Online at: http://politicalaffairs.net/article/articleview/5728/1/32/

High-tech Capitalism and the Class Struggle

By John Bachtell

Archives - Dates and Topics

2007 – online

August – September 2007

Aug. 13 – Aug. 19 click here for related stories: capitalism

8-16-07, 9:27 am

The field of scientific research, technological development and its application to the production process is advancing at a dizzying and ever accelerating pace. Astounding new technological changes like the Internet are revolutionizing production and social life. They are also creating massive problems that capitalism cannot overcome. Capitalism is an economic system that is internally compelled by the drive for maximum corporate profits to constantly revolutionize the means of production. Capitalists must perfect production or face ruin from their class rivals. As Marx and Engels stated in the Communist Manifesto,

The bourgeoisie cannot exist without constantly revolutionizing the instruments of production and thereby the relations of production, and with them the whole relations of society…constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify.

Changes in the production process are accelerating and the technological revolution is facilitating the capitalist globalization of production. Simultaneously, capitalism holds back the development of the productive forces. In the global economy dominated by capitalism only 1 percent of the work force is engaged in scientific research and technological development.

However, last year socialist oriented China announced it intends a massive increase in annual investment for research and development to lift the country out of poverty by 2050. Sixty percent of its economic growth will be based on science and technology by 2020. Developments in China, India, Vietnam, Cuba, and elsewhere will broaden and accelerate scientific and technological developments.

Creation and Destruction of Jobs

Revolutionizing the instruments of production is marked by constant churning – the destruction and creation of new jobs. The Bureau of Labor Statistics estimates between 25 and 30 million jobs are created and destroyed each year in the US.

This churning is affected by both outsourcing and application of new technology. While most, including in the labor movement, have focused on job loss due to outsourcing, more jobs are actually lost through technological advances. It is estimated that for every job lost through outsourcing, two jobs are lost through new technological innovations and applications. Forrester Research estimates that of the 2.7 million jobs lost above those created between 2001 and 2005, only 300,000 or 15 percent were due to outsourcing.

Rising Productivity Means Rising Exploitation

There has been a tremendous hemorrhaging of US manufacturing jobs over the past 30 years. Between 1996-2006 alone US manufacturing jobs declined by 12 percent. Yet from 1998 to 2003 industrial output increased and the US still leads the world, accounting for 23.8 percent of the world's manufacturing output in 2004, nearly the same as 1985. Japan is second at 20.9 percent and China is third at 9 percent and growing. (World Bank)

A Federal Reserve Statistical Release (Jan. 17, 2006) reported that in 2005 total industrial production increased 2.8 percent, while total industrial capacity rose 1.7 percent. Only 80.7 percent of industrial capacity was being used in December 2006.

"If we use 1947 as a baseline year for worker output by 2003, the labor productivity index had quadrupled!" and with it the rate of exploitation, noted Jim Lane in the People's Weekly World (January 15, 2005). Labor productivity gains have been on an accelerating pace since 1973.

Over 100,000 manufacturing corporations each with at least 20 employees still produce in the US. Companies employing 1,000 or fewer workers produce 80 percent of all productive value.

The impact of new technology on steel production has been dramatic. From 1982-2002, US steel production rose from 75 million to 102 million tons while destroying jobs. In 1980 the steel industry employed about 400,000 workers and "it took about nine hours of labor to produce a ton of steel. By last year, the work force had withered to some 120,000 workers but it took each of them only about two hours to make a ton of steel," wrote Eduardo Porter. ("Reinventing the Mill," New York Times, October 22, 2005).

Jobs are being lost to call centers in India. But job loss of human operators by voice recognition technology is even greater. In 2002 Sprint's productivity jumped 15 percent and profits increased by 4.3 percent, while the company eliminated 11,500 jobs. (Jeremy Rifkin, The Guardian, March 2, 2004).

