De-Industrialization

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Statistics

Michael Roberts

"The world is not de-industrialising. Globally, there were 2.2bn people at work and producing value back in 1991. Now there are 3.2bn. The global workforce has risen by 1bn in the last 20 years. But there has been no de-industrialisation globally. De-industrialisation is a phenomenon of the mature capitalist economies. It is not one of the ‘emerging’ less developed capitalist economies.

Using the figures provided by the International Labour Organisation (ILO) we can see what is happening globally, with the caveat that there is a serious underestimate of industrial workers in these figures and such transport, communication and many hi-tech workers are put in the services sector.

Globally, the industrial workforce has risen by 46% since 1991 from 490m to 715m in 2012 and will reach well over 800m before the end of the decade. Indeed, the industrial workforce has grown by 1.8% a year since 1991 and since 2004 by 2.7% a year (up to 2012), which is now a faster rate of growth than the services sector (2.6% a year)! Globally, the share of industrial workers in the total workforce has risen slightly from 22% to 23%. It is in the so-called mature developed capitalist economies where there has been de-industrialisation. The industrial workforce there has fallen from 130m in 1991 by 18% to 107m in 2012.

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The share of industrial workers in the mature economies has fallen from 31% in 1991 to 22% now. Indeed, according to McKinsey, manufacturing employment fell 24% in the advanced economies between 1995 and 2005.


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The reason that the mature capitalist economies have lost their industrial base is that it was no longer profitable for capital to invest in British industry in the late 19th century or OECD industry in the late 20th century. So capital counteracted this falling profitability by ‘globalising’ and searching for more labour to exploit.

And profitability fell because capitalist accumulation is labour-shedding. Capitalists compete against each other to get more profit. Those capitalists with better technology can steal a march on others by boosting labour productivity and reducing labour costs by cutting the workforce. So the drive is always for reducing the amount of labour power to boost profits. The central contradiction here, as explained by Marx’s law of profitability, is that the reduction in labour power relative to mechanisation leads to an eventual fall in profitability. This reduces the industrial workforce in the mature economies and leads to expansion of industry globally. Capitalism is a mode of production for mechanisation, but mechanisation will also lead to its demise as it is a mode of production for profit not social need and more mechanisation eventually means less profitability. That shows that as we move towards a robot economy: profit for capital and meeting social needs will become more incompatible. And the leisure society just an impossible dream.

Employment growth is falling in the advanced capitalist economies. Employment growth is way less than 1% a year in the 21st century." (https://thenextrecession.wordpress.com/2014/10/21/de-industrialisation-and-socialism/)


Discussion

Only deindustrialisation can lead us beyond capitalism

NICK SRNICEK:

"I want to argue today that only deindustrialisation can lead us beyond capitalism, or in other words, that post-capitalism will necessarily be post-industrial. [1] This means that rather than bemoan the loss of manufacturing jobs, or struggle to lure them back, deindustrialisation should instead be applauded as an important and irreversible achievement. Historically speaking, it is akin to the move away from agriculture-based economies. Just as the mechanisation of agriculture freed people from reliance on working the land, the deindustrialisation process has the potential to free people from the drudgery of most productive work. Yet an immediate consequence of claiming that deindustrialisation is necessary for post-capitalism means we must reimagine what the transition between economies might be like.

The traditional story of moving beyond capitalism is fairly straightforward. To be sure, this story has been complicated and critiqued throughout the 20th century, yet its general framework still underpins a number of assumptions about how to transcend capitalism. In broad strokes, the story begins with a shift away from agriculture-based economy which had been built around a large peasantry. In its place emerges rapid industrialisation – exemplified by the textile, steel, and eventually automobile industries in the 19th and 20th centuries. The social effects of this industrialisation were particularly important for understanding how post-capitalism was supposed to come about. Industrialisation involved a move from rural populations to increasing urban populations, along with a transformation of the peasantry into the proletariat, involving primitive accumulation and the dispossession of common land. The result of this was a new urban working class who had only their labour power to sell. But this transition also led to the development of a strong working class. Factories meant that workers were increasingly centralised in the workplace – they worked together, creating social connections and community. Moreover, the tendencies of capitalism were supposed to increasingly homogenise the working class. The result of all this was that the working class came to share the same material interests – things like better working conditions, higher wages, and shorter working weeks. In other words, with industrialisation there was the material basis for a strong working class identity. (It’s worth noting here, that despite this material basis, the industrial working class was always a minority of the working population. Even at the height of manufacturing in the most industrialised countries, employment in manufacturing only involved about 40% of the population.[2]) On the basis of their political strength though, the working class was supposed to become the vanguard of the population, leading us away from capitalism and towards something better. With the growing power of the working class, and the socialisation of production, it was thought that workers could simply take over the means of production and run them democratically and for the greater good.

