is that (at least as far as I am aware) they are really not being adequately studied in any country today. I would be very happy indeed to be proved wrong on that point.
On the answer to this psychological question will also depend much of the future of important sectors of the service economy such as retailing, catering and the theatre. With the development of viewdata it will be possible, if we wish, to do virtually all our shopping by telephone, without actually having to go shopping at all. In this case the shop could simply become a warehouse with a delivery service. Equally, with home video equipment and with the enhanced cooking facilities which development of domestic computers will bring, one will be able to have all one’s entertainment and all one’s meals at home without any fuss, if one so wishes.
Will we so wish it? One can easily envisage a future in which those above a certain threshold of affluence become increasingly self-sufficient hermits (a person living in solitude), earning their living in conducting their lives without having to leave their electronically protected houses-cum-offices. It is a technologically possible future, but not exactly an inspiring one. It would also of course have catastrophic effects on employment in service sector such as retailing.
That is one risk arising from the technological possibilities opening up in postmanufacturing society – a psychologically debilitating (weak and infirm (not mentally strong)) retreat into affluent introversion. But it is not, in my view, the biggest risk. Much more serious potentially is the danger implied by the phrase used in the last paragraph, “those above a certain threshold of affluence”. It is plain that, over the whole of Western Europe, an increasing proportion of the working class is acquiring middle class standards and middle class life styles. Despite the fluctuations of the business cycle, average real living standards are rising slowly and inexorably, so that by the end of the century the kind of average living standard now found in Scandinavia will be general over the whole of Western Europe, while the scandinavians and other trend-setters will have moved much higher.
But these standards will not apply to everybody. In all Western countries there will probably be a substantial minority who, for one reason or another, cannot find a place in the post-manufacturing economy. As the real cost of labour rises, more and more of the least skilled jobs become uneconomic; they either become automated, or they cease to be done at all. As the amount of captial per worker increases, the cost of employing unequalified workers – who cannot operate, or who might actually damage, the very complex and expensive machinery at their disposal – becomes prohibitive.
So one very disagreeable feature of post-manufacturing society could well be the existence of a sub-class of excluded men and women, more or less permanently unemployed. Being a minority these people would not command the political muscle which the industrial working class has enjoyed in post-war Europe. A declining trade union movement is unlikely to give them the support which their counterparts have tended to enjoy hitherto. The risk that they would become permanently disaffected, a focus of increasing crime and violence, is a real one.
This is perhaps the biggest danger for the West from the present recession. If substantial unemployment among the present under 25s persists for several years -and all the signs are that it will – we may find a whole generation of our young people have lost, or never had the chance to acquire, the habit of regular work. The sub-class of unemployables could in these circumstances become an alarming large one, such as would pose major problems of absorption and containment for society. Other factors also make the prospect still more dangerous. All large Wetern countries now contain substantial minorities of immigrants who are not fully integrated into the community, who tend to have high rates of unemployment and access usually only to the least attractive jobs. These people are likely to form the hard core of a depressed sub-class increasingly at odds with the rest of society. Moreover, as the pattern of income distribution starts to move from a pyramidal to a diamond-shaped structure -as is now happening generally in the West – the political pressure for equalisation is starting to diminish, and income and wealth differentials are widening. In the areas of advanced technology workers with the appropriate skills placed to secure high wage differentials. Thus the natural inequalities within society could widen dangerously.
The withdrawal of the State, and the retreat from the principle of the comprehensive welfare state, pose further problems. Previously the State has provided employment for many of the least skilled. It has also of course supplemented the incomes of the poor, and provided them with services they could not buy on the market. It has been on the whole a rather inefficient provider of these services, but if it withdraws from them it is not clear that anybody else will provide them. Deprivation may be more limited than in the past, but it may equally be more acute for those it affects.
At the same time, the increasing internationalisation of business will make it very difficult for any individual country to pursue policies of income distribution, or social justice, which are markedly at variance with its neighbours. Business will tend to migrate to those countries where it has to shoulder the fewest social burdens – other things equal – and as technology advances it will become progressively easier so to do.
Thus there are a number of factors which, unchecked, will tend to make a post-manufacturing society more socially unequal, and therefore more divisive, than hitherto. We cannot therefore afford to be complacent. As already indicated, there are no firm bases for projecting how large a proportion of the population in the long term the sub-class of the excluded will comprise. But that it will exist is virtually certain, and we cannot afford to ignore it.
