The Cybernetic Revolution and the Crisis of Capitalism (page 5 of 11)
By Jerry Harris and Carl Davidson
The Chicago Third Wave Study Group

By 1988 the U.S. required only 40% of its blue-collar labor force to produce the amount of manufactured goods equal to that produced in 1977. From 1967 to 1988, weight per dollar value had fallen by 43%. By 1985 Japan had increased its output two and half times with just the same consumption of raw materials and energy as in 1965. Cars used to contain 1600 pounds of steel; much of that weight is now replaced with plastics. Thus the application of intellectual capital--in this case in the form of design--has meant the drastic reduction of both physical capital and the labor force.

But the restructuring goes even further. Because the speed of processing information has increased, on-time warehousing, niche marketing, and the elimination of middle management have become possible. Second wave Industrial society produced mass products in huge factories with a giant labor force. This necessitated a huge number of middle managers to count production, oversee workers and move information along the command hierarchy. Now the rapid acquisition and deployment of information is the primary goal of management and corporations have restructured to insure its movement. With expanded information technology and cuts in employees, middle managers are a disappearing breed.

Timely information--which has led to shorter product runs, lower supplies, and niche marketing--also means rapid change and innovation. In essence the "creative destruction" of capital has been speeded-up. Its reflection in the labor force means more part-timers and more temporary workers. The most rapidly growing job category is contingent labor, forming 60% of all new jobs in 1993. This has increased the downward pressure on wages further. Even during the "jobless" economic recovery of 1993, while profits made a healthy recovery, the median hourly wages for males fell another 2.7%,

New technologies, corporate flight, and wage cutbacks have laid the basis for renewed accumulation, even in manufacturing. But this restructuring has increased poverty and class contradictions throughout society. The urban crisis, greater economic insecurity and political instability are spreading in ever widening circles. Like Catch 22, the system resolves one crisis only to create another with similar features.

Third Wave Finance Capital

The impact of information technologies on finance capital has been as dramatic as its effects on manufacturing. Telecommunications have established a global electronic marketplace, which functions in real time. The most important change has been a tremendous increase in unregulated, highly mobile speculative capital. This global infrastructure with geosynchronous satellites was created just as industrial capitalism was facing its crisis of accumulation. This allowed information finance capital to create a huge pool of wealth without creating anything for social use or consumption. While industrial capital had reached its limits of growth, speculative capital used the new technologies to expand and attract trillions of new dollars. In fact, the world trade in currency is 40 to 50 times larger than the world trade in goods. Worldwide the money market accounts for $500 billion a day, two trillion a year just from New York firms.