Revisiting 'The Promise and Peril of the Third Wave'

NOW ON THE 30TH ANNIVERSARY...of the publication of our 1994 Manifesto, Carl Davidson, Ivan Handler & Jerry Harris agreed to post it here for another review. We think it holds up pretty much. Do you?

The Promise and Peril of the Third Wave:

Socialism and Democracy for the 21st Century

By Carl Davidson, Ivan Handler and Jerry Harris

The Chicago Third Wave Study Group / May 1, 1994

The collapse of Soviet socialism is being celebrated by the defenders of imperialism throughout the capitalist world as the definitive victory in a struggle that has been waged for some 150 years.

It doesn't matter in these circles that the Soviet system was a deformed, distorted, or corrupted, or phony version of any socialism that Marx or Lenin would have recognized as their own. Nor does it matter that there are still a few pockets of resistance holding out, whether on a small scale in Cuba or on a large scale in China.

What does matter to them is that the only socialism that claimed to be an existing alternative for advanced industrial society is no longer a competing force.

The left now generally acknowledges the crisis. Some stalwarts were in deep denial until the very end. But despite this major defeat, the left, for the most part, still hopes to keep the red flag flying. For better or worse, most of the left groups and trends still want to defend their own brand of socialism, or at least defend a given set of socialist goals or ideals, if not socialism itself. As for the collapse or stagnation of existing varieties of socialism that held state power, the left generally tries to explain these failures as stemming from an internal lack of democracy or a surplus of bureaucracy or as a byproduct of external imperialist aggression or military competition, or some combination of all these factors.

We want to argue for a different approach. In our view, the crisis is deeper than a fundamental flaw in the theory or practice of socialism. We believe the causes of the failure of socialism lie in its historical roots in an industrial society, which is itself in crisis. We see the current chaotic situation around the world as the advent of an all-sided and deep structural crisis that is sweeping not only through the socialist countries but the capitalist countries as well. Rather than witnessing simply the end of socialism, we believe we are witnessing the start of a new radical upheaval in industrial society generally, in both the capitalist West and the socialist East. This perspective is not original with us. Much of the analysis that follows is taken from the work of Alvin and Heidi Toffler, co-authors of three widely read books: Future Shock, The Third Wave, and Powershift. We believe the socialist movement has a great deal to learn from both the questions they pose and the answers they supply.

In its limited analysis of the crisis so far, we believe the left has downplayed what the existing capitalist and socialist economies of the West have in common in real life. In industrialized societies, labor and machinery are organized along similar lines in both capitalist and socialist countries--the primary means of generating wealth is the mass production of the factory-based assembly line.

While each economy has its own particularities, the main patterns of socialized mass production are reflected and reproduced in all arenas of human endeavor. Moreover, these systems of mass production are linked together in country after country, as a dynamic and expanding market develops national industrial societies into a global system. For industrial mass production, the main dominant patterns of social organization are the forms of presumed rationality: concentration, centralization, standardization, specialization, maximization and synchronization. But despite its claim of rationality, industrial society is not a sustainable form of civilization, especially as it expands on a world scale. Its energy sources, whether capitalist or socialist, are primarily nonrenewable hydrocarbons--oil, natural gas, or coal--or toxic radioactive materials. Not only are these energy sources irrationally, unevenly, and unfairly distributed, but their full and complete use is also irrational. The steady, ongoing overuse of carbon-based systems would transform all of the solid and liquid forms of the element now underground and pump them into the atmosphere in the form of carbon dioxide. The end result is the "greenhouse effect" --a complex web of environmental disasters wreaking ecological havoc and rendering the biosphere unfit for human habitation.

This feature of industrial society is not a problem of the distant future. It is the "dirty little secret" of today's world standing behind the rising conflict between North and South. The truth is that we cannot have economic equality among nations based on today's levels and standards. If every country in the world were organized on just the same level and just the same types of production and consumption that are "enjoyed" in either the U.S., Europe, Japan, or even the former Soviet Union, the resulting polluted biosphere would render the globe uninhabitable for humans.

But industrial mass production is expansionist. It strives for universality, transforming industrial society into a mass society. It features mass urban centers, mass markets, mass media, mass culture, mass education, mass consumption, and mass political parties. While advanced capitalism roots itself in the mass market and mass consumption, Marxism, too, has reduced complex and diverse populations to oversimplified conceptions of "the masses."

Today's technological revolution has pushed industrial mass production to new heights in the capitalist world. New and upgraded factories continue to produce an ever-wider variety of commodities of improved quality at lower prices with less labor. Telecommunications has integrated capital markets into a 24-hour, online global system of exchange. The full consequences of these developments are only beginning to take shape, although change takes place at an increasingly rapid pace.

