ECONOMIC PROBLEMS OF A"POSTINDUSTRIAL" SOCIETY
Heilbroner, Robert L.
I think I should begin by expressing a certain caution with respect to the premise of my paper, a caution indicated by the quotation marks I have placed around the critical word...
...Thus, however inaccurate or inadequate the economic determinist view may be, it is foisted upon us as an initial mode of viewing the future for lack of any alternative "positive" approach...
...But it would be hasty to jump from the fact of a higher stock of embodied education to the conclusion that the stock of "knowledge" of the society has increased pari passu...
...The power of the moderately affluent middle classes, and of the service-sector located work force may prove more troublesome for a viable "incomes policy" than the wage-determination in an industrial setting (the recent experience in the municipal sectors is a case in point) 22 No less of a difficult problem for the macromanagement of the postindustrial system may be that of persuading the majority of income recipients, whose incomes lie in the fourth income decile and up, to relinquish substantial sums for the benefit of the poor who are to be found in the bottom three deciles...
...A more simplistic and quantitative exploration of the term is to be found in Herman Kahn's and Anthony Wiener's The Year Two Thousand (New York: Macmillan, 1967...
...First, as we have all come to realize, the meaning of growth is both ill-specified and elusive...
...We have already seen that the displacement of "muscular" by "intellectual" labor is one of the main attributes of postindustrialization...
...Is it possible to generalize about the effects of such a massive relocation, particularly when one takes into account the extraordinary heterogeneity of tasks contained within the service sector...
...second, suggesting the kernel of truth that resides in these views...
...The goals once chosen, the social scientist again comes into his own in the more modest, but nonetheless important, role of social "engineer...
...and (3) the most "attractive" sector for the introduction of machinery lies in the heretofore technically "neglected" service area...
...and in the United States over a period of 70 years the decline has been minuscule...
...No one can gainsay this change which, like the change in the sectoral location of labor, surely augurs new outlooks, experiences, and expectations for the labor force...
...A second structural challenge to be faced by the postindustrial world is the problem of ecological adjustment that must be faced over the coming decades—a problem that will steadily grow in intensity as population densities rise, pollution accumulates, and resources become depleted...
...In more concrete terms, there may be a limit as to the amount of government services, retail-trade services, education, recreation, financial advice, etc., that a man wants at a given income level...
...But in the main I think I am on firm ground in holding that education nurtures the association of "work" with reading, writing, and calculation, rather than with handling things...
...a Ferenc Janossy, The End of the Economic Miracle (White Plains, N.Y.: International Arts and Sciences Press, 1971), has a dramatic imaginative illustration of the respective importance of knowledge versus "labor power" or "capital...
...Businessstate cooperation is, of course, as old as capitalism itself...
...2nd rev...
...That linkages exist has been amply demonstrated, but the direction in which power flows (from the economic to the political structure, or vice versa) is unclear or perhaps unstable...
...And within that very important branch of social knowledge concerned with the operation of the socioeconomic mechanism, what seems to mark the education-intensive postindustrial society is a marked decrease in the ability of the individual to perform work outside his trained specialty—witness our helplessness in the face of a broken utensil, vehicle, electrical system, or plumbing fixture, compared with the versatility of the farmer (or industrial artisan), proverbially jack of all trades, even if master of none...
...Thus the definition of a postindustrial society that rests on a marked shift in the locus of employments can be amply demonstrated by statistical data...
...Numerous books have pop...
...Here one major trend seems likely to be reinforced by the postindustrial system...
...All these adjustments—the need for which hinges, let me repeat, on the unpredictable rate of technological displacement and the shift in the demand for various services— portend considerable strains on the "traditional" capitalist mechanism...
...The problem, then, is the extent to which the expansive drive of a capitalist mechanism, expressed through the acquisitive and accumulatory behavior of its corporations, can be given an appropriate area in which to manifest itself, if unrestricted growth within the industrial sector becomes impermissible for environmental reasons...
...Many studies have shown the extraordinary stability of income-shares accruing to the top and bottom deciles in the United States...
...Inflation has replaced deflation, but the one, like the other, is surely a market phenomenon...
...The figures are well known: in manfacturing, the assets of the top 100 firms in 1968 were as large a share (roughly 49 percent) of all corporate manufacturing assets as the share of the 200 largest industrial firms in 1950...
...But this is only conjecture...
...More skeptical observers have noted that (inflation aside) the R & D figures in the later years are swollen by the growing tendency to include routine testing or marketing procedures within the category of "research...
...ROBERT L. HEILBRONER 164 cated, service-connected tasks...
...Specifically "capitalist" relations with the underdeveloped world seem to have worsened in the most recent period, or perhaps we should simply say that the capitalist problem of "imperialism" has reemerged to a central position...
...168 It should be noted that we are far from understanding the dynamics of this twosector division with regard to the performance of the system as a whole...
...Nonetheless, as before, it is wise to look for continuities as well as differences in seeking to delineate the natur of the new socioeconomic environment...
...The stage may display new endemic characteristics and problems—indeed, I shall next turn to an exploration of what these may be—but it must also be expected to manifest many of the structural attributes of industrial capitalism, including concentrated economic power and wealth, a highly unequal distribution of pre (and probably post) tax income, and macro-malfunctions and misallocations of resources that arise from the predominance of the market as the principal allocatory mechanism...
...I hasten to stress the extreme tenuousness of our knowledge in all these fields...
...Meanwhile, the industrial "core," compris ciety: The Evolution of an Idea," Survey, Spring 1971, and The Coming of Post-Industrial Society (New York: Basic Books, 1973...
...Service work, in all (or most) of its varieties is characterized by trim surroundings, neat dress or a prestigious uniform, constant exposure to a "clientele," coffee breaks, telephone calls...
...To this matter we will return...
