Stacy Czyzewski checks a machine that can manufacture complex aerospace components at Pioneer Service Inc. in Addison, Ill. Photographs by David Kasnic for The Wall Street Journal

THE NEW LEFT’S ‘NEW WORKING CLASS THEORY’ FROM 1968 HAS FINALLY SHOWN UP. Within three years, U.S. manufacturing workers with college degrees will outnumber those without

By Austen Hufford
Wall Street Journal

Dec. 9, 2019 – College-educated workers are taking over the American factory floor.

New manufacturing jobs that require more advanced skills are driving up the education level of factory workers who in past generations could get by without higher education, an analysis of federal data by The Wall Street Journal found.

Within the next three years, American manufacturers are, for the first time, on track to employ more college graduates than workers with a high-school education or less, part of a shift toward automation that has increased factory output, opened the door to more women and reduced prospects for lower-skilled workers.

“You used to do stuff by hand,” said Erik Hurst, an economics professor at the University of Chicago. “Now, we need workers who can manage the machines.”

U.S. manufacturers have added more than a million jobs since the recession, with the growth going to men and women with degrees, the Journal analysis found. Over the same time, manufacturers employed fewer people with at most a high-school diploma.

Employment in manufacturing jobs that require the most complex problem-solving skills, such as industrial engineers, grew 10% between 2012 and 2018; jobs requiring the least declined 3%, the Journal analysis found.

At Pioneer Service Inc., a machine shop in the Chicago suburb of Addison, Ill., employees in polo shirts and jeans, some with advanced degrees, code commands for robots making complex aerospace components on a hushed factory floor.

The Factory floor at Pioneer Service Inc.

That is a far cry from work at Pioneer in the 1990s, when employees had to wear company uniforms to shield their clothes from the grease flying off the 1960s-era manual machines used to make parts for heating-and-cooling systems. Pioneer employs 40 people, the same number in 2012. Only a handful of them are from the time when simple metal parts were machined by hand.

“Now, it’s more tech,” said Aneesa Muthana, Pioneer’s president and co-owner. “There has to be more skill.”

How can U.S. manufacturing workers be saved from the spread of robots? Join the conversation below.

Pioneer, which makes parts for Tesla vehicles and other luxury cars, had its highest revenue last year, Ms. Muthana said. The company’s success mirrors that of other manufacturers that survived the financial crisis.

Improvements in manufacturing have made American factories more productive than ever and, despite recent job growth, require a third fewer workers than the nearly 20 million employed in 1979, the industry’s labor peak.

Manufacturers added 56,000 jobs this year compared with 244,000 jobs through this time last year. Automation and competition from lower-wage countries have contributed to declining U.S. manufacturing jobs.

Specialized job requirements have narrowed the path to the middle class that factory work once afforded. The new, more advanced manufacturing jobs pay more but don’t help workers who stopped schooling early. More than 40% of manufacturing workers have a college degree, up from 22% in 1991.

“The workers that remain do much more cognitively demanding jobs,” said David Autor, an economics professor at MIT.

Looking ahead, investments in automation will continue to expand factory production with relatively fewer employees. Jobs that remain are expected to be increasingly filled by workers from colleges and technical schools, leaving high-school graduates and dropouts with fewer opportunities. Manufacturing workers laid-off in years past also will see fewer suitable openings.

“It’s just not the case that bringing back manufacturing will be good for low-and-middle-skill workers,” said Mr. Hurst, who along with colleagues have studied the increasing demands of factory workers.

Robot wranglers

Advantage Conveyor Inc. in Raleigh, N.C., spent more than $2 million over the past decade on machines that cut and bend metal and plastics for the conveyor belts it builds. New machines allow technicians to make more parts per worker compared with the era when employees fashioned parts by hand.

Some of the workers were reassigned; others were laid off. “All of that menial labor moved to skilled labor,” said Vann Webb, company president. “You virtually have to have a two-year degree to work in our shop.”

Joshua Dallons, 28 years old, had hoped to become a nuclear engineer, but juggling college classes and a 30-hour-a-week grocery job was too much.

“I had that crisis,” Mr. Dallons said. “Do I want to keep pursuing engineering, or do I want to pursue this sort of job where I can quickly get into the field and quickly start making money?”

He decided to complete a training program in welding and was hired by Advantage in 2014. Mr. Dallons now works at a computer, designing conveyor layouts. He makes more than $25 an hour.

Large manufacturers also are tilting their workforce toward higher skilled, educated employees. Around 70% of new hires this year at Honeywell International Inc. ’s aerospace business have at least an associate degree, said Darren Kosel, a Honeywell plant manager.

The company isn’t a place for factory workers who want to just punch in and punch out every day, Mr. Kosel said: “If you want to be one of those people, you won’t be successful here.”

At a Caterpillar Inc. plant in Clayton, N.C., investments in technology help a single shift of workers produce the small-wheel loaders that four years ago would have taken two shifts.

The Harley-Davidson Inc. ’s engine plant in Milwaukee has robotic arms to ferry motorcycle pieces, taking over the tough, repetitive work formerly done by employees, said plant manager Chuck Statz. The machines have made the workplace safer, he said, mirroring a national trend. In 2018, factory workers were hurt at half the rate as in 2003.

Harley-Davidson employed 2,200 unionized manufacturing workers in 2018, 400 fewer than in 2014, which the company attributed to several factors. Caterpillar reported that it had 10,000 unionized workers at the end of 2018, down from 15,000 in 2007 During the same period, the equipment maker’s revenue climbed 20%.

A recent search of all Caterpillar’s U.S. job posts show that more than four in five require or prefer a college degree. A majority of the company’s production jobs called for a degree or specialized skill.

High risk
Ms. Muthana faced a hard choice in 2012: whether to invest millions of dollars in automated manufacturing and training, or to retire and close Pioneer, the company her uncle started 30 years ago.

In the old days, the factory’s oil-sputtering machines were adjusted by two dozen workers wielding foot-long wrenches. At the end of their shifts, they were covered in grease and metal shavings.

Pioneer’s biggest clients, makers of heating and cooling systems, switched to cheaper foreign suppliers. Business fell 90% in one year. And the company owed more to suppliers than its outstanding orders could cover.

Ms. Muthana sat in the company parking lot on October 15, 2012, looking at the cars of her employees. “If I closed my doors, where were they going to go?” she recalled thinking.

Rather than close the plant, she hired Pioneer’s first salespeople. They found vehicle makers that needed complex metal components that Pioneer could make more profitably than the parts for heaters and air conditioners.

The problem was that Pioneer’s old machinery couldn’t make the parts fast enough. So Ms. Muthana sought machines that could be programmed to precisely cut and drill the intricate parts in a single operation.

Labor Lag
U.S. manufacturers have shifted investmentfrom labor to capital more quickly than thebroader economy.

Pioneer had little experience with such advanced equipment, Ms. Muthana said, but she persuaded suppliers to help her install and set up the machines, as well as train employees to use them.

“We put a lot of money on her floor at one time with minimal guarantees that we were going to get that money back,” said Dave Polito, owner of her main machine supplier. Ms. Muthana said she has now spent more than $6 million on new technology, largely for machines and software.

The machines can make one complex part every six minutes, compared with 45 minutes of work on multiple machines once needed to produce a single part. Learning how wasn’t easy for longtime Pioneer employees.

Fernando Delatorre, who operated the older machines at Pioneer for 14 years, struggled to memorize the codes used to program the new machines.

“I wasn’t into computer things, learning all these numbers,” said Mr. Delatorre. He earned $16.50 an hour when he left Pioneer in 2017 for a construction job that paid more.

For Ms. Muthana, losing or firing longtime employees was the toughest part of her factory’s transition. About 10 of the company’s 40 workers remained. Just one of them operates a special grinder that hasn’t been computerized.

“I saved those jobs, and I gave them the opportunity,” she said, “but then most of the team is no longer here anyway.”

On a recent morning, Pioneer workers inspected parts that the automated equipment had made on their own overnight. They took digital measurements to make sure the parts matched customer specifications. A screen overhead detailed how efficiently each machine was operating.

A yellow light on one machine caught the eye of technician Stacy Czyzewski. A cutting tool was due to be replaced. She opened the machine’s enclosure, which seals in the oil and metal scraps. Using a small Allen wrench, she popped out the worn part and replaced it.

She punched codes on the machine’s keypad from memory and marked the repair on her iPad. Ms. Czyzewski wiped her hands on a towel. Her black polo shirt, emblazoned with Pioneer’s logo, was spotless.

Ms. Czyzewski had previously worked five years cleaning equipment at an Altria Group Inc. chewing tobacco plant. When it closed in 2017, a grant helped Ms. Czyzewski pay for a four-month training program where she learned to operate the machines used at Pioneer.

In a room at the center of the Pioneer factory, Rachith Thipperi converts customer orders into 3-D blueprints that are used to program machines. He started work at Pioneer as an intern while studying for a master’s degree in mechanical engineering at the University of Illinois at Chicago. Mr. Thipperi saw a future in the modern American factory.

Rachith Thipperi, an engineer, creates 3-D blueprints to program machines that manufacture customer orders at Pioneer Service Inc.

“There are people who are stuck in old manufacturing,” he said, “but there is also this innovative and growth aspect of it.”

