World Processing: Technology and Instability

Sometime in the 1970s, the public image of the computer was detached from past phobias. No longer the symbol of technocratic dehumanization, it was glorified as the harbinger of a new way of life. The popular futurism of Alvin Toffler (The Third Wave), the never-ending self-congratulations of the industry press, the advent of the "personal computer" and the high-tech fantasies of worried managers combined into a crescendo of hype usually heard only at Christmas or during a good war.

With computers, as with the rest of modern life, the marketing fantasy has more appeal than the real thing. The hope for a better future shrivels in the harsh glare of the present. Here we find computers pressed into the routine service of those who rule making war, keeping tabs on dissidents, strengthening the hand of management against workers, helping the megacorporations to coordinate their global franchises.

The development and application of any new technology is itself a lesson in the exercise of power. The use of computers in the current worldwide restructuring is a better example than most. It reveals the elements in the social order that are able to produce and direct the new technology, and to what ends. In so doing it exposes the real structures and priorities of the dominant social system.


"Everyone always talks about undocumented labor, but nobody ever talks about undocumented capital." —unattributed wisecrack

First off, information technology is being used to strengthen the international "integrated circuit" of power. Like transportation technology, another crucial underpinning of the global marketplace, it provides the possibility of large scale systems of production and control.

Computers have become vital in holding together an ever-more internationalized economic system perhaps best characterized by the emergence of what Business Week called "stateless money:" ... ..."a vast integrated global money and capital system, almost totally outside all governmental regulation, that can send Eurodollars, Euromarks and other stateless currencies hurtling around the world 24 hours a day." This is capital more "liquid" than anything seen before. It is capital that can, and does, flow wherever profits are highest; capital that prefers speculation to productive investment, and is more than willing to abandon the U.S. for the Third World (or vice versa) if new conditions render such a move profitable.

Such a degree of internationalization would not be possible without the development of sophisticated information retrieval and communications systems. As Herb Schiller puts it in Who Knows: Information In The Age Of The Fortune 500:

"The capability of the Trans-National Corporation to utilize productive facilities where the costs are lowest.... to penetrate markets with massive advertising campaigns, to avoid or minimize taxes by shifting production, and to take advantage of fluctuating currencies by transferring funds from one center to another, is almost totally dependent on secure and instantaneous global communication."

The driving force behind all these rapid changes is, as usual, various sorts of competition. What's different today is that this competition takes place in a world where corporations have become co-actors with the largest and most powerful nations. Japanese/American competition drives the development of computer technology and American/Soviet competition the technology of war.

With this integration of markets, the political dramas of the modem world become supra-national in character. Moreover, they take place within the context of a long-term decline in the power of the nation-state relative to business. As a Vice-President of Citibank (with over 3,000 local branches, Citibank has the largest private communications system in the world) recently put it; "what this all adds up to is another profound challenge to the unlimited sovereign power of nation-states brought about by the technical realities of global communications." Or, in more concrete terms, 30-40% of world trade is accounted for by internal transfers within multinationals.

This is not necessarily good news. As the power of the nation-state's economic and social clout weakens, it tends more and more to define its power in military terms. The Falklands fiasco is a good example. And certainly the Soviet/American nuclear standoff is driven in part by militaristic ways of maintaining national identity—ways which are running afoul of the economic and political realities of a tightly interconnected planetary society. Central among these realities is the disaster now overtaking the Third World.


Before the advent of the great recession in the '70s the official literature on Third World development was infused with optimism. The specter of ecological collapse was easily exorcised by a glorious vision—U.S. entry into the information age would go hand-in-hand with the transfer of most manufacturing to the low-labor-cost part of the world. In this bright delirium everyone was to win. While the developed world shifted to an information-based economy, the Third World would become the nexus of heavy industry, and thus continue to have a major stake in the stability of the world system. The industrial "miracle" countries like Brazil and South Korea were supposed to show the way for the rest of the "underdeveloped" nations.

