cyRev Online Journal

Rise of a New Working Class

The two most important sectors of labor have become knowledge workers and contingent labor. Knowledge workers are the single largest category of U.S. workers nearing 20% of the total. As pointed out by Barnet and Cavanagh, “The production, processing, and selling of information is the number-one growth industry in the world.” (Global Dreams, p. 334). But these workers span from high-end designers to low-end data processors, and both are global. Ford Escort designers work from three different countries, linked to computers in Dearborn working with parts from ten different nations. Data processors input information anywhere with work from everywhere.

The fastest growing manner of work is part-time, temporary and homework. This contingent category was half of all new jobs between 1980-87. By 1995, 60% of all new jobs were contingent, 60% of all new jobs earned below $20,000 a year, and 18% of the workforce employed at 40 hours a week made wages below the family poverty line. This type of labor force is being built to match the new capabilities of technology. As information speeds up, so does production and the market. This calls for greater flexibility in order to exploit the greatest potential presented by the new tools. Thus, the restructuring of the labor force into a more easily disposable pool of workers allows capital to respond more quickly to their own needs. The use of the technology is driven by the needs of accumulation, the technology does not drive the new organization, only makes it possible. But the possibilities are revolutionary, and this is what important sectors of the capitalist class have realized.

As the new work relations become global, new waves of immigrant workers seek jobs across borders. When capital goes global, so does labor. The number one export of Bangladesh and Jordan is labor. Jordan earned more from it’s citizens sending money back home than it’s total export of goods. In Los Angeles 40% of the population is foreign born, and New York reflects the same pattern. But not all of this is unskilled labor. Foreign born students in the U.S. account for 50% of all math, computer science, and engineering degrees. About 40% of all new patients in the computer field are from immigrant workers, and in Silicon Valley almost half the workforce for many corporations are foreign born. There is global competition for intellectual capital, and the U.S. is leading the race.

As the world economy changes there are global capitalists pushing and developing the process. This new global bourgeoisie represents two basic economic sectors, finance and the digital economy. The digital economy is in computers, telecommunications, media, phone and the cable industries--those corporations taking the lead in conceiving, developing, and producing the new tools of production, and its infrastructure. This diverse group of players shaping the new economy includes corporations such as Intel, U.S. Robotics, the Bells, and Motorola. The shift in power is clearly seen in the changing positions of the manufacturing and information sectors. GM is valued at $35 billion, while Microsoft is worth $71 billion.

There is a complex struggle shaping up between the new and old centers of capital. Although the second wave military-industrial complex has adopted and depends on new digital technology, the government spending, tax codes, and legislation which protect them are coming under increasing fire. For example, second wave political movements which attack immigrants are hotly opposed by silicon valley executives who want open access to world intellectual capital. Greater spending on education, retraining, and the development of human capital is often counterposed to the huge military budget. Changing the tax codes which protect the markets of industries like auto and steel, to a system which encourages investments in new technology is another point of conflict. All these issues are regularly covered in Wired magazine, a major voice for the digital economy.

The other major developing group is a class of the global financial elite. Digital technology has affected international finance more than any other economic sector. While the computer industry is producing value based in physical assets, much of the wealth in finance is alienated from actual physical products or useful social activity. Both sectors are driven by knowledge and information, but their effects on society are very different. This international bourgeoisie is very aware of itself. For example, Citibank made a list of 5,000 individuals whose net worth was $100 million or more. The bank then proceeded to help the superrich of the Third World get their money into banks in the U.S. Today there are 350 individuals with a worth of a billion dollars or more, their wealth is equal to half the world's population.

The financial strategy of Citibank is worth some attention. This bank under the leadership of Walter Wriston and then John Reed has innovated some of the most important changes in world financial markets. Corporations now focus on the top 15% of the world market, because the bottom 85% of the world's people simply don't have enough money to be considered important. As Reed stated; “There are five billion people living on Earth. Probably 800 million live within societies that are ‘bankable’” (Global Dreams, p. 383).

Reed's ideas have strong sway. In a knowledge economy, education becomes the key point of access. To use and buy information products and to be part of the new economy depends on your level of education. In most parts of the world, class and access to good education are closely linked. As Reed observed, “We made an important discovery that drove everything we did later...People's attitude about finances are a function of how they're raised, their education, and their values, not of their nationalities”, (Global Dreams, p. 376). Class, not nationalism is the unifying theme here. A world wide upper middle class ruled and cultivated by an international bourgeoisie is the vision that drives this economy--a world also divided between information rich and information poor.