Production workers at Pioneer start at $14 an hour and rise to $27 an hour with experience. Before investing in modern machinery, worker pay started near minimum wage, which was $8.25 an hour around the time the company was transforming in 2010.

Inspirational inscriptions decorate the walls of the Pioneer factory. “The most dangerous words are we’ve always done it that way,” one said. The boss has lunch with her 40 employees each quarter. Half are women.

Ms. Muthana attends college career fairs to find workers with skills and a desire to learn. “I’m willing to give you the opportunities,” she said. “But if you’re not willing to change, and you’re not willing to get out of your comfort zone, there’s nothing I can do.”

Write to Austen Hufford at austen.hufford@wsj.com

By Christopher Alessi

MarketWatch.com

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.

At the center’s pilot smart factory in Kaiserslautern, chemicals giant BASF SE produced fully customized shampoos and liquid soaps. As a test order was placed online, radio identification tags attached to empty soap bottles on an assembly line simultaneously communicated to production machines what kind of soap, fragrance, bottle cap color, and labeling it required. Each bottle had the potential to be entirely different from the one next to it on the conveyor belt.

The experiment relied on a wireless network through which the machines and products did all the talking, with the only human input coming from the person placing the sample order.

Siemens’s Amberg facility shows what is possible in an operational factory at this point. The plant, which builds automated machines for the factories of German industrial companies like BASF, Bayer AG, Daimler AG and BMW AG–and many of their rivals abroad–has been digitizing gradually for 25 years. Today it is about 75% on autopilot, with 1,150 employees mostly operating computers and monitoring the production process.

Designing a self-operating intelligent manufacturing system over an Internet network could still be a decade away. "We have the building blocks," said Siemens board member Siegfried Russwurm.

Besides Amberg, other German factories on the road to intelligent manufacturing include one operated by electronic motors producer Wittenstein AG, and Robert Bosch GmbH’s nascent adaptive assembly line for hydraulic equipment, set to be operational in Homburg this fall.

Germany’s foray into the industrial Internet comes amid widespread unease here about U.S. domination of the Internet. Google currently handles 95% of all German Internet searches, according to online statistics portal Statista, and its pervasiveness could pose a challenge for German industrial companies trying to harness the Internet to adopt a more service-oriented business model.

Günther Schuh, a member of the National Academy of Science and Engineering, which helped launch Industrie 4.0, said he has noted "genuine concern in German industry about the monopoly position of companies like Amazon or Google" because they control the interface between consumers and companies.

Google could potentially use its dominant position as a search engine to push its own products and services, while expanding beyond simply providing email, word processing and cloud computing software. For example, the tech company is in the early stages of producing technology for a self-driving car.

Amazon hasn’t just stuck to online retailing, but has moved into consumer electronics with its tablet device Kindle Fire and its Fire Phone smartphone.

German Chancellor Angela Merkel has warned that German companies need to do more to stay competitive in the digital economy, while German economics minister Sigmar Gabriel sees dangers in allowing American companies like Google to dominate the so-called Internet data business.

"The big data necessary for Industrie 4.0 to work isn’t being collected by German companies, but by four big firms in Silicon Valley. That’s our worry," Mr. Gabriel said at a public debate with Google Chairman Eric Schmidt earlier this month.

German executives appear less worried.

Peter Herweck, chief executive of Siemens’s division handling motorized equipment, said he doesn’t see Google’s Internet dominance as a threat to Siemens’s digital-manufacturing efforts. "Maybe they can become a partner," he said, by someday helping engineers find tools or parts needing repair inside factories.

"When it comes to the connected world, one needs more than just software" for smart manufacturing, said Werner Struth, a Bosch board member. "One needs products one can touch."

German companies have been at the cutting edge of production technology for years–and now they are getting government help to stay on top.

Industrie 4.0 is the kind of public-private program Germany does well. The government doesn’t pick winners through subsidies, but is giving EUR200 million ($253 million) for research to create new technologies and networking opportunities for companies to develop common standards–harnessing a vast system of public research institutes that help companies carry out research and development.

In the U.S., the Obama administration is trying to emulate that research network, having earmarked over $2.2 billion in 2013 for a nationwide manufacturing initiative.

Concurrently, U.S. industrial and tech giants including General Electric Co., AT&T Inc., Cisco Systems Inc., Intel Corp., and International Business Machines Corp. have joined forces in March to create the Industrial Internet Consortium. Like Industrie 4.0, the nonprofit consortium seeks to create a framework for companies and university researchers to establish standards and best practices for industrial applications of the Internet.

Write to Christopher Alessi at christopher.alessi@wsj.com and Chase Gummer at Chase.Gummer@wsj.com

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
SolidarityEconony.net 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.

This was followed by a crippling global recession in last ten years — from which we are only now just barely beginning to recover — that has created such a mass reluctance to spend and a devaluation of goods and services on a global scale.

FOSS may have had other (some say worthy) objectives, but the primary reason why it has been adopted above all else is that for many small startups, it was a cost elimination factor.

While the use of FOSS is not a panacea for cost reduction in every circumstance (in many situations the total cost of ownership is actually higher) the fact that Free and Open Source software is free to use still remains its primary selling point.

The movement towards Software Patent and Patent reform overall is also a product of the Free and Open Source Software movement, out of a desire not to pay licensing fees and royalties.

Next, Cloud Computing

Cloud Computing, particularly when combined with Open Source, takes anti-spendism to the next logical conclusion, which is the desire not to own or spend money on physical infrastructure.

Why buy servers, storage, networking equipment, or even applications, when it can be consumed in incremental, miserly fashion?

Yes, there are other drivers behind Cloud, from both an enterprise standpoint that include self-service, rapid provisioning and service automation, as well as from a consumer standpoint of having access to all of your data from all of your devices.

The only difference is we are now replacing cheap humans with even cheaper software automation.

But ultimately, Cloud is driven by a desire to reduce cost, and the price of Cloud Computing, be it IaaS, PaaS or consumer or enterprise-focused SaaS, is now driven by what seems like a race to the bottom by the respective public cloud vendors.

The industry’s transition to Cloud also represents anti-spendism in the form of the devaluation of the skilled labor that runs data centers and IT support infrastructure. Prior to Cloud, we saw beginnings of that with strategic/offshore outsourcing.

The only difference is we are now replacing cheap humans with even cheaper software automation.

Bitcoin: Here’s another anti-spendism poster child. Why trade goods and services of tangible value when instead, you can make money out of effectively nothing (CPU/GPU cycles) — thus buying goods and services for free?

It could be argued whether Bitcoin and other cryptocurrencies have staying power or will ever be truly embraced by mainstream society; and again, there are other reasons for Bitcoin’s existence. But the main value proposition is independence from the global financial system and pointing the middle finger at big banking and government currencies.

3D Printing, like Bitcoin, is another disruptive anti-spendism tech. While it is true that — in the case of both of these technologies — there is an initial seed investment (PC with GPU card, 3D Printer) as well as a cost of supplies (electricity, plastic polymer), the perceived value of what is produced far exceeds the initial seed cost and the recurring costs.

Additionally, as technology improves and the “means of production” become cheaper and more efficient, Bitcoin and 3D printing further devalue the goods and services industries they disrupt. Why buy from someone else when you can print it? Why use real money when you can create it out of thin air on your computer?

Post-PC, another example of anti-spendism tech

Post-PC is another good example of anti-spendism tech. Because of the tablet and ARM-based processor technology — using heavily consolidated, reduced bills of materials in overall components — we all know what we think computing devices should cost: $500 or less for a full-sized tablet, $200 or less for a small one. And we expect smartphones to cost $200 or less on a subsidized basis.

It would be easy to blame the Post-PC device manufacturers such as Apple, FoxConn, Samsung and Amazon for that, but ultimately consumers drive this trend.

My favorite anti-spendism tech lately is cord-cutting, or the practice of giving the middle finger to your cable TV company. Cord cutting combines a cocktail of cloud services, streaming devices and residential broadband to deliver your video content, so that you pay as little for your TV service as possible.

It’s easy to get angry at the cable companies because the perceived value of what they are offering is far, far lower than what many people are willing to pay for it, particularly if you do the math on your own and realize what you could get by buying things from streaming services piecemeal rather than by paying a big monthly cable bill.

And if it is any indication, cable TV providers are probably some of the most universally hated companies on the planet because of their awful service. So get used to cord cutting. It’s a thing, and it’s gonna be big.

Hence, the proliferation of those that seek the path of the Netflixes, the iTunes, the Amazon Instant Videos, the Hulu+, the Redboxes and the TiVos with the Over-the-Air antennae. I myself have become a recent convert.

And oh yes, the Aereos. I should probably include Skype, Google Hangouts, OOMA and other VOIP services as well. All products of anti-spendism.

The future of anti-spendism

Electric Vehicles and alternative energy sources are probably the the next wave in anti-spendism, although these aren’t perfected, mass-consumption technologies yet and they aren’t necessarily more affordable right now.

Those who embrace them are inclined to do so for ideological reasons of being green, not so much for overall cost concerns, although for some it is a side benefit.

However, as with other emerging technologies like 3D printing and cryptocurrency, it may be less than ten years before there is a huge backlash against how much money people are willing to pay for automobile fuel, if we assume the price of oil is going to continue to rise.

If the cost of electrical vehicles can be brought down closer to conventional combustion vehicle prices, and ultimately, the cost of recurring electrical charges over the life of the vehicle as well as maintenance is also proven to be significantly lower than their conventional counterparts, then we have an anti-spend disruptor in the making.

