Will the “Knowledge Economy” Save Us?

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[We were promised a “knowledge economy.” The offshoring and automation of industrial jobs was supposed to open up a new realm of work – we would become managers of information, gliding through a new “information age” where one’s creativity and skill determined one’s employment prospects.

Creativity and skill are important, but they do not characterize most “information age” employment. The neo-liberal ‘reforms’ of the past four decades have created a highly stratified workforce, where only a small proportion of employees engage in professional creative projects and creative problem-solving under conditions of relative autonomy and comfort.

Contrary to the boosterism of Richard Florida, and other exponents of the “creative class,” there is compelling evidence that even those ‘high-end’ “knowledge” workers, who are on the right side of the ‘digital divide,’ are not immune to the stress, alienation, and exploitation that characterized the earlier “industrial” economy.

Moreover, the “knowledge economy” is a thin, although lucrative, foam (to paraphrase Braverman) that floats atop the “old” industrial economy. The creation of well-paying jobs in the “tech sector” has not heralded a new era of worker empowerment.]

Introduction

According to Geoffrey Hodgson, developed economies have begun a transformation towards a “knowledge economy” comparable in importance to the industrial revolution. As production becomes increasingly complex, he argues, high levels of skill are increasingly important. There is an increasing reliance on specialist skills and the development of a complex and evolving “knowledge society.”[1] Richard Florida posits the existence of a “creative class” and describes key characteristics of the liberated “new workplace” in the “knowledge economy.”

Going beyond Andrew Ross’ descriptions of positive “knowledge” workplace attributes in No Collar, Florida waxes eloquently about the new “business casual,” or workers’ newfound freedom to wear stylish or garish clothing in the workplace. Florida lauds the flexibility in scheduling enjoyed by creative workers, and especially the creativity-driven transformations in the workplace itself. Offices have become less bland, he states, and are characterized by more radical furnishings. The new trend incorporates open, spacious office design with shared or communal spaces, and interesting lighting or art. Amenities at work may include espresso bars and Frisbee fields. Workplaces, suggests Florida, are being remodeled to reflect the expanding freedom of employee minds.[2]

Observing the apparent emergence of a “new” economy, Hodgson asserts that counter to the claims of Karl Marx and Harry Braverman, the developed economies are witnessing a dematerialization of production, and a move from “action to intellect.” As we move towards an “information-rich” society, deskilling is not occurring as a broad process, he argues, and there is no reason to believe that workers displaced from skilled or semi-skilled jobs will end up in deskilled jobs.[3] The thesis of the emergence of the “knowledge economy” has led one academic to venture as a possibility for discussion that,

The rise of the knowledge economy is changing the capital-labour dynamic that much of the existing theory on work organization is based. In the knowledge economy the ideas of Marx and Braverman, including alienation and the division of labour are no longer helpful.[4]

It remains questionable whether the dynamic of a “creative class” or “knowledge economy” really describes the current workforce in an “Advanced Industrial Country” [AIC] such as the United States. This essay will critique the existence of a “knowledge economy” first at the empirical level. Evidence suggests that jobs lost in manufacturing are not replaced by jobs of equal or greater skill, but rather a general move towards “unskilled” service work and rising unemployment. Moreover, material production remains important, and increasingly characterizes the global economy. An alternative vision of the economy will be proposed, in which “creative work” remains as a subsidiary of broader economic processes, representing an attempt by AICs and corporations to further dichotomize the division of labour between “creative” and Taylorized workers. This division occurs at the spatial level, and can arguably be understood within a Marxist framework.

Second, the thesis of a liberating “knowledge economy” will be critiqued more extensively at the workplace level. “Knowledge workplaces” are defined here as workplaces in which non-Taylorized employees are given relative autonomy to pursue the completion of tasks that involve tacit or codified knowledge, and creativity, often from conception to execution. Because Ross described the Razorfish dot-com enterprise as a defining example of a knowledge workplace, this essay will investigate it, along with other knowledge workplaces, to demonstrate that the division between capitalists and their management representatives, on one side, and the workers themselves on the other, leads to the continuation of problems experienced in the “old” workplace, such as alienation and exploitation. The issue of the Marx/Braverman deskilling hypothesis, however, remains less clear, and may require a reevaluation of the difference between Marx and Braverman.

The “Knowledge Economy” as a component of a less-skilled workforce

An examination of the labour market characteristics of the “knowledge economy” from the local to the global level demonstrates its minority position in the labour market, as an enclave within the AICs. Within Silicon Valley itself, high-tech workers require vast numbers of assistants and retainers. Sixty-percent of total employment there was non-technical in the 1990s.[5] The Valley’s workforce composition is linked to the general U.S. turn towards a predominantly low-waged service economy, rather than the growth of a high-tech workforce.

Since the 1970s, the OECD countries have experienced a “precipitous” fall in manufacturing employment, declining to less than twenty percent of the workforce in most cases.[6] While Hodgson suggests that higher levels of skills are required from contemporary workers[7], and Florida portrays a future of corporations competing for skilled workers, Hodgson also hints at a “substantial” “underclass” working in deskilled ‘McJobs’[8] existing alongside, or even resulting from, the high-skilled core workforce. This “underclass” may be the standard, rather than the aberration, under the rubric of the “New Economy.”

While General Motors was the largest private employer in the United States in 1970, today Walmart occupies that position, and sets the standard for labour practices across the country. Walmart is also the largest national retailer for a wide range of consumer goods.[9] It is significant that the U.S. labour market is dominated by a company characterized by its low-skilled, low-autonomy work environment and noted for minimal wages. “The hi-tech” sector that is supposed to serve as a counterbalance to the “McJobs” phenomenon may itself be experiencing the process of off-shoring. [See Appendix A] There is indeed a shift away from manufacturing, then, but it does not equate to a growth in innovation. Rather, as Roberts indicates, most growth appears to be concentrated in the menial, care, and sales end of the service economy.

