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Date Published: 9/15/2004
www.ctheory.net/articles.aspx?id=428
Arthur and Marilouise Kroker, Editors

Labor/Commodity/Automation

A Response to "The Digital Death Rattle of the American Middle Class: A Cautionary Tale"


Michael Betancourt


Dion Dennis presents a historical framework for the contemporary export ("off-shoring") of intellectual labor to cheaper labor markets outside the United States in his article "The Digital Death Rattle of the American Middle Class: A Cautionary Tale."[1] This essay takes his findings as its basis in order to extend aspects of his argument in new directions. His suggestion that the middle class in the United States is in danger of elimination due to a network of issues surrounding the costs of education and the belief in globalization's emphasis on "personal responsibility" has implications for the future of labor beyond just the continued existence of the middle classes.

In discussing the links between off-shoring and education, "The Digital Death Rattle of the American Middle Class" misses one important feature of what Dennis calls the "neo-liberal political redefinition of higher education as a private rather than a public good" -- its origins in the ideology of "autonomous achievement" used to justify the economic exploitation of labor and the social position of the economically powerful upper classes during the nineteenth century. This connection explains the inevitability of this off-shoring, and at the same time, may provide some insight into the transformation of creative and intellectual labor currently underway: the transformation from labor to commodity, then the automation of those commodity tasks, displacing human labor entirely from production to consumption. Off-shoring labor is only a symptom of these transformations.

This essay will propose connections between these structural changes and an understanding of what "intellectual labor" could become: a modular commodity that can (and will) be automated. The commodification of labor is a direct indicator that multinational corporations engaging in off-shoring are in the process of exceeding the ability of national governments, such as the United States, to regulate and control their activity through existing law.

Exporting intellectual labor to countries where wages are lower is possible now due to improved, low-cost communications technologies.[2] The commodification of creative work comes as a result of the same computer technologies that make the off-shoring of knowledge workers' labor economically viable. This relationship is circular. As technologies improve due to the success of intellectual labor, it becomes easier to shift the location of that labor on a global scale. Improved technologies imply an increased instability and uncertainty for labor, both physical and intellectual.

The parallels between off-shoring of physical production and the off-shoring of intellectual production (and services) may be signs that the automation of intellectual activities, as with earlier physical labor, may be forthcoming.[3] However, the origins of these developments can be located in an ideology that served to justify the emergence of the economically privileged upper classes in the United States during the initial phases of industrialization between 150 and 200 years ago: the idea of "autonomous achievement" contained in the "Protestant Work Ethic."

T. J. Jackson Lears, writing in No Place of Grace: Anti-Modernism and the Transformation of American Culture discusses how the ideology of the "Protestant Work Ethic" developed in the nineteenth century. His analysis presents a way to understand off-shoring at the beginning of the twenty-first century: in the nineteenth century, the upper classes used the model of the "Protestant Work Ethic," combined with the economic theories of Malthus, and Smith's The Wealth of Nations, to construct a liberal ethical model where economic success -- the American "self-made man" -- would stand as evidence of spiritual and moral success as well. Achieving this success was a personal act of will. Spiritually and morally superior individuals would be rewarded economically for adhering to their higher ethical standards. Those who were poor or unsuccessful economically were thus morally inferior as well, thus justifying their position in society:

For decades the task [of justifying an ethos of autonomous achievement] fell to moral philosophers. ... A man's conscience informed him about the moral universe; since ethical truth was knowable, the problem of morality was simply a matter of will: one chose one's duty or shirked it. And duty, in every case, involved autonomous achievement. The disciplined pursuit of individual self-interest was a moral imperative; prosperity was dependent on virtue.[4]

"Autonomous achievement" allows a redefinition of education as a private rather than a public good. The central thrust of this ideology is that the individual, through personal labor, achieves success without the assistance of government, friends, family, inherited position, or any other outside agency. It ignores many of the advantages those whom it serves had before they started, as well as excuses how they achieved their success by exploiting the labor of others. This pretense justifies the off-shoring of all jobs except the highest level of management -- the CEO and board of directors -- all of whom are members of the economically privileged upper classes.

