Industry East and West: The Second Industrial Revolution and the Western World
Sternberg, Fritz
The first industrial revolution began in England, spread to the Continental mainland, and then crossed the Atlantic to the United States. Only generations later did it affect Russia, and even then...
...However, this second industrial revolution does not affect only the Western industrial nations, but the Soviet Union as well, and this means that—unlike the first—it is affecting various societies with various social structures...
...of commerce The first graph shows a bigger rise in the upward curve in the post-war years prior to the economic recession...
...For example, this happened in the United States with the production of television and wireless sets...
...And, of course, they tell us nothing about the all important question, which is: will the United States be able to answer this challenge successfully...
...However, there is a danger that unemployment might increase...
...From 1947 to 1954 the increase was no less than 53 per cent, or an average of 7.5 per cent annually, whereas the average increase in industry was 25 per cent, or an annual increase of only 3.5 per cent...
...This last field is particularly important sociologically because in all previous technical revolutions administrative and office work—and thus the men and women engaged in it—were very little affected...
...Real power is in the hands of a relatively small group of capitalists, managers and employers...
...and the introduction of automation would therefore extend over a period of years, so that at no time would its effect on the labor market be very disturbing...
...So far matters have not gone far enough for the experts to be able to agree on a clear formula...
...Electronic machines are already able to perform a great deal of the office work which is being done today, which has in any case become more and more mechanical in recent years...
...With this the U.S...
...X, No...
...The government as such will also have to scope with the dangers which we sketched previously...
...economic expansion...
...This means that the Soviet economy has been growing and is expected to continue to grow through 1962 at a rate roughly twice that of the economy of the United States...
...They played first fiddle, but they were not in complete control of the orchestra...
...1, 1958, p. 39...
...A tremendous amount has been written about the rate of industrial growth in the Soviet Union, but for our purposes the quotation from Allen W. Dulles is sufficient because it very clearly underlines the main point: the comparison with the rate of industrial growth in the United States...
...At the same time it could release those tremendous progressive elements which are connected with the second industrial revolution...
...writers have been too ready • The Challenge to America: Its Economic and Social Aspects, Doubleday, New York, 1958, p. 65...
...but that is no longer enough...
...John Diebold, "Automation as a Challenge to Management," published in the UNESCO Science Bulletin, Vol...
...Quite a different attitude is necessary...
...The trade unions also existed as a power factor, and they had grown stronger and stronger...
...and secondly, as a consequence of the great increase in labor productivity and of rising living standards for the great masses of the people, the so-called tertiary industries have developed much more quickly in the United States than they have in Britain, Western Germany and Europe in general...
...In the years after the Second World War the production of the chemical industry increased tremendously...
...But in the 150 years approximately which have passed between the first and second industrial revolutions, decisive social changes have come about...
...The situation in offices, however, was usually very different...
...But in the present period of world political rivalries that just will not do...
...The result was a certain amount of unemployment in these sectors also...
...These targets would be designed to meet the demands of the present world-political situation, and at the same time assure the right proportions between the individual branches of U.S...
...So far so good...
...The abandonment of democratic institutions cannot even be considered, and therefore automation must be so extended as to raise labor productivity far above its present level...
...In the present world historical situation, the basis of comparison can no longer be America's own past—either industrially Or militarily...
...However, it must be remembered that not all power was in their hands...
...and by 1962 it may be about 50 per cent of our own...
...consumed directly about two-thirds of its production, whereas the proportion consumed in the Soviet Union was less than half...
...In a study entitled The Structure of American Economy* which was published shortly before the outbreak of the Second World War, there is a chapter entitled "The Corporate Community," which declares...
...Thus, factory workers experienced two separate technical revolutionary processes, whereas in offices today these two technical revolutions are taking place almost simultaneously and in the best case there is only a short gap between them...
...In other words, the government did not content itself with drawing up theoretical statistics of what might happen if...
...The introduction of automation, which of its nature reduces the amount of labor power necessary for a particular volume of production, may affect the labor market in any of three ways: the same amount of production can take place with less labor power...