We have to tackle the matter now, before unemployment becomes too deeply embedded in our culture. I believe, therefore, that we should now be looking very seriously at such issues as:
1. Can local communities take up the slack ( characterized by a lack of work or ) left by the retreat of the State, to see that vacuum of socially needed work and the employment needs of the local jobless are filled?
2. In order to do this, and to inculcate the habit of work among the young, should we be considering schemes for compulsory community service and work experience for young people – a form of non-military national service?
3. Should we not be examining with greater urgency than we are the case for easing the present link between contribution and reward, in other words between work and income (deeply embedded as it is in the Protestant work ethic), so that income is more closely related to need, via such schemes as negative income tax, which the increasing sophistication of computers now makes more possible than ever before?
One can paint an idyllic picture of industry in the post-manufacturing society, and many writers have done so. Unfortunatley there are enough negative aspects to puncture the euphoria, and some daunting question marks. But before coming to these, let me mention two other major implications of the application of computer technology. They concern the role fo woman, and the future of trade unions.
Mention has already been made of the remarkable changes in the perception by woman of their role, and the expansion of their aspirations, as a result of improved methods of contraception. Female participation in the labour force has increased sharply in recent years, and with it female demands for better job opportunities and better access to training and promotion. It is perhaps surprising that despite the recession and the rise in male unemployment, there has been very little evidence of a male backlash against these aspirations.
Industry will therefore increasingly adjust its working patterns to suit the requirements of woman, who will play an even-bigger part in it as we move into the post-manufacturing society. If one looks at the present pattern of female employment, it tends to fall into two distinct blocks. One the one hand, woman are heavily concentrated in a group of activities where the future prospects are particularly bleak: labour-intensive industries like clothng and textiles, and in service occupations most vulnerable to office automation (clerks and shorthand typists). Woman are also heavily concentrated in the retail trade, which we shall mention below.
Thus the first sweep of the computer revolution could have serious effects on female employment. On the other hand, woman are strongly placed in some of the fastest-growing sectors – in teaching, communications, and more recently in the computer industry itself. We may expect to see increased pressure for job opportunities to be provided for women in these expanding sectors of the economy, particularly if this can be done on the basis of working from home on a flexitime system.
It is clear that the kind of “return to cottage industry” type of working pattern sketched out above offers considerable attractions to woman, in that it enables them to combine home life and work. This means that there will be great social pressures in this direction. But of course this option will only be available to woman with adequate qualifications. More effort will need to be directed towards re-training woman who have left the labour force to rear a family, an wish to reenter work once the family is reared.
This is a particular instance of a much more general problem. The need for retraining to enable employees to cope with the very rapid technological changes which will be experienced in the post-manufacturing society will be a continuing challenge. The old concept that one learns a skill at the start of one’s working life which one then practices throughout one’s career has little relevance in a world where, in Professor Stonier’s words, “changes are taking place at an exponential rate rather than a linear one”. In future we must all expect to have to change jobs several times in our working life, to learn new skills continuously, if we are to cope with the accelerating pace of change.
At present society is ill-adapted to this emerging pattern. There is a serious mismatch between what the education system in most Western countries is geared up to provide, and what the world of work demands. We have to improve this relationship, by introducing greater flexibility on both sides. We have to strenghten the vocational (occupation or employment) training aspect of education, and adapt it more closely to the changing needs of industry. We have to increase the work experience element in schooling, and bridge the present yawning gap between school and life. We also have to ensure that career patterns in business are sufficiently flexible to enable people, as they feel the need, to take “sabbatical leave” to update their skills and re-charge their intellectual batteries, without detriment to their careers.
One option which merits serious consideration is to make business enterprises themselves, under suitable supervision, awarders of qualifications. The idea that the firm can be a teacher is one which is only beginning to become respectable, and it naturally arouses hostility in parts of th educational profession. But if we are to bridge the gap between work and education, and if experience in doing a job is to be properly recognised, there is much to be said for making the enterpris itself the teaching organisation in sutiable cases.
