Abstract
When it comes to the economic affluence of a nation and the ability of a country’s economy to improve the standard of living of its citizens and compete internationally, social scientists are in an unusual agreement that productivity “in the long run is almost everything” (Krugman, 1994:13). Manuel Castell (1996:80) throughout his extensive study of modern society as a network society seconds this observation and concludes that “productivity is the source of the wealth of nations“. Not only shifts in standards of living follow from changes in productivity performance. Less immediately related non-economic transformations in response to unequal national productivity gains occur, including major changes in the balance of global power relations. In this light, Krugman (1994:17) comments somewhat despairingly, the slowdown of “American productivity growth since the early 1970s becomes the most important single fact about our economy.“
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Notes
The reasons Castells (1996:468) offers in support of his label of network society for the emerging social structures throughout modern society refer to a historical trend in which the “dominant functions and processes in the information age are increasingly organized around networks. Networks constitute the social morphology of our societies, and the diffusion of networking logic substantially modifies the operation and outcomes in processes of production, experience, power, and culture.“ For a critique of aspects of Castells theory of society see Stehr (1999).
I will only cite one more example of the by now rather orthodox claim in science, in education, the economy and in much of the public realm that there is a technology driven demand for highly workers. That claim also resonates strongly with technological determinism: Davenport (1997:2) deferring to Peter Drucker’s ideas on the knowledge society explicates the term knowledge-based economy and indicates that the characteristic technological basis of the knowledge-intensive economy, namely information and communication technology, biotechnology, and new materials have created a “remarkable demand for highly educated workers, not only to advance and manage the technologies themselves, but to serve as experts in the finance, production, and marketing of the new products and services which the technologies produce.“ What is remarkable about Davenport’s assertion is that Drucker is one of the few economists who has indicated that the really intriguing dynamics of growth of knowledge workers is the extent to which such gains may not be demand but supply side driven (see Drucker, [1968] 1992:279). I will return to this point in detail later in the paper.
Castell’s (1996:78) expresses the suspicion that the poor validity of the economic statistics might be responsible for the productivity puzzle and therefore may not even be real: “It may well be that a significant proportion of the mysterious productivity slowdown results from a growing inadequacy of economic statistics to capture movements of the new informational economy, precisely because of the broad scope of its transformations under the impact of information technology and related organizational changes.“ However, he does not indicate how one might be able to specifically “heal“ the deficiencies of the current statistical regime.
Jorgenson (1997:4) sees the productivity paradox as arising from the prevailing identification of “productivity growth with technological change“. Technological change and productivity gains are distinct. Productivity growth is but a minor component to growth. Technological change occurs, he argues, as a result of investments; economic growth also is due to capital investment. Capital investments can be categorized into investments into tangible assets, human and intellectual capital. The purchase of computers constitutes an investment into tangible assets. But the key concept in this context, intellectual capital remains but a vague and perhaps even more irritating to economists an unmeasured and unmeasurable concept.
My cautious observations about a gradual rather than an abrupt, decisive transformation of the economy of industrial society into a knowledge-based economy that fully displaces and renders obsolete the earlier economic formations resonate with Werner Sombart’s ([1927] 2000) reflections about erroneous expectations that economic systems can change in dramatic even violent ways: “All those opinions are mistaken which expect a violent upset of the existing economic constitution and a sudden change of the bases of economic life. This opinion too misjudges the nature of economic development, which always proceeds in the form of a gradual,’ organic’ reshaping of existing conditions. A new economy’ grows’, like a plant, or an animal. Forcible interventions may well destroy, but they build nothing. All previous history confirms the accuracy of this observation.“
It is worth noting that the meaning of the term’s work and labor now are used almost interchangeably. Labor in contrast to work may or was seen as based in circumstances in another person’s direction and control while work refers to what directly maintain one’s existence and is carried with relative autonomy.
Several authors have adopted the term “neo-Fordism“ to describe the convergence of information technology and the managerial orientation of “Fordism“ (cp. Massey, 1984; also Jaeger and Emste, 1989:).
A brief description of the emergence, nature and recent challenges to mass production in the automobile industry in North America and Europe described as Fordism may be found in Dankbaar(1995).
The so-called scientific management principles that Taylor developed were, for example, designed to limit and restrict the exceptional control workers often had with respect to forms of knowledge that related directly to technical and performance-related knowledge on the shop floor.
Among the surprising even amazing properties of the transformation of the labor market is that the American economy was able to “satisfy the expectations of all these people with long years of schooling.... As a result of the change in supply, we now have to create genuine knowledge jobs, whether the work itself demands it or not. For a true knowledge job is the only way to make highly schooled people productive...That the knowledge worker came first and knowledge work second-that indeed knowledge work is still largely to come — is a historical accident. From now on, we can expect increasing emphasis on work based on knowledge, and especially skills based on knowledge“ (Drucker, 1968:285).
John Kenneth Galbraith dismisses Drucker’s argument out of hand. He affirms the orthodox view about the relation between education and the labour market and considers Drucker’s perspective as evidence for the typical self-complacency and pretension of the educator misreading the real power balance in society in the process. Galbraith (1967: 238) suggests it is the “vanity of educators that they shape the educational system to their preferred image. They may not be without influence but the decisive force is the economic system. What the educator believes is latitude is usually latitude to respond to economic need.“ In other words, Galbraith insists that the demand-side explanation generally favored by economists (as well as employers, educators and educational policy makers one should add) primarily accounts for the increase in skilled work.
The degree of technology intensity in individual firms was measured by the authors of the study by counting the number of technical processes or devices such as computer driven machines, robots and so on found in the plants (see Doms, Dunne und Troske, 1997: 287-288 for a detailed description of the different processes and devices)
In concrete terms, “the positive relationship between technology use and the percent of skilled workers is primarily due to a dramatic increase in the percent of scientists and engineers in the most technogically advanced plants“ (Doms, Dunne and Troske, 1997:263).
In response to the question of the reasons for the immense growth of the service sector in recent decades, Landauer without referring to Drucker, also offers an account that stresses factors induced by the demand for jobs. Thus, new jobs were needed, so new services were invented. Many new or expanded services depended on computers: a plethora of investment instruments — complex new mutual funds and trading schemes, a deluge of new insurance policies and options, a myriad of debit and credit cards, dozens of new kinds of bank accounts and novel banking services offered from widely dispersed branches and machines, multitudes of new medical techniques and therapies, fast food restaurants, fast copy stores, fully filled planes with frequent flyer plans, mom and pop mail order firms, direct marketing, PC maintenance, and so forth (Landauer, 1995:74-75).
Concerns that the quality of the available jobs may not be compatible with rising educationl levels (Harman, 1978:209) correspond to exactly the opposite perspective, namely that the quality of the world of work is primarily driven by the nature of the demand.
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Stehr, N. (2000). The Productivity Paradox. In: De La Mothe, J., Paquet, G. (eds) Information, Innovation and Impacts. Economics of Science, Technology and Innovation, vol 17. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4617-7_12
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