...economy can not only overcome the recession but increase its rate of expansion beyond that which was taking place in the period before it...
...and it will be still more so in the future as the gap between the total national products of the two countries diminishes...
...Apart from some superficial and over-enthusiastic movements aimed at applying the efficiency engineering methods of modern factory production to the work of the office, there has been little real consideration of the plant and the office as essential and fundamental parts of the same whole...
...and finally, there is a danger that the concentration of political power will increase to such an extent as to threaten democratic institutions themselves...
...Despite the various crisis oscillations, U.S...
...But what these graphs do not tell us is that even if their most favorable variant, i.e., that of a 5 per cent increase, proves to be accurate, the rate of U.S...
...But it is hoped that he will then go on to record that in view of the general world political situation the government acted vigorously, and that, after all, a very considerable increase of labor productivity was achieved...
...It is quite possible that in the future automation will affect more than 40 per cent of all persons engaged in industrial production...
...But this can change, and it probably will change to the extent that the automated industries become more and more important by comparison with industrial production as a whole...
...The total number of employed was 694,000 in 1947 and 791,000 in 1954...
...it is no longer required...
...One important point must be stressed here: certain circles are seeking to make light of the effect automation will have on the labor market...
...The United States, and with her the rest of the Western world, is therefore faced with the task of finding new methods of increasing the productivity of labor to a far greater extent than previously—and this must be done whilst at the same time maintaining democratic institutions...
...We must first of all be clear about one thing: automation is not a new industry, and it is also not a new machine with previously un known qualities...
...Today the U.S...
...in fact, it is a matter of life and death for the United States that the obvious conclusions should be drawn not only militarily but economically, and drawn in good time...
...Investment on the other hand, considered as a proportion of the gross national product in the U.S.S.R...
...economy has, on the whole, steadily expanded...
...Such depressed living standards made it possible for the Soviet Government to fix investment quotas which were relatively greater than those in the United States...
...and this may still be the case in a period when atomic energy may be the main source for certain Asiatic countries...
...The process of rationalization and the introduction of automation were often not widely separated...
...If the gap between the total U.S...
...The obvious conclusion is that new methods must be found and adopted...
...Further, today, in this period of the second industrial revolution, there is a far greater scientific understanding of the economic system...
...The important question for us now is whether these social organs are already strong enough, or can be made strong enough without great difficulty, to allow the societies of the Western world to absorb and digest not only the technical achievements of the second industrial revolution, but also to foresee and cope with its inevitable social consequences —something they were not in a position to do during the first industrial revolution...
...The economic recession led to the biggest fall in industrial production suffered at any time in the period after the Second World War...
...Again and again people compare the rate of U.S...
...How big the automated sector may be in the foreseeable future, is suggested by the English magazine The Economist which writes that in England 40 per cent of the people working in manufacturing...
...in fact, they often come more or less together within a relatively short space of time...
...the second of 4 per cent and the third of 5 per cent...
...In the United States, Great Britain, Western Europe and the Soviet Union, the production of atomic energy will remain only a supplementary source of energy in the foreseeable future...
...The workman who sold his skill for a living is now no longer in a position to do so...
...investments in "electric power, the metallurgical base and the producer-goods industries," to quote Allen W. Dulles...
...The world political and world historical question is whether and to what extent and with what methods U.S...
...At the same time, the workmen employed in these industries are now organized in trade unions, and the trade union is so firmly established as part and parcel of our social structure that it is impossible to conceive of a democratic society without it...
...During the Second World War the imperative and urgent task facing the U.S...
...Automation uses control devices that result in the automatic production and processing of goods and data...
...If the present number are to be retained after the widespread introduction of automation then this could only be on account of a very great increase of office work, and it is very doubtful whether such an increase will take place in the foreseeable future...
...In other words, in this period of "automation" human labor-power is being progressively excluded from every industrial process from the raw ma terial to the finished article...
...So long as there was economic expansion even the automated sectors of industry were in a position to increase the total number they employed, and the optimists could reply to those who feared that the introduction of automation would result in unemployment by pointing out that, in fact, their anxieties had proved unfounded: "the facts" did not bear them out...
