More "End of Work"

I'm discussing Jeremy Rifkin's 1995 book, The End of Work.

The postwar model of the American corporation started to run into problems in the 1980s, he says. 

The managerial system of corporate organization was like a lumbering giant, a powerful producer able to turn out a large volume of standardized goods but lacking the flexibility to make the kind of rapid changes necessary to adjust to sudden fluctuations in the domestic or global market. (p94). 

New technology increasingly eliminated what he calls "the increasingly bloated ranks of middle management" who just processed information flow up and down the hierarchy. 

In the information era, "time" is the critical commodity, and corporations bogged down by old-fashioned hierarchical management schemes cannot hope to make decisions fast enough to keep up with the flow of information that requires resolution. (p101)

This is driving re-engineering, and leaner corporations, he says. He then diligently examines the impact of technology and automation on a series of sectors, including agriculture, manufacturing, retail and banking. 

The nation state and government in general is declining. Governents can no longer guarantee market functioning, either.

So what is his answer? There needs to be more growth in "the third sector" - the non-market, non-government, "social economy." 

Most people would find it difficult to imagine a society in which the market sector and government play less of a role in day-to-day affairs. These two institutional forces have come to so dominate every aspect of our lives that we forget how limited their role was in the life of our society just one hundred years ago. Corporations and nation-states are, after all, creatures of the industrial era. ... 

Now, however, that the commercial and public sectors are no longer capable of securing some of the fundamental needs of the people the public has little choice but to begin looking out for itself, once again, by reestablishing viable communities as a buffer against both the impersonal forces of the global market and increasingly weak and incompetent central governing authorities. (p238)

The independent sector includes voluntary activities, tax-exempt organizations and charities, running from "social services to healthcare, education and research, the arts, religion and advocacy" which together are responsible for 9% of total employment.  The third sector creates social capital.  

Community service is a revolutionary alternative to tradtional forms of labor. Unlike slavery, serfdom and wage labor, it is neither coerced or reduced to a fidiuciary relationship.. It is an act entered into willingly and often without expectation of material gain. In this sense, it is more akin to the ancient economics of gift-giving. 

It is also, he argues, very American. Toqueville thought voluntary organization was one of the most distinct and remarkable features of the new American democracy: (Rifkin's quote of Toqueville, p 243)

Nothing, in my view more deserves attention than the intellectual and moral associations in America... In democratic countries, knowledge of how to combine is the mother of all other forms of knowledge; on its progress depends that of all the others.

The third sector, Rifkin says, is an antidote to the excessive materialism that dominated twentieth century industrial thinking. 

He thinks the third sector can restore social services which are being abandoned by over-indebted governments, despite suspicions on the left of what the first President Bush called "a thousand points of light." Interestingly, Rifkin defends himself against being seen as advocating a partisan Republican idea. 

Rifkin argues for a "shadow wage" - a deduction from income tax for volunteer hours given, as well as a "social wage" for those unemployed people who want to do community service full-time as an alternative to welfare. 

It would be a form of guaranteed income, but linked to community service. Interestingly, he notes Lyndon Johnson established a National Commission on Guaranteed Incomes in 1967. It went nowhere as many politicians feared it would undermine the work ethic. But the idea was not confined to the left. Milton Friedman proposed a "negative income tax" as a cash alternative to the mess of bureaucratic welfare dictats which amounted to a guaranteed income in any case.

Rifkin concludes:

finding an alternative to formal work in the marketplace is the critical task ahead for every nation on earth. Preparing for a post-market era will require far greater attention to the building up of the thrid sector and the renewal of community life.. The end of work could spell a death sentence for civilization as we have come to know it. The end of work could also signal the beginning of a great social transformation, a rebirth of the human spirit. The future lies in our hands. (p291,293)

So what should we make of the book? It is detailed, it is diligent, it is in many ways quite moderate. 

It was perhaps premature. Economies have grown substantially since the mid-1990s, but it seems we have done it in part by ever more boom and bust, and with a huge infusion of debt. 