As Dennis has noted, with the direct and immediate economic gains made available through higher education subsidized by the government the first several waves of college graduates were able to dramatically improve their standard of living.[5] This change in social position feeds the ideology of "autonomous achievement," producing a situation where the shift from public good to private improvement mirrors the self-serving ideology employed by the nineteenth century upper class: it enacts the premise that success was produced through individual labor without assistance.

Dennis' explanation of the shift of responsibility for education onto the individual demonstrates the middle and lower classes who aspire to change social position have adopted the ideology of "autonomous achievement":

Neo-liberal discourse promoted a marketplace framework where risk was redistributed from the collective to the individual. Government was no longer to be the guarantor of security. It was redefined as a partner in individual risk assessment and management. Within this econometric universe, people succeed or fail based solely on their own assessments of risk, and level of personal responsibility and merit. With its atomistic presuppositions, and its denial of large-scale social or structural phenomena, action to influence structural changes in national and global economies was limited to the dispensing of individualistic prescriptions for life-long learning and retraining. Notions of collective action, in support of the public commons or a public good became stigmatized, and discredited as a dishonest, mystifying set of rhetorical tricks deployed by an anti-American intellectual elite. With its individualistic focus, this is an atomistic ideology with a deep elective affinity for the mass export of jobs, the escalation of CEOs salaries, and the wholesale restratification of the American class system.[6]

By rejecting the government's role in their elevation, the middle class collectively participated in the dismantling of those factors which would have protected them against the current situation. At the same time, the belief that any form of government involvement is necessarily bad served to enable the deregulation of corporate activity beginning in the 1980s. This is the period that off-shoring began. Rejecting the government's ability to govern is built-in to the ideology of "autonomous achievement." It is what makes "autonomous achievement" autonomous. Privatization is thus a fundamental component of this ideology.

In a study on the privatization of pubic art museums, arts funding, and cultural institutions in the US and UK, Chin-tao Wu notes that in the period following World War II, US tax brackets were dramatically revised downward, as Table 1 shows. It is possible that one of the underlying forces driving this shift was the increased taxation of the middle classes as a result of higher pay levels:

Table 1. The Top Federal Personal Income Tax Rate in the US [7]

YearTax Rate
1913-15
1916
1917
1918
1919-1921
1922-1923
1925-1931
1932-1935
1936-1940
1941
1942-1943
1944-1945
1946-1951
1952-1953
1954-1963
1964
1965-1981
1982-1986
1987
1988
7
15
7
77
73
58
25
63
79
81
88
94
91
92
91
77
70
50
38
33

The rising number of middle class income earners were accustomed to having very low taxes (because they had previously occupied a much lower income bracket), may have allowed the steady lowering of taxes at all income levels. This possibility shows that taxation may provide a way to track the emergence and consolidation of power by the upper classes that Dennis has described. As Table 2 shows,[8] there is a correlation between the first generation of government-subsidized college graduate's children (i.e. the second generation college graduates who were between 45 and 59 in 2003) leaving college and the beginning decline in tax rate. The steady lowering from the tax rate the highest point -- the 1950s -- begins between 10 and 15 years after the first college graduates -- those who entered the work force in the 1950s, and correlating with the moment when their children graduate from college. This is the moment when an increased number of college-trained workers would be assuming higher-paying middle management positions, and would have more available income since their children have now graduated college and entered the work force. While the level of taxation for the upper classes has not dropped to the levels at the start of the twentieth century, it is possible to see the trend moving in that direction.

Table 2 shows the educational attainment figures provided by the US Census Bureau. Dennis' "educational boom" peaks with the children of World War II veterans (the largest numbers of these children being those born between 1949 and 1953) entering college between 1967 and 1971 (avoiding the Vietnam draft through the educational exemption) -- the specific group that moves into the work force during the 1970s. This group, the generation known as "yuppies" -- young, upwardly mobile professionals, is the one that most completely embraces the ideology of "autonomous achievement."

