Chapter 11 -- Hi Tech, Low Pay


Two bourgeois theories on the scientific-technological revolution

What, then, is the ultimate destiny of the scientific-technological revolution?

The bourgeois economists tend to fall into two not very distinct but nonetheless discernible schools of thought on this subject. One of them points to the past two centuries, which have seen a great many technological revolutions, beginning with the spinning wheel, the steam engine, the railroads, and so on. They argue that insofar as the functioning of the capitalist social system is concerned, the scientific-technological revolution does not really change much--no more, they say, than did the introduction of the automobile as a form of transportation, superseding the horse and buggy days.

While it is true that the functioning of the capitalist system, meaning thereby the exploitation of wage labor by capital, has not been fundamentally altered, the recent changes, however, do introduce a new social development. The older revolutions in technology can be compared to the scientific-technological revolution as an arithmetical progression is compared to a geometric one. This new revolution of course doesn't change the character of exploitation, but it multiplies its intensity, as the data we have presented discloses, and this becomes cumulative with each passing day as more and more statistical data is available.

The other school of thought, somewhat older and more craven in its apologies for the system, deals with the scientific-technological revolution from another angle. Its view, which has been extensively covered ever since Daniel Bell relieved himself of his thesis of the post-industrial society, is that the new stage of capitalism tends to disintegrate the proletariat as it has been presented ever since the days of Karl Marx. This thesis says that the old working class is vanishing and is being replaced by middle class elements, and that the old polarization between the capitalist class and the proletariat is softening and the antagonisms are diminishing. These new broad middle layers are said to be taking on more numerical strength and to be leaving behind the old class antagonisms. It's a familiar enough theme.

We have demonstrated earlier how high technology results in low-paid jobs. But the thesis of these Post-Industrial Revolution apologists is that a tremendous increase in white-collar workers, professionals, middle managers, administrative assistants, secretaries and so on--a huge group often referred to as the "Yuppies"-- effectively neutralizes the potential for class struggle of the type of the great working class struggles of the 1930s. In their view the shrinking number of steel, auto and electrical blue-collar workers enhances the growth of the so-called middle class.

Among other things, they close their eyes to the most recent data. For instance, an article in the New York Times in October 1985 dealing with recent layoffs at the Ford Motor Company threw light on white-collar layoffs at the giant U.S. corporations.1 It showed that there had developed a virtual campaign against office workers, similar to the anti-labor campaigns against blue-collar workers, but this time in the name of fighting "corpocracy."

The article dealt with layoffs at not only Ford but American Telephone & Telegraph, Union Carbide, General Motors, Bethlehem Steel and CBS. Now we can add ABC, GE and RCA to this list. You can really count in all the Fortune 500, as a matter of fact, for all are now engaged in what the New York Times article called trimming the "corpocracy." It is a wide-ranging and ever-deepening attack which may not have quite the same measure or intensity as the anti-labor campaign but nevertheless is just as painful and drastic for the much-touted "middle class" elements.

At the earliest stage of the anti-labor offensive, some misguided officials of unions, in an effort to ward off layoffs, cutbacks and plant closings, demanded similar layoffs of management. They got more than they wanted.

The post-industrial school of bourgeois economics has closed its eyes to the fact that the middle class itself is being polarized into two camps, one of which is steadily falling below its previous status while a smaller fraction whose earnings are supplemented by stock and bond ownership tends more in the direction of higher management.

We discount here petty proprietors, the traditional middle class between the capitalists and the workers. Rather, we are dealing with the so-called new middle class, which bourgeois statisticians lump all together in the service sector. Now, banking is a service industry. So under this reasoning, Walter Wriston, the former head of Citicorp, the world's largest banking corporation, and all the bank's maintenance workers, all the window washers and cleaning people, are lumped together as service employees! But even this most powerful bank recently took its credit card division out of the city of New York and relocated it in the Middle West, thereby shrinking the white-collar staff, especially the so-called middle layer.

What also gets overlooked completely is the assembly line character of the new so-called white collar workers. In fact, they are the clerical proletariat. Most are women, and many are Black, Latin and Asian. These jobs more and more tend to require less skill and give less pay.