...Dept...
...From the beginning of the fifties total production in the United States, Great Britain, the German Federal Republic and in Western Europe generally, has, on the whole, quite considerably increased...
...What is the technical significance of this second industrial revolu tion, and what will the increasing introduction of automation which is part of it actually mean to industry...
...it is also quite in the cards that some future historian will record that by the end of the fifties the United States, which is far ahead of the rest of the Western world in automation, had taken only the first steps down a very long path of development in this respect, and that so far there had been only a very slow and inadequate increase in labor productivity for the economic system as a whole...
...dustrial revolution to the mere process of automation would be too narrow...
...economic expansion before the arrival of the economic recession, Soviet economic growth was approximately twice as fast as that of the United States...
...Here, once again, is an important sphere in which the classic development of industry as it took place in Britain, Europe and the United States may not be repeated in Asia...
...When we consider these graphs alone things look quite comforting...
...Since the days of the first industrial revolution right down into the Second World War man has found sources of energy in coal and oil, and other deposits formed by nature and stored in geological eras...
...It is now possible for us to control processes too sensitive for human control, and to handle materials whose very production would be impossible without automation...
...What was true of the chemical industry was also true of a good many other branches of industry in which automation spread rapidly —their production increased considerably, but (in the beginning at least) not only were the workers already employed all retained, but new workers were taken on as well...
...industrial production as a whole, and 148 for the chemical industry...
...were plowed back primarily for expansion of electric power, the metallurgical base, and into the producer-goods industries...
...In addition, the second industrial revolution affects not only the Western world and the Soviet Union, but also the peoples of Asia, and, though with a certain time lag, the peoples of Africa because it is taking place in what may be called the phase of world historical development, a phase in which, with the decline of colonial imperialism, the Asiatic and increasingly the African peoples too are becoming free, sovereign States and building up their own societies and their own economic systems...
...But the thing did not stop at the automatic production of products which had been produced before—later on it became possible to produce new products on the basis of automation...
...Automation, Economic Expansion and World Politics In the following chapter we shall investigate the world political situation in which the second industrial revolution is taking place, but it is already necessary to point out here that the internal developments in the United States no longer depend exclusively on internal factors...
...plotted on logarithmic Scale '45 ,50 '57 —r—r 500 4% growth Gross National Product 300 200 1700 3% growth / 1000 Projections 1957 to 1975: / goo / / 800 100 grh / II 700 90 ^ 80 4% grow`th /^ II 70'^ %I^ 00 /// 3% 500 1897 1905 '15 '25 '35 / growth Sources: Raymond W. Goldsmith, A Study o/Saving in the UnitedStates...
...A decisive part of this work is now being done by automatic machinery...
...But if all that can be done is to maintain the present rate in the increase of labor productivity then before the century is out the United States will have been overhauled industrially by the Soviet Union— with all the political consequences which this would involve...
...With the introduction of automation a process has started which is tending to tear down the barriers between these separate categories of thought...
...However, it would not be right to regard increased unemployment as the direct result of automation...
...The effects of automation on the labor market will vary greatly according to whether it is introduced in a phase of on the whole expanding economic development, or in a phase of stagnation, or perhaps in a phase when there is even economic decline...
...Annual growth overall has been running at between 6 and 7 per cent, annual growth of industry being between 10 and 12 per cent...
...We can say, therefore, that the second industrial revolution is proceeding technically in three main fields: 1. The peaceful exploitation of atomic energy...
...for the first time technical changes are beginning to affect their status...
...Without complete automation such production would not be possible at all, because from beginning to end, from the raw material to the finished product, the human hand must not be involved at all...
...Further, for a variety of reasons the State sector is rapidly extending, and with it the general influence of the State on economic life is increasing...
...Government Printing Office, June, 1939, Washington, p. 158...
...that they will catch up with the United States not only relatively but absolutely...
...International Chemical Workers Union, gave extremely interesting information about the development of the chemical industry in the United States up to the time of the recession...