...moreover, as we have seen above, the size of the industrial proletariat has remained approximately constant...
...A mere 29 retail chains, for instance, control a fifth of all assets in trade...
...He asks us to imagine the instantaneous transfer of the populations of two nations, one developed and one underdeveloped—say, England and Pakistan (before its civil war...
...To put the matter differently, we cannot assume that a postindustrial society is one in which the general level of "know-how" is raised along with the The Sources of Invention (New York: St...
...What is specifically capitalist about the phenomenon is the focus of control on corporate enterprise...
...19 the top 10 percent of family units receiving about 30 percent of income, the bottom 30 percent less than one-tenth of income...
...Whether "capitalism" could adjust to such a situation is moot—in the opinion of economists as different in orientation as Marx and Keynes it could not—but in all likelihood such a trend would accelerate the tendency toward the "managerialization" of the public-private corporate state to which other tendencies, discussed above, now point...
...10 Thus there is some reason to regard the institutionalized knowledge-input of the postindustrial society as much less sharply differentiated from that of "industrial" society than might at first appear...
...that of psychic energies may be greatly increased...
...1 -1 Economic society today is strikingly characterized by what Robert Averitt has called a Center—a small number of very large and powerful industrial units—and a Periphery —a very large number of generally small and weak firms...
...This is the growth of business-state coordination at an overt rather than covert level...
...Reference should also be made to Zbigniew Brzezinski's Bethreen Two Ages: America's Role in the TechnoIronic Era (New York: Viking, 1970...
...This is the slow, irregular, but apparently irreversible trend toward the concentration of capital...
...The industrial "core" remains roughly constant...
...If there is one ultimate definition for postindustrial society, then, I would suggest, it is that stage of socioeconomic organization in which men gradually escape from the thralldom of blind mechanisms to enter the perilous, but potentially liberating, terrain in which human beings finally assert themselves, for better or worse, as the masters of their fate...
...Nonetheless, there seems little doubt that a new educationbased stratification has been created at the apex of the system, and that a new mystique surrounds "the scientist," symbol of the knowledge-oriented postindustrial system, comparable to that which formerly adhered to the captain of industry...
...In that case, where will the displaced labor go...
...More significant is the stubborn continuation and defense of the extreme concentration of wealth in the top 1 or 2 percent of family units who collectively own about a third of all wealth...
...S. Kuznets, Modern Economic Growth (New Haven: Yale University Press, 1966), p. 106...
...The "welfare" state, however inadequate in actuality, is now a generally accepted model for all industrial societies, and brings with it a considerable degree of "socialism" in the form of guaranteed incomes, family allowances, public health assurance, educational subsidization of lower income groups, and the like...
...I am aware, of course, of exceptions: agronomists, engineers, and a few similar professions...
...Nevertheless, the basic shift is unquestionably out of rural pursuits through industry into service tasks...
...This is by no means all gain, although some of it is...
...Drawing on Denison's work we may generalize for the United States that for the two decades prior to 1929 increases in the stock of capital goods and in labor supply together accounted for about two-thirds of our increase in output, whereas in the decades 1929-59 increases in these quantitative factors accounted for only 44 percent of growth...
...ularized the idea, of which the currently moss widely quoted is Alvin Toffler's Future Shock (New York: Random House, 1970...
...ECONOMIC PROBLEMS OF A "POSTINDUSTRIAL" SOCIETY 169 andi...
...We have already noted that the more extreme destabilizing tendencies of capitalism now seem to be faced with rough-andready remedies...
...Several possibilities for adjustment are available...
...very highly skilled tasks (surgeons) and very low-skilled (filing clerks...
...1' The actual power possessed by the new elite, as well as its degree of sub- or superordination to older elites, is as yet unclear...
...Had the demand for agricultural output been extremely elastic, the release of labor through mechanization would have resulted only in a much vaster increase in total farm output than we have in fact experienced...
...frivolous gadgetry, style changes, and pollution-absorbing technology at the other—the one extreme producing deleterious or dangerous growth, the other illusory or "defensive" growth...
...and that the "amount" of services (measured in the dollars we spend for them) may not rise as rapidly as income rises...
...LET ME THEREFORE START by exploring rather skeptically three different means that L This statement implies a certain economic deter minism...
...17 That is not a problem for this paper...
...Many forces within the postindustrial framework seem likely to diminish the strength of that mythology, and to strengthen the tendencies toward open coordination...
...The bleak expanse of the factory wasteland, surrounded with its high, electrified fence...
...perhaps one can draw equally or more convincing scenarios of greater stability, communal morale, individual fulfillment...
...Let me turn finally to another new attribute of the postindustrial world which also follows from the characteristics we have examined in our previous section...
...ECONOMIC PROBLEMS OF A "POSTINDUSTRIAL" SOCIETY 165 unbridgeable chasm...
...18 See A. Shonfield, Modern Capitalism (London and New York: Oxford University Press, 1965...
...2 A great amount of literature—too long for a footnote—now deals with "postindustrial society...
...For when we do so, we encounter some disconcerting considerations...
...A further caveat with respect to the supposed information revolution applies to the rise in the "stock" of education embodied in the work force...
...To raise these cautions against a simplistic view of the postindustrial society as one characterized by a "knowledge explosion" is not to deny that profound alterations are visible within contemporary society as a result of greater educational inputs—alterations that are likely to become even more pronounced in the society of the future...
...cit., pp...
...The physical dangers of work are less...
...Second and perhaps more important— although necessarily more conjectural—is the educationally based evolution of a "subclass" of highly skilled technicians, scientists, and experts who seem to be moving gradually toward a position of greater influence within the socioeconomic system as a whole...
...What will be the effect of this further mechanization...