His arguments for the third sector are also well-taken. Indeed, they are strenghhened by new forms of cooperation like open-source software, Wikipedia, and other huge voluntary endeavors at the heart of the new economy. More than ever is being done voluntarily. 

But I don't think the expansion of the voluntary sector in itself is a full solution. For one thing, why will the third sector expand? It needs to be encouraged and supported as well. I think Martin Ford's book, The Lights in the Tunnelwhich I discussed earlier, is more interesting in its emphasis on incentives, and the motivations people might have to do the right thing. 

The growth of voluntary organizations and restraint of exploitative or deviant behavior needs to be explained. 

I fully agree with Rifkin that more government is not the answer. This is where he parts company with liberals. There needs to be a wider range of organization and collective activity than just centralized activity. 

Perhaps the biggest contribution he makes, though, is his history of fears of automation in the twentieth century. So far we have always put such fears behind us, as growth has indeed being a swift incoming tide that raised all boats. 

After the second world war, for example, the huge expansion of the service sector, the vast increase in the scale of government, and the expansion of the market sphere as women went out to work enlarged the scope of the market and consumer demand. Suburbanization led to a huge wave of demand for many goods too. That made up for the increasing automation or loss to foreign markets of heavy industry.

But the fact that we have escaped the problems once does not mean we will inevitably escape them every time, or by using the same tools in the same way. 

Morning coffee on the West Side

I'm sitting here with G having morning coffee at a diner on the Upper West Side, looking out the window at a few cars passing by on Broadway. It is a bright, clear, cold December morning. We came here once about eleven years ago, and it is a nostalgia trip back. 

The markets rose steeply this week, on the back of a swap line agreement between the major central banks and a better-than-expected payrolls number yesterday. But things are still very fragile and volatile out in the world. 

The latest talk is for the ECB to lend several hundred billion - or even a trillion or two - to troubled eurozone sovereigns via the IMF. This would add some strict conditionality to the mix, and make it easier to argue it was not straight monetization of debt. That might help buy time. 

How far we have come since European officials considered any IMF involvement at all an offense to the strength and developed-country status of the eurozone, just two years ago.

G has spotted a nice dog out the window. "What a nice dog", she says, and tries to persuade me to have another slice of her french toast. 

But there is nothing which suggests the broader economic model is not broken. The supercommittee in the US Congress broke down, without making any progress towards resolving American fiscal problems. There is little or no progress in the western world towards a sensible resolution of entitlement programs.

Sometimes it's nice just to sip coffee and watch out for nice dogs. A beagle!

 

The End of Work

I'd like to write about The End of Work by Jeremy Rifkin, which I read last week. It is an older book by the standards of the current debate on labor markets and change. It came out in 1995, and argued that automation was wiping out employment across many industries in a wholly unprecedented way. 

The book finds its way into just about recent bibliography on the issue of how the labor market has changed. It attracted a huge flurry of attention in the post-recessionary, business re-engineering world of the mid-1990s with its massive layoffs in corporate America and feeble economy. 

Then, in the huge boom of the late 1990s, the book seemed to fall from attention. The world moved on, and quickly.  One of the fascinating things about the book is it has only one entry in the index for "internet" - and that is a specific dial-up data provider for abstracts of books and journals. 

To be sure, it talks about the "information superhighway" here and there in a peripheral way. But it is usually very difficult to see what is just around the corner. 

And that was of course the wild internet boom of the late 1990s, which turned capitalism on its head for a few years. Pets.com and kozmo.com were just a few years away. Google and Amazon.com were just ideas when Rifkin finished the book. Soon, everyone thought they were getting rich, until the NASDAQ crashed. 

I think this highlights one fundamental issue with the whole nature of change. We can see some things coming from a long way off, but it sometimes takes a very long time for them to get enough computing power or momentum or support to take off. Artificial intelligence has been a major field since the 1970s, for example. But Apple's new Siri on iPhones is one of the first major consumer applications which begins to approximate some of the hopes of the 1970s. And even that is a long way from Hal in the movie 2001.

Things happen much slower than you think. And things also happen much faster than you think - when you look back cumulatively.  You can get the right trend - but much too soon. 