...But as things developed, the products themselves were modified to facilitate the introduction of completely automatic production on a new basis...
...2. The partial and full automation of industrial production...
...perhaps in conjunction with other factors, economic setbacks were suffered— in that case unemployment would not remain confined to the industrial sector of the economic system, but would extend to the whole, affecting the tertiary industries as well...
...Automation in the factory, on the other hand, was the culmination of a long period of rationalization...
...Thus, the production of atomic energy for peaceful purposes is possible at all only because of the previous development of the process of automation, and at this point the two processes which make up the technical aspect of the second industrial revolution meet...
...Still, we should not overestimate for the immediate future the significance of the peaceful use of atomic energy in the Western world, since at least until 1975 it will come to no more than 10 percent of all energy sources, and in some countries perhaps less...
...there is a great deal of interrelationship between corporate managements...
...ble for introducing automation...
...it can affect half and more than half...
...expansion in the postwar period with that of earlier periods, and because the comparison is favorable there is a tendency to smug satisfaction...
...was significantly higher than it was in the United States...
...The second industrial revolution has now come to this society in which the giant corporations on the one hand face the big trade unions on the other...
...In other words, if the tasks facing us are to be performed satisfactorily, automation during the sixties must proceed at a much faster speed than it did in the fifties, whilst economic expansion as a whole must go forward much more rapidly...
...Above all, the second industrial revolution is proceeding parallel with the development of new sources of energy...
...They played second fiddle, but it was impossible to get on without them...
...in fact, instead of being in powerful unions which could protect their interests they will be exposed to automation as individuals and almost without any means of defense...
...Thus, the introduction of this new and revolutionary technique makes previous skills redundant...
...Not all branches of industry would be simultaneously affected, but first this branch and then that...
...Government should say forthrightly that an annual average increase of the gross national income of—I should say—at least 6 per cent is necessary for the next ten years if the United States is to maintain its military and industrial position towards the Soviet Union...
...and then let us assume further that, * John Diebold, ibid., p. 39...
...Incidentally it will probably not be necessary to reach the excessively high rate achieved by the Russians, because—as we shall see in our next chapter—they will probably be compelled by the great upheaval which is proceeding within the framework of their own society to increase the proportion of the gross national product devoted to consumption, thereby to some extent decreasing the proportion invested in heavy industry...
...In the first half of the twentieth century the number of people employed in offices increased far more rapidly than the number of factory workers...
...The Peaceful Exploitation of Nuclear Energy If we could review world history from the vantage point of the year 2000 we should far more easily recognize the importance of the new sources of energy than we can today...
...They wielded the chief influence in their respective countries, but they enjoyed no monopoly of power...
...The task, therefore, and a very big and difficult one it is, is so to increase the speed of automation that a much greater increase in labor productivity is secured...
...particularly as they are by no means so well organized as factory workers...
...first of all because they have always been the protagonists of technical progress, and secondly because they have the capital necessary to finance it...
...Therefore the percentage of working people in the United States who may ultimately be affected by automation may lie below the 20 per cent assumed for Great Britain...
...The production of atomic energy is also based on a natural deposit, that of uranium, but the deposits of this mineral (and of thorium) already known to exist are so great that the energy requirements of mankind can be regarded as covered for at least a thousand years—and this takes no account of deposits still likely to be discovered...
...The result will be that many office workers will be made redundant...
...And within the framework of this general increase there should be a very much bigger increase in industrial production as a whole, and a particularly rapid increase in the automated industries and those about to be automated...
...It is not enough to say that if the gross national product increases by so and so much then such and such will happen...
...At the same time unemployment increased...
...The government must now be given power to plan for the national economy as a whole—at least in broad outline...
...This was the case not only in the United States but all the big industrial countries of Europe...
...Author's italics] The decisive fact is that in the period of U.S...
...Through no fault of his own this type of workman—and many an office worker too—finds his skill no longer required...
...For one thing, the degree of exploitation suffered by working people in town and country in the Soviet Union can be maintained only by totalitarianterrorist methods, and would be quite impossible with democratic institutions...