...Rather, it seems probable that the concentration process will now proceed rapidly in the burgeoning service sector, where significant inroads have already been made (as is also the case in agriculture, still by far the least 15 Blair, op...
...In England in 1811 less than a third of the work force was employed in agriculture, and over a third was in services throughout the first half of the 19th century...
...2) almost three-quarters of a century of invention and innovation within the industrial core has left the proportion of the labor force relatively unchanged, as we have seen, and we can therefore assume that if the same general forces of technology and demand continue, there will not be significant labor displacement from this sector...
...The most sophisticated version of the concept is to be found in Daniel Bell's work: see especially the symposium, including his essay, in Survey, Winter 1971...
...The oligopolistic Center has been shown to be the source of much economic inefficiency and perhaps of inflationary pressures...
...The postindustrial society is likely to be faced with a "redundancy" of labor owing to the progressive incursion of mechanization into the service sector...
...At a less abstract level, however, the gain is much less...
...In a postindustrial society in which industrial expansion were necessarily constrained because of ecological hazards, and in which the large corporation had not found a satisfactory means of penetrating the service occupations, we could expect serious stresses to manifest themselves—a fall in profit rates and/or a much more acrimonious struggle over the division of the social product...
...the effectiveness of "institutional" invention, citing evidence that the preponderance of the important inventions or innovations of the last third of a century have been made by individuals or small firms...
...Put differently, the industrial factory worker—the key dramatis persona of the Marxian drama —continues to account for approximately the same proportion of the total work experience of the community: unskilled, semiskilled, and skilled workers—the blue-collar group—constituted 25.5 percent of the labor force in 1900 and 34.9 percent in 1968, the main shift taking place within this group as most unskilled labor rose to semiskilled levels...
...It is difficult to know what conclusions 21 Let me simply remind the reader that this sector includes the most highly bureaucratized elements of American life—the federal government— and the least bureaucratized—the individual proprietor or professional in the service trades or professions...
...and this may indeed militate against the willingness of the "educated" population to consider many manual tasks as appropriate ways of making a livelihood, regardless of the relative incomes to be had from goodshandling, rather than paper-handling, work...
...The same applies to manufacturing...
...7 See Robert Heilbroner, "On the Limits of Economic Prediction," Between Capitalism and Socialism (New York: Random House, 1970...
...One of these lawlike motions is the drive for profits characteristic of a capitalist system...
...No doubt the form and functions of this planning will display differing reaches and effectiveness in various societies with ECONOMIC PROBLEMS OF A "POSTINDUSTRIAL" SOCIETY their particular ideological, traditional, and structural differences...
...5 The reader should be warned that these statistics must be interpreted with care...
...24 In this sector labor costs are high, productivity low, and a new level of technological capability begins to bring many heretofore "unmechanizable" tasks within the reach of machinery: as a result we have the vending machine for the counter man...
...First, let us note that the industrial sector has not been the source of the main change in the profile of sectoral employment...
...23 We do not fully understand the reason for the 23 A brief technical footnote seems necessary here...
...and mining in the primary sector...
...If demand swells pari passu with the increased productivity per service worker that will result from "automation," then the service sector may continue to absorb its present 60-65 percent of the labor force...
...All these elements suggest that whatever else we may say about the postindustrial future, we should consider it as a stage of capitalism and not as a step "beyond" capitalism...
...279-318, esp...
...Let me therefore turn the coin over and review the evidence I have just marshalled in order to factor out those elements that seem to me particularly freighted with change...
...110, 113 14...
...but once again the fault lies with the failure of the market mechanism and the special constraints of private ownership...
...See S. Lebergott, Manpower in Economic Growth (New York: McGraw-Hill, 1964), p. 111...
...Shortrun economic prediction, based on presumptively "known" behavioral functions and technical constraints, has been shown to be egregiously faulty...
...The first of these, we will remember, had to do with the sectoral relocation of the work force away from the farm through the factory and into the office...
...12 Thus the emphasis on "knowledge" as the differentia specifica of a postindustrial system is not misplaced, although the precise nature of this difference requires to be spelled out a good deal more carefully than is often the case...
...These caveats and distinctions are important to bear in mind when we use the shift in employment locus as the basis for speculations about the implications of the postindustrial era...
...To put it differently, all speculation about postindustrialism assumes that the causal line of inference runs from the economic changes to the political and social changes, and although feedbacks may be discussed (such as the drive toward plannification) the primum mobile of "prediction" is the economic dynamic of social evolution...
...R. Mitchell, Abstract of British llistorical Statistics (London and New York: Cambridge University Press, 1962), p. 60...
...20 In passing, it might be remarked that this extreme concentration of control is not peculiar to capitalism— it could no doubt be found under feudalism and (insofar as power can be used as a proxy for wealth) under existing forms of socialism...
...Just as late industrial capitalism differs in striking and significant ways from the small-scale capitalism of Adam Smith's day, so it is probable that the "postindustrial" trends within contemporary capitalism are pushing in directions that also portend substantial change...
...The difficulties of controlling inflation may well be greater than those of overcoming depression, both to diagnose and to cope with politically...
...This enormous increase has led many observers to conclude that we have now "institutionalized" the process of scientific discovery and application, thereby radically changing the nature of the propulsive forces within the economy...
...3 As the history of every industrialized country indicates, the proportion of the labor force employed in agriculture shrinks to a very small fraction of the total work force: in the United States only 4 percent of the civilian labor force is to be found on the farm and this includes a considerable residue of subsistence farmers...
...the predominance and growth of large banks and insurance companies is well-known (the top 50 banks account for a third of all banking employment...
...This raises very grave problems for social scientists...
...By comparison with the manufacturing sector, these are all relatively unconcentrated industries, but in terms of absolute size of units, the large firm, with its bureaucratic organization, is increasingly evident...