The shift towards services is best understood in a global context. A revolution is occurring in global production, but not the revolution to which “creative class” theorists refer. Instead, industrial capitalist production methods have spread to every corner of the globe, accelerated by the process of globalization. As Robinson explains, the current economic era is characterized by the triumph of global economic relations based upon wage labour exploitation, mass proletarianization of the third world, and the commoditization of daily life.[10] The factory production that characterized the “industrial era” first-world economies now increasingly defines the developing world..[10] The factory production that characterized the “industrial era” first-world economies now increasingly defines the developing world. Few would suggest that third-world factory production creates empowering conditions. [See Appendix B]

In India, for example, modern industries based on mass-production have displaced local artisans and agricultural workers, one example being the shoemakers of Rajasthan. The incomes of these shoemakers and similar groups have declined significantly. They fall into debt, whereupon they require new employment. 250 villages in the area of Rajasthan have been absorbed into the modern carpet industry since 1991.[11]

China also provides a staggering example for understanding the scale upon which the growth of manufacturing industry is occurring in the developing world. From a labour force composed of an estimated 791.4 million people, 22% of this workforce is employed in industry. In other words, there are nearly 200 million industrial labourers in China alone,[12] or the equivalent of two-thirds of the entire United States population working to produce goods. The term “Newly Industrialized Countries” is widely understood to include, in particular, south-Asian countries such as China, South Korea, and Vietnam. The growth of the service industry in the developed core, and of manufacturing in the periphery, represents an informal global division of labour in which the production of physical commodities is not shrinking, but instead shifting to new locations. The role of the “high-tech” industry is arguably not to replace this lost AIC manufacturing capability, but merely, and ideally, to manage it from the core.

As Harrison and Bluestone argue, capitalists began “hollowing out” the economy of the OECD countries, beginning in the 1970s, in order to compensate for declining rates of return (the “profit squeeze.”) Moving their investments to the developing world allowed them to leapfrog over OECD regimes of labour regulation, and into zones of lower labour costs.[13] Stopford and Turner demonstrated how 58 U.K. MNCs were responsible for one-third of manufacturing job losses, while creating 200,000 such jobs offshore.[14] Comparative advantage in manufacturing, suggests Beenstock, has shifted from the developed to the developing world.[15] Thus, the “Newly Industrialized Countries” [NICs] have gained in manufacturing what the “Advanced Industrialized Countries” have lost.

Maria Gritsch and Linda Weiss describe this new economic arrangement. Gritsch refers to a realist view of “soft geo-politics” in which AICs themselves structure international economic arrangements and regulatory bodies in an attempt to improve their own competitive advantage relative to other AICs and the developing world. She investigated how the U.S. and G7 are responsible for most of the important economic agreements, after the AIC’s themselves had eliminated the Bretton Woods system in the 1970s. Key motivations for adopting a neo-liberal program included the 1970s crisis of capital accumulation described by Harrison and Bluestone, and the desire to curtail the power of organized labour, a desire that extended even to the Japanese government and capitalists.[16]

Similarly, Weiss argues that AICs have intentionally structured globalization to meet their chosen development paths of high-tech industry.

The measures now prohibited under the WTO are those of diminishing importance to a relatively advanced level of development, which depends increasingly on knowledge-intensive technologies…The measures permitted – or at least not explicitly prohibited – are advanced country friendly: they enable the industrialized state to align its national growth goals with significant support for industry, technology, and exports.”[17]

In this way, the AICs have structured the international economy to favour high-value-added, high-tech industries and innovation for the OECD countries, while allowing the expansion of manufacturing in the developing world.[I]

The existence of a developed-country knowledge sector and the continued prevalence of worldwide material production can be together understood as part of Marx’s labour theory of value. Braverman reviews this theory, which postulates that, in the modern industrial economy, workers use their labour power to produce exchange goods for a capitalist, thus expanding the capital belonging to the owners of production while themselves receiving only a fraction in return in the form of wages.[18] Marx reveals, however, that not all wages are paid through the production of commodities. Among various forms of employment not directly involving the transformation of natural materials, merchants, various forms of middlemen, and sales personnel are hired by capitalists to manage and sell their production. These employees are hired, using a portion of the capital created by production workers. Similarly, financial services, including banking and loans, siphon off a portion of the surplus value created by production workers, in order to generate interest.[19]

With the growing industrialization of the developing world, and increased service and “knowledge” work in the developed world, from a Marxist standpoint, it could be argued that a global minority of predominantly AIC-based knowledge workers in sales, finance, technical, and other professions helps organize and manage, and is in turn supported by, the now-offshored manufacturing that has left the AICs. In conceiving the knowledge economy, it is difficult to believe otherwise. Technical innovation, copyright law, and advertising are without value if no goods are being produced and sold. Those goods are being produced offshore in traditional workplaces analyzed previously by Marx and Braverman, and sold in the developed world in de-skilled sales giants. Or as Huws explains,

What appears to be emerging is an increasingly complex and elaborated division of labour within the old economy, in which activities previously carried out in-house are more and more likely to be subcontracted, and to be carried out at a distance. The companies which supply these outsourced services could be characterised as “knowledge-based”. However their fate is firmly tied to the existing firms in the “old” economy and the all-too-material products and services which they continue to supply.[20]

Given the subsidiary role of the “knowledge workplace” in the production process, it is not surprising that following the decline of the Dot-Coms, Razorfish employees increasingly found themselves reliant on corporate clients who “actually make things.”[21]

Knowledge work is as dependent on the production process as is a corporate consultant hired to improve company efficiency. Hodgson asserts that this hypothetical consultant is paid for his knowledge, rather than any physical instruments of production he uses or owned.[22] However, he still receives his payment from a company that, at some point, received surplus value from the creation of a product. This consultant, then, is just another cog in the management team that owes its existence to the workers whose sweat produces the surplus value. Hodgson is also misguided in assuming that the seemingly-new importance of skilled work negates the labour theory of value. When a bricklayer or a computer programmer receives higher wages or salaries than other workers, it is precisely because of their skill, which itself is and always has been recognized by the capitalist through greater monetary recompense for the worker, related to the amount of socially-necessary labour time necessary to acquire that skill and the higher rate of surplus value that his/her skill creates.[23] In other words, Marx has always assumed that worker skill is important to the production process.[24]

It cannot be said that the knowledge economy negates the Marx/Braverman analysis of production, then, because first, most workers do not fall into the “knowledge economy” in the United States. Second, the “knowledge economy” may well be experiencing downsizing as its limited number of jobs are spread more evenly, becoming a small proportion of national economies across the world. Third, the concentration of knowledge work in the OECD represents a choice by AIC producers to situate the knowledge enclaves in their home countries as high-value added businesses in global production chains where manufacturing industry, as a creator of value, remains predominant. This strategy by powerful Multi-National Corporations [MNCs] conflicts with their own desire to offshore even innovation labour in the search for the lowest possible costs.