Back then many liberal economists argued that the economic growth of the Third World was crucial to the health of the global system—that it should be regarded not only as a supplier of materials and labor and a consumer of finished goods, but as a producer of surpluses of its own (e.g. the Brandt Report of the late '70s). The managers had an opportunity to act as if they believed in a really international economy, since it was in their interests to do so. They shifted a lot of their "runaway" shops to lands of cheap labor, and so gained a powerful weapon against workers at home. They established high-technology enclaves in Southeast Asia, some few of which (Singapore, South Korea, Taiwan, Hong Kong, etc.) seem to have made it permanently into the ranks of the developed nations. They fought against "national liberation" movements that resisted their tender mercies. For a short while, they were able to project the image of a world in which, eventually, there would be room at the top for at least the elites from the peripheral countries.

But the happy harmony between the logic of profit and the ideology of liberal internationalism was shortlived. Protectionism is already the order of the day, and the adjustments are just beginning.

The old international division of labor depended upon developed countries supplying technology while the Third World supplied unskilled labor and raw materials. Already there is a radically declining need for this labor within the international economy, just as there is within the U.S. When there is no longer any great need for it at all, what will happen?

A recent study by the Institute of Development Studies (IDS) in Sussex, England indicates that we won't have to wait for the perfection of automated production systems, to see the answer to this one. Already micro-computers have undermined the competitive advantage of Third-World-based production. They have significantly increased the flexibility of assembly lines and reduced the amounts of both labor and materials needed in production—and they have improved product quality in the bargain. Soon real automation—robotics—will enter the economic calculus in a far more pervasive way than it has to date. In the Asian sweatshops where the microchips themselves are assembled, robots are arriving by the hundreds. Over 250 companies in Singapore imported Japanese robots in the past year, and Signetics Korea will be halving its 2300-person production force in the next three or four years with robot-based automation. The Malaysian electrical workers union expects a "blowout" caused by automation within five years "when a single production line requires only 50 workers instead of the 500 now" this is the second largest Malaysian industry. (ASIA 2000 — June/July 1982)

The overall tendency, according to IDS and others, is to reduce the incentive for the Transnationals to invest in Third-World-based production—especially now that high unemployment here at home has American unions clamoring for trade barriers against imports. With the introduction of robotics, the economics become even clearer. Labor costs must be very low to keep labor intensive production systems competitive.

Over the last few years the Japanese have shifted many of their semiconductor assembly lines to the cheapest free-trade zones of all those in Malaysia, Indonesia, Thailand, the Philippines and Sri Lanka. But now it is just as cheap to automate and keep assembly in Japan. Likewise, Motorola and Fairchild Camera and Instrument Corp. have both recently moved some production lines back to the U.S. from Southeast Asia. With automated assembly offshore production offers no cost advantage. And, with the Third World becoming ever more unstable, offshore production can seem politically unattractive, even in sectors of the economy where some economic advantage remains. This is demonstrated by Control Data's recent decision to pull out of South Korea, a decision prompted not by shifting economies but by the instability of the local work force. (Last year, 120 young Korean women employees of Control Data held two American executives hostage for 9 hours. The execs had come to resolve a labor dispute.)

Offshore production will certainly continue to some extent. But the bulk of manufacturing will not shift to the Third World. As the production process becomes more strongly rooted in the new high technologies, it is more likely to take place not in the Third World, but in the industrialized regions.


Multinational business may find it inconvenient to continue on the "development" paths laid down during the post-war boom. But this doesn't mean that they can simply be forgotten. The exportled economies thrust upon the periphery during that brief flourish of neo-colonialism were largely financed by U.S. and Western European banks. According to a source quoted in the N.Y. Times, 3/15/83 ("What's the bottom line in Third World debt?"), by 1982 the Third World owed the nine largest U.S. banks a sum equal to more than double their real assets. This $600 billion debt links the fate of the international banking system inextricably to the tottering economies of the periphery. The financial collapse of Mexico, to give only one particularly dramatic example, would certainly take down the Bank of America with it. Well over half of the B of A's assets are tied up in Mexican loans.

The hustle run on the Third World continues, too, in the conditions suffered by the millions whose lives always fell outside the development plan; in the desertification of lands stripped of foliage by desperate peasants, in jam-packed cities, where formerly agrarian people scramble for a toehold in the money economy; in the misery of wars eagerly fostered by the U.S. and Soviet military machines and the international arms merchants.


Not that life will be so wonderful here in fortress America. Employment in the once "guaranteed" sectors like auto will never recover from the shakeout of the last three years. Nor will the service sector expand far or fast enough to absorb the millions displaced by the new "mechanization of work." Secure employment will become the privilege of an elite of technicians and professionals who design, implement and oversee the new systems.