The main reason for today's ongoing revolution in the productive forces was the invention of the microchip. This revolution began in the 1950s with the merging of transistors, themselves the first major practical application of quantum mechanics, with the mass replication of miniaturized integrated circuits. The result was a device that vastly expanded the ability of the machinery of mass production to process information rapidly. In fact, the speed of the microprocessor has enabled information to be used within a time frame and on a scale of complexity hitherto unimaginable. Information itself has become an increasingly valuable commodity of a new type.

The microchip's impact is changing everything about our world and the way we live. Civilization is undergoing a quantum leap on the order of the agricultural revolution launched 6000 years ago, and the industrial revolution launched 200 years ago. We have now entered a third period of human history. We prefer to call it the information era; others refer to the same phenomenon as "post-industrial" or "postmodern" civilization to differentiate the present from the agricultural or industrial past.

Neither of these two earlier revolutions or waves of change--the agricultural and the industrial--is fully completed. Both are still having an impact today. As for the first wave, in some remote corners of the globe, hunter-gatherer societies continue to be drawn into settled agricultural modes of production. The persistence of the second wave is much more apparent. It continues to surge in the new industrial revolution now spreading in the formerly agricultural regions of Asia, Africa, and Latin America.

But the third wave of change, rooted in the impact of the microchip, is spreading even more rapidly. It has been underway for less than 40 years, mainly in the industrial societies of Europe, North America, and Japan. It is the main feature of the shift from industrial to post-industrial society, and its promise and peril will soon be projected into every corner of the globe.

A society becomes a "third wave" when a majority of its labor force becomes mainly and irreversibly engaged in processing information and providing services, rather than directly producing "hard" commodities or farm products. In the U.S., this point was reached by 1960. This does not mean that a third-wave society stops producing the traditional goods of basic industry. It is an even greater industrial powerhouse than before, but now it manages to produce these goods with a relatively smaller and smaller proportion of the labor force.

A good analogy is U.S. agriculture. Less than 100 years ago, a majority of the American labor force worked on farms for a living. Today U.S. farms are the most productive in the world, supplying not only the domestic market but the world market as well. But now, less than 3% of the labor force works on farms. Mechanization and relatively large amounts of fertile land are only part of the reason for this. U.S. farmers are also many times more productive than earlier farmers because of information--whether in the design of equipment, fertilizers, or hybrid seeds or in advanced knowledge of weather patterns transmitted by modern communications.

Surplus value as knowledge

Information is not a new component of production, even though its relative importance has grown with the progress of society. In fact, the creation of value, whether use-value or exchange-value, is best understood as the result of expanding the information content of the productive

process. An average laborer in an industrial society can produce much more value than he or she needs to survive comfortably. A similar worker on a pre-industrial farm will produce far less wealth using a far greater expenditure of labor time. The difference here is not the worker but the tools and organization of work.

The machines of the industrial era were created by the combined efforts of inventive workers, scientists, and engineers of past and current generations. They designed machinery to amplify a worker's abilities. For example, a stamping machine amplifies a worker's strength; a conveyor belt amplifies a worker's ability to move and access materials. In addition to machinery, new methods of organizing production also amplified each worker's effectiveness. Industrial production thus has a much higher knowledge component than pre-industrial agriculture or even the craftsmanship of early manufacturing. There, the individual worker had much knowledge, but the productive process had comparatively primitive tools.

In the information age, the knowledge content of production has become even higher. In third-wave production, only a few workers are needed to produce goods of much greater quality and sophistication. This is due to the embedding of microcomputer technology right into the tools of production. By organizing work so most of the manual tasks can be done by technology, the number of workers needed to carry out the task gets reduced dramatically, while the productivity of the individual worker soars in inverse proportion.

This change is also causing another important reversal. On the one hand, the workforce responsible for production is becoming more educated (in certain sectors) as its productivity increases. On the other hand, the workforce in many service areas (such as marketing) is becoming increasingly comprised of large numbers of very low-skilled workers. This is especially true for specific data gathering tasks -- data entry, feeding paper into Optical Character Recognition readers, scanning barcodes, etc. This may be a temporary phenomenon until new techniques are discovered to reduce the amount of labor needed to carry out many of these tasks.

For example, phone companies are continually adding new automated voice services for their customers, which is increasing efficiency and reducing the number of telephone operators. In any case, the less educated sectors of the labor force are forced to compete for a dwindling number of better-paying jobs or forced out of employment altogether.

The result is a deep structural crisis. The advent of the third wave is by no means a twinkling, painless shift into a utopian wonderland. It is more like a hurricane, leaving disorder and destruction in its wake. The third wave guts entire workforces and industries to the point of collapse. It sabotages old markets and renders national borders meaningless. It makes possible aglut of highly quality and relatively inexpensive goods, while also producing a radical anduneven restructuring of the working class itself.