In short, the labour conditions for a majority of workers in the developing, and likely even the developed world, are not characterized by “knowledge” work. Hodgson admits that the expansion of “knowledge” work to the point where it characterized production generally was only a hypothetical scenario.[25] Moreover, “creative work” remains dependent on, and as a subsidiary, of material production. Therefore, the work conditions investigated by Marx and Braverman remain predominant, and their theories of work organization remain valid. Most importantly, however, a Marxist framework can similarly be applied within the “knowledge workplaces” themselves, where the problems common to capitalist workplaces, particularly alienation, continue to exist.

Inside the Knowledge Workplace

Internalization and Fear: Extant forms of Knowledge Worker Management

Scholars of the high-tech industry, such as Ross, suggest that knowledge workers involved in problem solving are given considerable latitude in decision-making, allowing them to oversee processes from concept to execution.[26] Gideon Kunda describes high-tech employees who work very hard for very long hours, as relatively independent, and highly engaged in engrossing work.[27] Ross’ description of the knowledge workplace at Razorfish similarly suggests that many employees were interested in their work assignments, often to the point where they remained in the workplace for as long as they could sustain. Under these apparent conditions of self-motivation and self-direction, it is arguable, as Wayne Lewchuk infers for discussion purposes, that “knowledge” workers have escaped alienation.

Braverman describes alienation as the result of the separation of the control of the labour process from the labour itself: “Having been forced to sell their labor power to [the capitalist], the workers surrender their interest in the labour process, which has now been alienated.”[28] While Marx described a scenario in which the capitalist-owned product of workers’ segregated labour power appeared as an alien and hostile force directed against them, separating them from their own life activity, Ross instead suggested that the workplace at Razorfish “promised to deliver some of that human self-recognition that Marx had written about.”[29] Apparent in the arguments of both Ross and Florida is that the “knowledge workplace” allows the reintegration of labour and control, and finally allows employees to “see themselves” among the products of their own labour.[30]

The dedication of employees at Razorfish, and especially other “knowledge” workplaces, however, can be alternately explained as part of a new management strategy adapted for control over workers who possess tacit knowledge. Florida describes the difficulty faced by corporations in managing and inducing work from “creative” workers by the use of traditional methods of work organization. According to Florida, because creative workers do not respond well to positive or negative sanctions, and their creative processes cannot be observed, are difficult to force, and cannot be Taylorized, this dilemma of management necessitates loosened hierarchies and other features of the creative workplace, such as relaxed dress standards, that generally promote employee freedom and creativity.[31]

Kunda proposes the existence of a new management strategy developed as a response to the increasing complexity of the workplaces described by Florida. In his investigation of the “High Technologies” or “Tech” company, Kunda introduces a manager, who described the creation of the company’s work culture, or “religion” (a term echoed by some disaffected employees), as an attempt surreptitiously to induce employees to internalize company values (of decentralization, networking, and risk-taking) so that the workers would manage themselves. The company employed presentations, “bootcamps,” speeches, papers, and other materials as part of regular work and training sessions that were designed to permanently implant company values in employee psyches as a process of deliberate cultural engineering. In the process of giving their lives over to the company completely, workers experienced an emotional “high” and sense of community, but it was the end result of management directives.[32] Kunda refers to the Marxist scholar Richard Edwards, who suggests that this “normative control” is a response to continued worker alienation, and a modern extension of bureaucratic control.[33]

Similarly, Lesley Hunt’s recent extension of Edwards’ 1979 groundbreaking study of work organization suggests that insecurity has increasingly become the central tool of management in non-manufacturing workplaces. All scholars of modern knowledge and white-collar workplaces acknowledge the growing insecurity among this workforce. Workers are now highly aware that they face the unemployment office if they cannot cope with work conditions. “With this system of control there is very little need for managers because workers will seek to find ways of continuing in employment on their own without any need for surveillance.”[34]

The framework provided by Hunt and Kunda suggests that workers are not necessarily working intense, long hours for company because they want to, but because they have to for two reasons: they are insecure, and they have fallen under company normative control. An analysis of knowledge workplaces suggests that the conflict between the basic human desires of workers and their workload within the capital-labour dynamic leads to worker alienation in the traditional sense, and also alienation from their emotions and creativity. Exploitation also demonstrably features in these “new” workplaces, allowing the possibility that Jill Fraser’s depiction of a “white collar sweatshop”[35] extends to the most pure “knowledge” workplaces.

Alienation, emotional and creative

Even an idyllic workplace such as Razorfish evidenced forms of alienation, the first being alienation from emotions. Ross reveals that the relaxed and garish dress code believed by Florida to be empowering was also used as a tool of corporate profit. Management placed the expectation upon employees that they must create a “creative” persona in addition to their “technical” persona in order to suitably impress clients that the Razorfish corporation was indeed a “hip” knowledge industry. Ross recognized Hochschild’s analysis that such emotional labour carries with it negative after-hours effects.[36]

The potential for alienation in the creative workplace remains extant because “creative” employees remain labourers, dependent on a capitalist for wages, and subordinate to a structure of management. Whether or not the grip of management is strong, in the end, employees are working for interests that are not their own. Even at Razorfish, the “creative” workers were not in full control because management directives remained unilateral, and fully enforced.[37] The workers at Razorfish lacked real participation in work policy and design, and did not control hiring or firing, or which offices would remain open. In this respect, notes Ross, the Razorfish workers enjoyed even less self-management that earlier experiences such as the “autogestion of factory workers in the 1960s.”[38] And while the employees preferred to believe that they were not working for “the man,” the contracts accepted by management in reality compelled them to work for Nike, Armani, and the U.S. Navy.[39]

At Tech, management cultural influence was strong, and Kunda studied the “cognitive” and “emotional distancing” that resulted. Engineers understood the benefits of adopting the ideal attitudes and behaviours prescribed by management, but not all agreed with the company culture. Some wholeheartedly embraced the culture, becoming indistinguishable in their manner of conversation from management pep-talks, while others carried out company ‘acting’ on top of their real emotions. Many engineers and managers secretly felt that the company culture was at least somewhat ridiculous. On the other hand, some engineers preferred to assert that they were only working for the financial and career benefits, when in fact they were hiding an attachment to their work.[40] In the latter example, those particular workers may have been alienated from their own selves in a manner consistent with Erving Goffman’s description of individuals enjoying the “material and symbolic benefits of occupying a role” without feeling defined by it.[41] In this way, worker alienation from their emotions was common in the Tech workplace, and assumed varied forms.