The needs of woman in this respect are thus a particular example of a more general theme. Nevertheless, they have a special relevance in another context. Only woman can bear children. One result of the contraceptive pill and the change in female attitudes and aspirations resulting from it has been a sharp decline in the birth rate in most, thought not all, Western countries. It is true that the labour force in most of these countries will continue rising until the late 1980s as a result of the early post-war “baby boom”. But it will start to tail off quite sharply as we move into the 1990s, and if present trends continue it is safe to predict that Western Europe will start to become seriously concerned about its dwindling population, and the prospect of fewer and fewer youngsters having to support a growing army of dependents.
Future trends in the birth rate are quiet extraordinarily difficult to frecast, depending as they do largely on changes in attitudes and life styles which defy analysis. But it would be rash to assume that the birth rate will turn round of itself. It would be wiser to consider what kind of inducements would persuade woman to want to have more children. The most obvious incentive would be to make it easier for woman to combine a career with child-rearing.
The computer revolution could have a profound impact on the scope and importance of trade unions. During the 1970s in Europe, thougt not in North America, trade unionism gained very considerably in power, influence and numbers. Aided by sympathetic governments, trade unions secured legislation in most European countries which would guaranteed employees a high degree of job security. It became both difficult and very expensive to make workers redundant. Health and safety regulations at work were made stricter and more comprehensive, more generous arrangements for sick pay were secured, and woman workers won equality of pay for equal work and (at least in principle) equal opportunities for training and promotion. In a numbe rof countries workers won seats on the boards of directors as a statutory right, and in almost all the powers and scope of works councils (elected representatives of employees on the shop floor) were enhanced.
Thus industrial democracy took a major step forward in most Western European countries during the 1970s. At the same time, of course, European governments and industries faced continual pressure for higher real wages and shorter working hours. As a result European wages increased substantially compared to those in North America and the Third World. Moreover, as a result of job security provisions labour became essentially a fixed rather than a variable cost item, at least in large firms.
From the workers’ point of view, many of these gains seem to be proving counterproductive. The higher cost of labour has undoubtedly acted as a stimulus for the introduction of labour-saving automation, and has also deterred firms from expanding in Europe as much as they would otherwise have done. There has been a marked tendency for multinational investment to migrate from Europe to North America. The high cost of dismissing workers has made large firms reluctant to take them on if alternatives can be found. Thus the job security of those at work has, at least in part, been paid for by very high unemployment among the young, who have not had the opportunity of acquiring secure status at work. In almost every Europen country the under-25 age group has by far the highest percentage unemployed. Another reason for this fact has been trade union pressure to reduce the differentials between fully trained workers and young workers still under training. Since apprentice labour is no longer particularly cheap, it is less attractive to employers.
Thus the constraints applied by labour to large firms have led, and will lead increasingly in the 1980s, to a shift in numbers employed from large to small firms. Where possible, large firms now prefer to sub-contract work to small firms, which do not suffer the same constraints, rather than take one extra workers themselves. As large firms become more bureaucratised and more politicised, entrepreneurship is reviving at the level of small enterprises on whom the large ones increasingly rely. The principle of “small is beautiful” applies here too.
Entrepreneurship is indeed coming back into fashion. It accords with the spirit of the times, the prevailing distrust of large scale which we have already noted. It responds to the needs of large scale industry, encrusted by the restraints imposed on it by governments and collective bargaining. It is a natural reaction to the excessive taxation which the expansion of the State in the early 1970s necessitated. So we see in most European countries – particularly in Italy, but also in the UK, Germany, France and Scandinavia – a vigorous growth of the so-called “informal” or “hidden” or “black” economy, where work is being performed and income is earned by individuals or groups which are not recorded in the official statistics and not available to the tax collector.
The swing to small scale enterprise is encouraged by other factors too – notably the reviving taste for craftsmanship, the reaction against mass produced consumer products, the growing desire for individuality and self-expression among the peoples of the West. Until recently there were two powerful forces pulling int eh other direction. One, as we have seen, was technology, which before the age of the computer put a heavy premium on large scale. But, as we have seen, this is now changing. Perhaps the most significant change of all between the 1970s and the 1980s will prove to have been the fact that technology now begins positively to favour decentralisation and small scale rather than the opposite. When technology and public aspirations and values are pulling in the same direction, it is a powerful combination.