And that is what I think happened to Rifkin's book. His basic argument is (from the introduction):

For the whole of the modern era, people's worth has been measured by the market value of their labor. Now that the commodity value of human labor is becoming increasingly tangential and irrelevant in an ever more automated world, new ways of defining human worth and social relationships will need to be explored. 

The history of an idea

One of the most interesting things about the book is several chapters talking about the previous history of the idea. In the 1920s, as productivity soared, there were fears that demand would be insufficient. Businesses urged consumers not to go on a "buyer's strike." The press talked about "limited markets."

But business evolved away from a focus on production to consumption and consumer behavior. Advertising and consumer credit helped to stimulate new demand. The tale of "trickle-down technology", as Rifkin called it, seemed to work. Falling prices meant consumers had more money to spend on new goods. 

 After the second world war the same fears resurfaced. In 1947 Forbes mahazine ran an article called "Machines without Men" which announced that "the threat and promise of laborless machines is closer than ever." (p66). 

But the service sector boomed and military spending also boosted demand for four decades. The public sector expanded and employed millions. 

And so by the late 1980s people still believed that, as one official report put it, "historically, and we believe for the foreseeable future, reductions in labor requirements per unit of output resulting from new process technologies have been and will continue to be outweighed by the beneficial employment effects of the expansion in total output that generally occurs." (p40) 

Indeed, there was a long tradition of what Rifkin calls "visions of techno-paradise", with celebrations of engineering and technology, at least until in the wake of the shuttle disasters and Three Mile Island technology looked fallible as well. But. he says,

Ironically, the closer we come to the technologival fruition of the utopian dream, the more dystopian the future itself appears. That's because the forces of the marketplace continue to generate production and profit, with little thought of generating additional leisure for the millions of working people whose labor is being displaced. 

Not everyone benefitted from automation, of course. In one particularly interesting chapter Rifkin traces the impact of just one new technology - the automated cotton picker - on African Americans. "In 1949, only 65 of the cotton in the south was harvested mechanically; by 1964, it was 78%." (p71). A few years later it was 100%.  Five million people were pushed off the land and migrated north, just as a new wave of mechanization to displace unskilled labor in factories hit. When Detroit increasingly automated, blacks were disproportionately affected. 

I'll discuss what the book says about the situation in the 1990s in the next post. 

Sleep No More

One other thing I meant to write about is the theatrical production Sleep No More, which we went to in New York last week. 

It is a loose retelling of Macbeth, set in a wonderful warren of spaces in an old warehouse in Chelsea. The building is converted into the "McKittrick Hotel", which supposedly closed just before the second world war and has never been touched since.  It is a remarkable stage spreading over five floors and a hundred rooms. 

You put on a mask, and then follow the actors or explore the space by yourself.  The feeling of anonymity is itself interesting and destabilizing, as you move through rooms with twenty or thirty other people, none of whom can be recognized. That alone makes it feel like a different world. 

There are moors and baths and ballrooms and candy shops and hospitals and bedrooms. You are enveloped by the space, and its mists, and the subtle lighting, and evocative music. 

There are cinematic crescendoes of sound, and incidentals, and distorted echoes of twenties hits and ballroom music. You explore rooms with letters left on tables, hotel lobbies, chapels, statues standing amidst rubble and ruins, and forests of white birch. You pass through secret passages concealed in closets. 

There are touches of influence from movies, too, especially Hitchcock's Rebecca and Vertigo. There is an Edwardian grandeur to many of the spaces, only enhanced when the actors pass through in turn-of-the-century finery.  

The whole warehouse is like an art installation. The actors move around and up and down the stairs as if the surrounding audience is barely there. Macbeth sits in a bathtub washing the blood off his hands. Lady Macduff is murdered. The Royal Court sits at table in dramatic flood-lit slow motion. Banquo gets ready for a night out in his suit and tails. There are set piece balls and more intimate dances between couples in jazz clubs and bars. 

And you finish by emerging into a turn of the century jazz club with live performances and absinthe punch. 

In short, it is immersive experience, not passive theater, and that is just fascinating. We've never seen anything quite like it, and it has lingered in our minds over the past week. 