Emotional alienation occurred among Razorfish employees as a combination of the self-directed work structure, and a company culture less totalitarian,[42] but as equally pervasive, as Tech’s. Florida discusses how creative employees work more effectively on flexible “crunch” schedules, characterized by bursts of intense activity and long hours, rather than rigid ‘9 to 5’ arrangement.[43] Management at Razorfish allowed employees to exercise their own judgment on project schedules, but within the dynamic of a general dot-com work culture that expected long-hours and maximum effort. At the 360 corporation, one manager reminded an employee that, “you’re a dotcommer! You’re supposed to be here twenty-four hours a day.”[44] Similar to the Tech workplace, Razorfish employees faced the existence of overenthusiastic, or “cult-like” creative staff, who “drink the company kool-aid.”[45] Ross suggests that the mix of intense work culture and employee discretion at Razorfish may have alienated workers from their own creativity in the same way that emotional labourers are alienated from their emotions. He revealed that the most “insidious” aspect of creative work is that it turns employees’ creative impulses into company time. If employees end up exercising their creativity for the company at all hours of the day, it comes to define their lives, and the distinction between work and personal creativity becomes blurred.[46] One worker at Tech likewise noted how his work never really ended, how he was relieved that his home computer broke. He even dreamed of his work.[47]

Insecurity as a form of management

Lead figures in the tech industry promote insecurity, shifting the idea of job security towards a discourse of employability. “Nobody owes you a career,” emphasized one tech industry writer, and Microsoft management claimed, “we don’t guarantee anybody a job.”[48] These statements, and the general insecurity at Microsoft angered employees, who resented being labelled “disposable commodities.”[49]

Management disposes of its creative workers quickly and efficiently in the high-tech sector, if it perceives declining competitiveness as a result of “aging” individual skill sets, or workers that are unable to adapt.[50] Employment among software programmers and computer science graduates, for example, falls dramatically for every five years these professionals are employed after graduation. After twenty years, only 19 percent remain employed in their chosen field. These figures represent an emerging new trend of shedding surplus staff, since most civil engineers, by comparison, have been able to continue their professional work even twenty years after graduation.[51] The effects on workplace management are consistent with Bauman’s assertion that uncertain environments require less management.[52]

Under the flattened hierarchy at Razorfish, management devolved risk and responsibility onto employees,[53] which may have caused anxiety. The fact that employees increasingly assumed responsibility for the success or failure of a project, especially in a labour market climate where plum Dot-Com job options were decreasing, might logically have been a factor in workers “voluntarily” adopting seventy-hour workweeks. Ross observed that the abandonment of employees to senior management, without the cushioning effect of middle management, led to pressures to intensify work. The direct and unmediated exposure of Razorfish workers to senior decision-makers, and their goals, increased job pressure, and negatively affected worker emotions when left unchecked.[54]

The insecurity of knowledge workers leads them to accept unwanted and damaging overwork. Fraser refers to an engineer who recounted a management demand that salaried employees work at least sixty hours per week for at least a six-month period. Industry insiders view him as a ‘lucky’ worker, because the demands on him were clearly defined. Some Microsoft employees, by contrast, appear to spend more time at work than anywhere else. One employee worked so many hours in one day that he was unable to drive home because he “forgot where I lived.”[55]

No amount of creative control can stem the effects of overwork on the life of an employee. “Burnout” became a common and widely-recognized phenomenon at Tech. A result of the fast-paced work life, it typically manifested itself in the diminution of worker capacity to handle further assignments, and for self-control. Prolonged burnout led to family difficulties, substance abuse, mental collapse, “and even suicide.”[56] Further negative aspects of burnout included abandonment by other employees. Kunda cites examples in which employee emotional attachment to their work became a cause of burnout, as well as examples linking burnout to workplace peer pressure and work “addiction.”[II] Kunda emphasizes that the very company culture that valued employee attachment to their projects also promoted almost inevitable family crises, interpersonal problems, and health damage.[57]

The young, up-and-coming twentysomethings at Razorfish may have found “freedom” in seventy-hour workweeks. But it is increasingly clear that normal human-beings with families endure a different experience at these “new” workplaces. Fraser’s Intel study revealed, “emotionally or physically crippled” employees, “wounded by the very act of giving too much to their jobs.” The same symptoms discovered at Kunda’s Tech study were evident, notably suicide, familial, and mental collapse. “People were mean and angry.”[58] The heavy workload at Tech caused the products of employees to become part of a vast company force arrayed against them, leading to definite alienation from the process and goals of work among engineers. Projects became “battle scars,” near-disasters endured for the greater glory of the company. Workers felt the desire to remove themselves from their place of employment, whether for only a few minutes during lunch, to longer “pure” vacations, to future career options that did not involve intense technical knowledge work.[59]

A phenomenon related to uncertainty and burnout in the workplace is the hiring of temporary workers, which Fraser indicates is commonplace in the tech sector. Permatemping, or the long-term hiring of benefit-reduced “temporary” workers, now represents 200,000 employees at large enterprises such as Intel and Microsoft.[60] Temping leads to the alienation of workers from each other, because it divides the workplace. Kunda notes that temporary workers can feel “left out” simply by the virtue of being temporary. Indicators such as being denied the free Christmas turkey causes some workers to feel as if they are less valued. Tech employees call engineering temps “bodies” who are brought in to do a “job.”[61] As one temporary worker, an executive assistant in Silicon Valley stated,