Has disruptive technology ultimately devalued goods and services in the last ten years? Talk Back and Let Me Know.

About Jason Perlow

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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

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

By Mike Lofgren

Billmoyers.com

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]

How did I come to write an analysis of the Deep State, and why am I equipped to write it? As a congressional staff member for 28 years specializing in national security and possessing a top secret security clearance, I was at least on the fringes of the world I am describing, if neither totally in it by virtue of full membership nor of it by psychological disposition. But, like virtually every employed person, I became, to some extent, assimilated into the culture of the institution I worked for, and only by slow degrees, starting before the invasion of Iraq, did I begin fundamentally to question the reasons of state that motivate the people who are, to quote George W. Bush, “the deciders.”

Cultural assimilation is partly a matter of what psychologist Irving L. Janis called “groupthink,” the chameleon-like ability of people to adopt the views of their superiors and peers. This syndrome is endemic to Washington: The town is characterized by sudden fads, be it negotiating biennial budgeting, making grand bargains or invading countries. Then, after a while, all the town’s cool kids drop those ideas as if they were radioactive. As in the military, everybody has to get on board with the mission, and questioning it is not a career-enhancing move. The universe of people who will critically examine the goings-on at the institutions they work for is always going to be a small one. As Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

A more elusive aspect of cultural assimilation is the sheer dead weight of the ordinariness of it all once you have planted yourself in your office chair for the 10,000th time. Government life is typically not some vignette from an Allen Drury novel about intrigue under the Capitol dome. Sitting and staring at the clock on the off-white office wall when it’s 11:00 in the evening and you are vowing never, ever to eat another piece of takeout pizza in your life is not an experience that summons the higher literary instincts of a would-be memoirist. After a while, a functionary of the state begins to hear things that, in another context, would be quite remarkable, or at least noteworthy, and yet that simply bounce off one’s consciousness like pebbles off steel plate: “You mean the number of terrorist groups we are fighting is classified?” No wonder so few people are whistle-blowers, quite apart from the vicious retaliation whistle-blowing often provokes: Unless one is blessed with imagination and a fine sense of irony, growing immune to the curiousness of one’s surroundings is easy. To paraphrase the inimitable Donald Rumsfeld, I didn’t know all that I knew, at least until I had had a couple of years away from the government to reflect upon it.

The Deep State does not consist of the entire government. It is a hybrid of national security and law enforcement agencies: the Department of Defense, the Department of State, the Department of Homeland Security, the Central Intelligence Agency and the Justice Department. I also include the Department of the Treasury because of its jurisdiction over financial flows, its enforcement of international sanctions and its organic symbiosis with Wall Street. All these agencies are coordinated by the Executive Office of the President via the National Security Council. Certain key areas of the judiciary belong to the Deep State, such as the Foreign Intelligence Surveillance Court, whose actions are mysterious even to most members of Congress. Also included are a handful of vital federal trial courts, such as the Eastern District of Virginia and the Southern District of Manhattan, where sensitive proceedings in national security cases are conducted. The final government component (and possibly last in precedence among the formal branches of government established by the Constitution) is a kind of rump Congress consisting of the congressional leadership and some (but not all) of the members of the defense and intelligence committees. The rest of Congress, normally so fractious and partisan, is mostly only intermittently aware of the Deep State and when required usually submits to a few well-chosen words from the State’s emissaries.

I saw this submissiveness on many occasions. One memorable incident was passage of the Foreign Intelligence Surveillance Amendments Act of 2008. This legislation retroactively legalized the Bush administration’s illegal and unconstitutional surveillance first revealed by The New York Times in 2005 and indemnified the telecommunications companies for their cooperation in these acts. The bill passed easily: All that was required was the invocation of the word “terrorism” and most members of Congress responded like iron filings obeying a magnet. One who responded in that fashion was Senator Barack Obama, soon to be coronated as the presidential nominee at the Democratic National Convention in Denver. He had already won the most delegates by campaigning to the left of his main opponent, Hillary Clinton, on the excesses of the global war on terror and the erosion of constitutional liberties.

As the indemnification vote showed, the Deep State does not consist only of government agencies. What is euphemistically called “private enterprise” is an integral part of its operations. In a special series in The Washington Post called “Top Secret America,” Dana Priest and William K. Arkin described the scope of the privatized Deep State and the degree to which it has metastasized after the September 11 attacks. There are now 854,000 contract personnel with top-secret clearances — a number greater than that of top-secret-cleared civilian employees of the government. While they work throughout the country and the world, their heavy concentration in and around the Washington suburbs is unmistakable: Since 9/11, 33 facilities for top-secret intelligence have been built or are under construction. Combined, they occupy the floor space of almost three Pentagons — about 17 million square feet. Seventy percent of the intelligence community’s budget goes to paying contracts. And the membrane between government and industry is highly permeable: The Director of National Intelligence, James R. Clapper, is a former executive of Booz Allen Hamilton, one of the government’s largest intelligence contractors. His predecessor as director, Admiral Mike McConnell, is the current vice chairman of the same company; Booz Allen is 99 percent dependent on government business. These contractors now set the political and social tone of Washington, just as they are increasingly setting the direction of the country, but they are doing it quietly, their doings unrecorded in the Congressional Record or the Federal Register, and are rarely subject to congressional hearings.

Washington is the most important node of the Deep State that has taken over America, but it is not the only one. Invisible threads of money and ambition connect the town to other nodes. One is Wall Street, which supplies the cash that keeps the political machine quiescent and operating as a diversionary marionette theater. Should the politicians forget their lines and threaten the status quo, Wall Street floods the town with cash and lawyers to help the hired hands remember their own best interests. The executives of the financial giants even have de facto criminal immunity. On March 6, 2013, testifying before the Senate Judiciary Committee, Attorney General Eric Holder stated the following: “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.” This, from the chief law enforcement officer of a justice system that has practically abolished the constitutional right to trial for poorer defendants charged with certain crimes. It is not too much to say that Wall Street may be the ultimate owner of the Deep State and its strategies, if for no other reason than that it has the money to reward government operatives with a second career that is lucrative beyond the dreams of avarice — certainly beyond the dreams of a salaried government employee. [3]

The corridor between Manhattan and Washington is a well trodden highway for the personalities we have all gotten to know in the period since the massive deregulation of Wall Street: Robert Rubin, Lawrence Summers, Henry Paulson, Timothy Geithner and many others. Not all the traffic involves persons connected with the purely financial operations of the government: In 2013, General David Petraeus joined KKR (formerly Kohlberg Kravis Roberts) of 9 West 57th Street, New York, a private equity firm with $62.3 billion in assets. KKR specializes in management buyouts and leveraged finance. General Petraeus’ expertise in these areas is unclear. His ability to peddle influence, however, is a known and valued commodity. Unlike Cincinnatus, the military commanders of the Deep State do not take up the plow once they lay down the sword. Petraeus also obtained a sinecure as a non-resident senior fellow at the Belfer Center for Science and International Affairs at Harvard. The Ivy League is, of course, the preferred bleaching tub and charm school of the American oligarchy. [4]

Petraeus and most of the avatars of the Deep State — the White House advisers who urged Obama not to impose compensation limits on Wall Street CEOs, the contractor-connected think tank experts who besought us to “stay the course” in Iraq, the economic gurus who perpetually demonstrate that globalization and deregulation are a blessing that makes us all better off in the long run — are careful to pretend that they have no ideology. Their preferred pose is that of the politically neutral technocrat offering well considered advice based on profound expertise. That is nonsense. They are deeply dyed in the hue of the official ideology of the governing class, an ideology that is neither specifically Democrat nor Republican. Domestically, whatever they might privately believe about essentially diversionary social issues such as abortion or gay marriage, they almost invariably believe in the “Washington Consensus”: financialization, outsourcing, privatization, deregulation and the commodifying of labor. Internationally, they espouse 21st-century “American Exceptionalism”: the right and duty of the United States to meddle in every region of the world with coercive diplomacy and boots on the ground and to ignore painfully won international norms of civilized behavior. To paraphrase what Sir John Harrington said more than 400 years ago about treason, now that the ideology of the Deep State has prospered, none dare call it ideology. [5] That is why describing torture with the word “torture” on broadcast television is treated less as political heresy than as an inexcusable lapse of Washington etiquette: Like smoking a cigarette on camera, these days it is simply “not done.”

After Edward Snowden’s revelations about the extent and depth of surveillance by the National Security Agency, it has become publicly evident that Silicon Valley is a vital node of the Deep State as well. Unlike military and intelligence contractors, Silicon Valley overwhelmingly sells to the private market, but its business is so important to the government that a strange relationship has emerged. While the government could simply dragoon the high technology companies to do the NSA’s bidding, it would prefer cooperation with so important an engine of the nation’s economy, perhaps with an implied quid pro quo. Perhaps this explains the extraordinary indulgence the government shows the Valley in intellectual property matters. If an American “jailbreaks” his smartphone (i.e., modifies it so that it can use a service provider other than the one dictated by the manufacturer), he could receive a fine of up to $500,000 and several years in prison; so much for a citizen’s vaunted property rights to what he purchases. The libertarian pose of the Silicon Valley moguls, so carefully cultivated in their public relations, has always been a sham. Silicon Valley has long been tracking for commercial purposes the activities of every person who uses an electronic device, so it is hardly surprising that the Deep State should emulate the Valley and do the same for its own purposes. Nor is it surprising that it should conscript the Valley’s assistance.

