By Christopher Alessi

Oct. 27, 2014 – AMBERG, Germany–The next front in Germany’s effort to keep up with the digital revolution lies in a factory in this sleepy industrial town.

At stake isn’t what the Siemens AG plant produces–in this case, automated machines to be used in other industrial factories–but how its 1,000 manufacturing units communicate through the Web.

As a result, most units in this 100,000-plus square-foot factory are able to fetch and assemble components without further human input.

The Amberg plant is an early-stage example of a concerted effort by the German government, companies, universities and research institutions to develop fully automated, Internet-based "smart" factories.

Such factories would make products fully customizable while on the shop floor: An incomplete product on the assembly line would tell "the machine itself what services it needs" and the final product would immediately be put together, said Wolfgang Wahlster, a co-chairman of Industrie 4.0, as the collective project is known.

The initiative seeks to help German industrial manufacturing–the backbone of Europe’s largest economy–keep its competitive edge against the labor-cost advantages of developing countries and a resurgence in U.S. manufacturing.

Underpinning the effort is the Internet of Things, where the Web meets real-world equipment. Google Inc. made a big push on the consumer front this year with its $3.2 billion purchase of Nest Labs Inc., which makes thermostats that can be remotely controlled by smartphones and other connected devices.

Full-fledged smart manufacturing is still in the pilot phase. But the German Research Center for Artificial Intelligence has worked with German industrial companies to engineer some of the most advanced demonstrations in the field.


Category : Capitalism | Socialism | Technology | Blog

Photo: Workerless Factory

Summary: What does this culture and technology of anti-spendism mean for the future consumption and valuation of goods and services?

[Editor's Note: The author skims the surface of capitalism's endemic problem of the growing organic composition of capital (better tools) in relation to the decrease in living labor (fewer workers and less labor time). One reason noted by Marx is that it has no strategic reform solution , but it does set the conditions for socialism, and beyond that, the classless society of communism].

By Jason Perlow via Tech Broiler

Open Source. The backlash against Software Patents. Cloud Computing. Bitcoin. 3D Printing. Post-PC. Cord-Cutting. Electric Vehicles and Alternative Energy.

There are ideological and social drivers that are unique to every single one of these things, and yet there is a common thread that ties them together. I call this trend “anti-spendism”.

Anti-spendism is not necessarily a social movement that is tied to the betterment of society as a whole. It’s not like socialism or communism, where we are talking about a desire to more equitably distribute wealth to the have-nots.

It is by definition, the personal, self-centered desire not to expend capital at all. Or to put a more modern take on it, rapid advances in technology have so lowered our perceptions of what things should cost, that ultimately many goods and services have become devalued far below what people are willing to pay for them.

To put it bluntly, anti-spendism is “Hell no, we won’t pay” syndrome.

And while a case could be made that thriftiness in the trade of goods and services has always existed, even before money itself existed, there has never been a time in our history where thriftiness has overwhelmingly been driven by technology itself, or vice-versa.

The rise of FOSS

It is difficult to say where this all began, but I suspect that it emerged as a confluence of events beginning with the rise of the Free/Open Source Software (FOSS) movement in the late 1990s which planted the seeds among the technorati that you could get something of value (Software) for free.


Category : Capitalism | Socialism | Technology | Blog




Previous technological innovation has always delivered more long-run employment, not less. But things can change

The Economist, Jan 18th 2014

IN 1930, when the world was “suffering…from a bad attack of economic pessimism”, John Maynard Keynes wrote a broadly optimistic essay, “Economic Possibilities for our Grandchildren”. It imagined a middle way between revolution and stagnation that would leave the said grandchildren a great deal richer than their grandparents. But the path was not without dangers.

One of the worries Keynes admitted was a “new disease”: “technological unemployment…due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.” His readers might not have heard of the problem, he suggested—but they were certain to hear a lot more about it in the years to come.

For the most part, they did not. Nowadays, the majority of economists confidently wave such worries away. By raising productivity, they argue, any automation which economises on the use of labour will increase incomes. That will generate demand for new products and services, which will in turn create new jobs for displaced workers. To think otherwise has meant being tarred a Luddite—the name taken by 19th-century textile workers who smashed the machines taking their jobs.

For much of the 20th century, those arguing that technology brought ever more jobs and prosperity looked to have the better of the debate. Real incomes in Britain scarcely doubled between the beginning of the common era and 1570. They then tripled from 1570 to 1875. And they more than tripled from 1875 to 1975. Industrialisation did not end up eliminating the need for human workers. On the contrary, it created employment opportunities sufficient to soak up the 20th century’s exploding population. Keynes’s vision of everyone in the 2030s being a lot richer is largely achieved. His belief they would work just 15 hours or so a week has not come to pass.

When the sleeper wakes

Yet some now fear that a new era of automation enabled by ever more powerful and capable computers could work out differently. They start from the observation that, across the rich world, all is far from well in the world of work. The essence of what they see as a work crisis is that in rich countries the wages of the typical worker, adjusted for cost of living, are stagnant. In America the real wage has hardly budged over the past four decades. Even in places like Britain and Germany, where employment is touching new highs, wages have been flat for a decade. Recent research suggests that this is because substituting capital for labour through automation is increasingly attractive; as a result owners of capital have captured ever more of the world’s income since the 1980s, while the share going to labour has fallen.