The time I’ve spent as a temp ruined my financial situation, my self-esteem, and destroyed any sense of my career direction. There is also a psychological damage in having to constantly “learn” the same old thing over and over. The need to constantly learn can be very stressful, and actually eats away at my creative energy, since I have to become short-term rather than long-term oriented.[62]

Exploitation

It is also clear that exploitation, another old Marxist concept, still rings true in the “knowledge workplace.” As Ross indicates, the seventy-hour workweeks at Razorfish were partly compensated through stock options, an exchange he labeled as “Geekspolitation.”[63] This is a system of deferred payments, and carries great risk for the employee given should the business collapse, as was common during the dot com crash.[64] As Fraser indicates, one public-relations executive calculated that given the number of extra hours he had worked, motivated partly by stock compensation, his total “payoff” in the end amounted to less than the hourly wage of a secretary.[65]

Chris Benner revealed some indicators of exploitation in Silicon Valley. There, 1997 statistics revealed that high-tech workers were very highly productive in 1997, as value-added-per-employee reached $176,082. This compared favourably to the California average of $108,237. However, while value-added-per-employee increased by more than 100 percent between 1982 and 1997, wages for these workers increased by only 16.5 percent.[66] Further, stock options were unevenly divided. A National Center for Employee Ownership study of twenty Silicon Valley companies in 1998 revealed that top managers owned half of company stock options, and held on average options worth $2 million, compared to $58,000 for technical workers, and $18,000 for administrative assistants.[67]

Razorfish employees also did not receive through wages the full value of their labour. Because the creative workers were able to compare the high company billing rates and individual revenue generation figures with their own salaries, their exploitation was measurable to the dollar. The calculation of their pay rates was hampered because of a persistent failure among the creative staff to log their own hours, since they perceived the tedious procedure as holdover of corporate bureaucracy.[68] Thus, avoidance of unpleasant reminders of exploitation and payment structures at Razorfish may also be considered as further evidence of employee alienation.

Deskilling

While alienation exists within “knowledge” workplaces, there remains the question of whether or not the new work processes investigated here support or refute Marx and Braverman’s theories [See Appendix C] of deskilling. It is difficult to reconcile the contradictory evidence. Supporting the thesis of deskilling, a majority of labour conducted in the U.S. and the world consists of low-skilled service work and industrial factory production, with the material production creating the value upon which the limited “knowledge economy” rests. The future of the “knowledge workplace” itself is uncertain. Fraser refers to three categories of technical and service workers, only one of which is “resistant” to technological “reengineering.” Fraser believes this group is shrinking.[69] Roberts provides corroborating evidence [See Appendix A] that suggests a decline in high-skilled, high-discretion work in the U.S and its scattered redistribution throughout the globe.

Ross also notes that while early computer programmers in the 1960s oversaw many aspects of the production process, over time their work tasks were broken down, segmented, and streamlined, with the less difficult work outsourced to “occupational castes all over the world.”[70] This pressure towards deskilling may exist for “no-collar” workers as well. Indeed, the Dot Com economy itself was indeed largely outsourced to Eastern Europe and South Asia after the tech crash.[71]

At the same time, Hodgson has asserted that skill levels have not declined in the general U.S. workforce, and projects a general rise in the importance of skill.[72] Certainly, modern production innovations support his thesis. Past developments included CNC machines, allowing one worker to program a machine to create a certain product, prepare the machine by feeding it raw materials, and operate the machine during the production process – an integrated process requiring a high skill level, and conferring upon the worker the ability to interrupt the process and change its goals or product.[73]

Yet it is difficult to argue whether current trends support or disprove Marx’s thesis of deskilling, because it is unclear exactly what Marx said about deskilling, and whether it is the same as Braverman. On the one hand, Marx described a scenario in which the need by capitalists for managerial control over workers and a reserve army of the proletariat necessitated the break-up of skilled jobs through the introduction of technology and new forms of work reorganization – this is also the Braverman hypothesis. However, Marx also stated that technology throws labourers out of work in a manner that “necessitates variation of labour, fluidity of functions, and mobility of workers in all directions.” While this process is characterized by the sort of insecurity and uncertainty for workers already described in this essay, Marx claimed it made possible “the recognition of variation of labour and hence of the fitness of the worker for the maximum number of different kinds of labour.”[74] Marx also stated that capitalists would increasingly come to depend on the “general intellect” of skilled workers.[75]

Braverman focuses primarily on task fragmentation and Taylorist time-motion studies as the predominant form of work under capitalism, leading inevitably to deskilling. As Moraes-Neto reveals, this view has much in common with the earlier works of Charles Babbage and Adam Smith. Care should be taken in conflating it entirely with Marx’s own perspective.[76] In Moraes-Neto’s interpretation, Marx suggested that with the increased predominance of the machine in the production process, workers appear as superfluous. Moraes-Neto views modern “unmanned” factories in Japan as an example of this process.[77]  Thus, Marx did not necessarily hypothesize that deskilling is an inevitable facet of capitalism.

Conclusion

Florida and Hodgson were misguided to suggest that the hiring of highly-skilled workers would sweep the developed world, and (in Florida’s case) radically change work relations for the better. Rampant alienation and exploitation characterizes the knowledge workplace, existing to a degree even in the ‘showpiece’ Razorfish Dot-Com. The same invisible collar of management control and exploitation that plagues Taylorized workers continues to choke technical and creative workers.

The high skill-sets of “knowledge workers,” contrary to Hodgson’s assumptions, did not give them the leverage to avoid overwork, company brainwashing, and crippling burnout, as seen at Tech and elsewhere. It is clear Florida’s rosy depiction of the new workplace and Hodgson’s description of “declining machine intensity and increasing knowledge intensity”[78] are also exaggerated, given the growth of unskilled service work in the U.S., and the continued predominance of industrial manufacturing throughout the developing world. The “knowledge economy” is truly the ‘froth on the surface,’[79] to use a term favoured by Braverman.

What is less clear is whether the “knowledge workplace” represents a challenge to the deskilling hypothesis, should it continue to grow, or if it is instead an oasis in the midst of Taylorized work. If skill levels are on the increase generally, as Hodgson asserts, it is Braverman, however, and not Marx, who faces reevaluation. Marx did recognize the importance of skill, and referred to processes of uncertain employment conditions in which workers were forced to acquire broader skill sets. Marx’s vision of the increasing importance of worker skill under highly competitive conditions, unfortunately, reflects the pressures numerous workers face within the knowledge economy today.