Still, despite the essential roles of lower Manhattan and Silicon Valley, the center of gravity of the Deep State is firmly situated in and around the Beltway. The Deep State’s physical expansion and consolidation around the Beltway would seem to make a mockery of the frequent pronouncement that governance in Washington is dysfunctional and broken. That the secret and unaccountable Deep State floats freely above the gridlock between both ends of Pennsylvania Avenue is the paradox of American government in the 21st century: drone strikes, data mining, secret prisons and Panopticon-like control on the one hand; and on the other, the ordinary, visible parliamentary institutions of self-government declining to the status of a banana republic amid the gradual collapse of public infrastructure.

The results of this contradiction are not abstract, as a tour of the rotting, decaying, bankrupt cities of the American Midwest will attest. It is not even confined to those parts of the country left behind by a Washington Consensus that decreed the financialization and deindustrialization of the economy in the interests of efficiency and shareholder value. This paradox is evident even within the Beltway itself, the richest metropolitan area in the nation. Although demographers and urban researchers invariably count Washington as a “world city,” that is not always evident to those who live there. Virtually every time there is a severe summer thunderstorm, tens — or even hundreds — of thousands of residents lose power, often for many days. There are occasional water restrictions over wide areas because water mains, poorly constructed and inadequately maintained, have burst. [6] The Washington metropolitan area considers it a Herculean task just to build a rail link to its international airport — with luck it may be completed by 2018.

It is as if Hadrian’s Wall was still fully manned and the fortifications along the border with Germania were never stronger, even as the city of Rome disintegrates from within and the life-sustaining aqueducts leading down from the hills begin to crumble. The governing classes of the Deep State may continue to deceive themselves with their dreams of Zeus-like omnipotence, but others do not. A 2013 Pew Poll that interviewed 38,000 people around the world found that in 23 of 39 countries surveyed, a plurality of respondents said they believed China already had or would in the future replace the United States as the world’s top economic power.

The Deep State is the big story of our time. It is the red thread that runs through the war on terrorism, the financialization and deindustrialization of the American economy, the rise of a plutocratic social structure and political dysfunction. Washington is the headquarters of the Deep State, and its time in the sun as a rival to Rome, Constantinople or London may be term-limited by its overweening sense of self-importance and its habit, as Winwood Reade said of Rome, to “live upon its principal till ruin stared it in the face.” “Living upon its principal,” in this case, means that the Deep State has been extracting value from the American people in vampire-like fashion.

We are faced with two disagreeable implications. First, that the Deep State is so heavily entrenched, so well protected by surveillance, firepower, money and its ability to co-opt resistance that it is almost impervious to change. Second, that just as in so many previous empires, the Deep State is populated with those whose instinctive reaction to the failure of their policies is to double down on those very policies in the future. Iraq was a failure briefly camouflaged by the wholly propagandistic success of the so-called surge; this legerdemain allowed for the surge in Afghanistan, which equally came to naught. Undeterred by that failure, the functionaries of the Deep State plunged into Libya; the smoking rubble of the Benghazi consulate, rather than discouraging further misadventure, seemed merely to incite the itch to bomb Syria. Will the Deep State ride on the back of the American people from failure to failure until the country itself, despite its huge reserves of human and material capital, is slowly exhausted? The dusty road of empire is strewn with the bones of former great powers that exhausted themselves in like manner.

But, there are signs of resistance to the Deep State and its demands. In the aftermath of the Snowden revelations, the House narrowly failed to pass an amendment that would have defunded the NSA’s warrantless collection of data from US persons. Shortly thereafter, the president, advocating yet another military intervention in the Middle East, this time in Syria, met with such overwhelming congressional skepticism that he changed the subject by grasping at a diplomatic lifeline thrown to him by Vladimir Putin. [7]

Has the visible, constitutional state, the one envisaged by Madison and the other Founders, finally begun to reassert itself against the claims and usurpations of the Deep State? To some extent, perhaps. The unfolding revelations of the scope of the NSA’s warrantless surveillance have become so egregious that even institutional apologists such as Senator Dianne Feinstein have begun to backpedal — if only rhetorically — from their knee-jerk defense of the agency. As more people begin to waken from the fearful and suggestible state that 9/11 created in their minds, it is possible that the Deep State’s decade-old tactic of crying “terrorism!” every time it faces resistance is no longer eliciting the same Pavlovian response of meek obedience. And the American people, possibly even their legislators, are growing tired of endless quagmires in the Middle East.

But there is another more structural reason the Deep State may have peaked in the extent of its dominance. While it seems to float above the constitutional state, its essentially parasitic, extractive nature means that it is still tethered to the formal proceedings of governance. The Deep State thrives when there is tolerable functionality in the day-to-day operations of the federal government. As long as appropriations bills get passed on time, promotion lists get confirmed, black (i.e., secret) budgets get rubber-stamped, special tax subsidies for certain corporations are approved without controversy, as long as too many awkward questions are not asked, the gears of the hybrid state will mesh noiselessly. But when one house of Congress is taken over by tea party Wahhabites, life for the ruling class becomes more trying.

If there is anything the Deep State requires it is silent, uninterrupted cash flow and the confidence that things will go on as they have in the past. It is even willing to tolerate a degree of gridlock: Partisan mud wrestling over cultural issues may be a useful distraction from its agenda. But recent congressional antics involving sequestration, the government shutdown and the threat of default over the debt ceiling extension have been disrupting that equilibrium. And an extreme gridlock dynamic has developed between the two parties such that continuing some level of sequestration is politically the least bad option for both parties, albeit for different reasons. As much as many Republicans might want to give budget relief to the organs of national security, they cannot fully reverse sequestration without the Democrats demanding revenue increases. And Democrats wanting to spend more on domestic discretionary programs cannot void sequestration on either domestic or defense programs without Republicans insisting on entitlement cuts.

So, for the foreseeable future, the Deep State must restrain its appetite for taxpayer dollars. Limited deals may soften sequestration, but agency requests will not likely be fully funded anytime soon. Even Wall Street’s rentier operations have been affected: After helping finance the tea party to advance its own plutocratic ambitions, America’s Big Money is now regretting the Frankenstein’s monster it has created. Like children playing with dynamite, the tea party and its compulsion to drive the nation into credit default has alarmed the grown-ups commanding the heights of capital; the latter are now telling the politicians they thought they had hired to knock it off.

The House vote to defund the NSA’s illegal surveillance programs was equally illustrative of the disruptive nature of the tea party insurgency. Civil liberties Democrats alone would never have come so close to victory; tea party stalwart Justin Amash (R-MI), who has also upset the business community for his debt-limit fundamentalism, was the lead Republican sponsor of the NSA amendment, and most of the Republicans who voted with him were aligned with the tea party.

The final factor is Silicon Valley. Owing to secrecy and obfuscation, it is hard to know how much of the NSA’s relationship with the Valley is based on voluntary cooperation, how much is legal compulsion through FISA warrants and how much is a matter of the NSA surreptitiously breaking into technology companies’ systems. Given the Valley’s public relations requirement to mollify its customers who have privacy concerns, it is difficult to take the tech firms’ libertarian protestations about government compromise of their systems at face value, especially since they engage in similar activity against their own customers for commercial purposes. That said, evidence is accumulating that Silicon Valley is losing billions in overseas business from companies, individuals and governments that want to maintain privacy. For high tech entrepreneurs, the cash nexus is ultimately more compelling than the Deep State’s demand for patriotic cooperation. Even legal compulsion can be combatted: Unlike the individual citizen, tech firms have deep pockets and batteries of lawyers with which to fight government diktat.

This pushback has gone so far that on January 17, President Obama announced revisions to the NSA’s data collection programs, including withdrawing the agency’s custody of a domestic telephone record database, expanding requirements for judicial warrants and ceasing to spy on (undefined) “friendly foreign leaders.” Critics have denounced the changes as a cosmetic public relations move, but they are still significant in that the clamor has gotten so loud that the president feels the political need to address it.

When the contradictions within a ruling ideology are pushed too far, factionalism appears and that ideology begins slowly to crumble. Corporate oligarchs such as the Koch brothers are no longer entirely happy with the faux-populist political front group they helped fund and groom. Silicon Valley, for all the Ayn Rand-like tendencies of its major players, its offshoring strategies and its further exacerbation of income inequality, is now lobbying Congress to restrain the NSA, a core component of the Deep State. Some tech firms are moving to encrypt their data. High tech corporations and governments alike seek dominance over people though collection of personal data, but the corporations are jumping ship now that adverse public reaction to the NSA scandals threatens their profits.

The outcome of all these developments is uncertain. The Deep State, based on the twin pillars of national security imperative and corporate hegemony, has until recently seemed unshakable and the latest events may only be a temporary perturbation in its trajectory. But history has a way of toppling the altars of the mighty. While the two great materialist and determinist ideologies of the twentieth century, Marxism and the Washington Consensus, successively decreed that the dictatorship of the proletariat and the dictatorship of the market were inevitable, the future is actually indeterminate. It may be that deep economic and social currents create the framework of history, but those currents can be channeled, eddied, or even reversed by circumstance, chance and human agency. We have only to reflect upon defunct glacial despotisms such as the USSR or East Germany to realize that nothing is forever.