At the same time, even in relatively egalitarian places like Sweden, inequality among the employed has risen sharply, with the share going to the highest earners soaring. For those not in the elite, argues David Graeber, an anthropologist at the London School of Economics, much of modern labour consists of stultifying “bullshit jobs”—low- and mid-level screen-sitting that serves simply to occupy workers for whom the economy no longer has much use. Keeping them employed, Mr Graeber argues, is not an economic choice; it is something the ruling class does to keep control over the lives of others.

Be that as it may, drudgery may soon enough give way to frank unemployment. There is already a long-term trend towards lower levels of employment in some rich countries. The proportion of American adults participating in the labour force recently hit its lowest level since 1978, and although some of that is due to the effects of ageing, some is not. In a recent speech that was modelled in part on Keynes’s “Possibilities”, Larry Summers, a former American treasury secretary, looked at employment trends among American men between 25 and 54. In the 1960s only one in 20 of those men was not working. According to Mr Summers’s extrapolations, in ten years the number could be one in seven.

This is one indication, Mr Summers says, that technical change is increasingly taking the form of “capital that effectively substitutes for labour”. There may be a lot more for such capital to do in the near future. A 2013 paper by Carl Benedikt Frey and Michael Osborne, of the University of Oxford, argued that jobs are at high risk of being automated in 47% of the occupational categories into which work is customarily sorted. That includes accountancy, legal work, technical writing and a lot of other white-collar occupations.

Answering the question of whether such automation could lead to prolonged pain for workers means taking a close look at past experience, theory and technological trends. The picture suggested by this evidence is a complex one. It is also more worrying than many economists and politicians have been prepared to admit.

The lathe of heaven

Economists take the relationship between innovation and higher living standards for granted in part because they believe history justifies such a view. Industrialisation clearly led to enormous rises in incomes and living standards over the long run. Yet the road to riches was rockier than is often appreciated.

In 1500 an estimated 75% of the British labour force toiled in agriculture. By 1800 that figure had fallen to 35%. When the shift to manufacturing got under way during the 18th century it was overwhelmingly done at small scale, either within the home or in a small workshop; employment in a large factory was a rarity. By the end of the 19th century huge plants in massive industrial cities were the norm. The great shift was made possible by automation and steam engines.

Industrial firms combined human labour with big, expensive capital equipment. To maximise the output of that costly machinery, factory owners reorganised the processes of production. Workers were given one or a few repetitive tasks, often making components of finished products rather than whole pieces. Bosses imposed a tight schedule and strict worker discipline to keep up the productive pace. The Industrial Revolution was not simply a matter of replacing muscle with steam; it was a matter of reshaping jobs themselves into the sort of precisely defined components that steam-driven machinery needed—cogs in a factory system.

The way old jobs were done changed; new jobs were created. Joel Mokyr, an economic historian at Northwestern University in Illinois, argues that the more intricate machines, techniques and supply chains of the period all required careful tending. The workers who provided that care were well rewarded. As research by Lawrence Katz, of Harvard University, and Robert Margo, of Boston University, shows, employment in manufacturing “hollowed out”. As employment grew for highly skilled workers and unskilled workers, craft workers lost out. This was the loss to which the Luddites, understandably if not effectively, took exception.

With the low-skilled workers far more numerous, at least to begin with, the lot of the average worker during the early part of this great industrial and social upheaval was not a happy one. As Mr Mokyr notes, “life did not improve all that much between 1750 and 1850.” For 60 years, from 1770 to 1830, growth in British wages, adjusted for inflation, was imperceptible because productivity growth was restricted to a few industries. Not until the late 19th century, when the gains had spread across the whole economy, did wages at last perform in line with productivity (see chart 1).

Along with social reforms and new political movements that gave voice to the workers, this faster wage growth helped spread the benefits of industrialisation across wider segments of the population. New investments in education provided a supply of workers for the more skilled jobs that were by then being created in ever greater numbers. This shift continued into the 20th century as post-secondary education became increasingly common.

Claudia Goldin, an economist at Harvard University, and Mr Katz have written that workers were in a “race between education and technology” during this period, and for the most part they won. Even so, it was not until the “golden age” after the second world war that workers in the rich world secured real prosperity, and a large, property-owning middle class came to dominate politics. At the same time communism, a legacy of industrialisation’s harsh early era, kept hundreds of millions of people around the world in poverty, and the effects of the imperialism driven by European industrialisation continued to be felt by billions.

The impacts of technological change take their time appearing. They also vary hugely from industry to industry. Although in many simple economic models technology pairs neatly with capital and labour to produce output, in practice technological changes do not affect all workers the same way. Some find that their skills are complementary to new technologies. Others find themselves out of work.

Take computers. In the early 20th century a “computer” was a worker, or a room of workers, doing mathematical calculations by hand, often with the end point of one person’s work the starting point for the next. The development of mechanical and electronic computing rendered these arrangements obsolete. But in time it greatly increased the productivity of those who used the new computers in their work.

Many other technical innovations had similar effects. New machinery displaced handicraft producers across numerous industries, from textiles to metalworking. At the same time it enabled vastly more output per person than craft producers could ever manage.

Player piano

For a task to be replaced by a machine, it helps a great deal if, like the work of human computers, it is already highly routine. Hence the demise of production-line jobs and some sorts of book-keeping, lost to the robot and the spreadsheet. Meanwhile work less easily broken down into a series of stereotyped tasks—whether rewarding, as the management of other workers and the teaching of toddlers can be, or more of a grind, like tidying and cleaning messy work places—has grown as a share of total employment.