...ROBERT L. HEILBRONER concentrated sector...
...This concerns the problems of economic function and malfunction that a postindustrial society can expect to inherit from its precursor...
...it is the mythology rather than the reality of "laissez-faire," which has dominated the past century...
...the self-service store for the clerk...
...I must confess to a suspicion that if postindustrial society follows the general economic trajectory I have described, it will be accompanied by a more authoritarian political structure, by more anomic groups in the undereducated, by increasing restlessness and boredom among the educated "middle classes" still subject to the stimuli of a competitive, acquisitive culture...
...Nonetheless, a few cautionary remarks are in order...
...the clangor of the industrial shed, the dirty work clothes, the lunch pail, the grease, the grime, the dust that we find in most places of industrial work are missing from the store and the office...
...ing the late decade, in which the effects of the postindustrial changes might have been expected to reveal their influence...
...This brings us to the ways in which knowledge input is measured...
...It may therefore be quite mistaken to search, within economics or in its sister disciplines, for "positive" perspectives on a future that will not come into being by the workings of "lawlike" mechanisms (although it may be influenced by their residual influence), but by the political selection of social goals whose means of attainment then become the subject for social scientific investigation...
...Thus there are cogent reasons for thinking of the postindustrial society as one that differs in significant ways from the economic performance of the industrial capitalism to which it is a successor...
...cit., J. K. Gailbraith, The New Industrial State (Boston: Houghton Mifflin, 1967), and R. Heilbroner, The Limits of American Capitalism (NewYork: Harper & Row, 1966...
...This primacy of economic dynamics has nothing to do with ideology...
...As with the previous "visions" of a postindustrial system, I think there is a core of truth in this view...
...Finally, I will ask the much more difficult question as to the social consequences we can anticipate as following from these changes...
...Not only are the "laws of motion" of economics extremely imprecise, but the linkages between any given economic structure and its interlocked political and social accouterments are even more difficult to describe with any degree of assurance...
...For what 26 On this point see especially the discussion by Adolph Lowe, On Economic Knowledge (New York: Harper & Row, 1965, 1970...
...This is the effect of "automation" on the psychophysical process of "work" itself...
...The expenditure of physical effort is greatly reduced...
...3. A postindustrial society can be regarded as a "postcapitalist" society—that is, as a socioeconomic formation in which the traditional problems of capitalism will give way before the new organizational modes of a postindustrial system...
...Yet I shall resist this temptation in order to explore one last highly conjectural area that seems inescapable in any consideration of what the future may be like...
...However successfully we may have obviated the threat of mass unemployment and catastrophic income decline, there is scant evidence as yet that postindustrial society has solved problems that reflect the capitalist modus oper 20 R. Lampman, The Share of Top Wealth Holders in National Wealth 1922-56 (Princeton: PrincetonUniversity Press, 1962), p. 24...
...Changed, too, is the character of work supervision, away from factory whistles, check-ins, foremen...
...170 ROBERT L. HEILBRONER follow from this impressionistically drawn change in work milieu...
...For along with the increased training undergone by the labor force has come an increase in the compartmentalization and specialization of its skills, best exemplified by comparing the wide-ranging capabilities of the farmer with the much more narrowly defined work capabilities of the office clerk...
...ing manufacturing, mining, transportation, construction, and utilities, has stabilized at roughly a third of the work force...
...21 One such generalization is self-evident, but none the easier to interpret...
...It is not only technology, but the inelasticity of demand for "food" (Engels's Law) and the approximately unitary elasticity for manufactured goods that have resulted in the precipitous fall in rural em ployment and the secular steadiness of manufacturing employment...
...But every indication is that invention and innovation will be proportionately more concentrated on the tasks performed in the service sector...
...The wellknown rise in female labor participation (from 18 percent of all females of working age to 37 percent, in the years 1890 to 1969 in the United States) has brought as a consequence the illusion of a rise in service "employment," as tasks that were formerly carried out within the home, where they remained invisible to the eye of the statistician, emerged onto the marketplace...
...There is no doubt that technology is the major element in bringing about the sectoral migration of the labor force, for it has been the widening "technicization" of rural and then factory work that has released the manpower that has flowed into the tertiary areas of the economy...
...12 Perhaps it is to be noted in passing that the same ambivalence also attaches to this new figure who is viewed, as was the older entrepreneur, both as a heroic personage capable of building a great society and as a demonic force capable of destroying it...
...What further economic changes can be expected from the trajectory out of agrarian, through industrial, into the service-centered, education-intensive system we call "postindustrial...
...This seems likely for three reasons: (1) we are reaching the limits of labor displacement in agriculture (although there remains a small group that can still be dispossessed from their jobs in that sector...
...Thus, if postindustrial society in fact represents a new stage of socioeconomic relationships, the cause must be sought elsewhere than in the disappearance of the industrial sector as a milieu for work...
...but in fact a considerable proportion of employment in this sector is already provided by monopolistic or oligopolistic units...
...Finally, improved technology—which is, after all, only the concrete application of knowledge—rose from 12 percent of the causes of growth to 20 percent in the same two periods.7 These proportions also differ from nation to nation, as Denison has shown in a study of the sources of growth in Western Euro pean nations, but the direction of change— as in the case of the migration of labor—is the same throughout...
...But this constraint does not apply with quite the same force to the longer run, when the persistent trends of economic life assert themselves over their short-term vagaries.t7 Hence to whatever extent we dare to predict the contours of postindustrial society, it is perforce on the basis of these economic projections...
...Finally, we pass from structure to function...
...In suggesting that the changeful elements of the postindustrial trend will encourage overt planning, I do not mean to imply that the politicoeconomic problems of this stage of capitalism will necessarily be easier to solve than those of industrial capitalism...