Footnotes


[I] Under this arrangement, an OECD industry leader such as Nike could legitimately claim to not actually produce anything. While Nike might sponsor advertising or even research new footwear designs as a part of a value-added innovation strategy, it still relies on a multitude of garment workers hired by its subcontractors, spread out across the globe.

[II] Kunda (1992), 199-201. The effects of peer pressure at Tech, where employees need to retain “credibility” in order to be seen as valued members of future projects, invites comparison to Japanese-style “teamwork.” This method of organization holds workers responsible for their team members’ competitiveness, [Durand (1998), 193-194] potentially alienating them from one another if some members are not perceived as carrying their own weight. Workers appear to self-discipline as a group within these management-created structures.

Endnotes

[1] Hodgson, Geoffrey M., Economics and Utopia: Why the Learning Economy is Not the End of History,London, 1999, 181-184.

[2] Florida, Richard, The Rise of the Creative Class,New York: Basic Books, 2002, 116-122.

[3] Hodgson (1999), 182-4

[4] Lewchuk, Wayne. Course Outline. Work and Society 700. 2006. The continual “obsolescence” of Marx has been a subject of bemused discussion among socialists. Lewchuk’s question, however, succeeded in prompting a healthy discussion, as he no doubt intended.

[5] Benner, Chris, Work in the New Economy: Flexible Labor Markets in Silicon Valley,Malden: Blackwell, 2002, 211.

Serving the high-tech economy within Silicon Valley are legions of building service workers, including security, cafeteria staff, landscaping, and in particular, janitors, who possess contracts granting them few or no benefits, no protection against terrible working conditions, and wages that may violate minimum standards. [Benner (2002), 224.]

[6] Alderson, Arthur S, “Explaining Deindustrialization: Globalization, Failure, or Success?” American Sociological Review 64 (1999): 701.

[7] Hodgson (1999), 181.

[8] Ibid, 186-187.

[9] UFCW, “Wal-Mart Quick Facts,” UFCW: a Voice for Working America, 2006, 19 Nov. 2006 .

[10] Robinson, William I., Transnational Conflicts : Central America, Social Change, and Globalization, New York: Verso, 2003, 10-11

[11] Tucker, Lee, The Small Hands of Slavery: Bonded Child Labour in India, (New York, 1996: Human Rights Watch,)  23-24.

[12] “China,” The World Factbook, 14 Nov. 2006, U.S. Central Intelligence Agency, 23 Nov. 2006 .

[13] Alderson (1999), 702-703.

[14] Ibid, 703.

[15] Ibid, 705.

[16] Gritsch, Maria, “The Nation-State and Economic Globalization: Soft Geopolitics and Increased State Autonomy?” Review of International Political Economy 12:1 (2005): 1-2, 6-7.

[17] Weiss, Linda, “Global Governance, National Strategies: How Industrialized States Make Room to Move Under the WTO,” Review of International Political Economy 12:5 (2005): 724.

[18] Braverman, Harry, Labor and Monopoly Capital: the Degradation of Work in the Twentieth Century, New York: Monthly Review Press, 1974. 32-33.

[19] Leontiev, A., Political Economy,San Francisco: Proletarian Publishers, 1955, 140-144.

[20] Huws, Ursula, “A New Virtual Global Division of Labour? Some Lessons From the EMERGENCE Project,” Technikfolgenabschätzung 12 (2003), 25 Nov. 2006 .

[21] Ross, Andrew, No Collar: the Humane Workplace and Its Hidden Costs, New York: Basic Books, 2003, 64.

[22] Hodgson (1999), 197.

[23] Leontiev (1955), 27.

[24] Hodgson argues (185, 194-5) that production cannot occur without skill, and that the loss of skillsets would be more catastrophic to modern enterprise than any other factor. However, this assertion ignores the fact that skills are themselves developed by and stored in the minds and bodies of the workers, or in books and computers as the crystallized results of human labour. Thus, skills are ultimately dependent on human labour, and not vice-versa.

[25] Hodgson admits that, in his discussion of a “knowledge economy,” he is only “considering a scenario where the developments at the dynamic core overwhelm and dominate other tendencies” – a scenario that he does not assert actually exists. [Hodgson (1999), 187.]

[26] Ross (2003), 9, 23.

[27] Kunda, Gideon, Engineering Culture: Control and Commitment in a High-Tech Corporation, Philadelphia: TempleUniversity Press, 1992, 2, 4.

[28] Braverman (1974), 57.

[29] Ross (2003), 15.

[30] Ross quotes Marx: “Man is free only when he recognizes himself in a world he has himself created.” [Ross (2003), 2.]

[31]Florida (2002), 132-133.

[32] Kunda (1992), 4-9.

[33] Ibid, 13.

[34] Hunt, Lesley, “Living with Uncertainty: Estrangement, Alienation and Agency At Work,” Sociological Association of Aotearoa, New Zealand, 2003, Agribusiness and Economics Research Unit (AERU), LincolnUniversity, 23 Nov. 2006 , 2.

[35] Fraser, Jill A., White Collar Sweatshop,New York: W.W. Norton and Company, 2001.

[36] Ross (2003), 32-33.

[37] Ibid, 18-19.

[38] Ibid, 248.

[39] Ibid, 83. Pages throughout the book indicate that company solicited clients from the aforementioned group.

[40] Kunda (1992), 164, 172-181.

[41] Hunt (2003), 9.

[42] Kunda makes references to a “totalitarian” work culture at Tech. [Kunda (1992), 15.]

[43] Florida (2002), 123, 132-33.

[44] Ross (2003), 188. Employee weekly hour requirements are similarly high at Tech, where one manager wrote to an employee that, “if you work nine to five you get an average job review.” [Kunda (1992), 200]

[45] Ross (2003), 28.

[46] Ibid, 19.

[47] Kunda (1992) 3, 199.

[48] Fraser (2002), 138-139.

[49] Ibid, 139.

[50] Benner (2002), 221.

[51] Fraser (2002), 139.

[52] Hunt (2003), 8.

[53] Ross (2003), 18.

[54] Ibid, 252.