All these layoffs of the so-called middle management "corpocracy" are taking place in a period that has supposedly passed out of the recession of 1979 and is now enjoying capitalist prosperity. Again, if this is what happens in a period of prosperity, what will conditions be like in this solid mainstay of the capitalist system once the anticipated collapse is felt?

All truly service-oriented industry is industry which supports manufacturing, which is essential to the distribution of the products of industry. The service sector is not an autonomous, independent factor immune to the laws of capitalist crisis. It is wholly dependent on capitalist industry as a whole. Economic crisis, once it hits, may reach it later, but it inevitably arrives. Even Paul Volcker, the conservative chairman of the Federal Reserve Board, has continually called attention to the relationship between the industrial and service sectors and how dependent the latter is on the former.

Capitalist concentration and the middle class

The bourgeois reactionary utopia of a middle class solidly in line with the ruling class is based on a false economic foundation. Its attempt to lump together the millions of low-paid workers with upper-level corporate executives from banking, insurance, and stock brokerage houses is a fraud. Yet even among the very top, the fear of economic crisis, which impels them to push the drive for mergers and acquisitions to the limit in a frenzy of speculative schemes, has produced the so-called golden parachute stratagem. It's a means whereby top executives, in fear of the ultimate consequences of mergers, acquisitions and buyouts, are trying to make sure that they have a bailout for themselves.

In 1981, a Senate committee staff released a computer-aided study of data on corporate ownership compiled in 1980 by the Securities and Exchange Commission. According to the New York Times, the study showed "a high degree of concentration rooted in overlapping institutional stockholdings and interlocking directorates. The study found that the top levels of ownership in almost all major corporations are held or controlled by as few as 15 financial institutions, including major banks and insurance companies."2 The conclusions of the study merely confirmed a trend that has been noted in similar studies made over the past 35 years.

The study covered 100 of the country's largest companies in 17 areas of finance and industry, including banking, insurance, automotive, steel, energy, transportation, and retail.

J.P. Morgan & Co. through holdings it manages for others is effectively the first or second largest stockholder in 25 other companies studied in the report. They include IBM, Bank of America, Eastern Airlines, Citicorp, Sears, Mobil, General Motors, and General Electric. "The aggregate holdings of pension funds in large financial institutions like Morgan `place them in a special position to exert control or influence over the management of their portfolio companies,' the Senate study concludes. Citicorp was found to have the most interlocking directorates--49 direct interlocks with the other companies and 887 indirect interlocks. A direct interlock occurs when two corporations have a common director, while an indirect interlock takes place when directors of two corporations meet as directors of a third corporation. Interlocking directorates among direct competitors are forbidden by federal law."

The recent wave of mergers, acquisitions and buyouts, the biggest ever to take place in this country, has undoubtedly accentuated this trend. In almost every case, the new corporate entities have effected not only layoffs and plant closings, but also cutbacks in the professional and managerial staffs. The fear which has gripped the managerial staffs, especially the lower levels, in this new wave of the concentration of capital in fewer and fewer hands has filled the financial pages of the capitalist press. How could this be overlooked?

Rather than presenting a false homogeneous picture of what is passed off as the middle class, attention should be drawn to the polarization within it. The concentration of capital continually lops off large segments of the former elite groupings in the managerial staffs and throws them onto the market to compete for lower-paying jobs (if they are still of an age to do so). This is the grim reality, not the self-serving portrait of the middle class which tries to obscure the class contradictions between monopoly as a whole and the various middle layers.

In areas such as airlines, electronics and other high-tech industries, the Reaganite deregulation drive is affecting the so-called middle management layers, especially in the huge corporations, to the extent that it is showing up in the shrinking of mass markets designed to appeal to the middle class.

A summary of a Fortune magazine article, "The Mass Market Is Splitting Apart," explained: "Most businessmen don't realize it yet but the middle class, the principal market for much of what they make, is gradually being pulled apart. Economic forces are propelling one family after another toward the low or high end of the income spectrum. For many marketers, particularly those positions that sell to the well-to-do, this presages good times. For those used to selling millions of units of their product to middle-income folks, the prospects are altogether darker."3 (Our emphasis--S.M.) This illustrates the polarization we referred to, rather than the growing homogeneity and so-called upward mobility about which the second school of bourgeois economists preaches.