...The premise is that we are moving rapidly into a new framework of socioeconomic relationships, a framework sufficiently different from that of the recent past to warrant designation as a new "stage" of our historical development...
...Control of corporate wealth—by far the most strategic item of wealth—is much more tightly centered, with about two-thirds of such wealth in the hands of 0.2 percent of all families...
...S S II hall we then dismiss the idea of a "postindustrial" society as a chimera...
...the very highly paid (entertainers) and the very poorly paid (servants...
...In terms of the immediate impact on the quality of life, it may well be the most developed nations, with their high rate of pollution and their voracious consumption of resources, that stand to be the first affected...
...A third possibility is the extension of the transfer mechanism to permit a certain proportion of the young working-age population to live without work, at socially determined subsistence levels, if it so chooses...
...In an era that has rejected social fatalism, the future will no longer "arrive," but it will be made, however crudely, cruelly, or well by the harnessing of political wills and their focusing on deliberately chosen goals...
...Although it has declined slightly in France and England during the last 20 years, in Germany the percentage is unchanged...
...Insofar as formal education is devoted to exposing the student to the broadest vistas of history, the social and natural sciences, etc., one kind of "knowledge" is undoubtedly increased...
...and Edward Denison, Sources of Economic Growth in the United States (New York: Committee for Economic Development, 1962...
...They imply as well new strains on the macroprocesses of a system in which the historic underpinning identified by both Marx and Weber—a propertyless class of workers—has been replaced by a class of workers which, however "propertyless," are not forced to sell their labor power at the prevailing market rate...
...I think I should begin by expressing a certain caution with respect to the premise of my paper, a caution indicated by the quotation marks I have placed around the critical word postindustrial in my title...
...Robert Engler, The Politics of Oil (New York: Macmillan, 1971) ; G. Kolko, The Triumph of Conservatism (Glencoe, Ill., and New York: Free Press, 1963...
...What I rather wish to stress is the existence of an economic concentrate allied in some fashion with a political concentrate—a state of affairs that is not basically different from that which existed under "industrial" society, and which can, incidentally, be seen as well in the economic-political ententes of Japan, France, Germany, and other candidates for entry into the postindustrial realm.' The development of a "postindustrial" configuration of employment or education does not seem likely to undo this characteristic of economic concentration...
...Instead, the primary "experiential" fact of the employment shift has been the decisive decline of agricultural (farm) employment and a corresponding growth of market-lo some of the decline in employment in the agricultural sector represents a shift of agriculture-related employment into the industrial and service sectors— e.g., the rise of farm machinery manufacture, of chemical fertilizers, and of a government service sector and a private trade sector occupied with agricultural problems and products...
...A man or woman who has been relieved of virtually all economic necessity until the age of 21 or even 25 is reared in an environment in which some sort of economic provision, even if at a frugal level, is taken for granted...
...Measured by the conventional criteria of man-years of schooling, there is no doubt that this stock has increased markedly: whereas only 6 percent of the population aged 17 were high school graduates in 1900, nearly 80 percent had completed high school in 1970...
...That is, college prepares one not only intellectually, but experientially, for the store and the office rather than for the factory or the farm...
...The conjecture (it is perhaps too untestable to be dignified with the name of "hypothesis") is that the lengthened exposure to the "white-collar" atmosphere of the classroom tends to identify the expected characteristics of "work...
...The actual amount going for basic research in new industrial products for 1966 was estimated to be not $20 billion, but $1 billion...
...As in the case of the definition of postindustrialism that emphasizes the shift in the locus of employment, I do not want to denigrate the importance that has been attached to human "capital...
...2 Accordingly, it may be helpful to commence by specifying as clearly as possible what we mean by the "postindustrial" transformation, both to clarify its relationship to the "industrial" era now presumably on the wane, and to highlight those aspects of the coming era that are genuinely new...
...cit., Brzezinski, op...
...Also Ackerman, Birnbaum, Wetzler, and Zimbalist, "The Extent of Income Inequality in the United States" in The Capitalist System, eds...
...This is the classic problem of the economic "base" and the noneconomic "superstructure"— a problem that finds its starkest expression in Marx, but that can be traced back to the Scottish Historical School...
...It is also possible that the demand for "ser 24 See J. Schmookler, Invention and Economic Growth (Cambridge: Harvard University Press, 1966) for evidence of the role of demand in directing the course of technological discovery and application...
...Perforce he relinquishes his place to the moral philosopher—his historical godfather —whose task it is to raise the consciousness of men to the alternatives open to them...
...4 The remainder of the population—over 60 percent of the work force in the United States today —is employed in the congeries of occupations that produce "final" services...
...If demand swells more rapidly, or if technology enters more slowly, employment in this sector may rise still further in both absolute and percentage terms...
...Even at the simplest level—the man behind the tractor wheel instead of behind the hoe, behind the adding machine instead of behind the ledger, behind the computerized lathe instead of behind the chuck lathe—the nature of human effort in postindustrial society is given a supervisory, rather than directly "active," aspect...
...Hence much of the "growth" to which modern knowledge seems to contribute so strikingly may be of little or no welfare significance: armaments, space exploration, and pollution-generating production at one extreme...
...Although this drive does not produce the determinate "equilibrium" solutions of neoclassical economics' 21 it nonetheless permits us to anticipate with a fair degree of certainty such types of behavior as the search for cost-reducing technology, the concentration of business enterprise (whether for reasons of efficiency or profitable financial manipulation), the probable advent of economies of scale in industries that have not yet been "invaded" by technology, the crucial role to be played by autonomous public and private expenditures magnified by a "multiplier" of reasonably known dimensions, and still other regularities...
...Second, before looking for the implications of the shift toward a knowledge-input economy, it behooves us to inquire further into the "fact" of the increase in knowledge input itself...
...211 This leaves open, of course, the choice of goals...