...Other skills are required, but he has not learned them and cannot provide them...
...With the first industrial revolution the working day was generally extended, night work increased, and so did the employment of female and child labor...
...Thus, although for a good while to come the peoples of the Western world will continue to use atomic energy only as a supplementary source of energy, and it will therefore not greatly affect their daily lives, the situation on the second field of the industrial revolutionautomation— is very different...
...In the circumstances, therefore, it is not altogether surprising to learn that despite the introduction of automation the number of people employed in the industry actually increased...
...Thus, he is threatened with social degradation, a lowering of his social status...
...It will continue to expand in the future, and perhaps at an even faster rate...
...300 19 5 '57 1975 U.S...
...there is a danger of increasing labor degradation for a big and important section of the working people, including both factory and office workers...
...But this, it should be noted, comes to only 15 per cent of the English labor force...
...The Dangers of Automation The continued automation of production could involve serious dangers for the economic and social system of the countries of the Western world, and we should not make light of such dangers merely because so far they have not been clearly demonstrated statistically...
...The particularly high rate of expansion in the Soviet Union was made possible by keeping the living standards of between 80 and 90 per cent of the population (the workers and office employees in the town and the peasant workers in the agricultural collectives) very low...
...In a "Hearing" before a committee of the U.S...
...and because this is so the factors which brought about the economic recession were largely independent of it...
...The present situation is so urgent that the U.S...
...and 3. Electronically controlled calculating machines which radically revolutionize office work...
...The only valid basis of comparison today is the rate of expansion of a quite different + The New York Times, April 29, 1958...
...It was therefore given powers to control and guide production, and so to apportion the growing national product that this objective could be reached in the shortest possible space of time...
...But this just will not do...
...When discussing this question we must set our faces resolutely against any isolationism or provincialism...
...When automatic processes were first introduced after the Second World War and gained ground rapidly, fears were expressed that automation had come too soon, that it would embrace certain branches of industry too quickly, and that the negative consequences and dangers we have already indicated would inevitably arise...
...The figures for 1958, a year of economic recession, will probably show that Soviet investments in these same branches of industry were greater than the corresponding investments in the United States...
...In Great Britain and Western Europe, in general, the process is not yet so far advanced...
...and it was this economic expansion which enabled production in the automated industries to increase particularly rapidly...
...Previously, machinery was minded partly by unskilled workers and partly by skilled workers...
...But it must be pointed out that there is now just as big a danger, namely, that automation will spread too slowly, and that in consequence the rate of economic expansion in the United States will remain too low and it will therefore prove impossible to secure an adequate increase in labor productivity...
...In 1956 the Soviet Union produced only about 40 per cent by comparison with U.S...
...to overcome the recession and return to an expanding economy...
...Automation Will Become a Decisive Crisis Factor The economic recession was brought about by a whole series of factors, and certainly not by the progress of automation...
...The situation thus created will often be made worse by the fact that just those workers whose skills have become a drug on the market are no longer young...
...The societies which existed in the days of the first industrial revolution developed the necessary organs to absorb and digest its technical achievements, but they hardly began to develop those organs necessary to cope with its social consequences...
...Senate from which we have already quoted Otto Pragan, the educational director of the U.S...
...Such dangers do not exist today—the idea of social welfare is far too strongly ingrained in our social life for that...
...Aussming that a 6 per cent rate of increase were possible, it would then be necessary to discover how great the growth rate of industrial production as a whole would have to be, and, within that whole, the growth rate of the automated industries...
...Government was to overtake the war production of the Axis Powers as quickly as possible...
...I39 The first point to be noted is that up to the recent recession the introduction of automation in the United States, Great Britain and Western Europe was taking place in a period of economic expansion...
...As, instead of rising, total 140 industrial production was now falling, it was no longer possible for the automated sectors to increase their production at the previous exceptionally high rate...
...It is, however, equally obvious that the methods with which the Russians have been so successful cannot be taken over...
...This harsh distribution of the gross national product in the Soviet Union was enforced by the totalitarian State, and made it possible for the Russians to reach 80 per cent of the U.S...