[55] Fraser (2002), 149.

[56] Kunda (1992), 198-199.

[57] Ibid, 200-204.

[58] Fraser (2002), 158.

[59] Kunda (1992), 162-6.

[60] Fraser (2002), 140.

[61] Kunda (1992) 40, 211-213.

[62] Benner (2002), 203.

[63] Ross (2003), 10.

[64] Benner reminds the reader that shares can become valueless when a company crashes. “The vast majority of the (Silicon Valley) workforce still depends on their wages and salaries as their primary source of income.” [Benner (2002), 214-215.]

[65] Fraser (2002), 40.

[66] Benner (2002), 211-213.

[67] Ibid, 214.

[68] Ross (2003), 31-32.

[69] Fraser (2002), 85.

[70] Ross (2003), 36.

[71] Ibid, 19.

[72] Hodgson (1999), 186.

[73] Moraes-Neto, Benedito, “Automation and Labor: is Marx Equal to Adam Smith?” Trans. Paula Matvienko-Sikar, Rethinking Marxism 16 (2004):411-413.

[74] Dyer-Witheford, Nick, Cyber-Marx: Cycles and Circuits of Struggle in High Technology Capitalism,Illinois: University of Illinois Press, 1999, 81.

[75] Ross (2003), 249.

[76] Moraes-Neto (2004), 416-420. It is possible that Braverman is being stereotyped, and I will have to defer to scholars who have undertaken a more recent reading of Braverman. Braverman did place considerable emphasis on automation and deskilling as central to the reorganization of work under capitalism.

[77] Ibid, 411-413, 416, 420.

[78] Hodgson (1999), 184.

[79] Penn (2005), 3.

Appendices

Appendix A) The Off-Shoring of the Creative Class

In February, the New York Times reported on a survey of 200 Western MNCs across fifteen industries, where more than a third of these corporations expressed a desire to substantially restructure their global division of labour in a manner that would shift research and development work to India and China. Paul Craig Roberts argues that existing trends in the U.S. workforce are commensurate with a desire by MNCs to move the innovation sector abroad. Citing Bureau of Labour Statistics data, Roberts claims, “During the past five years (January 01 – January 06), the information sector of the U.S. economy lost 644,000 jobs, or 17.4 per cent of its work force. Computer systems design and related work lost 105,000 jobs, or 8.5 per cent of its work force.”[1]

Computer and mathematical employment has become stagnant in the U.S. Statistics indicate that this field has witnessed no net job ‘gain’ over the last decade, when adjusted for changes in population growth. Moreover, economists Joel Popkin and Kathryn Kobe note that U.S. industry investment in R&D appears to be languishing, though it is in fact rapidly being shifted overseas: “Funds provided for foreign-performed R&D have grown by almost 73 per cent between 1999 and 2003, with a 36 per cent increase in the number of firms funding foreign R&D.”[2]

Since the beginning of the new millennium, the only growth in the U.S. workforce has occurred in four mostly-non-“creative” sectors: “education and health services, state and local government, leisure and hospitality, and financial services.” Seven out of the top ten occupations currently experiencing accelerated growth are in health care and social assistance. Only four out of the top ten jobs projected to experience growth over the next ten years, the four being post-secondary teachers, customer service representatives, registered nurses, and general and operations managers, can be considered to be part of the “knowledge economy.” To even include those four employment categories as part of the “knowledge economy” stretches its definition. The remaining projected growth jobs are menial in nature.[3]

Similarly, in their evaluation of the Canadian labour market, Michael Burke and John Shields determined that the “top ten jobs for men and women are by and large not the quality, high-skilled, well-paid and technologically leading edge occupations so often touted as the key to our economic future.”[4] The three leading occupations for Canadian men are truck drivers, retail sales, and janitors, and for women, retail sales, secretaries, and cashiers.

As Roberts indicates, the strategy to promote a Western high-tech economy (described by Gritsch and Weiss) may not be succeeding. Rather than a shortage of technical thinkers required to feed a growing “knowledge economy,” Roberts argues that there is in fact an overabundance in certain sectors, caused by the declining need for engineering specialists in the U.S. when manufacture is similarly in decline. Between 2001 and 2006, only 69,000 new jobs were created “in all fields of architecture and engineering, including clerical personnel.” This is less than the number required to employ new U.S. graduates in those fields. While new graduates can occupy positions left by retirees, with manufacturing receding in the U.S., demand for the intellectual management of this production may also recede. Roberts postulates, “when manufacturing leaves, so does engineering, design, research and development, and innovation itself.” It is unclear whether the AICs will be able to retain dominance in the innovation field. Roberts argues that U.S. corporations are seeking absolute advantage rather than comparative advantage, meaning they will gravitate towards the lowest cost of labour in all fields.[5]

Appendix B) The Character of Production Work

Not even in the developed world are production lines characterized by employee empowerment. Even if skill levels and employee technical knowledge are rising generally, as Hogdson asserts,[6] production workers by and large are not becoming “knowledge workers.” Within complex, semi-automated assembly systems in post-Fordist engineering and electronics sectors, Durand presents a division between a core minority of workers that oversee the entire process, and a majority of “direct workers” and technicians that, despite increased technological knowledge requirements, conduct highly ‘routinized’ tasks in a just-in-time product flow. They possess little discretion, their work rhythm is controlled by machines, and their productivity is easily monitored by employers.[7] Thus, higher-skill levels do not necessarily lead to a “knowledge workplace,” and production work in the first-world and developing-world does not necessarily fall into the “knowledge” framework.

Appendix C) The Braverman Hypothesis

Like Marx, Braverman postulated that labour is the source of value, and he viewed work relations within a Marxist framework of antagonism between the worker and the capitalist. According to Braverman, the capitalist purchases worker labour power, but is really only buying the capacity to work. In order to speed up production and modify its forms, capitalists desired control over the labour process, which it achieved partly through the use of management. Taylorism represented a successful and influential attempt by management to divide and systematize the labour process, and control every step. Braverman expected a decline in the amount of skilled labour and general level of training as a result of this tendency towards deskilling. His conclusion that increasingly repetitive and unthinking labour was the natural result of capitalist work organization is the opposite of the “knowledge economy” concept.[8]


[1] Roberts, Paul C, “The New Face of Class War,” Counterpunch. 1 Oct. 2006, 19 Nov. 2006 <http://www.counterpunch.org/roberts09302006.html&gt;.