...The bitter class divisions "See among others, Bell, op...
...In passing, I should note that the smooth running of postindustrial society may hinge, even more than that of industrial society, on the presence of that "secondary" labor force (the drop-outs, casual labormarket participants, or exploited minorities) who continue to be available for the picking of fruit, the digging of ditches, the sweeping of floors, the washing of dishes...
...A massive misallocation of resources, visible especially in the decay of the cities, has taken public priority over mass unemployment...
...The first of these is the continuance of a trend whose origins can be traced back at least to the third quarter of the 19th century...
...Guarantees of em ployment, security of tenure in work, the "right" to expect an uninterrupted flow of income are thus plausible consequences of the transition to a postindustrial occupational and educational framework...
...They imply a high degree of that over-all plannification of which I spoke earlier...
...The paper appears here with the kind permission of the Japan Society...
...q The author, who is Norman Thomas Professor at the New School for Social Research, delivered this paper at a conference sponsored by the Japan Society and the Johnson Foundation...
...The great sectoral transformation of our times, in other words, has not been so much a shift from "industry" to "service" as a shift from agricultural to service tasks...
...H. Kariel, The Decline of American Pluralism (Stanford: Stanford University Press, 1961...
...Yet, in full awareness of the frailty of such "sociologizing," let me hazard one conjecture that combines the changed work experience mentioned above with a second characteristic of the postindustrial world— namely, the lengthened and broadened exposure of its work force to formal education...
...the psychological strains may be greater...
...see also "The Post-Industrial So are commonly advanced with regard to the idea of a "postindustrial" society: 1. A postindustrial society is one in which a preponderance of economic activity is located in the "tertiary" sector of the economy...
...Two such changes appear integrally connected with this trajectory, although as we shall see, the connections are not the same in each case...
...R. Edwards, M. Reich, T. Weisskopf (Englewood Cliffs, N.I.: PrenticeHall, 1972...
...Robert Solow, "Technical Change and the Aggregate Production Function," Review of Economics and Statistics, August 1957...
...and this redundancy—if it is not absorbed by a spontaneous growth of private demand for "services"—will require intervention into the market process on a far-reaching scale...
...For a fact that must be admitted in all our conjecturings about the shape of things to come is that we reveal ourselves, wittingly or otherwise, to be economic determinists—indeed, even technological determinists...
...It need hardly be said that the ecological threat affects not just the "postindustrial" world, but all nations, albeit in different fashions and at varying time schedules...
...Government statistics show a rise in R & D expenditures from roughly $1 billion at the end of World War I to a level of $28 billion in the early 1970s...
...166 ROBERT L. HEILBRONER general level of formal education...
...About this all-important question the social scientist has nothing to say, either as counselor or as expert "prognosticator...
...Without in any way challenging that supposition, let me warn against the misconception of that change as a massive emigration from industrial work...
...Similarly the top 200 firms in 1968 controlled as large a fraction of total assets as the top 1,000 firms in 1941...
...ECONOMIC PROBLEMS OF A "POSTINDUSTRIAL" SOCIETY endemic to capitalism in the late 19th and early 20th centuries seem to be yielding to a society of much greater economic (if not necessarily social or political) consensus...
...cit., and my essay "On the Possibility of a Political Eco nomics," Journal of Economic Issues, December 1970...
...Of the many new sources of tension and malfunction within the postindustrial world, this looming constriction of the expansive drive within the industrial sector seems among the most difficult of solution...
...But the basic nature of the challenge of mechanization is nonetheless clear...
...Whatever else its effects may be, the exposure to prolonged schooling seems to encourage an expectation of careers in white-collar, as opposed to blue-collar, tasks...
...s Nonetheless it is important, as before, that we scrutinize this characterization of postindustrialism with a certain reserve...
...Thus the postindustrial society encourages what Veblen called a "trained incapacity" for "dirty work" among that ever-growing fraction of the population that pursues formal education through the college level...
...This sector need not itself be within the tertiary sector, but might embrace subsidized small farming, labor-intensive subsidized handicraft, labor-intensive public construction, etc...
...However indistinct and blurred, these motions can nonetheless be described and, moreover, within broad limits their interactions can be deduced...
...It would be foolhardy to assert that an economic system operating under the constraints of "capitalist" ideologies and institutions cannot make these adjustments—one has but to consider the ECONOMIC PROBLEMS OF A "POSTINDUSTRIAL" SOCIETY 173 very great degree of social adaptation displayed by the capitalist nations of Scandinavia...
...Apart from a few descriptive generalizations—Michels' "iron law" of oligarchy, Weber's description of bureaucratic organization, Freud's or Erikson's outline of the topography of the psyche and its developmental stages—what do the other social sciences have to offer by way of predictive theory...
...Let me briefly summarize what these cautionary thoughts might be...
...IV We have already indulged in sufficient speculation with regard to the socioeconomic characteristics of the postindustrial world, and the temptation is to conclude on a note of solid empiricism...
...Along with the new sense of what "work" means there comes, I think, it growing expectation of security in the world of work...
...A second dimension of the mechanization problem has already engaged our attention...
...He calls this "the end of social fatalism...
...What is important to bear in mind is that some form of "growth," with all its money illusions and its mixture of "goods" and "bads," is an indispensable means of lessening the tensions generated by the need to divide the total product between wages and property income...
...What is at question is the time scale during which adjustment can be made and the degree of technological adaptation that can be achieved.° 5 At stake See, Robert Heilbroner, "Growth and Survival," Foreign Affairs, October 1972, and (with J. Allentuck) "Ecological Balance and the Stationary State," Journal of Land Economic.%, October 1972...
...One is the creation of a public employment sector designed to create employment for those displaced from the service area...