And the elimination of manufacturing jobs is a global phenomenon. Thirty-one million manufacturing jobs were eliminated between 1995 and 2002 in the world's 20 largest economies. Manufacturing employment has declined each of the past seven years and in every region of the world while global industrial production has risen by over 30 percent. (Alliance Capital).

Between 1993 and 2003, Japan's manufacturing jobs dropped by 16 percent. They are being eliminated even faster in China. Between 1995 and 2002, China lost more than 15 million manufacturing jobs, 15 percent of its total manufacturing work force. (Rifkin, ibid.)

Outsourcing R & D and Service Sector jobs

The revolution in science and technology has accelerated outsourcing including jobs unthinkable just a few years ago. For the first time the jobs of a majority of US workers are threatened with outsourcing including service, technical, healthcare, scientific and even government jobs at all levels. It is estimated 3.3 million US service industry jobs (and as many as 14 million) will be outsourced by 2015. Corporations are moving technical support, call centers, software development, and management jobs to India, Russia, and Eastern Europe and elsewhere.

US industry's investment in research and development has declined, falling to 63 percent of total domestic R&D (corporate, academic and governmental) in 2003, down from its peak level of 70 percent in 2000. But it is not lost – it is being shifted overseas.

"Funds provided for foreign-performed R&D have grown by almost 73 percent between 1999 and 2003, with a 36 percent increase in the number of firms funding foreign R&D." ("U.S. Manufacturing Innovation at Risk" Joel Popkin and Kathryn Kobe.)

As more and more software is Web-delivered, outsourcing of testing has increased. Internet Technology is being globalized. ("Can the US survive outsourcing?" Matthew Heusser, Stickyminds.com). A new field called utility computing has developed, which includes automated infrastructure services and business processes. One estimate is that over the next 10 years, the rate of IT job loss due to new technology will be about double the rate for outsourcing. (ITUtility Pipeline, Neil MacDonald and Darrell Dunn, December 14, 2004).

Outsourcing high tech jobs and scientific research, facilitated by the revolution in technology and especially communications, to low wage zones is compelled by the same drive for maximum corporate profits.

Global Supply Chain

The organization of production along the "global supply chain" is made possible and has taken a leap due to the technological revolution, in particular in computer science, communications and the Internet. Global corporations control the supply chain from beginning to end. For example, Dell Corporation's workers assemble computers at a plant in Austin, Texas and monitors in Tijuana, Mexico, but component manufacturing is strung from Malaysia to Korea and especially Taiwan and China.

As Barry Lynn describes,

From those suppliers it stretches on back through another three or four "tiers" to the sub-suppliers and sub-sub-suppliers. To ensure green light at all points along this line, Dell must watch hundreds of potential bottlenecks around the world, as some 4,500 parts from hundreds of suppliers are shipped to Austin, Texas. On any day, a single missing shipment of components can disrupt the whole operation. It's not uncommon for different transnational corporations to have the same sub-suppliers. While the global auto industry is made up of about 20 multinational corporations, the auto industry supply chain is made up of thousands of suppliers employing over 100,000 workers.

Developments in technology allow transnational corporations to swiftly move production from one plant to another, one country to another or one region to another.

Lean Manufacturing

The modern form for organizing production is called "lean manufacturing," also known as "just-in-time production" or "stockless production." It is defined as the "philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity." It was developed by Toyota Corporation in the 1950's and was adopted in the US in the 1980's, mainly in the auto industry. Lean manufacturing has its roots in Taylorism and takes scientific production management to a new level.

Lean manufacturing is characterized by constant daily production and the elimination of every bit of wasted work time; flexibility to set up multiple production lines or shift assembly between products; reduction or elimination of setup times; production of smaller batches to eliminate inventory; reduction of product development lead time; elimination of differences in production quality at plants around the globe; a "flexible work force," in other words, job categories are combined and part time work increases.