But the “race” aspect of technological change means that such workers cannot rest on their pay packets. Firms are constantly experimenting with new technologies and production processes. Experimentation with different techniques and business models requires flexibility, which is one critical advantage of a human worker. Yet over time, as best practices are worked out and then codified, it becomes easier to break production down into routine components, then automate those components as technology allows.

If, that is, automation makes sense. As David Autor, an economist at the Massachusetts Institute of Technology (MIT), points out in a 2013 paper, the mere fact that a job can be automated does not mean that it will be; relative costs also matter. When Nissan produces cars in Japan, he notes, it relies heavily on robots. At plants in India, by contrast, the firm relies more heavily on cheap local labour.

Even when machine capabilities are rapidly improving, it can make sense instead to seek out ever cheaper supplies of increasingly skilled labour. Thus since the 1980s (a time when, in America, the trend towards post-secondary education levelled off) workers there and elsewhere have found themselves facing increased competition from both machines and cheap emerging-market workers.

Such processes have steadily and relentlessly squeezed labour out of the manufacturing sector in most rich economies. The share of American employment in manufacturing has declined sharply since the 1950s, from almost 30% to less than 10%. At the same time, jobs in services soared, from less than 50% of employment to almost 70% (see chart 2). It was inevitable, therefore, that firms would start to apply the same experimentation and reorganisation to service industries.

A new wave of technological progress may dramatically accelerate this automation of brain-work. Evidence is mounting that rapid technological progress, which accounted for the long era of rapid productivity growth from the 19th century to the 1970s, is back. The sort of advances that allow people to put in their pocket a computer that is not only more powerful than any in the world 20 years ago, but also has far better software and far greater access to useful data, as well as to other people and machines, have implications for all sorts of work.

The case for a highly disruptive period of economic growth is made by Erik Brynjolfsson and Andrew McAfee, professors at MIT, in “The Second Machine Age”, a book to be published later this month. Like the first great era of industrialisation, they argue, it should deliver enormous benefits—but not without a period of disorienting and uncomfortable change. Their argument rests on an underappreciated aspect of the exponential growth in chip processing speed, memory capacity and other computer metrics: that the amount of progress computers will make in the next few years is always equal to the progress they have made since the very beginning. Mr Brynjolfsson and Mr McAfee reckon that the main bottleneck on innovation is the time it takes society to sort through the many combinations and permutations of new technologies and business models.

A startling progression of inventions seems to bear their thesis out. Ten years ago technologically minded economists pointed to driving cars in traffic as the sort of human accomplishment that computers were highly unlikely to master. Now Google cars are rolling round California driver-free no one doubts such mastery is possible, though the speed at which fully self-driving cars will come to market remains hard to guess.

Brave new world

Even after computers beat grandmasters at chess (once thought highly unlikely), nobody thought they could take on people at free-form games played in natural language. Then Watson, a pattern-recognising supercomputer developed by IBM, bested the best human competitors in America’s popular and syntactically tricksy general-knowledge quiz show “Jeopardy!” Versions of Watson are being marketed to firms across a range of industries to help with all sorts of pattern-recognition problems. Its acumen will grow, and its costs fall, as firms learn to harness its abilities.

The machines are not just cleverer, they also have access to far more data. The combination of big data and smart machines will take over some occupations wholesale; in others it will allow firms to do more with fewer workers. Text-mining programs will displace professional jobs in legal services. Biopsies will be analysed more efficiently by image-processing software than lab technicians. Accountants may follow travel agents and tellers into the unemployment line as tax software improves. Machines are already turning basic sports results and financial data into good-enough news stories.

Jobs that are not easily automated may still be transformed. New data-processing technology could break “cognitive” jobs down into smaller and smaller tasks. As well as opening the way to eventual automation this could reduce the satisfaction from such work, just as the satisfaction of making things was reduced by deskilling and interchangeable parts in the 19th century. If such jobs persist, they may engage Mr Graeber’s “bullshit” detector.

Being newly able to do brain work will not stop computers from doing ever more formerly manual labour; it will make them better at it. The designers of the latest generation of industrial robots talk about their creations as helping workers rather than replacing them; but there is little doubt that the technology will be able to do a bit of both—probably more than a bit. A taxi driver will be a rarity in many places by the 2030s or 2040s. That sounds like bad news for journalists who rely on that most reliable source of local knowledge and prejudice—but will there be many journalists left to care? Will there be airline pilots? Or traffic cops? Or soldiers?

There will still be jobs. Even Mr Frey and Mr Osborne, whose research speaks of 47% of job categories being open to automation within two decades, accept that some jobs—especially those currently associated with high levels of education and high wages—will survive (see table). Tyler Cowen, an economist at George Mason University and a much-read blogger, writes in his most recent book, “Average is Over”, that rich economies seem to be bifurcating into a small group of workers with skills highly complementary with machine intelligence, for whom he has high hopes, and the rest, for whom not so much.

And although Mr Brynjolfsson and Mr McAfee rightly point out that developing the business models which make the best use of new technologies will involve trial and error and human flexibility, it is also the case that the second machine age will make such trial and error easier. It will be shockingly easy to launch a startup, bring a new product to market and sell to billions of global consumers (see article). Those who create or invest in blockbuster ideas may earn unprecedented returns as a result.