Table 2. Percent of College Graduates (as of 2003)

All Races and Both Sexes (by age)Total (numbers in thousands)Educational Attainment
TotalLess than Bachelor's degreeBachelor's degree or higher
PercentPercentPercent
15 years and over
15 to 17 years
18 to 19 years
20 to 24 years
25 to 29 years
30 to 34 years
35 to 39 years
40 to 44 years
45 to 49 years
50 to 54 years
55 to 59 years
60 to 64 years
65 to 69 years
70 to 74 years
75 years and over
15 to 17 years
18 years and over
15 to 24 years
25 years and over
15 to 64 years
65 years and over
225,250
12,628
7,554
19,884
18,721
20,521
21,284
22,790
21,420
18,814
15,470
11,930
9,438
8,673
16,123
12,628
212,622
40,066
185,183
191,016
34,234
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
76.6
99.9
99.9
88.8
71.6
68.5
70.2
70.9
70.1
68.9
71.0
75.5
80.4
81.5
84.6
99.9
75.3
94.4
72.8
75.6
82.6
23.4
0.1
0.1
11.2
28.4
31.5
29.8
29.1
29.9
31.1
29.0
24.5
19.6
18.5
15.4
0.1
24.7
5.6
27.2
24.4
17.4

Source: U.S. Census Bureau
Internet Release Date: June 29, 2004

The evolution towards higher education as a prerequisite for employment noted by Dennis could be called a side effect of a "will to autonomy" that the middle classes have embraced. The steady shift towards lower tax rates begins in 1964, at exactly the same moment that the surge in college-level attainment begins: the children born in 1942 entering the work force. These would be predominately the "war babies" born in the year following their father's enlistment, while the peak years 1949-1953 would be those born following their father's return. This first group would then be graduating college and entering the professional, "white collar" work force starting in 1962 or 1963, supporting the suggestion that changes in taxation for the rich can be used to track educational advancement among the middle classes.

While the tax rate for the upper classes -- the richest portion of the United States, those who own and direct the labor of others, both "white collar" and, by extension, "blue collar" workers -- has fluctuated over the course of the twentieth century, there is another historical correlation worth noting. The historical dominance of corporate power over economic and political life, and the lowest levels of taxes for the richest citizens. Beginning with Teddy Roosevelt's active enforcement of the Sherman Anti-Trust Law at the start of the twentieth century, and its amendment by The Clayton Act in 1914, the United States government began to regulate the economic actions of the upper classes indirectly through their ownership of large corporations. Taxes began a steady ascent during this period. Within four years of the creation of the Federal Trade Commission,[9] the highest tax bracket climbed from 7% to 77%, corresponding to both an actively engaged military (World War I), and increased scrutiny and oversight by the new agency.

The trend in taxation reverses during the 1960s. A dramatic reduction in taxes occurred between 1964 and 1988, dropping from 77% to 33% for the highest income bracket. This change corresponds to both the emergence of "autonomous achievement" as an active ideology for the middle class, and the gradual off-shoring of physical labor, joined at the turn of the century by the off-shoring of knowledge workers and "support" jobs for the information economy.

The shift to an ideology of personal responsibility for education coupled with an increase in the number of highly skilled, college educated workers both inside and outside the United States has helped create the current liquidity of intellectual labor. Central to the ability of corporations to off-shore that labor is the appearance of global, digital communications networks that enable oversight-at-a-distance. Without this communications network, there could be no off-shoring of intellectual labor. The development and dominance of the ideology called "globalization" that Dennis tracks follows this historical arc, visible in lowered taxes for the wealthy CEOs who head the corporations.