...production, but the U.S...
...It is not our task here to examine it in any detail, but certain of its aspects must be considered...
...There is a danger that in the best case the maximum variant foreshadowed in the Rockefeller Report will be attained...
...On the other hand, the industrial revolution of our time directly affects all the industrial nations of the West, and it naturally finds a much broader field of operations there than the first ever did, for it was with this first industrial revolution that industrialism really began...
...To make the position clear you could say that in industry there were protracted periods of rationalization culminating, once the individual labor processes had been more and more simplified, in automation...
...In the thirty years from 1920 to 1950 the number of office workers in the United States increased by 150 per cent, as compared with an increase of 53 per cent in the number of factory workers...
...Let us assume that automation did result in considerable unemployment in those industries in which it was introduced...
...This would mean, however, that in this epoch of the second industrial revolution humanity would develop step by step towards a process hitherto performed by nature alone, namely, the actual production of sources of energy...
...However, these views are based on a false premise which overlooks the importance of industry for the economic system as a whole, including the tertiary industries, and fails to take into account the possibility of "secondary" unemployment as a result of automation...
...there is a danger that the tendencies towards an economic crisis will increase...
...Modern electronic calculating machines and other machinery intended to save labor have only just started to make their way into offices, but during the next few years they will, in all probability, spread there faster and faster...
...or even greater production can take place with a non-commensurate increase in labor power...
...We can, therefore, safely say that in the long period between the first and the second industrial revolutions the societies of the Western world developed social organs which they did not formerly possess...
...For this reason office workers may suffer more from the new technical revolution represented by automation...
...In short, automation, and the second industrial revolution generally, are not yet so far advanced that they could determine whether the economic prosperity of the capitalist world shall continue or grind to a halt...
...They have often developed their particular skills many years ago and have been practicing them ever since...
...If to it we add a significant portion of office work as soon likely to come under automation, the total of affected workers for the foreseeable future comes to about 20 per cent of the labor force...
...However, in the long run, automation is going to change the traditional distinction between plant and office, linking them together as a single, inter-connected system.* Automation is absolutely essential for the production of atomic nergy for peaceful purposes, owing to the great dangers of radio-activity...
...Partly through interlocking directorates, partly through the activities of the major financial institutions, partly through particular interest groupings, partly through firms rendering legal, accounting, and similar services to the larger corporations, and partly through intercorporate stockholdings, the managements of most of the larger corporations are loosely brought together in what might be called the corporate community...
...The exploitation of atomic energy for peaceful purposes is introducing a new period in the technical revolution...
...So far no definitive success on this particular field has been obtained, but there is every indication that it will be obtained in the future...
...This is true not merely of the factory in which he is or was employed, but in the particular industry as a whole...
...In fact, automation is still in its infancy...
...The Three Spheres of the Technical Revolution The process of automation is extending to one industry after the other, but any definition which sought to confine the second in • Automation and Technological Change, United States Government Printing Office, Washington, 1955, p. 220...
...Automation and Unemployment Let us deal first with the more direct and immediate danger: the threat of unemployment...
...and that soon afterwards they will forge ahead...
...and these societies are striving in different ways and with different means to embody and digest its results...
...investment levels for heavy industry...
...economic development will, according to Allen W. Dulles, remain well behind that of the Soviet Union...
...production could possibly have been doubled...
...TM society based on quite different principles, namely, that of the Soviet Union...
...We have pointed out that automation can embrace industries employing up to 40 per cent of the total number of industrial workers, but that is not the case yet...
...Once things have gone so far, automation, and the second industrial revolution in general, may become more and more the central factor which decides whether the prosperity of the economic system as a whole shall continue or come to an end...
...world-political factors are also involved, and, in particular, the rate of industrial development in the Soviet Union...
...Even in the comparatively few years in which automation has come to the fore it has already become very clear that the original estimates concerning its likely sphere of application were much too conservative...
...The reason for these underestimates was that at first automatic processes were introduced into already existing factories in order to produce the same old products more efficiently...