In a forthcoming book Thomas Piketty, an economist at the Paris School of Economics, argues along similar lines that America may be pioneering a hyper-unequal economic model in which a top 1% of capital-owners and “supermanagers” grab a growing share of national income and accumulate an increasing concentration of national wealth. The rise of the middle-class—a 20th-century innovation—was a hugely important political and social development across the world. The squeezing out of that class could generate a more antagonistic, unstable and potentially dangerous politics.

The potential for dramatic change is clear. A future of widespread technological unemployment is harder for many to accept. Every great period of innovation has produced its share of labour-market doomsayers, but technological progress has never previously failed to generate new employment opportunities.

The productivity gains from future automation will be real, even if they mostly accrue to the owners of the machines. Some will be spent on goods and services—golf instructors, household help and so on—and most of the rest invested in firms that are seeking to expand and presumably hire more labour. Though inequality could soar in such a world, unemployment would not necessarily spike. The current doldrum in wages may, like that of the early industrial era, be a temporary matter, with the good times about to roll (see chart 3).

These jobs may look distinctly different from those they replace. Just as past mechanisation freed, or forced, workers into jobs requiring more cognitive dexterity, leaps in machine intelligence could create space for people to specialise in more emotive occupations, as yet unsuited to machines: a world of artists and therapists, love counsellors and yoga instructors.

Such emotional and relational work could be as critical to the future as metal-bashing was in the past, even if it gets little respect at first. Cultural norms change slowly. Manufacturing jobs are still often treated as “better”—in some vague, non-pecuniary way—than paper-pushing is. To some 18th-century observers, working in the fields was inherently more noble than making gewgaws.

But though growth in areas of the economy that are not easily automated provides jobs, it does not necessarily help real wages. Mr Summers points out that prices of things-made-of-widgets have fallen remarkably in past decades; America’s Bureau of Labour Statistics reckons that today you could get the equivalent of an early 1980s television for a twentieth of its then price, were it not that no televisions that poor are still made. However, prices of things not made of widgets, most notably college education and health care, have shot up. If people lived on widgets alone— goods whose costs have fallen because of both globalisation and technology—there would have been no pause in the increase of real wages. It is the increase in the prices of stuff that isn’t mechanised (whose supply is often under the control of the state and perhaps subject to fundamental scarcity) that means a pay packet goes no further than it used to.

So technological progress squeezes some incomes in the short term before making everyone richer in the long term, and can drive up the costs of some things even more than it eventually increases earnings. As innovation continues, automation may bring down costs in some of those stubborn areas as well, though those dominated by scarcity—such as houses in desirable places—are likely to resist the trend, as may those where the state keeps market forces at bay. But if innovation does make health care or higher education cheaper, it will probably be at the cost of more jobs, and give rise to yet more concentration of income.

The machine stops

Even if the long-term outlook is rosy, with the potential for greater wealth and lots of new jobs, it does not mean that policymakers should simply sit on their hands in the mean time. Adaptation to past waves of progress rested on political and policy responses. The most obvious are the massive improvements in educational attainment brought on first by the institution of universal secondary education and then by the rise of university attendance. Policies aimed at similar gains would now seem to be in order. But as Mr Cowen has pointed out, the gains of the 19th and 20th centuries will be hard to duplicate.

Boosting the skills and earning power of the children of 19th-century farmers and labourers took little more than offering schools where they could learn to read, write and do algebra. Pushing a large proportion of college graduates to complete graduate work successfully will be harder and more expensive. Perhaps cheap and innovative online education will indeed make new attainment possible. But as Mr Cowen notes, such programmes may tend to deliver big gains only for the most conscientious students.

Another way in which previous adaptation is not necessarily a good guide to future employment is the existence of welfare. The alternative to joining the 19th-century industrial proletariat was malnourished deprivation. Today, because of measures introduced in response to, and to some extent on the proceeds of, industrialisation, people in the developed world are provided with unemployment benefits, disability allowances and other forms of welfare. They are also much more likely than a bygone peasant to have savings. This means that the “reservation wage”—the wage below which a worker will not accept a job—is now high in historical terms. If governments refuse to allow jobless workers to fall too far below the average standard of living, then this reservation wage will rise steadily, and ever more workers may find work unattractive. And the higher it rises, the greater the incentive to invest in capital that replaces labour.

Everyone should be able to benefit from productivity gains—in that, Keynes was united with his successors. His worry about technological unemployment was mainly a worry about a “temporary phase of maladjustment” as society and the economy adjusted to ever greater levels of productivity. So it could well prove. However, society may find itself sorely tested if, as seems possible, growth and innovation deliver handsome gains to the skilled, while the rest cling to dwindling employment opportunities at stagnant wages.

From the print edition: Briefing

Category : Capitalism | Keynes | Technology | Working Class | Blog

An Essay Confirming Our Ongoing Need for both Marx and Gramsci to Spotlight, Dissect and Break Apart Our Adversaries

By Mike Lofgren

Rome lived upon its principal till ruin stared it in the face. Industry is the only true source of wealth, and there was no industry in Rome. By day the Ostia road was crowded with carts and muleteers, carrying to the great city the silks and spices of the East, the marble of Asia Minor, the timber of the Atlas, the grain of Africa and Egypt; and the carts brought out nothing but loads of dung. That was their return cargo.

