Regarding the excellent post by CHS and the equally good book by Drucker, I find in the 20 years since I read “Post Capitalist Society” to have changed my outlook on its relevance.
In 1993 I was engaged in growing a business that was primarily knowledge based (and still is today) and I was electrified to read Drucker’s words which seemed to validate my very own senses at the time. He pointed to a bold future where knowledge provided significant leverage over competition, and for the first time, integrated concepts like knowledge based “barriers to entry” and the substitution of knowledge for capital. He also (perhaps unwittingly) advanced the concept of the proto-typical technocrat, those that could confer power and authority using nothing more than the withholding of technical knowledge.
It seemed to be a prescient message of triumph for the long maligned technical underclass- who had endured for decades the witness of realtors and mortgage brokers with nothing more than a high school education marshalling enormous commissioned incomes replete with all the social power that came with it.
But it was not to be.
Fast forward 20 years, and we have witnessed the ascendancy of a bloated financial overclass, while although decidedly white collar, is quite far from providing any semblance of knowledge based labor value into our society. Instead, they are experts and prognosticators of “fictitious capital”, the practice of which, I would argue, does not satisfy the tenements for knowledge based labor value.
Over the years, there have been many writers advancing concepts which lay claim to obsolescence of Marx’s critical theories. Some of the more popular are:
- Marx neglected to consider the emergence of the middle class, and thus, had an invalid framework of context for social relations. (Marx considered two classes, the proletariat, and the capitalist or bourgeoisie- the worker was exploited, the capitalist did the exploiting, a “middle class” is just a worker with slightly less exploitation- and a marginally higher standard of living).
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Marx neglected to consider the inevitability (and effectiveness) of government intervention to prop up capitalism’s inherent antagonisms, and as such his predictions of collapse were and are erroneous. (at least partially true)
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Marx’s Labor theory of Value contains irreconcilable contradictions (mostly centered on the “transformation problem” and these arguments must be abandoned when generally accepted time conditions are imposed on the purchase price of input commodities, this problem resolves in support of Marx)
There are more, but suffice to say the debate still rages, with no clear cut (despite claims to the contrary) competing theories that can hold up.
To that end, I put Ducker’s thesis into the same camp, claiming a breakthrough, but are things really any different? To answer this, we have to go back to basics and remember that Marx’s theory only applies to commodity production. If you are involved in R&D, prototyping, or any other form of non-capitalist production then we have to recognize that these theories do not apply, and not try to stretch them into a regime that they were never intended to fulfill.
So with regard to knowledge workers, we might then propose two categories: a. knowledge workers that are involved in commodity production, and b. knowledge workers not involved in commodity production.
To the first category, I would argue that the knowledge worker is essentially mis-identified, they contain no advantage over a traditional worker in the sense that they are identically exchanging (selling) their labor power for a wage income.
Let’s assign some job titles to help illustrate, let’s compare an auto worker who’s job it is to screw lug nuts on Chevrolet Vegas, and a software developer. Both can withhold their labor at will (tempered by the necessity to exchange labor for sustenance income). Although both use knowledge to comprise their work product, the knowledge is useless without the coupling of physical labor on the part of the worker, e.g., the auto worker has to be trained to screw on the lug nuts, and the software developer has to study computer science.
Irrespective of the receipt of information to advance these skills (training) this information is again worthless until activated by the worker by adding physical labor. The difference then reduces to the barrier to entry, which is to say how long is the training, and how expensive is it. To replace the software worker would be more difficult than to replace the auto worker, as the training component is longer, so in this sense the developer may hold a temporal advantage.
But this advantage is really one of supply and demand, not of one worker having knowledge and the other not. It is just that one form of knowledge is more difficult to obtain, and there are also no doubt aptitude issues. The capitalist means of production response to aptitude issues is by discretization of labor content, i.e. breaking down complex tasks into tiny, bite sized operations transferrable to larger sets of less skilled labor. Knowledge workers are not exempt from this tendency.
As to supply and demand, here the issue stalls. In free market systems, price does seek equilibrium. If the market signals that more software developers are needed by pricing wage labor at high values relative to auto workers, then more people will study software developing and the wage prices will drop, trending toward the same threshold as the auto worker. The trouble (and subsequent opportunity) comes in when there are time lags between the market signals and labor realization of these signals. Remember, market signals are always looking backward to inform labor of current conditions.
So let’s summarize the issues that are the same for knowledge workers in capitalist production:
1.) Either worker can withhold labor at will.
2.) Both wage scales are subject to social effects, in other words, society determines the relative value of their respective labor power through market signals- not technological content.
3.) Both are exploited by the capitalist.
4.) Both are required to exchange labor power for money in their respective fields to provide for the purchase of sustenance commodities.
5.) Both are impacted by capitalist initiative to atomize their labor efforts, reducing their skill sets to ever smaller packets that can be redistributed to larger, lower skilled, and less expensive labor sets.
6.) Both types of workers are subject to supply and demand market signals, equilibrium will tend to redistribute wage levels to a common denominator, so any technocratic gain is likely to be temporal.
7.) In a measure of ownership of stocks, bonds, and similar investments, even considering 401k participation, the vast majority of these holdings are owned by an extremely small percentage of the population, effectively debunking the notion that there is egalitarian distribution of the means of production. On the contrary, it is highly concentrated in the hands of a few.
So what have we really gained here, and are not the similarities greater than Drucker’s vaunted differences?
If we look at the second category, wherein the knowledge worker is not participating in the production of commodities, we have a different picture.
Here we can make a case that a knowledge worker can start a business, for example, with reduced needs for fixed capital. But let’s review, if he wants to “free lance”, or work for himself, then he is not in any way associated with the capitalist class, so further comparison is not useful. If he wishes to start a larger company, that then hires other knowledge workers, he then is part of the capitalist class, and we can continue. But a detailed analysis of the fundamentals reveals again that not much has really changed. The basic building blocks of a capitalist enterprise are still there, the pieces are; fixed capital (buildings, machines, etc), money capital (cash for operations, sustenance of the principals, and any raw materials needed), and variable capital (employee wages),
You can argue that the knowledge worker needs less fixed capital than a start up car company for example, but the best you can really do is argue the proportions change, not the fundamental process. You still have the M-C-M’ circuit flow of capital-knowledge worker or not.
Then property ownership (intellectual property) dynamics comes into play here as well. Knowledge workers do tend to be more heavily interested in IP (patent) protection, as their work product is often easily copied. Software is a great example of this. In fact, one of the characteristics of the knowledge worker culture is the notion of monopoly, without State protected monopoly status most of these enterprises would be in real trouble, as so many of these types of products are extremely easy to copy. If a commodity can be copied at virtually zero labor cost, Marx would say that commodity has virtually zero value.
So we see a situation where increased State protection of a knowledge worker’s work product becomes essential to realizing any value, without this, there would be no value whatsoever. It is an open question as to whether society is better off with these types of State protections or whether “open source” types of product profiles are better for society as a whole.
But to close on the issue of knowledge workers not participating in commodity production, I would have to agree that there may be more opportunities to increase your wage labor status pursuing technical, knowledge based careers, and there may be a different proportion of fixed capital to variable capital requirements for a start up but ultimately given time, both supposed exemptions are not really differences at all.