Lean manufacturing, while it is prevalent in the auto industry is still just growing elsewhere. Because of their power, the transnational corporations use just-in-time manufacturing to push off inventory on the sub-suppliers. For example Dell was able to cut inventory at its Austin assembly plant to four days worth, from the industry average of 60-120 days.

Intelligent Technology

New waves of the scientific and technological revolution are cresting that will have huge implications for the production process and job displacement over the next 20 years.

Computers are becoming ubiquitous in society, including in all aspects of the production process. Today "intelligent systems technologies" are being integrated into the production process. These are systems that emulate and actively employ some aspect of human intelligence in performing a task. Some examples include sensing and vision systems, computer-based intelligent systems (artificial intelligence to production) and robotic systems that interact with workers in some way.

There are some 800,000 robots on assembly lines globally, one-half in Japan and 120,000 in the US. Robotics technology, first widely used in the auto industry for painting and welding, is undergoing a qualitative leap. New technologies such as machine vision, force sensing, speech recognition, and advanced mechanics are being integrated into robotic systems. This has enabled robots to function in ways not thought practical before.

The electronics industry was one of the first to use vision in robot systems to mount chips on circuit boards. It is used in all mechanical industrial assembly including automobile components, cellular phones, disk drives, printers and kitchen appliances.

Developments in artificial intelligence (AI) enable computing machines to be placed on the factory floor to sense and solve production problems instantaneously. Production problem can be reported via the Internet remotely.

The French steel corporation Usinor utilizes AI in operating its continuous blast furnace operations. The Sachem system armed with 1,000 sensors, acts as "neurons" between different production process, detecting irregularities and monitoring hundreds of variables. Its accumulated database allows it to learn from previous experience and provide diagnostic information and make recommendations to technicians.

New Scientific and Technological Convergence

On the horizon is another big revolution in science and technology that stems from the convergence of biotechnology, information science, theoretical science and Nanotechnology. It will affect everything – design, mass production, materials, electronics, and food production, the environment and job displacement. It has been dubbed the sixth industrial revolution.

Nanotechnology is defined as "any application of science that deals with elements between 100 nanometers and a tenth of a nanometer in size in which size is critical to the application's ultimate purpose." One nanometer is equivalent to one-billionth of a meter. The width of a human hair is approximately 80,000 nanometers.

Nanotechnology would revolutionize computing power. Expanding the capacity of semiconductor computer chips is essential for expanding computing power. Moore's Law, formulated by Intel founder Gordon Moore back in 1965, states the number of transistors on a chip doubles every 18 months. But there is a physical limit to how small you can get with traditional chip construction. And that limit is rapidly being approached.

Nanotechnology, also known as "molecular engineering," or "precise molecular manipulation" opens up a whole new world in semiconductor chip construction. This is an example of how the nanotech revolution will usher in a radical new approach to industrial production.

As Peter Montague states, "Typical manufacturing today – even construction of the tiniest computer circuit – relies on "top-down" techniques, machining or etching products out of blocks of raw material. For example, a common technique for making a transistor begins with a chunk of silicon, which is etched to remove unwanted material, leaving behind a sculpted circuit. This "top-down" method of construction creates the desired product plus waste residues.

In contrast, Nanotechnology makes possible "bottom-up" construction in which atoms are arranged under software control – or in ideal cases they will self-assemble, just as living cells self-assemble – into the desired configuration with nothing left over, no waste. Instead of cutting trees into lumber to make a table, why not just "grow" a table? (Welcome to NanoWorld: Nanotechnology and the Precautionary Principle Imperative)

Nanotechnology also includes the building of nanoscale robots called "nanobots," which would be software programmed to assemble other "nanobots" and repair them.

Scientists have already engineered carbon molecules called "buckyballs" named after Buckminster Fuller's geodesic domes, which they resemble in shape. Scientists are working to engineer materials that would be stronger than steel at a fraction of the weight and radically enhance the efficiency of photovoltaic cells.