...At the same time a new relationship between the State and the national economy must be established, and all steps must be taken to ensure that the introduction of automatic processes will be a blessing for the present generation and not merely for those generations still to come...
...Thus, while in industry proper the factors tending towards an increase in unemployment as a result of automation can perhaps be compensated, and perhaps more than compensated for, by big increases in production, this is not likely to be the case where office workers are concerned, even if there should be some general increase in office work...
...Thus, when some people play down the possible effects of automation on the labor market on the ground that the process itself would be spread over years and would, in any case, affect directly not more than a fifth of those gainfully employed, they overlook the decisive point which is that although this process of automation may, in fact, not affect more than one-fifth of the total number of employed people, it may well have secondary effects far greater than its primary effects...
...Government has power to carry through its military program, i.e., to take a certain amount of the gross national product and apply it to military purposes...
...It was not good enough during the Second World War, and it is certainly not good enough in the present post-war period...
...If things are allowed to go on as they are, the United States, and the Western world which it leads, will be unable to maintain Western industrial and economic supremacy...
...The individual employercapitalist no longer dominates the most important industries today as he did then...
...the Asiatic countries may well branch out in new directions...
...Allen W. Dulles has said : * Whereas Soviet gross national product was about 33 per cent that of the United States in 1950, by 1956 it had increased to about 40 per cent...
...But it is not sufficient to analyze past trends and then project them into the future...
...Unless society regards it as a primary and urgent task to get these men resettled and re-educated, the situation will be very serious indeed...
...In fact, the relative importance of the automated industries by comparison with the rest is already rapidly increasing in the United States as automation spreads...
...The second graph attempts to show the development up to 1975 taking three possible variants: one of 3 per cent...
...And this, mark you, was in 1956—a year of U.S...
...For one thing, the number of persons engaged in agriculture in the United States is much greater than in Britain...
...Today it has not made anything like such progress—not even in the United States, and certainly not in Great Britain and Western Europe...
...But today these office workers are being directly and indirectly affected by the second industrial revolution...
...But even before it reaches this point it will have become more and more important for industry as a whole...
...Furthermore, investment funds in the U.S.S.R...
...Taking a very high level of production and a high standard of living as their starting point, many U.S...
...In discussing the military revolution we pointed out that it was by no means at an end...
...This is the danger of labor degradation, and it may arise for both factory and office workers unless prompt and effective counter-measures on a suitable scale are taken...
...The chemical industry, in particular, has been greatly affected by the introduction of automation...
...It is rather a new technique which is gradually embracing a larger and larger part not only of industry proper but also of the administra tive apparatus...
...The Rockefeller Report* presents two very interesting graphs: GROWTH TRENDS IN OUR ECONOMY bill ions of 1957 dollars...
...An important point to note here is that although the total number of employees increased the total of so-called "production workers" hardly increased at all...
...Danger of an Increased Concentration of Political Power In a previous chapter we dealt briefly with the great concentration of economic and political power which came about in the Westtern world even before the advent of automation, and we saw that the major part of industrial production was controlled by between a thousand and fifteen hundred giant corporations...
...Even before the advent of automation, decisive economic and political power in the United States was embodied in this "corporate community," and the situation was similar in the rest of the Western world...
...and these unusually high investment quotas created the conditions for doubling Soviet production in a much shorter space of time than U.S...
...The production of chemicals lends itself readily to the introduction of automatic processes...
...The specific conditions of automation by comparison with the technical processes of the first industrial revolution have been analyzed by James B. Carey* as follows: The first industrial revolution, usually identified with Watt's steam engine, replaced animal and human muscle power with steam power and electric power...
...It was rather the direct result of the economic recession which hit the economic system as a whole...
...Instead it drew up its plans, rolled up its sleeves and made certain of what it wanted...
...It is therefore by no means enough for the U.S...
...But in 1957 an economic recession began in the United States...
...greater production can take place with the same labor power...
...and the United States gross national product in 1956 reveals that consumption—or what the Soviet consumer received— was less than half the total production in the former, whilst in the United States it was over two-thirds of the total...