This understanding drove Citibank's credit card strategy in the Third World. When Citibank looked at Asia they saw 10 million people making $30,000 or more outside of China and Japan. The best way to find them was simply the phone book. Over 50% of the world's population has never even made a phone call. Only the wealthy have phones, and of course phone lines are a necessary tool of the new economy. So in looking at markets in India, where computer use is growing at 25% a year, Pei-yuan Chia, head of Citibank's global consumer operations was able to say; “Forget about 90% of the people, and focus on the top 10%. That's 80 million people” (Global Dreams, p. 377). In Indonesia the market become owners of TV. satellite dishes.

While there has been a decentralization of production, the third wave economy is producing greater concentrations of power. Sassen argues this concentration involves; “top level financial, legal, accounting, managerial, executive, and planning functions”. (Losing Control? page 10). While many of these services are contracted out, they nevertheless take place in a handful of international cities such as New York, London, and Tokyo. As Sassen points out; “the more globalized firms become, the more their central functions grow: in importance, in complexity, and in number of transactions. The sometimes staggering figures involved in this worldwide dispersal demand extensive coordination and management at parent headquarters.” (LC, p. 9). This complex and centralized coordination of global markets is made possible by the speed and reach of information technology.

These centralized functions have a territorial aspect. They take place in enclaves in world cities, both in the developed world and third world. There are wired and affluent blocks in Manila, Mexico City, and Shanghai, as well as Frankfurt, Paris and Los Angeles. Malaysia is planning to build the first fully wired capital city in a 250 square mile area the government is calling the Multimedia Super Corridor. This third wave Brasilia is expected to be finished by 2020. This same global process has brought third world enclaves into the advanced centers. Vast stretches of New York and L.A. look, feel, and live in conditions that parallel the poorer areas of the world.

Ideology and Superstructure

As the digital economy gains strength it changes the relationship of capital to the state, creating a new legal structure and dominant ideology. Second wave imperialism has key differences with third wave globalization. Imperialism was tied to the national sovereignty and development of the state of its' origin. A key aspect was the development of a broad middle class and labor aristocracy. As the famous British imperialist Cecil Rhodes observed; “I was in the east end of London yesterday and attended a meeting of the unemployed. I listened to the wild speeches, which were just a cry for ‘Bread, Bread’, and on my way home I become more than ever convinced of the importance of imperialism ... If you want to avoid civil war, you must become an imperialist.” (Lenin, Imperialism, p. 72) Revolution or imperialism, the choice is clearly stated. The exploited wealth of the third world would make the growth of a middle class possible, and therefore national development could avoid civil war.

In fact, nationalism replaced class struggle as the dominant ideology within the working class and society as a whole. That was starkly evident by the support for World War I in the European socialist movement. As Hilferding pointed out; “For the imperialist this nation is real; it lives in the ever increasing power and greatness of the state, and its enhancement deserves every ounce of his effort...the national idea becomes the driving force of politics. The common action of the nation, united by a common goal of national greatness, has taken the place of class struggle, so dangerous and fruitless for the possessing classes”. (Hilferding. Finance Capital, p. 336) Nationalism, not globalization was the ideological context of second wave imperialism. As imperialists countries conquered the world, they made their territorial possessions part of their own nations, and closed international markets for their exclusive exploitation. It was this monopolization that lead to World War I and Germany's attempt to redivide world markets.

Today's ruling ideology sees no national borders, only markets. The creation of jobs and a growing middle class is not an object of globalization. International financiers could care less about an inner city middle class in Detroit or Chicago. The spreading waves of unemployment which helped sparked the L.A. riots didn't create the same fear of civil war which haunted Rhodes. Today's capitalists just sit down at their computers and transfer their money elsewhere. The political response isn't creating new jobs, but throwing people off of welfare. This growing hostility to and criminalization of the poor is a political reflection of a global bourgeoisie disconnected to national development. When the chairman of Dow, Carl Gerstacher dreamed of buying “an island owned by no nation”, he expressed the not so hidden desire of his class. In fact, international finance has made the Cayman Islands the fifth largest economy in the world.

These changes are undercutting the idea of citizenship which arose with the building of second wave nation states. In the French revolution democratic inclusion was born within this philosophy of national citizenship. The mass struggle to expand voting rights created some popular control over the nation's economic and political decisions. Entitlements extended citizenship to welfare, education, and health. All of these rights revolved around state mediation and guarantees.