Throughout history, state systems with outsized pretensions to power have reacted to their environments in two ways. The first strategy, reflecting the ossification of its ruling elites, consists of repeating that nothing is wrong, that the status quo reflects the nation’s unique good fortune in being favored by God and that those calling for change are merely subversive troublemakers. As the French ancien régime, the Romanov dynasty and the Habsburg emperors discovered, the strategy works splendidly for a while, particularly if one has a talent for dismissing unpleasant facts. The final results, however, are likely to be thoroughly disappointing.

The second strategy is one embraced to varying degrees and with differing goals, by figures of such contrasting personalities as Mustafa Kemal Atatürk, Franklin D. Roosevelt, Charles de Gaulle and Deng Xiaoping. They were certainly not revolutionaries by temperament; if anything, their natures were conservative. But they understood that the political cultures in which they lived were fossilized and incapable of adapting to the times. In their drive to reform and modernize the political systems they inherited, their first obstacles to overcome were the outworn myths that encrusted the thinking of the elites of their time.

As the United States confronts its future after experiencing two failed wars, a precarious economy and $17 trillion in accumulated debt, the national punditry has split into two camps. The first, the declinists, sees a broken, dysfunctional political system incapable of reform and an economy soon to be overtaken by China. The second, the reformers, offers a profusion of nostrums to turn the nation around: public financing of elections to sever the artery of money between the corporate components of the Deep State and financially dependent elected officials, government “insourcing” to reverse the tide of outsourcing of government functions and the conflicts of interest that it creates, a tax policy that values human labor over financial manipulation and a trade policy that favors exporting manufactured goods over exporting investment capital.

All of that is necessary, but not sufficient. The Snowden revelations (the impact of which have been surprisingly strong), the derailed drive for military intervention in Syria and a fractious Congress, whose dysfunction has begun to be a serious inconvenience to the Deep State, show that there is now a deep but as yet inchoate hunger for change. What America lacks is a figure with the serene self-confidence to tell us that the twin idols of national security and corporate power are outworn dogmas that have nothing more to offer us. Thus disenthralled, the people themselves will unravel the Deep State with surprising speed.

Mike Lofgren is a former congressional staff member who served on both the House and Senate budget committees. His book about Congress, The Party is Over: How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted, appeared in paperback on August 27, 2013.

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).

He does offer a good deal of evidence that brainpower was not exclusive to a single class. Lecklider is strongest when he examines union educational programs, for here he can offer not only the prospectuses of educators but testimony from women who engaged in these programs themselves. The International Ladies Garment Workers Union adopted ’Knowledge Is Power‘ as a slogan in the 1910s (p. 71), followed by ‘the future of the world lies in the hands of intelligent and well-informed workers’ (p. 76). Workers’ education began with radical ideals—the residential Bryn Mawr Summer School for Women Workers (BMSS) ‘promot[ed] workers’ power in the workplace and society’ (p. 70) – but over the years it devolved into practical coursework. Lecklider is exacting when such programs fall short of revolutionary ideals, chastising the BMSS for ‘divorcing … classroom experiences from everyday life in the workplace, thus compartmentalizing intellectual labor as distinct from working in industry’ (p. 78). To justify his criticism, he cites Bryn Mawr’s dean quoting one student asking ‘bemusedly’, upon arriving on campus, ‘Where are all the factories’ (p. 78)? But a single remark, especially one cited by a dean, is hardly conclusive evidence that conducting the school on a campus in the summer ‘introduced’ an ‘obstacle’ to the correct cultivation of class consciousness among organic intellectuals (p. 78).

Lecklider is at pains to show that BMSS students struggled to ‘resist assimilating to middle-class values and behaviors … by taking an active role in developing the BMSS curriculum and taking charge of discussion within the program’ (p. 81). When the students declared their desires, they were pluralist. They wanted diverse things. So, for example, ‘Bryn Mawr’s immigrant students agitated for the admission of African American women, a campaign that was successful by 1926’ (p. 82). They also expressed an ‘urgent wish’ for music appreciation (p. 81). Was this a fight to ‘resist’ middle-class acculturation, or was it an empowering affirmation of a love for music?

Here, as elsewhere, we see Lecklider straining as he tries to clamp the cultural life of workers into class-struggle polarities. Sometimes he views it as helpful to educate well-rounded workers as opposed to equip organizers with directly usable skills; at other times, when a centralized Workers Education Bureau guided by the American Federation of Labor promotes the decidedly reformist goal of building worker confidence, thus enabling workers to meet employers ‘on equal footing’ (p. 88), Lecklider is not sure whether such efforts, arguably ‘middle-class,’ also contributed to the molding of some sort of collective working-class consciousness.

Turning to African-American currents, the Harlem Renaissance, and the making of urban black identity, Lecklider is more interested in writers than schools or musicians. He notes that for all their antagonisms, W. E. B. Du Bois and Booker T. Washington shared a ‘fundamental agreement that freedom begins in the mind and that building alliances begins with expanding access to brainpower’ (p. 96). His most interesting artifact is Claude McKay’s novel, Home to Harlem (1928), where dialectical possibilities of brain-brawn transcendence play out in homoerotic overtones. The bookish character Ray, a Haitian waiter whom a ‘repulsive’ black character calls ‘that theah nigger professor’ (1), is affectionately counterposed to his bosom buddy, Harlem’s brawnier, party-going, opium-smoking, ‘primitive’ sailor Jake. While some play poker, Ray reads Crime and Punishment.(2) He quotes from Goethe’s Werther.(3) But books don’t make him ‘dopey’.(4) In McKay’s view, Ray:

    felt more [than Jake] and his range was wider and he could not be satisfied with the easy, simple things that sufficed for Jake … he drank in moreof life than he could distill into active animal living. Maybe that was why he felt he had to write.(5)

Lecklider reads Home to Harlem as ‘a special form of resolution to the artificial division of mind and body in modern black fiction’ (p. 112). He has a point, but it would better be put without the graceless jargon in which he declares that McKay ‘prioritizes queer affection’ and that ‘McKay’s depiction of their relationship highlights the boundedness of intelligence within black experiences of embodiment’ (p. 114). The clumsiness of the abstraction is somewhat reminiscent of the passage in The German Ideology where Marx and Engels mock the philosophers’ absurd habit of disguising a fact (‘The cat eats the mouse’) with a pseudo-profundity (‘Devouring of the mouse by the cat is based upon the self-consumption of nature’).

Too commonly, Lecklider’s conceptual categories are too clumsy to enfold the dynamic complexity of an interesting story; and so schematic as to be overwhelmed by the preoccupations of the recent past. At his most Procrustean, he stretches shreds of evidence into a shape that suits his overall argument. Loading the shreds with significance, he tends to stretch the evidence past the breaking point. Thus, he devotes an entire chapter to the image of Albert Einstein and the theory of relativity after the First World War. This is more than one-tenth the entire length of the book, but what it delivers is meager. Lecklider reads relativity as implying ‘that ordinary people’s observations were always wrong’ (p. 51), when in fact it implied that everyone’s everyday observations – including physicists’ and capitalists’ – were, for certain purposes, wrong. He cites at some length a single conservative’s allegation that relativity was ‘a symptom of Bolshevism in an unstable world’: the illusion of the curvature of space, wrote this worthy, Columbia astronomer Charles Lane Poor, was what happened ‘when Bolshevism enters the world of science of course!’ (p. 59, citing an article by Poor called ‘Jazz in the scientific world’). But how representative was Poor? Lecklider ends this chapter in a conceptual blur:

    Though representations of Einstein failed to resolve the contradictions at stake in defining American identities following World War I, his brainpower was used to filter these contradictions through a fascinating individual whose legacy was the subject of contentious division.

Lecklider’s chapter on pictorial and literary representations during the Great Depression is his most ambitious and rewarding. ‘Depression-era representations of intelligence within mass culture reflected a producerist ideology that suggested brains could be trusted precisely because they were inextricable from material production’ (p. 125). Under the sponsorship of the New Deal’s Works Progress Administration, posters promoted libraries for all, not just brainiacs. If anything, the worker-hero of the 1930s was muscle-bound, not effete. ‘New Deal posters recast workers in the center of civic life by aligning modern machinery with the pursuit of intelligence’ (p. 143). Meanwhile, left-wing writers heralded the emergence of ‘proletarian cognoscenti’ (p. 146), while one ahead-of-her-time novelist, Tess Slesinger, in The Unpossessed (1934), sent up radical intellectuals for their estrangement from the sweaty body. Although here too Lecklider might be accused of Procrustean overstretch, he does intriguingly suggest that, in her view, at least, it is within same-sex relationships that body and mind best match.

What then of the explosive image of brainpower at work that followed Hiroshima and Nagasaki? Images of nuclear physicists in fiction and film are much-visited territory for scholars of Cold War culture (6), and perhaps this explains why, when Lecklider turns to the aftermath of the Second World War, he dwells on a narrow case: how journalists depicted the Oak Ridge, Tennessee nuclear laboratory as a nicely domesticated home town rather than the ‘subversion, elitism, danger, and social transgression’ (p. 190) far more visible in popular magazines, newsreels, and science fiction when they addressed, directly or indirectly, the monstrosity of the Bomb. He pays little attention to the mad scientist so beloved of popular imagery in the Frankenstein tradition.

