Chapter 1: The End of Work
According to Rifkin, we are entering into a Third Industrial Revolution due to the introduction of a new generation of information and communication technologies. The number of unemployed and under-employed in the U.S., Japan, and Europe are growing daily as transnational companies build state-of-the-art high tech production facilities. The difference between the technology of today to that of yesterday is the new ability to replace the human mind itself. Surveys show that only 5 percent of the companies around the world have begun to make the transition to the new machine culture. This emphasizes the fact that when the machine culture is well under way, we can expect a level of unemployment that will make the Great Depression rate of unemployment look enviable.
Although corporations spent more than a trillion dollars on technology in the 80's, it has only been in the past few years that these expenditures have begun to pay off.
"A survey of the past half-century of economic activity discloses a disturbing trend. In the 1950's the average unemployment for the decade stood at 4.5 percent. In the 1960's unemployment rose to an average of 4.8 percent. In the 1970's it rose again to 6.2 percent, and in the 1980's it increased again, averaging 7.3 percent for the decade. In the first three years of the 1990's, unemployment has averaged 6.6 percent." What is significant about these statistics is the long-term upward trend. It is very telling how economists have upwardly revised the acceptable level of unemployment over time.
According to Rifkin, we are experiencing a technological transformation unlike any we've ever experienced, and the outcome depends on how the productivity gains are distributed. "A fair and equitable distribution of the productivity gains would require a shortening of the workweek around the world and a concerted effort by central governments to provide alternative employment in the third sector-the social economy-for those whose labor is no longer required in the marketplace. If, however, the productivity gains of the hi-tech revolution are not shared, but rather used primarily to enhance corporate profits, to the exclusive benefits of stockholders, top corporate managers, and the emerging elite of high-tech knowledge workers, chances are that the growing gap between the haves and the have-nots will lead to social and political upheaval on a global scale.
Chapter 2: Trickle-down Technology and Market
Realities
Trickle-down technology is the belief that benefits brought about by advances in technology and improvements in productivity eventually filter down to the mass of workers in the form of cheaper goods, greater purchasing power and more jobs. This of course, rests firmly on the assumption that Say's law holds...supply does indeed create its own demand.
"A corollary to the trickle-down argument states that even if workers are displaced by new technologies, the problem of unemployment will eventually resolve itself. The growing number of unemployed will eventually bid down wages. Cheaper wages will entice employers to hire additional workers rather than purchase more expensive capital equipment, thereby moderating the impact of technology on employment.
According to Rifkin, the 1920's and the 1960's were also a time of dramatic technological unemployment. The 20's episode was dealt with through commercialization, which changed our culture from utilitarian to mass consumption. The 60's episode was dealt with through Keynesian economics,i.e. the involvement of government. According to Rifkin, these weapons are useless for the coming round.
The main argument for reducing the budget deficit has been the conviction that to do so will lower interest rates, which in turn will increase consumer and business spending. What needs to be considered is that this spending will be greatly dampened by the increased unemployment and loss of purchasing power that will result from reduced government spending.
Chapter 3: Visions of Techno-Paradise
This chapter looks at the "world-view" metaphors that have dominated throughout history in our society. Before Rene' Descartes, organic and religious metaphors were the building blocks upon which the very fabric of thought was built. The philosophy of Descartes, along with the transition from rural to an industrial way of life, dethroned the above stated metaphors and replaced them with the mechanical metaphor. The philosophy that predominates at a particular time in history has an all- encompassing influence that is often greatly under-estimated. From Aristotle to Kant, the very basic value judgements and needs that we often ascribe as springing from the soul, are born.
"The ideal that science and technology-harnessed by a nation of dedicated and faithful laborers steeped in the modern work ethic-would direct us into an earthly kingdom of great wealth and leisure continues to serve as a governing social and economic paradigm to the present day."
Along with the mechanical view of life came the "cult of efficiency" and the birth of "engineering values". This view was the basis for the utopian visions of philosophers and economists such as Ayn Rand, Ludwig von Mises, and Friedrich August von Hayek. Interestingly, Rifkin mentions Hitler's and the Third Reich's obsession with technological efficiency at this point.