The role of government in the oversight of corporations declines over this period. The ideology of privatization (globalization) attacks public institutions and replaces them with private interests as both Dennis and Wu have shown. The groups effected by this transformation of government are the historically "lower" ("blue collar") classes -- those who could be termed "proletarian." These workers survive based on their labor rather than through the direction of other's labor. In this regard, the middle class ("white collar") labor is no different than that of the "blue collar" workers: both groups are directed by the upper classes who employ them. The intellectual labor performed by the "white collar" employees now being off-shored is only different in kind from their "blue collar" brethren who work in manufacturing. The ideology of "autonomous achievement" many of these workers adopted is a result of their position as the "petit" bourgeoisie who aspire to become fully bourgeois by emulating the beliefs, customs and culture of the upper class.[10] This aspiration has resulted in their jobs being subject to off-shoring because they have dismantled (or disabled) the governmental involvement in business that protected them.

The logical extension of this off-shoring is easy to imagine: all labor becomes a commodity. As with manufacturing, intellectual labor will be shifted from country to country to exploit the differences in labor costs, much as a corporation will shift purchasing raw materials for manufacturing. What this development reflects is a commoditization of creativity and the intellectual labor that goes with it. This paradigm shift comes at a moment when other forms of intellectual production begin to become commodities. Dave Stutz describes this process in the software industry:

The word commodity is used today to represent fodder for industrial processes: things or substances that are found to be valuable as basic building blocks for many different purposes. Because of their very general value, they are typically used in large quantities and in many different ways. Commodities are always sourced by more than one producer, and consumers may substitute one producer's product for another's with impunity. Because commodities are fungible in this way, they are defined by uniform quality standards to which they must conform. These quality standards help to avoid adulteration, and also facilitate quick and easy valuation, which in turn fosters productivity gains.[11]

Stutz is writing about computer programs, an intellectual product, and one of the most visible areas whose development has been off-shored. It is a result of human creativity rather than of physical manufacturing in the sense of physical goods such as automobiles. This transformation of creativity into a commodity is a new phase of industrial production contained in the idea of an "information economy" -- that the manipulation of old data and creation of new data, in parallel to manufacturing, becomes a portable "industrial process" with the data in itself becoming an "object" (intellectual property) that parallels the role of raw materials used in other kinds of manufacturing.[12]

A paradigm shift in our understanding of intellectual labor is underway. The shift of intellectual labor away from human activity to modular commodity is demonstrated by corporations off-shoring this kind of labor to take advantage of lower costs elsewhere in the world. The treatment and handling of labor as a commodity is missing from the conceptual landscape of the twentieth century in the US because this handing of labor has been blocked since 1914. Without the vastly improved shipping and communications technologies put in place since the 1960s, the off-shoring of labor (both physical and intellectual) would be cost-prohibitive. The new technologies -- shipping containers, internet, communications satellites, etc. -- now enable labor-as-commodity. The ability to shift between differentially priced labor markets gives corporations an absolute advantage in their manufacturing costs. The Clayton Act, Title 15 U.S.C. ยงยง 13, identifies and forbids the exploitation of labor as a commodity by creating a uniform minimum wage -- but only inside the United States:

(d) Payment for services or facilities for processing or sale

It shall be unlawful for any person engaged in commerce to pay or contract for the payment of anything of value to or for the benefit of a customer of such person in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such person, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

This section establishes uniform minimum wages, thus postponing the conversion of labor into a commodity until off-shoring began with manufacturing jobs in the 1980s. The advent of off-shoring enables the transformation of labor into a commodity precisely because it falls outside the jurisdiction of the Clayton Act. The potential of labor to become a commodity is therefore implicit in labor itself, but it is a potential that largely has been suppressed through legislation.

Yet, the kind of labor the Clayton Act was primarily created to address is physical, not intellectual. The consideration of creative work as a modular component in a larger construction is a fundamental change in how we view "white collar" labor. The general commoditization of labor -- both physical and intellectual -- demonstrates that the globalized corporation, even if located within the United States, is functioning (at least to some extent) outside the framework of anti-trust law. The Clayton Act's provision for uniform minimum wages has historically prevented the conversion of labor into a modular commodity. But the minimum wage is also the reason for the contemporary conversion to commodity since corporations justify their off-shoring to take advantage of lower wages elsewhere in the world.