[2] Ibid.

[3] Ibid.

[4]  Burke, Michael, and John Shields, “Tracking Inequality in the New Canadian Labour Market,” Restructuring and Resistance: Canadian Public Policy in an Age of Global Capitalism, Comp. M Burke et. al. Fernwood Press, 2000, 103.

[5] Roberts (2006).

[6] Hodgson, 186.

[7] Durand (1998), 191-192.

[8] Braverman (1974), 53-4, 57, 63-4, 67, and Penn (2005), 4-6.

Bibliography

Adler, Paul S. “Marx, Machines, and Skill.” Technology and Culture 31 (1990): 780-812.

Alderson, Arthur S. “Explaining Deindustrialization: Globalization, Failure, or Success?” American Sociological Review 64 (1999): 701-721.

Benner, Chris. Work in the New Economy: Flexible Labor Markets in Silicon Valley. Malden: Blackwell, 2002.

Braverman, Harry. Labor and Monopoly Capital: the Degradation of Work in the Twentieth Century. New York: Monthly Review Press, 1974. 45-70.

Burke, Michael, and John Shields. “Tracking Inequality in the New Canadian Labour Market.” Restructuring and Resistance: Canadian Public Policy in an Age of Global Capitalism. Comp. M Burke et. al. Fernwood Press, 2000. 98-123.

“China.” The World Factbook. 14 Nov. 2006. U.S. Central Intelligence Agency. 23 Nov. 2006 .

Durand, Jean-Pierre. “Is the Better Job Still Possible Today?” Economic and Industrial Democracy 19 (1998): 185-198.

Dyer-Witheford, Nick. Cyber-Marx: Cycles and Circuits of Struggle in High Technology Capitalism. Illinois: University of Illinois Press, 1999.

Florida, Richard. The Rise of the Creative Class. New York: Basic Books, 2002. 116-143.

Fraser, Jill A. White Collar Sweatshop. New York: W.W. Norton and Company, 2001.

Gritsch, Maria. “The Nation-State and Economic Globalization: Soft Geopolitics and Increased State Autonomy?” Review of International Political Economy 12:1 (2005): 1-25.

Hodgson, Geoffrey M. Economics and Utopia: Why the Learning Economy is Not the End of History. London, 1999. 179-204.

Hunt, Lesley. “Living with Uncertainty: Estrangement, Alienation and Agency At Work.” Sociological Association of Aotearoa, New Zealand. 2003. Agribusiness and Economics Research Unit (AERU), Lincoln University. 23 Nov. 2006 .

Huws, Ursula. “A New Virtual Global Division of Labour? Some Lessons From the EMERGENCE Project.” Technikfolgenabschätzung 12 (2003): 68-71. 25 Nov. 2006 .

Kunda, Gideon. Engineering Culture: Control and Commitment in a High-Tech Corporation. Philadelphia: Temple University Press, 1992.

Leontiev, A. Political Economy. San Francisco: Proletarian Publishers, 1955.

Moraes-Neto, Benedito. “Automation and Labor: is Marx Equal to Adam Smith?” Trans. Paula Matvienko-Sikar. Rethinking Marxism 16 (2004): 407-422.

Penn, Roger. “Lecture 6: the Deskilling Thesis.” Sociology of Work and Employment. Oct. 2005. Lancaster University. 23 Nov. 2006 .

Roberts, Paul C. “The New Face of Class War.” Counterpunch. 1 Oct. 2006. 19 Nov. 2006 <http://www.counterpunch.org/roberts09302006.html&gt;.

Robinson, William I. Transnational Conflicts : Central America, Social Change, and Globalization. New York: Verso, 2003.

Ross, Andrew. No Collar: the Humane Workplace and Its Hidden Costs. New York: Basic Books, 2003.

Tucker, Lee, The Small Hands of Slavery: Bonded Child Labour in India, (New York, 1996: Human Rights Watch.

UFCW. “Wal-Mart Quick Facts.” UFCW: a Voice for Working America. 2006. 19 Nov. 2006 .

Weiss, Linda. “Global Governance, National Strategies: How Industrialized States Make Room to Move Under the WTO.” Review of International Political Economy 12:5 (2005): 723-749.

2 thoughts on “Will the “Knowledge Economy” Save Us?

  1. […] [We were promised a "knowledge economy." The offshoring and automation of industrial jobs was supposed to open up a new realm of work – we would become managers of information, gliding through a new "information age" where one's creativity and skill determined one's employment prospects.Creativity and skill are important, but they do not characterize most "information age" employment. The neo-liberal 'reforms' of the past four decades have created a highly stratified workforce, where only a small proportion of employees engage in professional creative projects and creative problem-solving under conditions of relative autonomy and comfort.Contrary to the boosterism of Richard Florida, and other exponents of the "creative class," there is compelling evidence that even those 'high-end' "knowledge" workers, who are on the right side of the 'digital divide,' are not immune to the stress, alienation, and exploitation that characterized the earlier "industrial" economy.Moreover, the "knowledge economy" is a thin, although lucrative, foam (to paraphrase Braverman) that floats atop the "old" industrial economy. The creation of well-paying jobs in the "tech sector" has not heralded a new era of worker empowerment.]  […]

  2. Thanks for this article Brendan, which I also find may well be useful for my own teaching purposes. While this report is already very extensive, one might add discussion of the degree to which the mass mediated trumpeting of the “knowledge economy” is part of an inflated demand for excessive certification, that is, an artifical demand for employees with one or more university degrees, even if the subject of the degrees has little relevance to the actual job itself, as a pretext for not raising workers’ wages.

    One solution then would be to: a) impose fair trade as an absolute norm, where the payment of extreme minimum wages is treated as an illegal subsidy; 2) raise the wages of workers in manufacturing and service sectors at home; and, 3) decrease the arbitrary demand for workers with university degrees. Perhaps then universities could once more function as centres of exploration, knowledge production, debate and critique, and less of what they are now: glorified job placement services in direct competition with more practical vocational training institutes.

    Anyway, these are rough ideas and I am sure there are many questions I am missing here.

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