The information highway upon which we find ourselves speeding held the promise of a workerless, utopian world for all once upon a time, when it still lay before us. Where is that promise now? "Ironically, the closer we seem to come to the technological fruition of the utopian dream, the more dystopian the future itself appears. That's because the forces of the marketplace continue to generate production and profit, with little thought of generating additional leisure for the millions of working people whose labor is being displaced."
The transition to the Third Industrial Revolution will be marked by the "transition from renewable to nonrenewable sources of energy and from biological to mechanical sources of power." According to Rifkin, the Third Industrial Revolution "emerged immediately after World War II, and is just now beginning to have a significant impact on the way society organizes its economic activity."
Chapter 5: Technology and the African-American
Experience
In this chapter, Rifkin looks at the devastating effects of technology on the african-american laborer. The under-lying intent of this chapter, or so it seems, is to give the reader an idea of the large-scale repercussions that lay before us by not only understanding, but feeling the tragedy that DID happen-only on a very small-scale.
Chapter 6: The Great Automation Debate
This chapter looks at the historical concerns over automation and the impact this has on all spheres of the economy. The Ad Hoc Committee on the Triple Revolution "argued that the new cybernetic technologies were forcing a fundamental change in the relationship between income and work. The authors pointed out that until the present moment in history "economic resources had always been distributed on the basis of contributions to production.""
This concern is being heard once again due to the internet and the idea of globalization, among other things. The global economy is now moving toward a shrinking labor market...we, as of yet, have no real understanding of the consequences this will have on our future civilization.
Chapter 7: Post-Fordism
Society moved from the managerial process of mass-production to a process called "lean production" after World War II. Lean Production, unlike mass-production, "combines the advantage of craft and mass production, while avoiding the high cost of craft production and the rigidity of industrial production."
The lean-production method, which was engineered by the Japanese spread beyond the auto industry into just about every industry. "Corporate re-engineering is only in its infancy, and already unemployment is rising, consumer purchasing power is dropping, and domestic economies are reeling from the aftershocks of flattening giant corporate bureaucracies."
According to Rifkin, one of the outcomes of the Third Industrial Revolution will be the dissolution of the farmer, which at this time consists of nearly half the human beings on the planet. "The productivity gains in agriculture were so swift and effective that by the late 1920's economic instability was no longer fueled by crop failures but, rather, by over- production...Higher yields and greater output have created a crises of over-supply for most of the current century, continually pushing down prices for farmers. Depressed prices in turn have forced farmers to produce even more in order to cover fixed costs and overhead, only perpetuating the cycle of over- production and falling prices." The price and commodity supports implemented by our government should highlight the fallibility of Say's Law.
Rifkin goes on to detail much of the genetic research taking place in the United States and the fact that today,"thousands of microorganisms and plants have been patented as well as six animals...[i.e.] the government is giving its imprimatur to the idea that living creatures are reducible to the status of manufactured inventions, subject to the same engineering standards and commercial exploitation as inanimate objects."
Chapter 9: Hanging Up the Blue Collar
The chapter looks at the massive decline of blue collar jobs due to automation. According to Rifkin, the replacement of human labor with machines is now affecting virtually every major manufacturing activity. "By the mid-decades of the coming century, the blue collar worker will have passed from history, a casualty of the Third Industrial Revolution and the relentless march toward ever greater technological efficiency."
Chapter 10: The Last Service Worker
For the past two decades, it has been obvious that we have been moving from an industrial, to a service economy. This chapter appears to me to be the foundation from which the author builds his argument. According to Rifkin, technology and globalization is reducing the need for human labor in this sector with the same speed and efficiency as was found in the blue collar sector. If his argument has some validity, it is this chapter that will lead the reader to wonder what sector will be created to absorb excess labor. Will this sector be as effective a sponge as the service sector was for blue collar worker?
So far, the benefits from technology and the advances of productivity have not "trickled down" to the average worker. Instead, the benefits have accrued to stockholders and top management. In this chapter, Rifkin supplies statistical facts that shows this to be the case.
This wave of automation is very different than that found in the past in that this time the impact is going to fall on the middle class. One of the effects of this is an alarming increase in the gap between the wealthy and the poor. This is notmerely an issue of envy, as some economists so prolifically claim it to be. There are inevitable consequences, such as violence, vandalism, and even revolution. In my opinion, in any area of life where you get something of value, there is something else of value that you must give up. In this instance, if we insist on keeping the status quo, the above consequences comes with it.