G thinks it should be permanent, part of the New York experience. I agree.  It should run for years. 

Kahneman and thinking

We went to an event last night featuring Nobel Laureate Daniel Kahneman talking to David Brooks of the New York Times. It was entertaining. Kahneman, of course, is a psychologist, who won a Nobel in Economics for experimenting with the ways in which people do not match the homo economicus model of mainstream economics. He was wry, ironic and funny.

One of the main things that struck me was a discussion of how his original paper with his co-author, Amos Tversky, attracted morre attention when it was published in Science in 1974. 

We included examples as inserts, he says, and people could recognize themselves in those in a way they would not in statistical tests. The mind finds it very easy to go from the particular to the general. You can tell a story and people will immediately jump to the generalized points that a story makes, the lessons for other areas. 

But when it comes to applying generals to particulars, people are much more reluctant. They don't think psychological findings apply to them, for instance. Or they forget generalized facts they know. Or they are overconfident. 

So going from generalized statistical findings to actually applying it in real life, or abstraction to particulars, is very hard.

That is a fascinating little insight into communication. People respond to stories more than theories. 

The Splendors of the East

We also walked through the Met's newly restored Islamic Galleries, which are fresh, impressive and beautiful. I was particularly taken by an Andalusian silk curtain of dating back to the 15th century. Only four examples of such curtains remain, but they must have been a pervasive features of the great palaces, rippling in soft breezes. 

I never knew such things existed. When we saw the Alhambra in Granada earlier this year, there were no fabrics or carpets in the main halls, of course. The original appearance must have been very different.

 It often happens that way. In the frieze of Sant' Apollinare Nuovo from the late Roman Empire in Ravenna, the colonnade of the Roman porticoes is filled with beautiful hangings, rather than just the severe white marble piillars of our own imagination.  And the bare walls of medieval castles had their lavish tapestries. 

All mostly lost.  Just the bare stones remain.

It is often the small things that make a difference. 

I also was amazed by the illustrated leaves from the Tahmasp Shahnameh, a remarkably illuminated sixteenth century version of the Persian epic. 

At the same time, the sheer dazling profusion of intricate luxury art in the Islamic wing leaves one wondering what happened to the average Iraqi or Egyptian peasant. The fabled riches of the East lie, at least in small part, here for view. But only as museum pieces. 

The wealth and vigor of Abbasid Islam has gone, replaced at best by Dubai shopping malls. 

I did get sufficiently intrigued by the script to try to learn to make out a few arabic letters. It makes it feel that more intelligible. 

The Land of Cockaigne

We visited the Met on Saturday, and wandered through the exhibition Infinite Jest. It is about the development of satire, and it features a range of 17th and 18th century cartoons, including Gilray.

One of cartoons referred to the old medieval idea of Cockaigne, which got me thinking. It was a medieval peasant's idea of utopia. Food rained from the sky and authority was reversed. Abbots were whipped by monks, and lords insulted by peasants.                          

These ancient yearnings are interesting. How far does a modern supermarket satisfy that ancient dream? It is filled with kinds of food in vast plenitude which peasants could not even have imagined, let alone daydreamed about. 

After several days of Thanksgiving overindulgence, we have probably eaten better than the average king in the twelfth century, who had expensive spices to conceal rotting meat.. 

I read Fernand Braudel's book Civilization and Capitalism, 15th-18th Century, Vol. I: The Structure of Everyday Life (Civilization & Capitalism, 15th-18th Century) a few years ago, and I was struck by how thin and bare medieval existence could be. People were cold in the winter, very cold. Firewood was in short supply, and out of reach of much of the peasantry for long periods on France.  Famine was frequent. 

One thing I've talked a lot about in this blog is the fact that we have achieved satisfaction of physical and survival needs. People in developed countries do not yearn for hams to fall from the sky, nor shiver in the cold as medieval peasants did. 

And although there is still plenty of authority, little of it bears down quite as hard as serfdom.  Yesterday's "famous-for-being-famous" celebrity gets more public attention than most minor lords ever did. 

We live in a post-Cockaigne world.