The Martyrdom of Man by Winwood Reade (1871)

Feb 21, 2014 – There is the visible government situated around the Mall in Washington, and then there is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The former is traditional Washington partisan politics: the tip of the iceberg that a public watching C-SPAN sees daily and which is theoretically controllable via elections. The subsurface part of the iceberg I shall call the Deep State, which operates according to its own compass heading regardless of who is formally in power. [1]

During the last five years, the news media has been flooded with pundits decrying the broken politics of Washington. The conventional wisdom has it that partisan gridlock and dysfunction have become the new normal. That is certainly the case, and I have been among the harshest critics of this development. But it is also imperative to acknowledge the limits of this critique as it applies to the American governmental system. On one level, the critique is self-evident: In the domain that the public can see, Congress is hopelessly deadlocked in the worst manner since the 1850s, the violently rancorous decade preceding the Civil War.

Yes, there is another government concealed behind the one that is visible at either end of Pennsylvania Avenue, a hybrid entity of public and private institutions ruling the country…

As I wrote in The Party is Over, the present objective of congressional Republicans is to render the executive branch powerless, at least until a Republican president is elected (a goal that voter suppression laws in GOP-controlled states are clearly intended to accomplish). President Obama cannot enact his domestic policies and budgets: Because of incessant GOP filibustering, not only could he not fill the large number of vacancies in the federal judiciary, he could not even get his most innocuous presidential appointees into office. Democrats controlling the Senate have responded by weakening the filibuster of nominations, but Republicans are sure to react with other parliamentary delaying tactics. This strategy amounts to congressional nullification of executive branch powers by a party that controls a majority in only one house of Congress.

Despite this apparent impotence, President Obama can liquidate American citizens without due processes, detain prisoners indefinitely without charge, conduct dragnet surveillance on the American people without judicial warrant and engage in unprecedented — at least since the McCarthy era — witch hunts against federal employees (the so-called “Insider Threat Program”). Within the United States, this power is characterized by massive displays of intimidating force by militarized federal, state and local law enforcement. Abroad, President Obama can start wars at will and engage in virtually any other activity whatsoever without so much as a by-your-leave from Congress, such as arranging the forced landing of a plane carrying a sovereign head of state over foreign territory. Despite the habitual cant of congressional Republicans about executive overreach by Obama, the would-be dictator, we have until recently heard very little from them about these actions — with the minor exception of comments from gadfly Senator Rand Paul of Kentucky. Democrats, save a few mavericks such as Ron Wyden of Oregon, are not unduly troubled, either — even to the extent of permitting seemingly perjured congressional testimony under oath by executive branch officials on the subject of illegal surveillance.

These are not isolated instances of a contradiction; they have been so pervasive that they tend to be disregarded as background noise. During the time in 2011 when political warfare over the debt ceiling was beginning to paralyze the business of governance in Washington, the United States government somehow summoned the resources to overthrow Muammar Ghaddafi’s regime in Libya, and, when the instability created by that coup spilled over into Mali, provide overt and covert assistance to French intervention there. At a time when there was heated debate about continuing meat inspections and civilian air traffic control because of the budget crisis, our government was somehow able to commit $115 million to keeping a civil war going in Syria and to pay at least £100m to the United Kingdom’s Government Communications Headquarters to buy influence over and access to that country’s intelligence. Since 2007, two bridges carrying interstate highways have collapsed due to inadequate maintenance of infrastructure, one killing 13 people. During that same period of time, the government spent $1.7 billion constructing a building in Utah that is the size of 17 football fields. This mammoth structure is intended to allow the National Security Agency to store a yottabyte of information, the largest numerical designator computer scientists have coined. A yottabyte is equal to 500 quintillion pages of text. They need that much storage to archive every single trace of your electronic life.

Yes, there is another government concealed behind the one that is visible at either end of Pennsylvania Avenue, a hybrid entity of public and private institutions ruling the country according to consistent patterns in season and out, connected to, but only intermittently controlled by, the visible state whose leaders we choose. My analysis of this phenomenon is not an exposé of a secret, conspiratorial cabal; the state within a state is hiding mostly in plain sight, and its operators mainly act in the light of day. Nor can this other government be accurately termed an “establishment.” All complex societies have an establishment, a social network committed to its own enrichment and perpetuation. In terms of its scope, financial resources and sheer global reach, the American hybrid state, the Deep State, is in a class by itself. That said, it is neither omniscient nor invincible. The institution is not so much sinister (although it has highly sinister aspects) as it is relentlessly well entrenched. Far from being invincible, its failures, such as those in Iraq, Afghanistan and Libya, are routine enough that it is only the Deep State’s protectiveness towards its higher-ranking personnel that allows them to escape the consequences of their frequent ineptitude. [2]


Category : Capitalism | Democracy | Hegemony | Technology | Terror and Violence | Blog


Senator Joseph McCarthy

Inventing the Egghead: the Battle over Brainpower in American Culture

Author: Aaron Lecklider
University of Pennsylvania Press

Reviewed by Todd Gitlin

Aaron Lecklider, who teaches American studies at the University of Massachusetts, Boston, proposes to stand the last century of American intellectual life on its head, or at least on its side. In keeping with Antonio Gramsci’s project of looking beyond the world views of traditional intellectuals – the ones who get paid to write and talk – he wants to resurrect the working class’s organic intellectuals, the non-professionals who exercise ‘brainpower’ even if they’re not credited for it by snobbish conservateurs who carve out exclusive domains where cultural capital confers privilege upon the best and the brightest. Popular culture, Lecklider writes, has been for the last century ‘a critical site in shaping American ideas about brainpower’ (p. 225).