The second factor which has worked against the pressure to decentralise has been the tendency for governments, faced with the horrors of “stagflation”, to try to enlist the support of trade unions and employer organisations in governmental decision making. During the 1970s most European countries moved a long way down the road to the corporate state, with increasing power and influence devolved to the central decision-making authorities in the trade unions and employer organisations. In some countries – West Germany, Austria, Scandinavia, The Netherlands – the system worked reasonably well. In onter – Italy, Ireland, UK – it was less successful. But in almost every case the experiment was working against the grain of public opinion, and at the cost of a certain rigidity and bureaucratisiation of industrial policy, which as the decade wore on became less and less acceptable.
Now there is growing evidence that, at least in some European countries, the importance of the trade unions is declinig as inflation recedes and unemployment rises. Trade unions are on the whole not popular bodies. The rise in unemployment reduces their bargaining power, and their numbers. It forces them back onto the defensive. As we have seen, trade unions operate much more successfully in large organisations than in small entrepreneurial ones, where personal contacts between the individual workers and his or her boss are much closer. The kind of decentralised pattern of working life indicated above is likely to prove an inhospitable climate for trade unions. Part of the undinding of the dichotomies created by the Industrial Revolution, which we are postulating as characteristic of post-manufacturing society, is a decline in the overall influence of trade unions – thought they will undoubteldy remain very important in certain sectors of the economy (particularly I suspect, in the public sector).
Of course, the pattern will vary from country to country. As so often in recent years, among European countries it is the UK where the pendulum seems to be swinging most violently, towards and now away from the corporate state. In countries with a more stable political structure, such as Scandinavia and the German-speaking countries, the trend is less marked; but I suspect that in varying degrees it will apply over most of Western Europe.
The 1980s, therfore, will see a move back towards small units, operating in much pleasant environments than the old manufacturing industries today, with fewer constraints, closer personal links between managers and employeess, and with very large amounts of capital installed per worker. The opportunities for job satisifaction should be much greater than has been the case for the average worker hitherto.
Utopia? What are the snags (unexpected or hidden obstacles and drawbacks) and the risks? The first, which has been little studied up to now, concerns human nature. Working with computers has one huge drawback; for intelligent people – and intelligence is needed to be a computer programmer, still more an analyst – it can be extremely boring. That is one reason why, even today, there is an acute shortage of computer software operators. In some ways working alone with a computer in a laboratory, or supervising a bunch of robots in a hygienic control room, can be even more boring than the most repetitive work on a moving production line. On the production line one can at least talk to one’s neighbours. Much of the work required in the age of information technology is mentally but not physically fatiguing – and above all, lonely.
Industrial psychologists thus have a complex set of problems to address in the postmanufacturing age. Will it be necessary to maintain the factory and the office, not as a functional necessity – all communication can if necessary be carried out without physical contact, via the telephone and the closed-circuit TV – but as a psychological requirement, to cater (satisfy) for the human need for contact with one’s fellow beings?
The first question, then, which arises is the likely impact on employment of the new technologies. The leading technology of the 1980s is likely to continue to be, as it undoubtedly is today, information technology based on the computer and the silicon chip. As with all new technological innovations, it is easier at first glance to see what jobs will be lost through its application than what jobs will be gained. Thus on the one hand, computer-based automation on the shop floor (primarily through the substituion of robots for humans) is plainly going increasingly to replace men and woman by machines in the actual manufacture of goods. The production lines of the future, at least in Western society, will be manned by robots and not by people. Similarly, in the offices of the future the recording and trasmitting of information, hitherto performed by an army of clerks and typists, will in future be increasingly electronically handled and processed. Office automation will also have major impact on the operations and staffing of banks and insurance companies.
On the other hand, as with earlier innovations, the long term effect could well be to create more jobs than are lost. Analysis of the impact of past innovations on jobs suggests, unexcitingly, that it is impossible to establish any general correlation between innovation and the total number of jobs. Some innovations have on balance destroyed jobs; others have on balance created jobs; in others teh effect is indeterminable. It is never easy to isolate the impact of the innovation from other events (e.g. the movement of the business cycle). But perhaps the most significant effect of innovation is to remove bottlenecks to growth (bottlenecks which perhaps had not previously been identified as such). To quote one example, it has been calculated that had automatic telephone dialling not been invented, the entire working population of the UK would now have to be employed as telephone operators. The example is a neat one. Automatic dialling is an innovation which does not, on the face of it, create a new industry. In this respect it is not like the invention, say, of plastics or of bio-technology (which we will be discussing below). It is a straightforward subsitution of capital for labour. Yet its major long term effect has not been to destroy jobs but to enable the market it serves, and indirectly the economy as a whole, to expand much faster and further than would otherwise have been possible.