This polarization is not only the result of the recent economic crisis. The "number of families with low incomes has climbed" for a longer time, said Fortune. "But the decline of the middle really began during the long expansion of the late 1970s when the families began to find the economic ground under them shifting." An accompanying chart showed the dwindling of the middle class. Below it, Fortune said: "The percentage of families in the `middle class,' here defined as having an annual income of $15,000 to $35,000 in constant 1982 dollars, dropped sharply over the past ten years. Families at the extremes increased as a proportion of the total, particularly from 1978 on."

This illustrates the divisiveness inherent in the nature of the capitalist economy in general and what the blessings of the scientific-technological revolution in particular bring on. It devastates not only the working class but also the middle sections.

How they go from higher-paying to low-paying jobs was well illustrated in the late 1985 California supermarket strike conducted by the United Food and Commercial Workers union and the International Brotherhood of Teamsters. The management of the supermarkets proposed creating a new job classification, meat clerk, with an hourly wage of $7.25, for meatcutters who performed essentially the same job but who at the time earned $13.48 per hour. A company official insisted, predictably enough, that changes in technology and services offered by supermarkets had eliminated many tasks previously performed by meatcutters. Where meatcutters used to handle many whole sides of beef or pork, the company said, a great deal of meat now arrived at stores boxed in smaller portions. Therefore, they insisted on this new classification. Under these circumstances, they insisted that the employees, whom they now called meat clerks, should be paid the $7.25 rate. This is really using a meat axe to cut wages!

"Just because they are getting the boxed beef, that doesn't give them the right to put a seven-dollar an hour employee in the place of an eleven-dollar an hour one," said the UCFW. "These cutters," said union officials, "have been apprentices for four or five years, have been journeymen for seven or ten years. We can't agree to this at all."

This struggle illustrates both the significance of the scientific-technological revolution as a source for super-profits for the bosses and the iron necessity of the unions to resist with vigor and determination.

A Washington Post article entitled "Middle Managers Under Siege, No Longer Immune from Layoffs," stated: "Middle managers, the staff people long thought essential to a smooth-running corporation, are becoming increasingly expendable because of the rapid rise of office automation."4

The pressure to reduce the middle element has been especially strong in GM, which has acquired the Hughes Corporation and earlier the Electronic Data Systems Corporation. Investment bankers and their analysts who act as advisers to these giant corporations are speed-up artists in Brooks Brothers clothing who often find bulges in the waistlines of corporations like GM and the others. According to the Washington Post article, they found that GM had a "bloat" of white-collar workers. "It's temporary, say GM officials, and the pressure is on to reduce it."

" `Most of the white collar reductions will come out of the ranks of middle management and out of the clerical staffs,' said one of those automotive industry consulting firms, Peter C. Van Hull, director of Arthur Andersen and Company. `Many times the middle management and clerical groups are involved in work that doesn't add value to the product.' " How quick they are to use Marxist terminology whenever it comes to increasing super-profits for the big bosses in the ruling class! " `They tend,' continued Hull, `to become self-perpetuating bureaucracies. . . . Jobs that don't add value to the product are not needed.' "

Petty bourgeois theoreticians have time and again attempted to draw a false analogy between a bureaucracy and a ruling class, insisting that both serve an identical function and therefore there's no real difference between them. This should be an eye opener to them. Bureaucracies in ancient slavery and in feudal times, from ancient Rome to ancient China, have always served as mere instruments of the ruling property-owning classes. These in their own way have sought to either augment or diminish the size, power and influence of the bureaucracy, but it has always served a different function than that of the ruling class.

The ruling class under capitalism has historically served as the organizer of production, but the development of the productive forces, particularly the momentous dimension of the scientific-technological revolution, makes them superfluous. Centralized, collective, socialized production, which is what we have now, makes the ruling class wholly unnecessary. The process of production is now ready made for the working class. It only needs to overcome the gap between its objective position and the consciousness which is indispensable to harmonizing collective, centralized production with collective, centralized ownership by the workers.


1. New York Times, Oct. 13, 1985.

2. New York Times, Feb. 5, 1981.

3. "The Mass Market Is Splitting Apart," Fortune, Nov. 28, 1983.

4. "Middle Managers Under Siege," Washington Post, Sept. 1, 1985.

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