...We have already called attention to the presence and the undoubted continuing importance of the industrial core which, together with the agricultural sector, supports the tertiary activities of the postindustrial world...
...This definition of postindustrialism calls attention to the shift in occupational locus whose beginnings can be discerned far back in the 19th century...
...and there is no sign that this concentration or its focus will diminish appreciably in a postindustrial setting, although the wealth-holding elites may recruit newcomers from the scientific-technological community...
...Presumably the importance of the employment shift for a postindustrial system is that a change in occupational habitat brings new social experiences and needs...
...One of these ways—research and development (R & D)—is certainly grossly inflated...
...For example, In addition, we must note that some part of the rise in service employment represents the transfer of certain kinds of work from the nonmonetized household sector to the monetized commercial world...
...The first change has to do with the progressive mechanization of work—that is, with the further development of the very force that lies behind the trajectory of economic transformation itself...
...These shares have remained roughly constant, or have inclined slightly toward inequality dur 1 ° See G. Kolko, Wealth and Power in America (New York: Praeger, 1962...
...10 Howard Sherman, Radical Political Economy (New York: Basic Books, 1972), pp...
...2. A postindustrial society may refer to a change in the nature of growth-producing inputs from quantitative to qualitative factors...
...A second possibility is the deliberate steady reduction in the work force, achieved partly' by further extending the compulsory years of schooling, partly by reducing retirement ages, partly by shortening the work week...
...As this paper will make clear, I do not quarrel with the argument that deepseated changes in structure, institutions, and behavior are indeed surfacing within the economic sphere, whence they spread out to affect social and political life,' but unfortunately a certain voguish quality has come to surround the word "postindustrial" by which we describe this phenomenon...
...articles by Kaufman and Melman...
...The rise of this "knowledge elite" has been remarked by many...
...77 For a few studies of these linkages see: AEA Proceedings, 1972, pp...
...But in all postindustrial systems I would anticipate something that might be described as a "corporate state" —that is, a state in which the activities of the Center and the state are brought into compatible paths, in which the risks and instabilities of the Periphery are offset, or at least partially underwritten, and in which acceptable resource allocation is attacked by coordinated action between the public and private sectors...
...by the uncomplaining masses or explained away in terms of a theological or a political religion...
...14 13 Blair, op...
...4. 14 Robert T. Averitt, The Dual Economy (New York: Norton, 1968...
...There is no point in attempting to guess to what degree industrial companies will be able to move into such fields as entertainROBERT L. HEILBRONER ment, travel, personal services and the like...
...174 is the level of qualitative well-being, the rate of tolerable growth, and in the end the viability of the planet itself as a human habitat...
...This change in the existential and experiential character of labor offers rich ground for speculation, but little substantial basis for extraeconomic prediction...
...The export of capital, a major means of venting the expansive drive in the past, becomes less open, owing to environmental problems of pollution in the other developed countries (which are currently most attractive to capital), and to political problems in the underdeveloped world...
...In sum, there is little doubt that statistical examination of growth patterns among industrialized nations shows a steadily increasing importance of "knowl edge-related" inputs, and a corresponding decline in increases in brute "labor power" or sheer quantities of unchanged capital (for example, the addition of more railroad tracks...
...Key statements are those of M. Abramovitz, Resource and Output Trends in the United States Since 1870 (New York: National Bureau of Economic Research, 1956...
...Next, we find the distribution of wealth and income little if at all disturbed by the types of changes we have discussed...
...15 the sprawling Periphery has been identified by at least one student as the main source of business instability.l° More important, but even less well understood, are the extent and nature of the linkages that bind the Center and political power structure...
...The answer hinges entirely on the elasticity of demand for the services produced in this sector...
...vices," like that for "manufactures," will ultimately reach "satiety...
...ed., Norton, 1970...
...I will deal specifically with this issue at the end of this essay...
...Here the primary meaning of "postindustrial" calls our attention to numerous studies of growth within industrial countries, and to the more or less common conclusions that "knowledge" has played a steadily rising role in promoting growth, compared with increases in the size of the labor force or the quantity of (unchanged) capital...
...Thus the organizational character of industrial capitalism, with its hierarchies, bureaucracies, and above all its trend toward concentration, seems likely to continue in the postindustrial society...
...In this situation of extreme indeterminacy a key may be provided by what Adolph Lowe has identified as the mood of the times—cer tainly of the postindustrial age...
...We tend to picture the service sector as comprised of large numbers of independent proprietorships (lawyers, self-employed, one-man enterprises...
...All these problems seem likely to add further impetus to the overall drift toward business-state planning to which we have already pointed...
...ROBERT L. HEILBRONER particular sequence of technology that has given us this shift and cannot therefore make firm predictions with respect to the future...
...Equally dramatic, whereas those enrolled in college in 1900 constituted only 4 percent of the population aged 18-21, today well over half of this age group is in college...
...The dimensions of the ecological problem are ultimately very great and its restrictive implications severe...
...For example, whether "alienation" is exacerbated or alleviated is a matter about which we cannot even make informed guesses, not least because of the variety of tasks embraced within the service sector...
...It arises because we can discern "lawlike" motions within the economic sphere that have no counterparts in the political and social realms...
...Economic Indicators (1972), European countries: OECD, Basic Statistics of the Community (1970...
...Is there any doubt, he asks, that the growth curve of "Pakistan" would rapidly turn upward, while that of "England" would soon turn sharply down...
...That is not my intention...
...From one industrial nation to another the magnitude of these proportions varies, but the "drift" is visible in all, as the table below clearly indicates: PERCENTAGE DISTRIBUTION OF EMPLOYED WORKERS Agricul- Indus- Service ture try U.S., 1900 38 38 24 1970 4 35 61 France, 1950 35 45 20 1970 17 39 44 West Germany, 1950 24 48 28 1968 10 48 42 U.K., 1950 6 56 39 1970 4 45 50 Source: U.S...