Generally speaking, three main groupings of workers emerge in third-wave society. The first group is a dynamic and growing force of skilled analysts, designers, and technicians filling new jobs created by the new technology, whether in the private or public sectors. The second group is a stagnant or shrinking force of both skilled and unskilled "blue-collar" occupations. Their ranks are being depleted by automation or by the export of their jobs to the huge pools offar cheaper but now "globalized" labor in the newly industrializing regions of the third world. The third group is a growing deskilled pool of unemployed and even unemployable workers. From the capitalist perspective, these workers have a negative net value--even if they were employed, their skill level would result in the production of less value than the cost of sustaining them. This is the so-called "permanent underclass"--people with inadequate incomes for the necessities of survival, let alone to buy the higher quality goods of third-wave production.

The third wave thus contains both promise and peril. On one hand, it fuels unemployment and social chaos that breed the danger of war and genocide. On the other, it creates entire new industries in biotechnology, aquaculture, and alternative energies. In this sense, the third wave contains the potential for sustainable advanced "green" technologies that can serve societies of abundance, decency, and human rights for all.

But what is worse than the dangers posed by the third wave is the attempt to ignore or stifle the information technologies fueling it. This was a deep flaw in the structure of the "command economies" of the Soviet bloc, which based their politics on the centralized control and restriction of information. The growth of the new technology requires open, accessible, and decentralized sources and outlets for the flow of information. But this was hardly possible in societies that stationed soldiers to guard photocopy and fax machines. Far from creating political security, these measures were only effective in ensuring the economic backwardness of the societies practicing them. Relative to information-rich production methods and products in the West, the socialist factories were thus inefficient, wasteful, and, with few exceptions, produced outmoded or shabby goods.

To be fair, the feudal and capitalist worlds initiated these practices of attempting to control politics by controlling information. It was Hitler's propaganda machine that gave birth to the term "totalitarian." The use of the state to control and restrict the market in information, moreover, was simply an extension of state intervention in the traditional economy. Capitalist industries in the West have always tried to use the state to "protect" favored industries from competition with more productive, better-organized factories in other countries. Trade unions have also tried to "protect" obsolete jobs with featherbedding work rules. In the U.S. auto industry, for example, both management and labor believed that planned obsolescence was acceptable as a way to guarantee future demand, growth, and job security. Instead, they guaranteed stagnation and backwardness. The result was a huge opening for Japan to take a larger market share with a better product.

A left that fails to base itself fundamentally on an accurate assessment of the nature and direction of these developments in the productive forces does not deserve to be called Marxist. At best, its critique of capitalism and industrial society generally will be limited to moralism and will become irrelevant to practical politics. At worst, it will propose bankrupt solutions to the crises that will evoke a reactionary nostalgia for the fetters of the old order.

It does no good, for instance, to call for re-industrialization of the economy along the lines of the blue-collar industries of the past. While some industries can be retained and some jobs can be restored-mainly those that were lost due to the business cycle, mismanagement, or unrestricted runaways-most of those jobs or industries eliminated by advances in technology and industrial organization cannot be restored.

Marxists especially should not call for a retreat to less advanced, more inefficient, more wasteful, and less skilled forms of production that produce poorer goods at higher prices. In fact,it has always been part of our strategic critique of the bourgeoisie that its interests and methods fettered society's productive forces and produced a moribund, wasteful, and decadent system.

Taking A New Look at the Lessons of History

Seen from this perspective, the failure of industrial "second-wave" socialism is part and parcel of the collapse and transformation of second-wave industrialism worldwide. In particular, its earlier uncritical and dogmatic embrace of industrial patterns as "scientific" or "progressive," regardless of limitations or conditions, hastened the socialist crisis.

Second-wave industrialism concentrated huge productive forces of machinery, labor, and capital. Working-class communities surrounded giant factories, where communist "concentrations" were to be built as part of the newly massified neighborhoods. Socialist political structure was to reflect the skeleton of industrial organization and life. The whole working class, for instance, was to be concentrated into one mass party with a single strategy. Advocacy of diversified, multi-party systems or strategies was frequently denounced as "liberal" or "bourgeois." This industrial principle of concentration was carried forward into Soviet economic and social planning. Whole new cities were built around giant factories. As Lenin put it, maximization was the "highest level of development." Bureaucracy was the inevitable and natural organizational form when all production and planning was to be concentrated under the state. A diversified market was not only politically incorrect but supposedly went against the industrial principle of efficiency through concentration.

The communist party was to be built along the same centralized lines as factory management; rank-and-file "Jimmy Higgins" workers, mid-management full-time cadre, and the elite board of trustees, or central committee. Just as industrial management reflected hierarchical relations of power, socialist political relations contained the same design.