Intelligence, he argues, is contested domain. The town has as much of it as the gown. This is a clever idea, and Lecklider, frequently original, carries it a considerable distance—sometimes farther than the evidence warrants. His starting – and finishing – point is that the charge of ‘anti-intellectualism’ famously and exhaustively leveled by Richard Hofstadter against American culture is actually self-fulfilling, for Hofstadter and his allies, failing to acknowledge that intellectual life could be conducted by non-professionals, ‘opened historians to attack by ordinary women and men for attempting to preserve an elitist category, creating a cycle of misunderstanding that continues to manifest in contemporary American life’ (p. 222). Hofstadter, from this point of view, ‘bracketed off intellect from the brainpower of ordinary women and men and divorced intelligence from working-class cultural politics’ (p. 222). By implication, it’s no wonder the left has been crammed into the margins of history. But Lecklider has prepared a clever flanking movement. The conflict over who is entitled to be regarded as intelligent may even culminate in a happy ending:

    Reclaiming the history of an organic intellectual tradition in American culture represents a starting point for envisioning intelligence as a shared commodity across social classes; wrested from the hands of the intellectuals, there’s no telling what the brainpower of the people has the potential to accomplish (p. 228).

Lecklider begins his counter-history in the early decades of the 20th century.

Even as managers downgraded ordinary workers, adopting Taylorist methods to ‘transform’ themselves into ‘scientists’ (p. 26), vast numbers of working-class Americans refused to believe that managers and their hired hands held a monopoly on brains and intellectual interests. Institutions including amusement parks, comic books, public lectures, and summer schools cultivated the sort of intelligence that did not need – indeed, might actively resist – the sort of formal education on offer in the decades before 1920, when fewer than one 18–24-year-old in 20 was enrolled in college. Brainpower, Lecklider insists, was the subject of class struggle. Contra Hofstadter – who looms in the shadows as Lecklider’s foil throughout, emerging as an explicit bête noire in the epilogue—America as a whole was not ‘anti-intellectual.’ Rather, at least at the turn of the 20th century, ‘anti-intellectualism coexisted with representations of an intellectually gifted working class’ (p. 8). The history of intelligence in American culture, he argues, is ‘tortuous’, ‘considerably more complicated’ than the straightforward declinist narrative embraced by scholars such as Hofstadter, Lasch, Lewis Coser, C. Wright Mills, Herbert Marcuse and – odd company on this list – Reinhold Niebuhr (p. 224).


Category : Education | Intellectuals | Technology | Working Class | Blog

Gigi Roggero: The Production of Living Knowledge: The Crisis of the University and the Transformation of Labor in Europe and North America

Translated by Enda Brophy,
Temple University Press, Philadelphia, 2011.
194pp., $69.50 HB.
ISBN 9781439905739

Reviewed by Dave Mesing
Marx & Philosophy Review of Books

July 26, 2013 – After the death of neoliberal politics, Gigi Roggero argues, contemporary capitalism finds itself in a state of crisis in which the possibility exists for an autonomous organization of labor against capitalist command. When put this way, Roggero’s argument sounds too utopian for a context in which academic laborers face increasing precariousness, anxiety and pressure, at the same time as a decrease in compensation, influence and control. However, Roggero’s opening salvo that neoliberalism is finished is not a naïve profession of faith in the prospects for the struggle against capital; he is critically attuned to the possibilities and limits of the contemporary conjuncture. In positing the death of neoliberalism at the outset of his study, Roggero does not mean that specific instances of neoliberal politics or its effects no longer exist. Instead, he argues that a fundamental point of analysis necessary for an accurate understanding of the current political situation in both Europe and North America is that neoliberalism is no longer able to constitute itself as a coherent system.

Roggero refers to this situation as a double crisis: both the global economy and the western university are in trouble. For Roggero, crisis is no longer a stage in an economic cycle, but rather the contemporary form of capitalist accumulation, and the university is undergoing a similar crisis which he claims is intimately connected to the economic crisis. This is because Roggero takes his point of departure from the fact that ‘it is impossible to understand the transformations of the university if they are not connected to the transformations of labor and production.’ (3) In order to explore the commonalities between the crisis in capitalism and the crisis in the university, Roggero reads the conflicts within the university in terms of class struggle, power relations and production. He argues that the production and management of knowledge is central to contemporary relations of production, but notes that this thesis does not mean that there is an alternative between intellectual and manual labor, or that manual labor is disappearing.


Category : Marxism | Philosophy | Technology | Blog


Marcuse’s optimism, that the alienating effect of commodification could be overcome, greatly influenced the 1960s counterculture

Herbert Marcuse

‘How was it, Marcuse asked, that the totalizing administered state, which he saw at work in western societies, got away with it?’ Photograph: Associated Press

By Peter Thompson

The Guardian, UK

April 15, 2013 – When the student generation took off in the 1960s across Europe, in Germany at least it was Herbert Marcuse who had the greatest influence. This is because whereas Adorno, with his highly pessimistic philosophical statements about historical development, could talk about a negative progression of humanity from the "slingshot to the megaton bomb", Marcuse continued to maintain a more optimistic view of what could be achieved. Indeed, when 1968 happened, Marcuse said that he was happy to say that all of their theories had been proved completely wrong. Also, Marcuse wrote in a far more accessible way about the ways in which philosophy and politics were intertwined.