Undoubtedly similar effects will come form other aspets of the computer revolution: for example, the transmission of information via viewdata and the development of intelligent terminals linked to a main-frame computer in the office and the home. The nature and location of jobs will change, and the skills rquired. We will address these matters later. The point I wish to make at this stage is that there is no way, so far as I am aware, of determinng whether the total number of jobs available (leaving aside other factors) will increase or diminish as a result of the computer and the related impact of information technology (or telematics, informatics or whatever other name is used). In default of any firm evidence, one can only rely on intuition. My intuition tells me that, while the short term effect may well be negative, the longer term overall effect will be positive.
But of course the computer and its offshoots are not the only manifestation of technological innovation in the post-manufacturing society. Indeed, by the end of the decade they may no longer appear the most dramatic or important in their impact. By then the leading new technology could very well be bio-technology or the synthesising of life, including genetic engineering. The implications of biotechnology for society are perhaps even more radical, and certainly potentially more dangerous, than those of the micro-processor. It is not our intention to explore these here; but rather to make the point that, from the point of view of jobs, the implications of bio-technology are likely to be more obviously benign than those of the computer revolution. For bio-technology will essentially create new industries rather than alter the inputs to existing ones.
The same is true of the other leading areas of new technology in the 1980s, so far as they can be identified today. These include the development of new sources of energy – without which economic activity is likely to encounter major bottlenecks inhibiting further growth in the 1990s; the rapidly improving understanding of the Earth through plate tectonics, the sue of satellites and other means; and the development of materials science through molecular electronics and the like. In all these cases the impact on overall employment should be unambiguously beneficial.
The other point which has to be made at this stage is that forecasting the application of new inventions is a hazardous exercise. The most significant impact of an invention is usually one which has not been forseen by its inventors, its advocates or its critics. A note of humility is therefore appropriate at this stage of the argument.
Taking account of all these uncertainties, I conclude that the best judgement one can make at this point in time is that the overall impact of new technology on total employment in the post-manufacturing society will be at worst neutral, more probably bening.
I now turn to the effect of social factors. Will the social pressures discussed above continue to operate in the post-manufacturing society, and if so what will be their impact on overall levels of employment?
First, to repeat, there is very little evidence from opinion surveys that the distrust of business and government, the desire for more environmental protection and protection of the consumer which characterised the 1970s are likely to diminish in the 1980s. Insofar as these pressures impact on overall employment, their effect is more negative than positive, in that they tend to deter new investment. However, their impact varies from industry to industry.
For example, social resistance is liable to slow down – for good or ill – the introduction of bio-technologies and the spread of nuclear energy. On the other hand, computer technology is likely to make industry less environmentally vulnerable. Computers do not pollute. Information technology is essentially a “clean” industry. It can operate in attractive surroundings, and can offer its employees and the communities within which it operates a pleasant and stimulating environment. An industrial revolution based on knowledge rather than on coal and steel is clearly one which imposes fewer external costs on society.
It has another, even greater advantage. At the very beginning of this pamphlet I referred to the alienating effects which the technology of the first industrial revolution imposed on its participants because of its requirement for very large scale operations to achieve maximum efficiency. The technology of the first industrial revolution emphatically was on the side of the big battalions. As we have seen, society and public opinion increasingly are not.
This dichotomy (contrast between two things) can to a large extend be resolved in the knowledge-based second industrial revolution. Computer technology facilitates small scale decentralised operations. At the extreme the computer can turn the home into an information centre, so that if we want to we can revert in large sections of our economy to the kind of pre-industrial working pattern described at the very beginning of this pamphlet. In other words, by using the link between the telophone and the TV screen, by installing viewdata systems and word processors in the home, with intellignet terminals, we can return if we so wish to the pattern of cottage industry, with virtually all the operations of the office decentralised to the home, the workers communicating with each other by telephone and closed-circuit television. They can, of course, work on a flexitime basis. The need for large concentrations of office workers disappears. Commuting to work can become an option rather than a necessity, and operatives can to a very large extent choose their place of work.