...The answer I fear is, discouragingly little...
...4 Transportation and utilities, because they produce nontangible commodities, are often grouped within the tertiary sector...
...The importance of maintaining an adequate level of aggregate demand in the face of widespread expectations of "guaranteed white-collar work," of remedying the disruptive effects of the misallocation of resources, and of dealing with the problems of an economic system increasingly polarized between a Center and a Periphery all seem likely to increase the need for, and the political acceptibility of, some kind of "planning...
...The extreme vulnerability of the system to failures of aggregate demand has been tempered by the growth of a public sector...
...Needless to say, this change in expectations accords very well with the actual displace ment of labor from agricultural tasks and from the unskilled categories of industrial work, and its increasing deployment in ser vice occupations...
...In addition, a study by Jewkcs, Sawers, and Stillcrman throws considerable doubt on " John M. Blair, Economic Concentration (New York: Harcourt Brace Jovanovich, 1972), p. 15, citing estimate by David Novick of the Rand Corporation...
...If this identification of a profound change in mood is true—and I believe that it is— perhaps our view of the future as something to be "predicted" is fundamentally at variance with the realities of the age...
...The increasing "white collar" nature of work and the greater educational exposure of the majority may lessen this means of internalized control, unleashing a "free-for-all" race which no mechanism other than outright controls will be able to restrain...
...Thus the employment functionally related to agriculture is larger, perhaps by a considerable degree, than that "formally" related to it...
...Nothing of that kind is visible...
...Between that collection of often arbitrarily defined outputs called "Gross National Product" and any operational concept of "welfare" is a wide and perhaps 7 Denison, op...
...See also Blair, op...
...Unlike industrial man, however, who also shares in this complete ignorance of the fundamental provisioning tasks, postindustrial man is no longer even familiar with the environment in which the great bulk of our industrial products originate...
...Now I wish to proceed in a somewhat different direction...
...To what extent the expansive international momentum of capitalism can be diverted to the areas of services is an uncertain question, but not one that seems especially promising, as the various "service" occupations are now defined...
...In a word, the quality of the growth of a "postindustrial" society must be compared with that of an "industrial" society, before we can discuss the rise of knowledge-inputs as a cause for celebration, as well as a simple fact...
...Like industrial man, postindustrial man is divorced from knowledge of the most fundamental provisioning activities of society: the seasons affect him only insofar as they determine his vacation time, the weather only as it upsets his travel plans or conditions his choice of clothing...
...the top 50 insurance companies for almost half of all employment in that field...
...As a result of these and still other changes, the "revolutionary" proletariat has failed to materialize...
...Perhaps this is nothing more than the diffusion among the great bulk of the population of attitudes that were formerly evident mainly among the up per decile...
...The first, whose implications we will examine again subsequently, is a change in the expected life-styles of a postindustrial population...
...29 See again the work of Lowe, op...
...Technology releases the manpower, but its migration into another sector thereafter depends on the demand for commodities originating in the various sectors...
...presumed to be the source of more than twice that proportion of growth in the later period...
...172 H eretofore I have been discussing the postindustrial society from two points of view: first, analyzing the inadequacies of certain views concerning the term...
...Let us only add that the specific features of postindustrialism that we have heretofore discussed—the sectoral shift and the increased education input— are not in themselves the source of any stabilizing tendencies (although one might claim that the defensive weaponry of macroeconomics is itself in part a product of the knowledge input of our time...
...Marlin's Press, 1958...
...When the ecological problem arrives "in earnest," it will pose an acute problem for postindustrial societies...
...22 Joan Robinson has suggested (in Economic Heresies [New York: Basic Books, 1971], p. 93) that control over the price level ultimately depends on the acquiescence of the population in a "traditional" set of hierarchical gradations, so that the determination of a few key wage bargains in fact settles the aggregate wage bill...
...215-27...
...We return at the conclusion to this problem of social forecasting...
...cit., p. 152, ff., and passim...
...It is a farreaching change in the character of what we call, or think of, as "work...
...It would not be surprising if the graduates of the postindustrial educational institutions bring with them strong expectations that "work" is not a scarce privilege to be com peted for, but a basic right—the normal re ward for having completed the long training that society has enjoined...
...Conversely, improved education and training, which were credited with only 13 percent of growth in the earlier period, were The literature again is too large to be reviewed...
...I group them here in the "industrial" sector because they are integrally connected with industrial processes...
...Of roughly 44 million employed in the service sector in 1970 (not including utilities or transportation), 13 million were in government, 15 million in trade, 4 million in finance (banking, insurance, brokerage, real estate...
...The growth of the laundry industry, the restaurant industry, the professional care of the aged, even "welfare," represent instances of this semispurious inflation of the growth of "employment" in service occupations...
...Historical Statistics, p. 74...
...In that sense, the average citizen of the postindustrial society is not only "better educated" but really knows more, with regard to the natural sciences, human behavior, etc., considered as abstractions, than did his counterpart in industrial or preindustrial society...
...the programmed lathe, the automatic check-reader, the omnipresent computer...
...ROBERT L. HEILBRONER 176...
...First, I wish to inquire into two structural or transformational stresses to which postindustrial society will be subject, beyond those that we have already identified...
...cit., chap...
...ECONOMIC PROBLEMS OF A "POSTINDUSTRIAL" SOCIETY "lawlike" statements can we apply to the organization of political affairs, to social organization, to changes in cultural life-style, and the like...
...28 By this he means the end of an age in which not only the events of nature but the events of society are taken as "givens," to be mutely accepted 28 Adolph Lowe, "Is Present Day Higher Edu cation `Relevant'?," Social Research, Fall 1971...
Vol. 20 • April 1973 • No. 2