Instead, in his climactic chapter, he ushers onstage the caricature of the egghead, that sexless or effeminate archetype, weirdly subversive, contemptuous of ‘the people,’ a figure tailor-made to characterize Adlai Stevenson in two successive presidential elections. In popular imagery, why did the egghead loom so large, so contemptible? Lecklider answers his own question:

    The Cold War egghead refracted cultural fears about the challenges to the American way of life posed by homophile politics, antiracist social movements, and a left that refused to disappear in spite of intimidation tactics, blacklists and HUAC belligerence (p. 192).

Lecklider, however, once again overplays his hand, focusing sharply, almost exclusively, on materials that make his point. To flesh out the image of the egghead, he devotes more than a dozen pages to the exegesis of two 1950s depictions of intellectuals as naïve crypto-Communists in the late 1950s: a single obscure science fiction story (‘The chicken and the egghead‘), written by Frank Fenton, a journeyman Hollywood screenwriter, and a play, The Egghead, by Molly Thacher Kazan, a thinly disguised defense of her husband Elia for having ‘named names’ – important, Lecklider insists, as ‘one of the most complicated representations of the egghead in the Cold War era’ (p. 214).

But why do these particular two artifacts deserve such attention? Why not consider, say, the hapless but endearing Mister Peepers, the bespectacled (a sure sign of eggheadedness) junior high school science teacher who had a successful three-year sitcom run (1952–5)? Why not its complement, the long-running Life of Riley (1944–51 on radio, 1949–50 and 1953–8 on television), in which one of the networks’ few working-class regulars is a lovable oaf-dope? Why not Meyer Levin’s best-selling novel of 1956, Compulsion, based on the Leopold-Loeb case of the two Chicago Wunderkind teenagers who, transfixed by a perverse interpretation of Nietzsche, committed a murder to prove they were Übermenschen? However you judge these popular works, aren’t they more significant than a sci-fi story and a briefly running play?

In the end, Lecklider does not refute Hofstadter but does sketch a counter-current open to elaboration, and opens up more questions. How did it happen that ’elitism‘ became the bête noire of the oilman scion and Yale man William F. Buckley, Jr., and his legions of devotees? More could be done to trace the imagery of brainpower and eggheads through the saga of American conservatism’s on-again, off-again marriage with (pace Lecklider) anti-intellectual populism of the Joseph McCarthy-Richard Nixon-George Wallace-Sarah Palin sort, with the eggheads transported to Washington, where they transmogrified into the striped-pants Alger Hiss and demoniac ‘pointy-headed bureaucrats’. How did the fey egghead evolve into the elitist bogeyman: viz., the Al Gore (Harvard ‘69) against whom George W. Bush (Andover ‘64, Yale ‘68) successfully presented himself in 2000 as the people’s tribune. The figures of elitist and counter-elitist in popular culture amply deserve a sequel, all the way down to Sarah Palin’s failed, indeed counter-productive, blasts at ‘the lamestream media’ who pilloried her for claiming insight into Russian policies because ‘You can actually see Russia from land here in Alaska’.

Notes

    Claude McKay, Home to Harlem (New York, 1928), p. 114.Back to (1)
    Home to Harlem, p. 166.Back to (2)
    Home to Harlem, p. 272.Back to (3)
    Home to Harlem, p. 259.Back to (4)
    Home to Harlem, p. 265.Back to (5)
    See especially Paul Boyer, By the Bomb’s Early Light: American Thought and Culture at the Dawn of the Atomic Age (New York, NY, 1985).Back to (6)

Other reviews:
S-USIH
http://s-usih.org/2013/07/eggheads-of-the-world-unite-you-have-nothing-to-lose-but-your-yolks.html [2]
H-Net
http://h-net.msu.edu/cgi-bin/logbrowse.pl [3]
LSE Review of Books
http://blogs.lse.ac.uk/lsereviewofbooks/2013/08/09/book-review-inventing-the-egghead-the-battle-over-brainpower-in-american-culture/ [4]
Point Magazine
http://www.thepointmag.com/2013/reviews/watch-the-professor [5]
Source URL: http://www.history.ac.uk/reviews/review/1486

Links:
[1] http://www.history.ac.uk/reviews/item/63563
[2] http://s-usih.org/2013/07/eggheads-of-the-world-unite-you-have-nothing-to-lose-but-your-yolks.html
[3] http://h-net.msu.edu/cgi-bin/logbrowse.pl?trx=vx&list=H-Amstdy&month=1305&week=e&msg=zPGm28fSNpWkPMlQ4wlqpg
[4] http://blogs.lse.ac.uk/lsereviewofbooks/2013/08/09/book-review-inventing-the-egghead-the-battle-over-brainpower-in-american-culture/
[5] http://www.thepointmag.com/2013/reviews/watch-the-professor

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.

As such, the production of knowledge is a key battlefield for class struggle in the present moment. The conflicts within the university that take place on this battlefield are not merely analogous to the crisis in capitalism, rather they are directly bound up with issues of labor and production. Roggero identifies three aspects that summarize the crisis of the university: the demise of the public-private dialectic, the devaluation of university knowledge as a means of social mobility, and the proliferation of borders amongst university disciplines, with neither old, new, intra-, inter-, or post-disciplines able to articulate the current crisis except as new forms of artificial measure for capitalist command.

The collapse of the public-private dialectic is most visible through the widespread corporatization of the university, the topic of Chapter 3. Roggero notes immediately that the process of corporatization in the university means not only that universities are increasingly behaving like corporations or receiving more funding from private companies, universities are actually becoming corporations through the application of various techniques lifted from the corporate world, including the implementation of competitive mechanisms for resource allocation, evaluation and accreditation as a measure of value for teaching and research, internal governance systems based on corporate management strategies, and the rethinking of institutional missions in line with market values. Roggero’s concrete examples of university change come through a comparison of US and Italian universities. Substantial differences between the two systems exist, such as the presence of a national authority over all universities in Italy and the 1980 Bayh-Doyle Act in the US, which incentivized intellectual property rights by linking them with federal funding. However, Roggero is able to generalize a set of tendencies present in both systems.

Such techniques explain why Roggero adopts the term `corporatization’ rather than `knowledge factory’ in order to describe the contemporary university. The term `knowledge factory’ helps to capture the attempts to organize and control labor within the university, but is analytically insufficient because it underestimates the differences between the university and the factory. Roggero argues that Taylorist organization cannot actually occur within universities, but is instead imposed only as a form of control, creating an artificial temporality for the measure of knowledge production.

The measure of knowledge production is precisely what is at stake in the corporatized university. Roggero suggests that ‘it is through knowledge, translated into the form of educational credit and certification, that the forms of precarization are articulated.’ (81) This structural connection between the transformation of the university and the labor market is the primary reason why university knowledge has become seriously discounted as a means of social mobility. The fact that a university degree is a necessary but not sufficient condition of entry into the labor market—what some refer to as ‘the “high-schoolization” of the university’—transfers the mechanisms of selection from outside to inside. (81) The university no longer participates in the hierarchization of labor power through the granting of degrees, but is rather subsumed within the labor market. Roggero refers to this process as differential inclusion: a person’s social and economic capital do not depend on whether she has gone to university, but rather in which form of accreditation she has participated, including professional development or post-degree programs that are often not formally recognized. Amidst this transformation in labor, the university stands as a privileged site of inquiry because it is ‘one of the metropolitan nodes of the regulation of labor power, in a context in which the borders between the educational market and the labor market become increasingly permeable: both of them find in the production of knowledge their central element.’ (84)

In addition to the transformation of university knowledge production within the crisis of contemporary capitalism, Roggero explores transnational class composition as well as the production of the common as key issues for contemporary politics. To carry this out, Roggero relies on and extends several key concepts from the postoperaismo tradition: the general intellect, cognitive capitalism, autonomy of migration, multitude, and the common. Chapter 1, ‘The Future is Archaic,’ and Chapter 2, ‘Coordinates of Capitalist Transition,’ situate Roggero’s understanding of the contemporary scene. He provides an account of the present as constituently ambivalent; social cooperation is absolutely productive, both for the organization of living labor and the potential for capitalist expropriation. Roggero specifies that his account of ambivalence is genealogical and not dialectical, insofar as he aims to track ‘the subjective matrix of a process determined by a field of antagonistic forces,’ in the context of a shifting terrain of conflict full of possibilities in their historicity and contingency. (21) He follows Mario Tronti’s well-known prioritization of worker struggles over capitalist development, arguing that this affirmation pertains not only to chronological time, but also to the quality of the antagonistic relationship between autonomy and subordination that constitutes the ambivalence of the present.

Roggero borrows an orientation from postcolonial critique in order to further articulate the way in which capitalism is in transition today. He puts forward an understanding of ‘post’ as something that does not indicate a radical rupture with the past, nor the end of inequality and oppression, but rather a diffusion at the global level. The paradigms of capitalist social relations continue to be re-articulated, and therefore the problem ‘is to recognize the heterogeneity of capitalism in every historically determined space and time, just as the forms of resistance that continually interrupt and subvert its course.’ (36) In terms of knowledge as it relates to the production process, Roggero argues that it is inseparable from its owners. ‘The new technologies are based, in fact, on the dynamic production and management of knowledge, language, and information, none of which can be completely separated from the subjects of social cooperation and encapsulated in machines at the risk of blocking the very same process of technological development.’ (54) It is precisely this ambivalent situation, in which the productive power of knowledge that is instrumental for capitalist accumulation cannot be entirely appropriated from the material constitution of its subjects, which characterizes the concept of living knowledge.