Whereas the French structural Marxist philosopher Lois Althusser had been at pains to draw a clear dividing line between early and late Marx, Marcuse maintained that the themes of the early works of Marx, concerned as they were with estrangement and alienation, were carried over and indeed deepened in the later, more economic texts. As he puts it: "if we look more closely at the description of alienated labour [in Marx] we make a remarkable discovery: what is here described is not merely an economic matter. It is the alienation of man, the devaluation of life, the perversion and loss of human reality. In the relevant passage, Marx identifies it as follows: ‘the concept of alienated labour, ie of alienated man, of estranged labour, of estranged life, of estranged man.’"

Marcuse linked economic exploitation and the commodification of human labour with a wider concern about the ways in which generalised commodity production (Marx’s basic description of a capitalist society) was at one and the same time creating a massive surplus of wealth through economic and technological development and an acceleration of the process of reducing humanity down to the level of a mere cog in the machine of that production.

How was it, Marcuse asked, that the totalising administered state, which he saw at work in western societies, got away with it? It did this through what he called "repressive tolerance". This is the theory that in order to control people more effectively it is necessary to give them what they need in material terms as well as to let them have what they think they need in cultural, political and social terms.

Parliamentary democracy, he maintains for example, is merely a sham, a game played out in order to give the impression that people have a say in the way that society works. Behind this facade however, he maintained that the same old powers were still at work and, indeed, that through their tolerance of dissent, debate, apparent cultural and political freedom had managed to refine and increase their exploitation of human labour power without anyone really noticing.

Constitutional liberty and equality was all very well, he argued, but if it simply masked institutionalised inequality then it was worse than useless. As he put it in One-Dimensional Man: "Free election of masters does not abolish the masters or the slaves. Free choice among a wide variety of goods and services does not signify freedom if these goods and services sustain social controls over a life of toil and fear – that is, if they sustain alienation. And the spontaneous reproduction of superimposed needs by the individual does not establish autonomy; it only testifies to the efficacy of the controls."

This instrumentalisation of humanity could only be reversed, Marcuse maintained, by challenging the social processes which had led the governing value system to change from pleasure, joy, play and receptiveness to delayed satisfaction, the restraint of pleasure, work, productiveness and security.

Drawing on Freud, he maintained that this switch from the pleasure principle to the reality principle was stunting human potential just at the point where the objective economic conditions for human liberation had reached their high point. Again, this is where Marxist historical materialism is married up with the dialectic – and he sees the two as inseparable – by pointing out that the switch from the pleasure principle to the reality principle was absolutely necessary for the development of civilisation but that, in the process, the Eros of human fulfilment had to be sublimated.

In this dialectical sense, civilisation is both a negative and a positive step forward. However, the positive civilising process cannot be seen as the end of the dialectic, what Francis Fukuyama later called "the end of history", as long as the dialectic of human liberation was incomplete. As he puts it: "the true positive is the society of the future and therefore beyond definition and determination, while the existing positive is that which must be surmounted."

It is easy to see how this forward-looking and optimistic philosophy could appeal to the political radicalism of the 1960s generation, and how the call for the liberation of humanity as both individual and collective could help to unleash new social movements who no longer had any faith in the ability of the traditional and conservative parties of the left to bring about significant political change in either east or west.

Next week I shall track back to take a look at the work of Walter Benjamin, the lost prophet of the Frankfurt School.

Category : Capitalism | Hegemony | Socialism | Technology | Blog

A Critique of Heinrich in MR on Technology, Value and Crisis

By Keith Joseph

The Kasama Project

Monthly Review published an essay by Michael Heinrich critiquing Marx’s work on the falling rate of profit called:Crisis Theory and the Falling Rate of Profit.  I haven’t seen any response yet.  Here’s mine.

Heirnrich puts forth three basic theses: 1. Marx, at the end of the day, does not present a coherent and final crisis theory.  2. Marx had two more or less distinct economic projects.  The first begins with the Grundrisse (although this text appears to the public last) and includes the three volumes of Das Kapital and the Theories of Surplus Value. This was the project as Marx originally conceived it and announced it in the Preface to A Contribution to the Critique of Political Economy (the six book plan). The second, lesser known, project begins after 1865 and see Marx re-working his earlier formulations in light of new evidence and even scaling down his ambitions.  He now believes he will only be able to complete part of his work and others will have to finish it.  3. The math on the falling rate of profit doesn’t add up.

The essay is very interesting and I am certainly eager to investigate Marx’s “second” project more thoroughly.  Heinrich does a fine job of explaining how Marx conceived the critique of political economy  at various moments and his emphasis on Marx’s willingness to continually question and re-think his findings is important and worthy of emulation.

I found Heinrich’s refutation of the falling rate of profit’s math unconvincing because it is not clear that Heinrich understands the falling rate of profit at the conceptual level.  Setting the rate of profit and the rate of surplus value into mathematical formula  is an important step in the proof of the theory and the formalization of theory can bring clarity but the way that Heinrich proceeds obfuscates more than it reveals.  

Simply put, rising productivity of labor manifests itself in a falling profitability of capital.  It is not clear in Heinrich’s critique that he understands this basic point at the conceptual level.