At the factory itself the function of humans will increasingly be the control the operations of robots, so that the numbers who need to work there will be greatly reduced and the conditions in which they work can be greatly improved.
This gap between expectations and achievement in the Western society is one of the main problems confronting us as we move into the post-manufacturing era. There is little evidence that the gap is narrowing. Undoubtedly there has been some reduction in expectations as the world has moved from boom into recession. Unemployment is clearly modifying wage demands. Student unrest has largely disappeared as a social force with the rise in unemployment for the under 25s (the worst affected age group in virtually all countries). It could of course return with redoubled force if we fail to solve the problem of youth unemployment.
But, as expectations decline, so does the ability of the productive machine to meet them. If you cannot satisfy expecations when real output is growing at 3 or 4% a year, it requires a major change in attitudes to satisfy them when real output is static or declining. Opinion research indicates that with the exception of student unrest, there has been no discernible reduction in the strength of the social attitudes which played their part in disrupting the boom in the late 1960s and early 1970s. And, as we have moved through the 1970s, one set of attitudes has emerged in survey after survey in country after country – a deepening disrespet and contempt for authority in all its guises. This is a point of enourmous significance to which we shall return later in our analysis of post-manufacturing society.
However, the point I wish to make now is the impact of all these forces on government. Governments in all Western countries came under increasing pressure from the late 1960s on. Social expectations increased while inflation and recession weakened industrial performance. The first reaction of most governments – most notably in the case of the UK, Italy and The Netherlands – was to expand the public sector to offset the decline in the private sector and to respond to the increased demands of society. As a result the proportion of the total population employed in the public sector, and the proportion of total national income taken by the State grew progressively as “stagflation” (persistent high inflation combined with high unemployment and stagnant demand in a country’s economy) worsened.
The result was, of course, to burden the private sector, and the taxpayer, still more – without in fact satisfying the public demand for improved services. From the mid-1970s, therefore, government in all major Western countries has been contracting, both as an employer and as a provider of services. This retreat of government from earlier commitment is a painful and difficult process. Nevertheless it seems an inevitable trend as we move into the 1980s. The turnaround has been most marked in the US and the UK, but in contrast to a decade ago it is evident everywhere.
This turnaround has two major effects. First, it means that one major source of employment in the service sector is declining. Second, it means that services formerly provided, with varying degrees of adequacy, by the State are either going to revert to private enterprise in the 1980s or are not going to be provided at all.
I hope the foregoing analysis explains, albeit sketchily, why the 1980s – the first decade in which Western society can be said to have fully entered its “post manufacturing” phase – is likely to be a decade of under-employment. But is this a necessary condition of the post-manufacturing society, or merely an unfortunate and temporary coincidence?
This is the next major question I wish to address. in order to do so, it is first necessary to define in rather more detail the main characteristics of post-manufacturing society. The following definition is drawn from an article by Professor Tom Stonier in a recent publication by the Henley Centre for Forecasting in London. Stonier describes as the main characteristics of what he calls “the post-industrial economy”:
“1. It is primarily a service economy rather than a manufacturing one with the knowledge industry predominating.
2. It is a credit-based economy, characterised by a flow of credit information rather than by large transactions involving money or gold.
3. It is primarily transnational rather than national
4. changes are taking place at an exponential rate rather than a linear one.
5. It is characterised by unprecedented affluence both at the private individual level and in the public sector.”
Whether or not these are the most noteworthy characteristics is something that could be argued about a great length. Other writers have cited slightly different elements. But for our purposes this is probably as good a list as any. The question I have to pursue is what the implications of a society whith these characteristics are likely to be for employment and for work. I take them in that order, though obviously the two are inter-related. I assume that, in accordance with Kondratieff’s theory, irrespective of the speed of movement down the post-manufacturing road, the level of economic activity and therefore of employment will generally be less in the 1980s than in either the 1970s or the 1990s. In other words, we can anticipate some recovery in employment and in the general level of business activity, taking account of the fluctuations of the business cycle, during the 1990s (assuming, of course, no major outburst of hostilities and no major breakdown in law and order). That much economists can tell us. What they cannot tell us is the precise extent of that recovery – whether, for example, it will be enough to restore the kind of employment levels that we experienced in the heyday of the post-war boom in the 1950s and 1960s.