The production of living knowledge within the continual reconstitution of capitalist social relations opens up a discussion of contemporary class composition and the institution of the common. He follows the classic understanding of class composition, arguing that class does not pre-exist the material conditions of its subjective formation in class struggle. This means that the subjects from whom capital cannot entirely appropriate knowledge come together only through their resistance to the capital relation. Similarly, knowledge itself is not a common, but only ‘becomes common in the production of living labor and in the organization of autonomy from the capital relation.’ (123) As such, Roggero understands the production of subjectivity within contemporary capitalism to be a battlefield on which lines of flight from the crisis are available at the “frontier” of the university. He understands the frontier in a temporal sense, linking up with radical and subversive ideas before they are reduced into the borders of the university.

In order to flesh this out, Roggero turns to an extended discussion of the development of black, race, ethnic, women’s and LGBT studies in the history of US universities. These lines of inquiry were rooted in the social movements of the 1960s and 1970s, not as initiatives from within the university. Although these forms of thought were eventually integrated into the university, this integration was not without struggle and the knowledge retains an ambivalence that is not entirely controllable. Roggero labels the type of knowledge production that operates on the frontier of the university ‘self-education,’ and argues that this type of knowledge can be organized and made common. ‘The becoming-institution of self-education projects indicates the capacity to organize autonomy and the resistance of living labor, determining command and collective direction within social cooperation, producing common norms in the destructuring of the university that exists, and breaking with capitalist capture, reappropriating and creating the commonwealth.’ (132)

The Production of Living Knowledge is an exciting and challenging work. It is useful not only for its theoretical developments which bear witness to the continued relevance of postoperaismo, but also as an example of conricerca, or co-research, the wellspring from which the book has developed that I have underplayed thus far. Conricerca is a method of partisan participation in research which poses the question of subjectivity from the beginning. Class consciousness is not thereby something which an external subject must reveal and develop, but rather something in which the researcher, as a producer of knowledge, is already involved in from the beginning. This methodology complicates the existing division between intellectuals and political practice, and it is in this regard that Roggero finds himself truly on the frontier. As theoretical practice, Roggero’s book helpfully articulates that horizontality and the questioning of hierarchy are precisely what is at stake in the organization of autonomous processes from capital, not the starting point for organization. In this way, he is able to avoid the pitfall of fetishizing either a leaderless, radically anti-authoritarian practice or a longing for a leftist Margaret Thatcher. By similarly avoiding the deference to neoliberalism as a conceptual skeleton key, Roggero deftly occupies the ambivalent terrain that makes up our present situation, on which we must take up the struggle against capitalist command.

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

‘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.

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:

“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.”

Production based on exchange-value would collapse at this point because no new value production is possible.  Yes the products of human labor would exist, including means of production but there would be no source for surplus value, the capital relation is a process and the process would end without labor to exploit.  Heinrich’s comment above reveals that he doesn’t really understand the point of the falling rate of profit.  Profit is the form that capital accumulation must take under capitalist social relations.  Capital accumulation is the form that the development of the productive powers of human labor must take at a certain level of development.  Once the productive powers of human labor are developed to the point that human labor is no longer necessary the profit form is no longer necessary but more importantly the value form is no longer necessary.  Value is “abstract socially necessary labor time.” If socially necessary labor time is zero exchange value is no longer an adequate form, capitalism is over.

The crisis of 2008 is best understood in this light.  Moore’s Law, for example, the idea that digital technology develops in an exponential progression, is an expression of stunning rate of technological change that has taken place over the last 30 years.  Rapid (and in some instances exponential) technological change and rising labor productivity are the central feature of the current economic crisis.

This crisis is rooted in the neoliberal solution to the stagflation crisis of the 1970′s.  Neoliberalism in practice crushed the labor unions, deregulated the economy, dumped the gold standard and moved to floating exchange rates, and globalized the production process thereby unleashing the merciless whip of competition radically spurring the pursuit of relative surplus value and resulting in mind boggling technological change. Rapid technological change and rising labor productivity puts downward pressure on the rate of profit and that is the essence of the problem for the system. 

Rising labor productivity, pursued relentlessly by capital seeking advantage over the competition, gives temporary advantage to the innovating capital but, paradoxically, undermines the overall rate of surplus value production putting downward pressure on the rate of profit.

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. 

Debt financing, another way to offset a falling rate of profit, allows the realization of existing values before they are destroyed by the fall in socially necessary labor times.  The financial crisis ensued when expanding markets and debt financing could no longer keep pace with rising productivity/falling rate of profit.  Although it is expressed as a financial crisis its origin is in the production process. 

Marx explained, famously, in the Preface to A Contribution to the Critique of Political Economy, that a mode of production is overthrown when the forces of production can no longer develop within the matrix of existing social relationships. 

The "productive forces" is another way of thinking about technology. Technology increases the productive power of human labor. The productive forces are then people and their technology/tools.

Under capitalism, the productive power of human labor takes the alienated form of capital and appears, to labor, as an alien power outside itself when capital is in fact the mystified form of labor’s power.  Disturbances in the development of human productive power appear as crisis of capital accumulation.

In the current crisis the further accumulation of alienated human power (capital) is fettered by the debt relation.  The debt relation started as a spur to further development allowing consumption to outstrip revenue. Debt and credit sped the turnover of capital making further accumulation possible.  But as interest rates rose debtors became unable to continue borrowing and repaying. The crisis ensued and the debt relation became a fetter on further accumulation – the movement of a social relation from spur to fetter is a familiar pattern explained in Marx’s Preface to A Contribution to the Critique of Political Economy.

The tendency towards a falling rate of profit is an expression of the contradiction between the continued development of the productive forces and the social relationships in which those forces have hitherto developed (the contradiction is also detailed in the Preface).

At this time debt is the specific social relation fettering continued economic development. Transforming the debt relation will solve this crisis.  There isn’t any other solution. If the hegemony of financial capital continues we will remain in recession tittering on depression for at least a decade while the impossible task of attempting to pay back debt is undertaken. The debt relation is enforced by the hegemony of financial capital.  This is why financial capital is our main enemy right now, and it is also why we should be able to rally the whole of society (all other social classes) against this “one percent.”  As an aside, “financial capital’s” hegemony is not some unanticipated outcome due to a new stage of “monopoly capitalism.”  The hegemony of financial capital is rooted in the separation of ownership and production which is what the stock market is all about.  This is a part of the expected maturation of capital.

Historical Materialism demonstrates that increasing labor productivity drives historical change. Rapid technological development is the historical mission of capitalism. Marx showed us that capitalism’s social relationships began as a spur to rapid technological development but they would eventually become brakes on further development and at that point there would be social and economic crisis and a transformation of our economic relationships would become necessary if catastrophe is to be averted.

Heinrich’s work shows that there is still much theoretical work to do, the role of the credit system and its relation to the falling rate of profit is still a critical area of further research and the current crisis is an perfect example of this relationship.

Tags: crisis of 2008, crisis theory, falling rate of profit, Marxism, value theory

By Atlee McFellin
SolidarityEconomy.net 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.

The Great Recession was caused by a combination of two major factors, with the center of it being the overall failure of the decades long strategy of neoliberalism. More specifically, the collapse of the economy was caused by a long process of what French economists Gerard Dumenil and Dominique Levy call, “the quest for high income, financialization, and globalization.” This quest refers to the efforts of the 1% to increase incomes via profits, capital gains, bonuses, stock options, and wages, while using that vast wealth to push for the deregulation (especially of the financial sector) and the expansion of increasingly unwieldy financial instruments. This growing and already colossal financial sector also became an increasingly global movement to expand the so-called “free market,” to deregulate the global economy under the guise of globalization.

The second major factor in their analysis of the cause of The Great Recession is “the macro trajectory of the U.S. Economy.” In this factor they identified three main aspects: the “low and declining accumulation rates, the trade deficit, and the growing dependency on financing from the rest of the world and domestic indebtedness.” This neoliberal strategy failed to correct a decades long trend of declining capital accumulation rates by corporations. The movement of corporations abroad greatly worsened the trade deficit and, when coupled with the concerted effort of the 1% to enhance their wealth at the expense of the other 99%, forced the vast majority into substantial debt. This unsustainable situation triggered a collapse in the housing market, causing the rapid decline of the entire economy in its wake. It is, in turn, this overall failure of the neoliberal strategy that’s beginning to lead to something transformative, new, and green. (1)  It began with a push for a Green New Deal and is now finding its home within diverse movements under different labels including green economy, sharing economy, solidarity economy, new economy, and others.

