April 26th, 2014
in Op Ed
by Charles Hugh Smith, Of Two Minds
The emerging economy is opening up new ways to reconnect workers to their work and the profits from their work.
One of the most striking blind spots in our collective angst over the lack of jobs is our apparent disinterest in the nature of work and how work creates value. This disinterest is reflected in a number of conventional assumptions.
One is the constant shedding of tears over the loss of mind-numbing manufacturing jobs. I doubt a single one of the innumerable pundits decrying the loss of "good manufacturing jobs" spent even one shift in an actual assembly line. There is a reason Henry Ford had to pay the then-astronomical salary of $5 per day to his assembly-line workers: the work was so physically demanding and boring that workers quit after a single shift. The only incentive that would keep people doing such hellish work day in, day out, was a big paycheck.
After the success of the moving assembly line, Henry Ford had another transformative idea: in January 1914, he startled the world by announcing that Ford Motor Company would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn't automatically apply to every worker, it more than doubled the average autoworker's wage.
While Henry's primary objective was to reduce worker attrition - labor turnover from monotonous assembly line work was high - newspapers from all over the world reported the story as an extraordinary gesture of goodwill.
Another is the confusion over what constitutes the means of production in a knowledge economy. The term means of production has its origins in Marx's analysis of capitalism, but the means of production change along with the processes of creating value.
As a result, Peter Drucker identified the worker's knowledge (human capital) as the means of production in a knowledge economy in his book Post-Capitalist Society.
Many readers have misunderstood Drucker's point; their objections include -
- the software workers use is essentially owned by Microsoft and other corporations;
- only corporations have the means to use workers' knowledge and
- means of production is an outdated Marxist term that is being mis-used by Drucker.
These objections miss the point. A skilled knowledge-worker can create $100,000 of value with a $500 PC and $300 of software. What percentage does the software represent of the output ($100,000)? Not even 1%.
As for corporations being the only owners of capital who can deploy workers' knowledge, millions of self-employed people suggest that this blanket statement is not entirely true. Yes, enterprises that deploy billions of dollars in material capital (oil drilling rigs, shipyards etc.) cannot be replaced by the self-employed, but what percentage of the economy requires billions of dollars in capital to operate? In a service-dominated economy, capital-intensive industries are a shrinking slice of the pie.
Rather than focus on employment, why don't we examine the nature of work? Why don't we ask how work creates value in a knowledge economy that is commoditizing/automating whatever labor can be commoditized/automated? How about asking if work can be re-shaped to become meaningful beyond the paycheck being earned?
Let's review the idea that work that isn't controlled and owned by the workers is inherently alienating.
In Marx’s view, workers were alienated from the product of their work because they did not own the product or control the means of production. Marx argued that the absence of ownership and control was also an absence of agency (control of one’s destiny) and meaning. Workers were estranged from the product of their work, from other workers and from themselves, as the natural order of the product of work belonging to the one who produced it was upended by capitalism.
Marx characterized this separation of work from ownership of the work and its output as social alienation from human nature. Capitalism, in his view, did not just reorder production into enterprises whose sole goal was profit and accumulating more capital; it destroyed the natural connection between the worker, the processes of work and the product of his work.
Marx was thus one of the first to analyze work not just in terms of economic output but in social and psychological terms.
This tradition was carried on by writers such as Eric Hoffer, who saw work as the source of life’s meaning, and Christopher Lasch, who saw the rise of consumerism as the basis of meaning and the rootless cosmopolitanism of the modern economy as the source of a culture of narcissism. For Lasch, the relentless commoditization of life disrupted the natural social relations of family, social reciprocity and the workplace, depriving individuals of these sources of meaning and replacing them with an empty consumerism that worshipped fame and celebrity.
Lasch explained these dynamics in his landmark book The Culture of Narcissism: American Life in an Age of Diminishing Expectations.
The marketplace's commoditization of everyday life - both parents working all day for corporations so they could afford corporate childcare, for example - created two alienating dynamics: a narcissistic personality crippled by a fragile sense of self that sought solace in consumerist identifiers (wearing the right brands etc.) and a therapeutic mindset that saw alienation not as the consequence of large-scale, centralized commoditization and financialization but as individual issues to be addressed with self-help and pop psychology.
In Lasch’s view, both of these dynamics ignored the loss of authenticity that resulted from the commoditization not just of production but of every aspect of everyday life. In this sense, Lasch’s social analysis is an extension of Marx’s original insight into the alienating dynamics of commoditized wage-work, in which workers and their work were both interchangeable.
Lasch’s analysis brings us to the source of modern alienation: it’s not just employees who are interchangeable - employers are equally interchangeable. The interchangeability of work, employees, employers, products and services is the key characteristic of commoditization.
What is the takeaway for those seeking a job or career? There are several takeaways.
One is that the sources of value creation are linked to the level of agency (control of one’s work) and ownership of the work: work that is not process-based (i.e. that cannot be commoditized) and that is experientially sensitive to mastery enables a higher level of agency and ownership because the worker owns the means of production - his human and social capital.
The second is that the dramatic lowering of barriers to education and the ownership of tools powered by the Internet has greatly expanded the opportunities to escape an alienating dependence on the state and cartels for employment and on superficial consumerism for meaning.
If we trust networks rather than states or corporations for our security, we automatically gain agency (control of our work and lives) and an authentic sense of self gained from owning our work and the results of our work.
It is important to understand that corporations exist to make a profit and accumulate capital, for if they do not make a profit and accumulate capital they will bleed capital and disappear. To believe that organizations dedicated to making a profit could magically organize society in ways that benefit every participant is nonsense. Corporations organize labor and capital to accumulate capital. It is absurd to expect that such organized self-interest magically optimizes the social order.
This is not to blame all the ills of society on corporations; it is simply to note that corporations are limited by their limited purpose. Their purpose is not to organize a healthy, sustainable economy; it is to organize labor and capital in such a way that the corporation can accumulate capital in a marketplace controlled by supply and demand.
Corporations have profited greatly from the alienation of work and the social order, as narcissistic debt-based consumerism is a highly profitable economic order, even if it is socially dysfunctional, unsustainable and destructive to individual agency and meaning.
The expansion of decentralized, distributed networks, the near-zero cost of knowledge and the declining cost of the means of production (digital memory and processors, software, 3-D fabrication machines, robotics and tools) offer newfound opportunities for workers to reclaim their agency and ownership of their work and output.
Rather than rely on centralized states and corporations to organize labor and capital, collaborative networks can do so without alienating workers from their work and disrupting the sources of meaning.
The emerging economy is opening up new ways to reconnect workers to their work and the profits from their work. These include traditional models such as self-employment and worker-owned cooperatives and new models of collaborative project-based work.
How do we change a dysfunctional, unsustainable and alienating system? By investing in new ways of creating value and alternative models of cooperative work and ownership.
This essay was excerpted from my new book Get a Job, Build a Real Career and Defy a Bewildering Economy which is on sale through Tuesday evening (Pacific Standard time) at a 20% discount for my regular readers ($7.95 for the Kindle edition, 20% off of the list price of $9.95. The print edition is $20).
You can read the introduction and first section of the book here.