The latest waves of layoffs have already produced immense demoralizations expressed as rising rates of suicide, alcoholism and domestic violence. Despite recent and much-publicized erosion of the "work ethic," most U.S. workers still seem to experience joblessness as a catastrophe. And although the restructuring (disguised as "Reaganomics") has met with sporadic working-class protest, the main response is still passive despair.

The longer-term consequences are harder to foresee. The growing numbers of "marginal" people both here and in the Third World will present major difficulties for capitalism. Much as the pacification of the Third World is an ongoing concern for whole covens of bureaucrats and military men, the pacification of the U.S. will again become a standing line-item on corporate and governmental agendas.

When sociologists say "marginal," they mostly mean: on the margins of the wage system, of work. Work serves two basic purposes. It is, of course, the main means of access to that great "necessity" of life, money. But it's also vital to the systems of "secondary control" which supplement the primary systems of state force (the police, the army) and programmed leisure time. It provides the single most important opportunity for participation in "normal" life, and therefore for the construction of a "normal" identity. More concretely, it fills the empty hours that would otherwise breed unrest and imparts the discipline of hierarchical power a discipline that can never be allowed to lapse.

With more and more people becoming permanently unemployed, or else employed only marginally in ways that do not provide them with "career opportunities," the system loses much of its ability to integrate restless groups. A result is the growth of what one British writer called "the impossible class" in places as culturally and geographically divergent as Brixton, England and Santo-Andrade, Brazil.

Brixton is a mostly Black London neighborhood whose collective counterattack against the police triggered nationwide youth riots in 1981. Santo-Andrade, a vast slum on the outskirts of Sao Paulo, was likewise the flashpoint for massive riots just this April. Both areas teem with the jobless, the penniless and the restless—people who have lost, or have never had, the usual ties to the economic system. Instead they survive by various combinations of part-time work, welfare, street-hustling, squatting, shoplifting, scavenging and robbery.

Here some important differences emerge. While the British rioters of 1981 were quite successfully isolated from the rest of the working-class population, this will be less easily done in Brazil. Santo-Andrade, for instance, was also the detonator for the big auto workers' strike of 1980-81. In general, Third World "marginals'' have much closer social and cultural ties to the regularly employed workers than do their European and U.S. counterparts. This, however, is mostly because Third World workers have never enjoyed even the relative security and comfort afforded the majority in the central countries during the last two decades.

One doesn't have to accept a scenario of simple mass unemployment to foresee analogous problems developing here. Just as likely is what some analysts are calling ''the feminization of work.'' In other words, most jobs reduced to the traditional status of ''women's work,"— underpaid, part-time, insecure. Also, like "women's work,'' many of these jobs may be done at home, with "telecommuting" replacing the office for millions by the end of the century. Workers would be paid piece-work, have little contact with other company employees, and (the managers doubtless hope) be totally unorganized.

While this prospect is predictably touted by industry flacks as a "liberation," it is actually more like a return to the conditions preceeding the industrial revolution. But it is worth remembering that a major reason workers were originally brought together in factories two hundred years ago was to discipline them. Today, it is hoped, the computer will be able to monitor the worker so closely that other forms of oversight can be dispensed with.

The essence of marginalization is not the lack of wage-work per se, but the lack of the identification with it that comes with sharing its rewards. Along with this lack of identification comes an inner abandonment of the "work ethic" and attendant success fantasies—executive suite, house in the suburbs, whatever.

Not that there will be any shortage of candidates for the Technical/Professional elite. Millions are willing to be good if it will keep them in Porsches and chocolate. For millions more religion and alcohol will fulfill their traditional roles. For others though, different means are called for, and the managers hope that microchip-based technologies will help provide these means.


"Dealing with contradictions and conflicts is a tricky business." —David Rockefeller

With the world ever more brutal and unstable, and with the system unable to offer everyone a place, the marginals are becoming the "surplus population" of a Malthusian capitalism. War seems ever more attractive as a means of social control. Let's call this the 1984 scenario. In Orwell's Oceania, the basic problem was that society had become too productive, and military waste production had to be maintained to keep the population amenable to government manipulation. There are, incidentally, 45 countries at war at this moment, and at least one of those wars—the Iran/Iraq conflict—is just the sort of slow-burning, labor-intensive operation that invites interpretation as a deliberate population control measure.