But globalization is reducing citizenship to an economic status, succinctly articulated by Margaret Thatcher's statement that there is no society, only individual men and women. We are now simply an economic being with no social existence, so the state has no social responsibility. Those with a good job live in a nice community, with excellent schools, safe streets, polite police, and politicians who return your calls. Those without jobs live in projects, with rundown schools, abusive police, and politicians who make you the cause of every problem in society. One is a citizen, the other criminalized. This truncated citizenship fits hand in glove with the marginalized contingent work force, and the changing relationship between capital and labor. But as the specter of unemployment spreads, the legitimacy of government shrinks. If citizenship is only based on economic well-being those outside that constricting circle become political outsiders moving to the right, the left, or into nihilistic rebellion.

Instead of “one man one vote,”globalization is based on “one dollar, one vote.” The control of massive amounts of money creates an exclusive club that Sassen labels a “cross-border economic electorate”. It's a return to property based voting rights, but on an international scale. This electorate has its' own economic policy objectives which undercut social and productive investment. Although cloaking their ideology as economic efficiency their bias effects taxes, public spending, credit control, interest rates, exchange rates, and income.

As a former IMF official stated, “International capital is extremely powerful. Nobody can stand in front of it. The ability of financial markets to impose discipline on government policies ... is nothing less than amazing.” (S.F. Chronicle, July 5, 1996) This is no surprise given the amount of money under control of international investment funds. For example, three large firms based in San Francisco have at their disposal $12 billion. Compare this to the U.S. government's annual foreign aid budget of $7.3 billion.

Wriston has become a major spokesperson for the global bourgeois giving clear expression to their ideology. He explains electoral democracy as an international system where financiers take “a vote on the soundness of each country's fiscal and monetary policies. This giant vote-counting machine conducts a running tally on what the world thinks of a government's diplomatic, fiscal and monetary policies and this opinion is immediately reflected in the value the market places on a country's currency”. (Twilight of Sovereignty, p. 9) “If your currency becomes worthless, the world knows about it very quickly. If your economic policies are lousy, the market will punish you instantly. I'm in favor of this kind of economic democracy.” (Wired, p. 202-03).

Here we find a new definition of democracy which excludes 99.9% of the world's people. Of course Wriston likes to pretend this international referendum reflects “the collective wisdom of people all around the world”. But who are these people? According to Wriston, “yuppies very interested in their ability to make a buck”. (Wired, p. 202). Meet the new citizens of global democracy. As observed by David Korten in the Nation; “A thin segment of the superrich at the very lip of the champagne glass has formed a stateless alliance that defines global interest as synonymous with the personal and corporate interests of its members”.

Wriston doesn't limit his thinking to the new economic democracy, he is also an astute observer of technology and its' effects on sovereignty. As he states; “The increased velocity of money gives you a difference in kind - not just degree. It's like a piece of lead: you put it on your desk, it's a paperweight; you put it in a gun, it's a bullet. The huge volume and speed of the international financial markets has put a brake on the ability of sovereign governments to do a lot of things they used to do”. (Wired, p. 202) How appropriate to see the global bourgeoisie as armed revolutionaries attacking the state. For Wriston information technology is a weapon aimed at governments and people around the world.

Wriston's book title, The Twilight of Sovereignty, underscores a key process of globalization, the weakening of nation-states and the redefining of the role of government. As Sassen points out; “global financial markets represent one of the most astounding aggregation of new rights and legitimacy...powers historically associated with nation-states”. (LC, p. 38) It is not only that stateless corporations are escaping taxes and national responsibilities, but that they have used states to create a new international structure of laws and legitimacy. Transnationals can have their cake and eat it too. At the same time they reduce their tax burden and demand cuts in social services, they use government to help penetrate new markets, keep labor and environmental costs low, and subsidize their global activities. We are not looking at the disappearance of states, but the redefinition of their role.

The hegemony of free market ideology has bestowed legitimacy on a whole range of new laws and functions that were previously done by the nation-state. Corporations always played a dominant role in the state apparatus to protect their national economic interests. But globalization has transformed those interests, and so state functions have transformed to structure the new international economy. Sovereignty is being decentered to a transnational legal system and supranational world trade organizations. The state has been the chief tool of implementation, and in the process has altered itself. As Sassen observes; “Over the last twenty years a process has reconfigured the intersection of territoriality and sovereignty as it had been constituted over the last century” (LC, page 30).