Rising labor productivity means less labor embedded per unit of output so the commodity bears increasingly less value. Additionally, rising labor productivity destroys existing values since value is determined by socially necessary labor times and rising labor productivity shortens socially necessary labor times. So, existing values must compete in the market with values created under the new conditions of production.  Any labor time above the new socially necessary standard is disappeared in the market as a result of competition.  A falling rate of profit can co-exist, for a time, with a rising mass of profit if the capital relation is reaching new places and markets are expanding.  Heinrich ignores all this.  Now he does mention the importance of the credit system (which is the most developed form of money under capitalism) and its importance to understanding modern crisis.  The credit system is no doubt crucial.

Heinrich’s error, I think, is revealed in the following. Heinrich quotes a famous passage from the Grundrisse and then he argues that it is mistaken. 

“In the so-called “Fragment on Machines,” one finds an outline of a theory of capitalist collapse. With the increasing application of science and technology in the capitalist production process, “the immediate labour performed by man himself” is no longer important, but rather “the appropriation of his own general productive power,” which leads Marx to a sweeping conclusion: “As soon as labour in its immediate form has ceased to be the great source of wealth, labour time ceases and must cease to be its measure, and therefore exchange value [must cease to be the measure] of use value. The surplus labour of the masses has ceased to be the condition for the development of general wealth, just as the non-labour of the few has ceased to be the condition for the development of the general powers of the human head. As a result, production based upon exchange value collapses.”

Heinrich’s then says:

These lines have often been quoted, but without regard for how insufficiently secure the categorical foundations of the Grundrisse are. The distinction between concrete and abstract labor, which Marx refers to in Capital as “crucial to an understanding of political economy,” is not at all present in the Grundrisse.6 And in Capital, “labor in the immediate form” is also not the source of wealth. The sources of material wealth are concrete, useful labor and nature. The social substance of wealth or value in capitalism is abstract labor, whereby it does not matter whether this abstract labor can be traced back to labor-power expended in the process of production, or to the transfer of value of used means of production. If abstract labor remains the substance of value, then it is not clear why labor time can no longer be its intrinsic measure, and it’s not clear why “production based on exchange value” should necessarily collapse. When, for example, Hardt and Negri argue that labor is no longer the measure of value, they do not really refer to the value theory of Capital but to the unclear statements of the Grundrisse.7

Hardt and Negri’s arguments, regardless of what they may assert, are not consistent with the Grundrisse and that they appeal to the authority of the Grundrisse is not a mark against that text.  But that is a minor point.  Heinrich points out that value embedded in a machine (that is the labor time embedded in the machine) is transferred from the machine to the product.  This is correct. 

But when Heinrich says:


Category : Capitalism | Marxism | Technology | Blog

By Atlee McFellin via Common Dreams

In a recent article about success in the sharing economy, Van Jones explained the degree to which sharing, crowdfunding, and other similar concepts are fundamentally transforming the economy as we know it. He turned to examples like Zipcar, Solar Mosaic, AirBnB, and Couchsurfing to show this transformation happening on the ground.

For the few who don’t know, Jones founded Green For All, one of the central organizations within the growing green economy movement. His tremendously poignant article makes one wonder to what extent this sharing economy is similar to the green economy and how are we to understand their relatedness theoretically and organizationally? One could certainly say they have much in common, from the role the above-mentioned firms play in helping protect the environment by crowdfunding solar panels or reducing people’s need to own their own car.

It’s one thing to see what ideas or outcomes they have in common. For the broader purposes of looking towards our collective potential to fundamentally transform the economy, it’s also important to look at how they relate to one another organizationally. This two-part series attempts to do just that. The first part looks at the green economy movement theoretically and organizationally, while the second part looks at the sharing economy, solidarity economy, and new economy to make the case for a New Economy Coalition acting to unite them all.Credit: New Economy Institute

Even though the green economy has been growing in the U.S. for decades, its birth into mainstream social consciousness very much began with the push for a Green New Deal as an immediate solution to a collapsing economy in late 2008. We saw the potential for job creation through public investment with the Green Jobs Act prior to the collapse and the subsequent American Recovery and Reinvestment Act. (1)  The hope behind the push for a Green New Deal is based upon FDR’s New Deal legislation in the 1930s and the works of economist John Maynard Keynes. The focus is a massive reinvestment by the government into the economy. With a Green New Deal that investment would be focused on renewable energy, energy efficiency, public transportation, improvements to the electrical grid, and other carbon-reducing strategies for job creation.

Category : Capitalism | Ecology | Technology | Blog

The AP’s High-Impact Three-Part Series on Joblessness and Stalled Recovery

Middle-Class Jobs Cut in Recession Feared Gone for Good, Lost to Technology

By Associated Press

NEW YORK, Jan 25 2013 — Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.

And the situation is even worse than it appears.

Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries, and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.

They’re being obliterated by technology.

Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.

“The jobs that are going away aren’t coming back,” says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of “Race Against the Machine.” ‘’I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years.”

The global economy is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they’re on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories, from secretaries to travel agents, are starting to disappear.

“There’s no sector of the economy that’s going to get a pass,” says Martin Ford, who runs a software company and wrote “The Lights in the Tunnel,” a book predicting widespread job losses. “It’s everywhere.”

The numbers startle even labor economists. In the United States, half the 7.5 million jobs lost during the Great Recession were in industries that pay middle-class wages, ranging from $38,000 to $68,000. But only 2 percent of the 3.5 million jobs gained since the recession ended in June 2009 are in midpay industries. Nearly 70 percent are in low-pay industries, 29 percent in industries that pay well.


Category : Capitalism | Technology | Working Class | Blog