Harvey Cohen, writing for Strategy Analysis, describes the possibility of creating "smart systems" and how they might impact intellectual labor. By following the parallel apparent in the modularity of the assembly line, we discover this paradigm shift includes an emergent potential for some of these tasks to be automated by "smart systems." The automation of intellectual labor would repeat the displacements produced by automation of physical labor, but on a global scale:

Embedded intelligence within an increasing number of devices and applications is creating smart systems that are becoming more and more efficient and cost-effective in replacing humans who perform narrowly focused and somewhat low-skilled tasks such as customer and help-desk support, directory assistance, advisory functions, reference and interactive assistance. Intelligent capital -- and the idea of replacing human cogitation and action with machine reasoning and decision-making -- is becoming more compelling, in the long run, than the idea of outsourcing such work to lower-cost economies to take advantage of short-term labor-rate arbitrage. In the long run, for simple tasks, smart machines will replace the most cost-effective humans.[13]

Intellectual labor is inventing its own obsolescence through computer automation for tasks previously requiring human thought and oversight. Such a development suggests the gains to be made in third world countries through off-shoring may be brief. It is the last stage of the separation of intellectual activity from human agency. This separation, both in the United States and elsewhere, comes as the result of globalization's colonial demands on third world economies and on the economy of the United States itself. Both are shaped to service the immediate needs of the corporation, and adapt themselves overtime to those needs. These shifts are what has produced the current phase of off-shoring.

It is possible to speculate that there will be additional phases of off-shoring as automation begins to replace these workers and the globalized corporations again need to cut costs through reduced labor expenses, both direct in the form of salaries and indirectly through the collateral of "benefits." What began with off-shoring of physical production in the 1980s, and continues with the off-shoring of some intellectual labor, presents the possibility for a cycle of downsizing within the United States that periodically will remove the lowest level of employment from the US labor market in preparation for those tasks being automated. The ideology of "autonomous achievement" embraced by the middle classes has an ironic character: by working to create computer systems that emulate or replace human agency, the ideology of "autonomous achievement" becomes a reality of "automated achievement" for the upper classes, leaving the remainder of society to work as consumers, effectively eliminating human creativity from the production process.


Notes
---------------

[1] This essay is commentary and an extension of earlier research by Dion Dennis published in CTheory: "The Digital Death Rattle of the American Middle Class: A Cautionary Tale, " CTheory, article A136, November 18, 2003, available online at www.ctheory.net/text_file.asp?pick=402

[2] Dennis, Dion. "The Digital Death Rattle of the American Middle Class: A Cautionary Tale."

[3] Cohen, Harvey. "The Threat of Intelligent Capital, (summary)," available online at: www.strategyanalytics.com/cgi-bin/greports.cgi?rid=232004051011

[4] Lears, T.J. Jackson. No Place of Grace: Anti-Modernism and the Transformation of American Culture, 1880-1920, New York: Pantheon, 1981, pp. 19-20.

[5] Dennis, op. cit.

[6] Dennis, op. cit.

[7] Chin-tao Wu, Privatizing Culture, New York: Verso, 2002, p. 5.

[8] From the US Census Bureau website: www.census.gov/population/www/socdemo/education/cps2003.html

[9] The Federal Trade Commission Act, establishing the FTC as an oversight agency whose mandate was to investigate and bring suit against unfair business practices became law on September 26, 1914.

[10] Greenberg, Clement. The Collected Essays and Criticism: Vol. 1, Chicago: University of Chicago Press, 1955, p. 5-11.

[11] Stutz, Dave, "Some Implications of Software Commodification", available online at: www.synthesist.net/writing/commodity_software.html

[12] It is easy to understand the concern of intellectual property rights when viewed from inside this commodity-driven framework.

[13] Cohen, op. cit.


--------------------

Michael Betancourt is an art critic and artist working in Miami, Florida.

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