Another factor worth mentioning at this stage is the dramatic change now taking place in many Western countries with regard to public sector employment. The early 1970s saw a major increase in the public sector in many Western countries, notably the USA, UK, Italy, the Netherlands and Sweden. The reason for this increase were complex. In the period from the mid-1960s on, the Western world underwent what amounted almost to a social revolution. New pressure groups – consumerist, environmentalist, minority rights, groups for racial and sex equality, student unrest, worker participation and industrial democracy – came to exercise an increasing influence on society and on political life. In the USA these movements acquire a considerable fillip from the widespread protest against the Vietnam war. In France there was the remarkable if short lived student-and-worker uprising against the Gaullist regime in May 1968. In Western Europe as a whole, but particularly in the UK and Italy, there was increasing trade union militancy at the end of the 1960s, leading to wage-induced inflationary pressures. Elsewhere in Western Europe the trade unions concentrated on penetrating the power structure of industry through participation in the decision-making processes of management. Only in the US did the trade union movement become less powerful in the 1970s.
This complex of new social pressures – which helps to form the backcloth to the emerging post-manufacturing society – can be ascribed, I believe, to two main factors: rising expectations and an increasing disrespect for authority, permeating throughout Western (thought not, in the second instance, Japanese) society. Why? A number of elements played their part. I would like to identify what seems to me to be some of the major ones – not necessarily in order of importance.
1. Declining belief in and acceptance of traditional religion – partly resulting from the intellectual demolition of Christian ideology through the discoveries of Charles Darwin and his followers gradually seeping down through the community. Scientific humanism gives no credence to the existence of an after life which will redress the injustices of this life; it therefor tends to make one less tolerant of imperfections on Earth. By encouraging a questioning attitude of dogma, it also tends to remove one of the traditional buttresses (a projecting support) to establish authority in society.
2. The pervasive effect of the mass media in widening people’s horizons and increasing their expectations. The use of the media as a marketing tool of great persuasiveness and effet meant that exporsure to the media increased people’s discontents.
3. Similarly, the great expansion of education – especially higher education – which took place in all Western countries in the 1950s and 1960s, increased expectations and at the same time led to a much greater questioning of authority, whether it be of government, church, education itself, trade union or business.
4. The invention of the contraceptive pill has had, and will continue to have, a farreaching impact on society by its enlargement of the options open to woman. It has clearly done much more than anything else to enable woman to overcome the constraints placed upon them by society in ordering their life styles. As such, its effect on life styles and values, on social normes, on family life and on the so-called “permissive society” has been pervasive. We shall return to this point later when we come to examine likely working patterns in post-manufacturing society.
5. The increased movement of people in the post-war era has also done much to enlarge expectations, especially among the poorer sections of the population.
6. It is no accident that the social explosion took place towards the end of the longest period of sustained full employment and economic growth in world history, when people had come to assume that the boom would go on for ever, and that full employment and rising living standards could be taken for granted.
The combined result of these and other factors was that by the start of the 1970s expectations where outrunning by a substantial margin the ability of society to meet them. This gap between expectation and achievement had both a materialist aspect and a qualitative one. On the one hand the increases in wages and salaries demanded far exceeded the feasible increases in production; the resulting gap could only be bridged by price rises, reducing the real value of the income increases won and thus generating fresh demands. Europe had already started to slip down the inflationary chute before OPEC gave it a final shove. On the other hand, demands for improvements in the quality of life – often at the expense of productive efficiency – further widened the gap between the demands of society and the ability of the productive machines to meet them.
(Two examples. The hostility of environmentalists to nuclear power stations in a number of European countries adds to energy costs and thereby reduces industrial productivity. In the USA it is argued that one of the main reasons for the decline in productivity growth in recent years has been the diversion of a significant part of the national’s capital investment into measures to improve the industrial environment at the behest of regulatory bodies of one kind or another. Of course these examples do not imply that opponents of nuclear power or US regulatory agencies are wrong – merely that you cannot expect to have your cake and eat it.)