Keynes believed that in instances of economic crisis significant governmental or public investment was required in order to jumpstart the economy. By investing a considerable amount of money into the economy, he believed the government could offset the overall decline in demand. In doing so, the government could thereby create jobs, rebuild the tax base, and make its investment back without increasing the long-term deficit. The idea behind the Green New Deal has been simple: instead of a New Deal like with FDR back in the 1930s, this would invest in renewable energy, public transportation, energy efficiency, improvements to the electricity grid, etc. This is what makes it a Green New Deal. Unfortunately, even with the funding through ARRA and smaller governmental stimulus measures, the amount of funding has thus fallen far short of levels necessary to jumpstart the economy. (2) On top of that, the lack of adequate funding leaves us far behind on global targets to cap atmospheric carbon levels as well. (3)

Still, Green New Deal policies are a massive shift from the neoliberal orthodoxy of the last few decades. Just like the Republican Party’s almost unanimous support for destructive trade agreements, most Republicans oppose Green New Deal types of policies as well. It doesn’t matter that their opposition is based on flawed or even outright fabricated ‘analyses.’ Their opposition is based on the interests of who pays for their political campaigns. The oil and gas industry alone spent almost $64 Million in the 2012 election cycle, 90% of which went to members of the Republican Party.  Meanwhile, clean energy and low-carbon companies are growing and building a political force of their own. This is growing and will, over time, provide a counterforce to the oil and gas industry and their stranglehold on Capitol Hill. The American Council on Renewable Energy represents many of those clean energy companies and their trade associations. Similarly, the push for an energy efficient economy is finding a new political voice in the American Council for an Energy-Efficient Economy. In many ways the green economy movement is at the forefront of the push to fundamentally transform the economy with other similar movements trailing close behind.

What’s perhaps the most exciting and promising aspect of the movement for a green economy and a Green New Deal is that it’s bringing together a host of different organizations representing communities and constituencies that haven’t often come together over the years. The movement for a green economy and a Green New Deal came to prominence in 2009-2010, as so-called Cap & Trade policies and others were on the verge of passage. The Alliance for Climate Protection, a non-profit organization with Al Gore as its board chair, was leading the charge by acting as a coordinating entity of sorts with numerous member organizations helping provide a degree of direction to the movement in general. Now called The Climate Reality Project, its focus has shifted more towards general public education around climate change. This is likely a result of the inability to pass comprehensive climate change legislation during President Obama’s first term and the drastic decline in public belief around the role of human activity in causing climate change. It seems few expected such a drastic assault by the extreme right in spreading disinformation like the manufactured “Climate Gate” scandal.

Labor unions, manufacturers, and environmental organizations are coming together through organizations like the Apollo Alliance and the Blue-Green Alliance (recently merged). They are made up of both public and private labor unions like the United Steelworkers Union, environmental organizations like the Sierra Club, and even manufacturers of all sizes. Small and medium-sized businesses are part of this movement through the Advanced Energy Economy. Local chambers of commerce have even joined the fight through Chambers for Innovation and Clean Energy. Ceres is bringing together a wide variety of companies and investors small and large to address climate change and build a green economy. Broad umbrella organizations have emerged representing all types of community-based local organizations. 1Sky is the biggest of these organizations and recently merged with 350.org under the 350.org name to create a large advocacy organization made up of hundreds of thousands of members in the U.S. and a still larger global movement. It tackles many of the traditional environmental issues, while also advocating for Green New Deal policies. The Green Economy Coalition recently emerged as a global network to strategically support the expansion of the green economy at a global level in advance of the UN’s Summit on the 20th anniversary of the Earth Summit this past June of 2012.

Low-income communities and communities of color are part in this movement too. Green For All has been pioneering the creation of green jobs, career-track jobs that pay a living wage, have benefits, and address environmental issues at the same time. They lobby Congress on environmental and Green New Deal policies, develop innovative policy research, while assisting coalitions of organizations in cities to implement green job creation strategies and helping green businesses grow. Providing empowering opportunities for traditionally marginalized communities is a vital aspect of this growing movement, which is why Green For All and others similarly working to create and expand opportunities low-income communities, communities of color, and others who have traditionally been passed by when economic opportunities arise.

There are other organizations and efforts within this larger movement for a Green New Deal. The Smart Growth Alliance is pioneering a new national opposition to sprawl and support for public transportation at the same time. There are even signs that working to rebuild our urban cores around public transportation and the remediation of brownfields can be done in ways that empower traditionally marginalized communities. (4) Numerous other organizations are starting sustainability initiatives aimed at involving themselves in one way or another in this movement for a green economy and a Green New Deal. ICLEI, Local Governments for Sustainability, is a network of local governments from around the world focused on the best ways for governments to leverage their resources to best build the green economy.

Outside of the public policy arena, organizations and institutions all across the country are launching sustainability initiatives as part of a truly massive movement. Colleges and universities and joining this movement through the American Association for Sustainability in Higher Education. Countless think tanks have emerged to focus on renewable energy and clean tech to workforce development, bio-based alternatives to petroleum-based chemicals, and much more.

This movement isn’t the only game in town when it comes to transforming the economy. Alongside the push for a green economy are a few other movements with the goal of fundamentally transforming the economy in one way or another. The green economy movement is much more expansive though, but aside from the work of groups like Green For All, it’s very much a “double bottom line movement.” Unlike traditional economic approaches that stand firmly on the belief that profit should be pursued above all else, that considerations of externalities like the environment only hinder profitability, the green economy movement is based on the belief that profitability and environmental sustainability can go hand in hand. As will be discussed in a subsequent article, the sharing economy, solidarity economy, and new economy take the goals of the green economy one step further, emphasizing a “triple bottom line” of people, planet, and profits. Just like the recognition that environmental sustainability and profit aren’t mutual exclusive, these other movements stress that the well being of communities can go hand in hand with environmental sustainability and the well being of the economy overall.

When the green economy movement first came on the scene with the ascendency of Van Jones to become President Obama’s green jobs advisor, some claimed it was part of a Communist conspiracy. Despite the irrational rantings of Glenn Beck and others, there is a strong push within this movement to more fundamentally transform the economic system as a whole. It just doesn’t have anything to do with traditional or “actually-existing” forms of Communism.

Given the frightening reality of climate change, the manipulative push-back from powerful corporate interests, and the longer-term economic stagnation that stands before us, it is likely that the green economy movement will increasingly take on the task of a more fundamental and structural transformation of the economy. The structural imbalances of power continue to thwart attempts to transform the economy on Capitol Hill. Examples like the Citizens United decision and the corporate assault on our democracy will likely force the green economy movement to fight for a more fundamental transformation of the dominant values and institutions in the U.S. This includes the nature and structure of major corporations as well as the nature of the political system overall. This is why an increasing unity between the green economy movement and other efforts to transform the economy are so important. The broader triple bottom line framework and transformational focus of efforts around sharing, solidarity, and a new economy must increasingly creep into the green economy movement; finding greater ideological and organizational unity.

We can already see the rise of a considerable mistrust of the entire notion of a green economy, evidenced by terms like ‘green washing’ and the decline in belief regarding climate change. A poignant example of this mistrust can be found with criticisms of the recent “Rio +20 Summit.” The 2012 UN Conference on Sustainable Development was meant to produce a renewed transformational focus on revamping the global economy for the planet and its poor. It showed little signs of achievement though. What’s more, this mistrust was codified into an alternative summit hosted as the “People’s Summit Rio+20.” It concluded that the green economy movement was fundamentally broken. As noted in one of their concluding documents, only by redirecting efforts towards the original goals of an Earth Summit, transforming the global economy into something that benefits the planet and its poorest, could the green economy find salvation.

From the perspective of the planet’s poorest and the organizations working with them, the green economy doesn’t represent opportunity. It represents a friendlier face of a global capitalist economy that has exploited them and their natural resources for decades. And just as the Alliance for Climate Protection became The Climate Reality Project in the face of public mistrust and disbelief in the realities of climate change, if the green economy movement wishes to win the hearts and minds of the American people, it has to not just educate but to create tangible and immediate solutions for individuals and communities struggling in the wake of our broken economy. This is why the other diverse movements to transform the economy have such a vital role to play. Each of them provide unique lessons for creating solutions today.

The green economy has been growing in the U.S. for decades, but if its going to go to the next level to transform the overall economy during these delicate beginning years of the 21st Century, it needs a mass movement behind it. The only way that’s possible, the only way the movement for a green economy becomes an impassioned charge from communities all across the country, the world for that matter, is for it to place the well being of those same communities into the forefront of it’s goals. When the movement to build a green economy transforms itself from a double bottom line to a triple bottom line movement, finding ways equitably support and interact with even the most marginalized communities, it’s firmly on the path to victory.

##

(1) Gerard Dumineil & Dominique Levy, The Crisis of Neoliberalism, (MA, Harvard University Press, 2011), P. 35-40.

(2) For a detailed description for how a Green New Deal could lead to substantial economic development, see Tim Jackson, Prosperity Without Growth, (DC: EarthScan, 2009). P. 113.

(3) Intergovernmental Panel on Climate Change, “Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN).” Abu Dhabi, May 9th, 2011.

(4) Carlton C. Eley. “Equitable Development: Untangling the Web of Urban Development through Collaborative Problem Solving.” Sustain: A Journal of Environmental and Sustainability Issues. Issue 21, Fall/Winter 2010.

This work is licensed under a Creative Commons License

Atlee McFellin is a Co-Founder & Principal of SymCenter. Atlee specializes in the creation of innovative economic development strategies and programs. Prior to founding SymCenter, Atlee worked with The Democracy Collaborative to create comprehensive strategies for cities around the country based on the Evergreen Cooperatives in Cleveland, OH. He is also the board co-chair of the New Economy Network, a national network of diverse organizations building a new economy from the ground up.