The Promise and Peril of the Third Wave: Socialism and Democracy for the 21st Century (page 2 of 7)
By Carl Davidson, Ivan Handler and Jerry Harris
The Chicago Third Wave Study Group / May 1, 1993

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

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

A society becomes "third wave" when a majority of its labor force becomes mainly and irreversibly engaged in processing information and providing services, rather than directly producing "hard" commodities or farm products. In the U.S., this point was reached by 1960.

This does not mean that a third wave society stops producing the traditional goods of basic industry. It is an even greater industrial powerhouse than before; but now it manages to produce these goods with a relatively smaller and smaller proportion of the labor force.

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

Surplus Value as Knowledge

Information is not a new component of production, even though its relative importance has grown with the progress of society. In fact, the creation of value, whether use-value or exchange-value, is best understood as the result of expanding the information content of the productive process. An average laborer in industrial society can produce much more value than he or she needs to survive comfortably. A similar worker on a pre- industrial farm will produce far less wealth using a far greater expenditure of labor-time. The difference here is not the worker but the tools and organization of work.

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

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

This change is also causing another important reversal. On one hand, the workforce responsible for production is becoming more educated (in certain sectors) as its productivity increases. On the other hand, the workforce in many service areas (such as marketing) is becoming increasingly comprised of large numbers of very low skilled workers. This is especially true for specific data gathering tasks -- data entry, feeding paper into Optical Character Recognition readers, scanning barcodes, etc. This may be a temporary phenomenon until new techniques are discovered to reduce the amount of labor needed to carry out many of these tasks. For example, the phone companies are continually adding new automated voice services for its customers, which is increasing efficiency and reducing the number of telephone operators. In any case, the less educated sectors of the labor force are forced to compete for a dwindling number of better-paying jobs or forced out of employment altogether.

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

Generally speaking, three main groupings of workers emerge in third wave society. The first group is a dynamic and growing force of skilled analysts, designers and technicians filling the new jobs created by the new technology, whether in the private or public sectors. The second group is a stagnant or shrinking force of both skilled and unskilled "blue collar" occupations. Their ranks are being depleted by automation or by the export of their jobs to the huge pools of far cheaper but now "globalized" labor in the newly industrializing regions of the third world.

The third group is a growing deskilled pool of unemployed and even unemployable workers. From the capitalist perspective, these workers have a negative net value--even if they were employed, their skill level would result in the production of less value than the cost of sustaining them. This is the so-called "permanent underclass"--people with inadequate incomes for the necessities of survival, let alone to buy the higher quality goods of third wave production.

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