We are now plainly in a sixth phase, where for the time being at least there is not enough demand to ensure full employment and investment opportunities are insufficent to prevent captial saturation. Kondratieff disciples would say that this was inevitable, that we are now in a period equivalent to that of 1873-1893, and that a major recovery in world trade and economic activity is unlikely before the 1990s. The OPEC price explosion of 1973 may have delivered the final coup de grace to the post-war boom, but its demise was inevitable anyway, as the forces which gave it its initial impetus began to run down.
In fact both unemployment and inflation were starting to grow in most Western countries from the mid-1960s, and by the start of the 1970s inflation had become a significant problem in many countries. The boom was starting to run out of steam before the oil producing countries put the boot in. According to this view, there is not much we can do to restore economic activity until the natural process of digestion has worked its way through the system, and new factors – the accumulating impact of new technology, the need to renew run-down capital, perhaps the emergence of major new markets in China and South East Asia – provide a base for lift-off around the end of the decade. Until then, while the shorter term cycles will provide fluctuations around the base level of activity, the upturns will be inadequate to restore full employment and the downturns will be severe.
However, the remarkable coincidence of dating – OPEC’s emergence coinciding with the centenary of the stock market crash which ended the railway boom – should not lead us to suppose that we are living through a straight re-run of the 1880s. In many ways the dilemma facing policy-makers is much more complex now than then. This is the first time in world history that economic depression has gone hand in hand with infation. This fact makes it very unlikely that governments will be prepared to undertake Keynesian-type reflation (expand the output by government stimulus) to boost activity, for fear that reflation will stimulate inflation faster than it will restore jobs. The fight against inflation has also pushed up interest rates throughout the world, thus further deterring new investment.
The other significant feature of the 1980s is that the “stagflation” is taking place against a packcloth of rapid technological innovation, and intense competition in manufacturing from the newly industrialised countries in East and South East Asia and elsewhere. This competition is pushing Western Europe and the USA – and, to a lesser but significant extent, Japan -even faster down the road to a service-based, post-manufacturing society.
To some extent, of course, this was what happened in the 1930s – and it is perhaps to the 1930s rather than teh 1880s that we should look for parallels to our present situation. (There are in fact more people out of work today in the UK – the worsthit of any major Western economy by the present recession – than at any time in the 1930s). In the 1930s, as today, increasing international competition in stagnant world markets led to rapid erosion of traditional industries -coal, textiles, heavy engineering; while the products of new technology – automobiles, aircraft, electronics, cinema – enjoyed the same kind of boom conditions as we associate today with the energy industries and computer software. Periods of recession do not slow down the process of economic change; rather they accelerate it. History does not suggest that technological innovation comes to a grinding halt in harsh economic conditions. What happens rather is that the life cycle of industries, from vigorous youth to declining senility, is accelerated. That is what we are witnessing today.
Of course, governments try to arrest the process by artificial means. In the 1930s the favoured process was the imposition of restrictions on imports, and the encouragement of cartels in threatened industries. So far we have avoided the same kind of headlong retreat into cartels and autarchy in the present recession, and the evidence of the long term harm which it engendered in the inter-war era is probably sufficiently strong to enable us to continue to resist the temptation. But a milder version of the same policy is being followed in industries like steel (the EEC’s “Davignon plan”), shipbuilding, textiles and automobiles, with “voluntary” restrictions on imports and “orderly marketing” arrangements to cushion the shock of competition and recession. Such arrangements on the whole do little good, but not too much harm. The run-down of traditional industries continues, though at a slightly less frightening pace.
The point that I am seeking to make is this. At the present time in Western Europe and North America we are living through a number of inter-related developments and it is important that we should separate them out in our minds if we are to make sense of where we are going. The most important long term trend is to move away from a manufacturing-based economy to one based on services, and particularly on knowlegdge-based activities. This trend is being accelerated by the erosion of our traditional manufacturing base resulting from stagnant world markets (the Kondratieff effect) and increasing Third World competition. The trend itself owes a great deal to the developments of technology, in two respects: the creation of new service industries on the one hand (see below), and the elimination of jobs in manufacturing – and, it must be said, in many of the service industries as well – by increased productivity through automation in one form or another.