Chapter 12: Requiem for the Working Class
In this chapter, Rifkin puts forth statistics that show an increasing level of stress experienced by the average American. According to Rifkin, this increase of mental and physical stress is due to the "hyper-efficient high-tech economy". He also points out in this chapter that not only the United States, but all countries, are going to experience a dramatic reduction in full-time employment and an increase in part-time employment. This of course will also create stress as incomes fall and job security is threatened. "Across the country U.S. corporations are creating a new two-tier system of employment, composed of a "core" staff of permanent full-time employees augmented by a peripheral pool of part-time or contingent workers." According to chief economist at the national planning Association, Richard Belous, around 35 percent of the U.S. workforce will be contingent workers by the year 2000. This phenomena is not limited to manufacturing jobs, but also to professional positions.
Chapter 13: The Fate of the Nation
In this chapter, Rifkin takes a look at the effects of the Third industrial Revolution from a global perspective. "...the wage component of the total production bill continues to shrink in proportion to other costs. That being the case, the cost advantage of cheap third world labor is becoming increasingly less important in the overall production mix." This fact along with the reality of a burgeoning population in third world countries portends devastating effects.
Chapter 14: A More Dangerous World
It is obvious that one of the effects of increasing unemployment will be increasing violence. Rifkin appears to attribute the observed increasing violence in the past decade, to the Third Industrial Revolution. "On the eve of the third millennium, civilization finds itself precariously straddling two very different worlds, one utopian and full of promise, the other dystopian and rife with peril. At issue is the very concept of work itself. how does humanity begin to prepare for a future in which most formal work will have passed from human beings to machines?...Not that the commodity value of labor is becoming increasingly unimportant in the production and distribution of goods and services, new approached to providing income and purchasing power will need to be implemented. In order to deal with the productivity gains resulting from technology, benefits must also accrue to workers in the form of more leisure time, i.e. reduction in working hours. We also need to realize the importance of the third sector-"the social economy".
Chapter 15: Re-engineering the Work Week
Rifkin takes a look at the effects of a shorter work week in this chapter. He looks at the fact that throughout U.S. history, an increase in productivity has resulted in a reduction in the number of hours worked, however, this has not been the case in the last four decades since the computer revolution. In fact, according to Harvard economist Juliet Schor, during the last four decades, productivity and number of hours worked have increased. Rifkin views the shorter work week as a necessity not just for the workers, but for the viability of society as a whole. His reasoning is as follows: Increased technology -> increase in capital inputs -> layoff of workers -> higher output of goods due to increased productivity -> lower purchasing power of consumers due to high unemployment. The reduction of working hours would open up more employment positions and increase purchasing power.
Chapter 16: A New Social Contract
Rifkin takes a look at the changing role of the government sector due to globalization and the economic and political power of Multinational Corporations. According to Rifkin, "The diminishing role of both the mass worker and central governments in the affairs of the marketplace is going to force a fundamental rethinking of the social contract." This inevitable shrinking of both the commercial and public sectors makes it necessary to build up the social sector, which is also known as the independent or volunteer sector. According to Rifkin, " The third-sector vision offers a much-needed antidote to the materialism that has so dominated twentieth-century industrial thinking...The very idea of broadening one's loyalties and affiliations beyond the narrow confines of the marketplace and the nation state to include the human species and the planet is revolutionary and portends vast changes in the structuring of society." This change requires a re-socialization, which is a very slow process.
Chapter 17: Empowering the Third Sector
The viability of the social sector depends on the acceptance and assistance from the commercial and the public sector. This chapter spells out what form this assistance should take.
Chapter 18: Globalizing the Social Economy
In this chapter, Jeremy takes a look at the increase of volunteer associations throughout the world. He sees this sector as a safe haven from the onslaught of technology due to it's "inherently" human character, for example, the emotional care of the elderly cannot be done with machines.
Postscript
"In the new world that's emerging, government is likely to play a much reduced role in the affairs of commerce and a far greater role in the civil society. Together, these two geographically bound sectors can begin to exert tremendous political pressure on corporations, forcing some of the gains of the new commerce into the communities."
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