...To an increasing extent machines are being minded today not by human labor-power but by other machines...
...The big corporations are, of course, primarily responsi • The Structure of the American Economy, a Report under the direction of Gardiner C. Means, U.S...
...to analyse coming developments by merely projecting past trends into the future...
...Only generations later did it affect Russia, and even then only in part, whilst the peoples of Asia were hardly affected at all...
...may be in this sector...
...During the first industrial revolution there was no very big body of office workers, and in between the two revolutions technical developments primarily affected the factories and the workers employed in them, and not the white-collared workers in the offices...
...Author's italics] The figures which are of importance in our connection have been underlined...
...In these fields it was over 80 per cent of actual United States investment in 1956, and in 1958 it will probably exceed our own...
...In the United States the number of working people who are directly affected by automation may be smaller than in Britain...
...In the speech from which we have already quoted Allen W. Dulles gives very striking figures: A dollar comparison of the U.S.S.R...
...The Extension of Automation The process of automation began first in the United States and has made greater progress there than, for example, in Britain and Western Europe...
...Increased automation in the sixties, together with many other factors, will greatly widen the scope of State activities...
...it tends to replace the human regulation and control of machines and thereby changes the machine operator into a supervisor of an automatically controlled operating system...
...Before automation was introduced, the factory and the office were not only physically separated, their ways of thought were different: the way of the management, the way of the clerical and administrative employee, and the way of the workman...
...Today we can see that automation is making headway in more and more branches of trade and industry—so much so, in fact, that it is calling for rethinking of a kind that did not exist before automation was introduced...
...It was 525,555 in 1947, and in 1954 it was very little more than 532,000...
...But before this danger of increased unemployment makes itself felt to any extent a different danger may have arisen—even in a period of general economic expansion...
...Science and technique have not marked time, and their representatives are already busy in Europe, the United States and the Soviet Union in transforming those processes which led to the production of the hydrogen bomb into processes for the generation of energy for peaceful purposes...
...If we take the average of production for the years 1947 to 1949 inclusive at 100, then by 1954 it was 125 for U.S...
...economy...
...Government's power should be extended beyond the sphere of purely military production and it would set up certain broad targets for the national economy as a whole and for the automated industries in particular...
...Thus, the giant corporations are the moving spirit in the introduction of automation, and in consequence we are threatened with a development which is only too likely to increase the dangers inherent in any further intensification of the progress of industrial concentration...
...But man's mind cannot always easily keep pace with events, and it is by no means a matter of course for most people that henceforth world political rivalry will extend more and more to the economic and industrial sphere...
...In the present world political situation it is not enough to say that if there is such and such an increase in the gross national product then the various sectors of the economy could develop in this or that fashion...
...it replaced the handicraft worker with the machine tender or machine operator...
...Polythene, which in a short time has become as common as glass as a container, is a good example...
...The danger is a very real one, and the sooner it is recognized the better...
...and this not only for a short period, but perhaps for the rest of his life...
...Above all, the fear that at some time in the future human activities could be slowed down and perhaps seriously held up by a lack of energy has no longer any basis...
...Automation can provide the main solution for a great increase of labor productivity in the United States and the rest of the Western world...
...This arises with the introduction of automation just as it did with all previous technical revolutions, and for the same reason, namely, that improved technical processes reduce the total volume of labor power necessary so that the same volume of production can be obtained and distributed by a smaller number of producers...
...In fact, in the Western world these industries are now dominated by between 1,000 and 1,500 giant corporations...
...The United States cannot afford an industrial development as slow as the one which has been proceeding so far...
...product and the total Soviet product continues to diminish, the danger will be that even in years of prosperity the Russians will reach 100 per cent of U.S...
...Without automation it simply could not be produced.• Thus, the field of application of automatic processes has steadily widened in the past few years, and it will continue to widen in the future, particularly as automation is revolutionizing our ways of thought...
...It may well be, therefore, that unless something is done for them this particular group will be the first victims of automation...
Vol. 6 • April 1959 • No. 2