But even in 1984, warfare wasn't enough. It was supplemented by the telescreen, a device that also has its parallels in the modern world. TV and home video are obvious examples, since they provide a surrogate image-based participation in the life of society. And the development of corporate TV, the computerized information utility, the fifty-seven variety cable pacification box, computer-targeted advertisement, teleshopping, 3-D video games and other trinkets too wonderful even to imagine will certainly help.

And, since it is so easy to "talk back to your TV," other, less subtle applications will also be deployed. Developments in computerized surveillance technology are truly mindboggling. Already, devices that can take the place of the prison are being tested. A recent article in the San Francisco Chronicle (4/26/83) tells of a microchip anklet that notifies the central computer if the prisoner strays more than 200 feet from the phone. Like many developments, this one was anticipated in science fiction usually used by an evil society against the hero.


Nobody, including the top managers, really knows how much of all this will come true, or how fast. Computerization in general is proceeding at a breakneck pace. But the rate of microelectronic investment in the workplace itself, the primary source of all these contradictions, is currently much slower than anyone expected. The market for factory automation products and services in the U.S. this year is about $4 billion, and while some industry analysts envision an explosion of the market to as much as $30 billion by 1990, this is uncertain. There simply isn't much incentive to buy new plants and equipment these days. The Wall Street Journal (10/11/82) commented that while the the automated "factory of the future" may eventually become standard, right now "there are practically no new factories being built."

Even if a real economic recovery arrives, the incentives to automate production in the industrialized regions of the world may not turn out to be so compelling after all. Some Third World countries (Singapore, South Korea, etc.) have "developed" far enough to support automated production, and perhaps to support it more cheaply than the American economy can. Besides, the TransNational corporations (TNC's) are already heavily committed to these areas. And, in many cases, the TNCs' only access to foreign markets otherwise protected by import curbs will be by building the factories where the markets are. Finally, there will be products and processes which resist automation enough to remain competitive even when done labor-intensively—providing that labor is cheap enough.

Automation is the fruit of capital's drive to cut costs and reduce its dependence on workers. This is the result of no unified plan, but rather a byproduct of the competitive need to survive. During the last wave of automation, in the '50s, the economy, and especially the service sector, were rapidly expanding. This time around automation is based on far more flexible devices, and is taking place in the context of increased international competition, choked world markets and decrepit infrastructure.

All these variables make predictions difficult. A few things are clear nonetheless. First, unless the new technologies turn out not to work at all, further mechanization of work is inevitable sooner or later. Second, this means that unemployment and "underemployment" (low-paid, part time, insecure work) will continue to grow. Third, wage-work linked to programmed consumption has been the primary means of social control in the developed countries since 1945. As this means breaks down, cash strapped elites are likely to resort to some brutal alternatives.

In this context, even the most sophisticated strategies for "full-employment," like the idea of converting war-related industries to peaceful use, fall very short indeed. Reasonable though they may seem, they are unachievable without major social upheaval, upheaval that their proponents refuse to welcome.

A better approach is to honestly confront the complexity and depth of the current restructuring and to try to find a politics that can match it. A successful fight for the development and use of technology must focus on the issue of control, and it is not only technology but work itself that is used to control the population. It will have to grapple with the profoundly contradictory implications of the new automation, implications which this article has only gestured at. We can take a lesson here from Alvin Tamer and his ilk, who have shown just how many millions of people, suspecting the scale of the coming changes, are straining to understand the "big picture'.'

One point of leverage in dealing with the reality of economic immiseration may be in taking the hype at its word—turning the promise of liberation from work into a political demand. Workers and marginals in Italy and elsewhere have already pioneered the fight for the separation of work and income—for the "right to live" rather than the "right to work". (It should go without saying that welfare as it currently exists does not qualify as "living".) Others, most recently Northern European youth, have bypassed "income" altogether by simply taking what they need, squatting houses and jumping public transit gates.

These sorts of tactics are, of course, limited. They are cited only in the hope that they might evoke a sense of politics as an assertion of the right to live. With work becoming the focus of life for only a privileged elite, and a meaningless agony for the rest, such an assertion, long overdue, may be a real possibility. The only other choice is a more or less uncritical defense of the society of wage-work and its "ethic".

by Tom Athanasiou, con Amigos