Of course, this didn’t happen, and the best example we have of this proposal was the miserable Soviet experience. What occurred in that experiment was a glorification of productivity at the expense of freedom. Just as in capitalist societies, work was the ultimate imperative, and it was no surprise to see Taylorism, Fordism, and other productivity-enhancing techniques being forced upon the workers of the USSR. In the capitalist countries, by contrast, the industrial sectors declined and the basis for a strong working class has been systematically attacked. Yet if we look at developing countries, the traditional story finds little traction as well. Even developing countries are increasingly deindustrialised. This can be seen in two broad facts: first, newly industrialising economies are not industrialising to the same degree as past economies (measured in terms of manufacturing employment as percentage of population). Rather than 30-40% employment, the numbers are closer to 15-20%. Secondly, these economies are also reaching the point of deindustrialisation at a quicker pace. Measured in terms of per capita income levels, these economies reach their peak industrialisation at a much earlier point than previous countries did.[3] This is the so-called problem of “premature deindustrialisation”. The conclusion to draw from the experience of the 20th century is that the promise of the traditional narrative – the industrial working class leading a revolution to democratic control over the means of production – has not been fulfilled and seems to now be obsolete. We no longer live in an industrial world, and classic images of the transition to socialism need to be updated.


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So what is the alternative? Can we still imagine a transition to something beyond capitalism, or have the very conditions of socialism evaporated into history? What does the transcendence of capitalism mean if not simply working class control over the means of production?


I want to take my cue of what post-capitalism might entail from a quote of Marx’s:

“In fact, the realm of freedom actually begins only where labour which is determined by necessity and mundane considerations ceases; thus in the very nature of things it lies beyond the sphere of actual material production.”

What is invoked here by Marx is that the realm of freedom is beyond both material production and the centrality of work to society. Deindustrialisation, insofar as it means the replacement of human labour with increasingly mechanised and automated labour, is therefore a necessary step to something beyond capitalism. Deindustrialisation is the only way in which we escape the imposition of work, as it enables us to outsource production to machines. Importantly, deindustrialisation also appears to be the only way to achieve a society of abundance and leisure time. Without it, one falls into two possible alternatives: either, expanded free time but with generalised poverty (primitive communism), or increasing abundance at the cost of authoritarian work (Soviet communism). If we are to avoid these outcomes, the automation of manufacturing and productive work in general is a necessary step to building something beyond capitalism. Deindustrialisation is, in other words, a necessary stage to move beyond capitalism.


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We need to reimagine the sources of political agency in a deindustrialised world. A final consequence of the new transition narrative, therefore, is that class agency is more complex than just rebuilding a workers’ movement. The industrial working class cannot be the agent of change. Or to make an even stronger claim – not only can the industrial working class not be the agent of change today, it never could have been the revolutionary subject, since its existence was premised upon material conditions that had to be eliminated in the shift to post-capitalism. The necessary stage of deindustrialisation means that the industrial class loses its unity in the process – it fragments and falls apart, as we’ve seen in recent decades. In its place, though, arise new class formations. Key amongst these is the precariat – that class which relies on part-time jobs, contract work, freelance work, informal work, temp work; which has an income that barely sustains their livelihood, let alone that of their families; or which is unemployed or underemployed. Today, this category describes an increasingly large group of people. They are at the sharp edge of capitalism dynamics – a world which demands people work for survival, yet which is increasingly incapable of generating that work. Having experienced the tensions of capitalism, it is groups such as the precariat which may form the basis for a renewed class politics.

So, in conclusion, deindustrialisation is necessary for post-capitalism – it is something to be applauded and not nostalgically lamented. The future must be oriented towards a post-work society, but getting there will involve acknowledging class has changed, and that political power must be rethought." (http://thedisorderofthings.com/2014/10/23/post-capitalism-will-be-post-industrial/)