Nanobots with limitless functions are envisioned including those that can search and destroy cancer cells in blood vessels, clean up toxic waste dumps and be used as pollution sensors at a nano level.

Nanotechnology is already employed in some production, for example in the clothing industry to produce stain-repellant cloths. Nanoscale materials are found in electronic, magnetic and optoelectronic, biomedical, pharmaceutical, cosmetic, energy, catalytic, and materials applications. Nanotech applications are found in chemical-mechanical polishing, magnetic recording tapes, sunscreens, automotive catalyst supports, electro-conductive coatings, and optical fibers.

Impact On the Working Class

This technological revolution suggests the jobs of the future may either be highly skilled or unskilled. Most jobs requiring modest skill sets and training will be eliminated. Either way, capitalist globalization will continue the race to the bottom in wages, workplace and environmental safety.

This development takes place in the context of massive budget cuts to social programs, privatization and dismantling of public education, school closings, skyrocketing "push-out" rates in working-class and especially nationally and racially-oppressed communities.

The institutionalized racism and discrimination embedded in US society generally and the educational and production process means that African Americans, Latinos, other minority workers, immigrants and women will be impacted disproportionately. Under capitalist globalization, this pattern will be repeated in developing countries.

To counter the affects of the technological revolution, greater working class unity and global labor solidarity is necessary. In addition to fighting for global wage and workplace standards, there is a need to shorten the work week with no cut in pay, defend public education at every level, demand massive funding to bring the new technology to every educational institution and radically broaden education in science and technical skills.

There is also a need to control the investment practices of corporations. This includes forcing a reinvestment in the US manufacturing base and reorienting spending priorities to fund the reconstruction of the nation's infrastructure, thereby putting millions of people to work. These are some policies called for now and especially under a radical restructuring of the US economy by an anti-monopoly people's government.

The growth in the productive forces of global capitalism is accompanied by deepening contradictions it has no solution for including the growing obscene wealth gap in the US and between the advanced capitalist countries and the developing states.

Basic Contradiction of Capitalism

One of the sharpening contradictions within modern day capitalism is the development of the productive forces and the resulting mass joblessness. As Gus Hall, the late chair of the CPUSA wrote in 1998, Until now there were inventions that made production by human labor more efficient. But today's advanced technology is based on replacing human hands and minds. Machines replacing human labor on a mass scale will bring on the next crisis of capitalism.

Production without human hands or "lights out production" as it is referred to, is a growing phenomenon. Production assembly lines can be run remotely via the Internet by engineers, technicians and programmers, and can be run with the "lights off." These factories operate 24-7 and shutdown only for scheduled maintenance. A string of factories spanning the globe can be run continuously in sync.

As Karl Marx observed in 1859,

At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production, or – what is but a legal expression for the same thing – with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. No social order ever perishes before all the productive forces for which there is room in it have developed; and new, higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society itself. (Preface to a Contribution to the Critique of Political Economy)

Global capitalism develops productive forces to maximize profits over solving human needs. In the hands of corporations driven by maximizing profits, the development of science and technology is distorted. There are always dangers including nuclear power, genetically modified foods and science for military use. Similar dangers lurk with nanotechnology, which incidentally is the third largest research item funded by the National Institute of Science and much of those applications are planned to be military related.

In the hands of the working class in power building a socialist society, the scientific and technological revolution can be put to use for the benefit of humankind as a whole including feeding the hungry, housing the homeless, providing free health care and halting and healing the environmental destruction. In fact accelerating the development of the productivity is crucial to the development of socialism. For once the means of production will not be alien and hostile to the working class, but become a liberating force. This prospect underscores the need for a broad grassroots discussion on the necessity for a socialist transformation in the United States.

--John Bachtell chairs the Illinois Communist Party and is a member of the national board of the Communist Party USA. Send your letter to the editor to pa-letters@politicalaffairs.net

| | | Save Page to del.icio.us