The "democratic centralism" that developed within this pattern was one where democracy was always a secondary aspect to a centralized and hierarchical leadership responsible for decisions and control of information. This pattern of centralized power was as true for capitalist monopolies as it was for socialist bureaucracies responsible for production. Within the ruling party itself, Stalinism took this principle to its zenith in its centralization of international political authority

Specialization was also part of the second-wave industrial code. The efficiency of a labor task was seen in its specialization, which also gave rise to the professionalization of work. For Lenin, this meant the professionalization of the cadre into a full-time revolutionary, and later for Stalin as the "red expert." Eventually, this resulted in the separation and domination of political and technical work from democratic input and oversight.

Lastly, mass production also produced standardization. Everything from time, weights, and products, to culture and ideas was standardized. For socialism, the impact was a dogmatic standardization of Marxism, the political line set by the one accepted center, the Soviet Communist Party. Differences were suppressed not only inside the USSR but also worldwide. Bolshevik organizational structure became the standard for acceptance into the Third International. And perhaps even more destructive was the idea that there existed only one economic model on which socialism could be built.

A one-sided emphasis on all the above elements was the product of industrial society and formed a fresh basis of criticism for lack of socialist democracy. Socialism, understandably, could only function within the world in which it was born. When socialism embraced the proletariat as the primary agency of progressive change, it also tended to romanticize industrial society. Socialism has consciously or unconsciously integrated second-wave industrialism's intern designs and limitations into its own theory and practice.

Was there any alternative? Could socialism build a democratic, open, and participatory society based on industrial principles? Although both the Soviets and Chinese experimented at different times with worker-controlled factory committees, worker congresses, and collective management, the authoritarian patterns of managerial hierarchy always reasserted themselves; they were imbedded in the organization of work on the factory floor. Thus these relations could not be permanently transformed while trapped inside the second-wave industrial economic base. The very design of large-scale production enforced its own organizational logic.

Second-wave industrialism not only engendered mass society but also encoded forms of mass domination in its structure. The centralization of information necessary to run huge firms was best done with a concentration of authority in the hands of a specialized hierarchy. In both East and West, this was touted as the most efficient and scientific form of production, although not necessarily the most democratic.

Within this context, it became extremely difficult to permanently build a democratic socialism, although the tension between democracy and centralization existed for a long time. Under Lenin, the Bolsheviks certainly had relatively open and free-wheeling political debates, rather than standardization of thought. And Lenin became more acutely aware of the dangers of bureaucracy as they emerged towards the end of his life. After Lenin's death, the theoretical and programmatic effort to launch an alternative to the abuses of industrial socialism was best defined by Bukharin, who, along with Lenin, was the main theoretician of the Third International a world scale and of the New Economic Program (NEP) in the Soviet Union itself. In fact, the most vital debate from the late 1920s through the 1930s was not between Stalin and Trotsky, but between Bukharin and Stalin.

For Bukharin, the NEP was more than a temporary adjustment or retreat. Instead, it was a strategic plan to build socialism through a balance between rural and urban economies. Bukharin defined it as a "dynamic economic equilibrium" in which the growth of industry was geared toward the growth of agriculture instead of its one-sided exploitation. This view reserved an important role for the market and saw class struggle mainly as managed, peaceful competition between larger state enterprises and the smaller private sector.

For the Stalinists, rapid concentration, centralization, and forced growth at gunpoint were the means that would win the class struggle for their variety of socialism. Class differences were to be forcibly eliminated rather than peacefully managed. This path was certainly not inevitable, but the global and historical context of the industrial era was an important factor in developing, supporting, and rationalizing the Stalinist economic plan.

We believe revolutionaries who are genuinely progressive and democratic must reconstruct society with the people, tools, and materials bequeathed to them by history. We oppose the forced march of armed utopias and their attendant gulags. But we also believe the old state and industrial patterns and methods of command cannot simply be taken over and put to good use by new elites.

The capitalists launched the Industrial Revolution and became the new global masters because they dominated and developed the new industrial economic base of manufacturing. They did not base their revolutions primarily on a seizure of the feudal manors and landed estates of the old agricultural societies. The socialists of the second wave, however, have been ambivalent. On one hand, they based themselves on the advanced, rising class, the proletariat. The working class was the most advanced, not because of what it thought at any given time, but because it was part of the most advanced productive forces and thus had the ability to remake society. On the other hand, they attempted to build a new world mainly by expanding the old, unsustainable, second-wave industrial base rather than by nurturing a new historic economic order out of the most advanced achievements of the second wave.

In this way, Marxism spawned two visions of the future classless society. In one, all classes were to be abolished except the proletariat; all society was to be industrialized and proletarianized under the hegemony of the working class. The proletarian ideological line is dominant over all forms of science, art, and politics. On the other, all classes, including the working class, were to wither away through the gradual but steady abolition of toil brought about by the revolutionary advance of the productive forces. All ideology and politics are subordinate to freedom of scientific inquiry, tolerance of diversity, and the expansion of universal human rights.