The superstructure that regulates the explosion of new financial markets and global corporations consists of a number of important international institutions. These are: the Administration of International Commercial Disputes; Chamber of Commerce in Paris; American Arbitration Association; London Court of International Commercial Arbitration; and bond rating agencies such as Moody's and Standard and Poor's. In addition are the important agreements reached in NAFTA, GATT, and the World Trade Organization, while older institutions such as the World Bank and International Monetary Fund have extended their reach and affluence.

GATT has recently put particular focus on key areas of the third wave economy. The Uruguay Round eliminated barriers to international banking, insurance, information, and media services. At the same time it moved to give greater protection to the intellectual property rights of global corporations, hoping to prevent the development of an independent technological base in the third world. Meanwhile NAFTA and WTO are rapidly constructing a market that prevents national governments from passing any laws that help local companies compete with transnationals. These changes means both financial and manufacturing sectors will be less response to local needs, and be tied ever closer to global markets. The grinding down of labor and environmental standards are also part of the package.

Globalization has trapped the third world in an intricate web of economic relationships. This is a response to the tide of independence which swept through the developing world after WW II. As the old colonies achieved political freedom from the territorial domination of imperialism they sought to develop independent national economies through import substitution and south to south trade ties. The new era of global capital hegemony has been achieved through the huge influx of money, the threat of its' rapid removal, debt, the flexibility of international production, and the new rules and regulations built to sanction and house these dominate relations. The key to the new system is its' flexibility, mobility, and speed; rather than its' territorial control, stability, and dedicated exploitation of any one particular people.

Conclusion

In the Nation, Jerry Mander opens a series of articles on globalization stating: “Economic globalization involves arguable the most fundamental redesign and centralization of the planet's political and economic arrangements since the Industrial Revolution.” (Nation, July 15,1996). This redesign was set in motion by the crisis of accumulation and stagnation in the world capitalist system. Like a man in a sinking ship looking for a way out, information technology provided capitalism a life boat to a new world of profits. It also provided the tools to construct new forms of domination and exploitation, with all the old habits and desires hiding the revolutionary possibilities inherent in the shaping of our future.

Information technology holds the possibilities for greater democracy and participation through the access to information and knowledge. Technological labor may lead to a new type of value which can destroy commodity production. It can develop environmentally safe modes of production, and help equalize relations between the north and south. The potential is there, but this demands a political will and a revolutionary movement which understands its' historic possibilities. Either a mass democratic movement will take hold and direct the use of digital production, or it will be dominated by global capital to extend and strengthen their own rule.

The left is beginning to respond to globalization. A developing agenda is crystallizing and movement has begun. Some of the key points have been: international labor standards at a living wage; international environmental protection and methods of production; sustainable local development using appropriate technology; reducing work-time and spreading work; the control of capital movements; and open borders. Such demands as a 24 hour work week, plus eight hours of education and retraining, with three days off, has become a practical full employment policy which guarantees an educated workforce that keeps in-step with rapidly changing technology.

Lastly, the concept of democracy must be extended to world citizenship. As Malcolm X argued in 1965, civil rights are something that a government gives or takes away, human rights are guarantees that every child in the world is born possessing. The content of these rights is a global struggle over the political, social and economic quality of life. The left needs a vision which sees the future not as a remake of the industrial past, but one which embraces a renewed internationalism. Globalization makes “workers of the world unite” more true and necessary today then when Marx made his famous call in 1848. Globalization or internationalism, which world will we create?

References

Barnet, Richard, Cavanagh, John. 1995. Global Dreams. New York: Touchstone

Collier, Robert. 1996, July 5. San Francisco Chronicle. “Bullish Investors Pouring Billions Back Into Mexico”; “3 Major Players Based in Bay Area”.

Lenin, V.I. 1973. Imperialism, The Highest Stage of Capitalism. Peking, Foreign Language Press.

Mander, Jerry. 1996, July 15. The Nation. “The Dark Side of Globalization”.

Rosen, Fred. 1996, December. NACLA. “IMF: One Step Closer to a Global State”.

Sassen, Saskia. 1995. Losing Control? Sovereignty in An Age of Globalization. New York, Columbia University Press.

Singer, Daniel. 1997, January. Monthly Review. “Requiem for Social Democracy?”

Sivanandan, A. 1996, April\June. Race and Class. “Heresies and Prophecies: the Social and Political Fall-out of the Technological Revolution”

Wriston, Walter. 1992. Twilight of Sovereignty: How the Information Revolution is Transforming Our World.

Wriston, Walter. 1996, October. Wired. “Want to Know About the Future of Money? Talk to Walter Wriston”.