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II. The New Industrial Revolution

To social democrats, man is a maker. Productive work is central to human dignity and happiness. Yet in America steady work at decent wages is in danger of becoming something beyond the reach of many of our citizens. But, paradoxically, the very forces that threaten many with unemployment and economic disruption are also cause for great optimism: human beings may now be liberated from much of the dirt and danger and drudgery of the workplace. We are undergoing a "new industrial revolution" -- comparable to the large-scale manufacturing revolution that began transforming the world two centuries ago, and that gave birth to the mode of industrial production associated with Henry Ford. This new stage of economic development involves a shift to new productive processes, the emergence of new service industries, a vast extension and refinement of the international division of labor, the globalization of commerce, investment, information and know-how, and an intensification of the competition for markets.

In this new industrial revolution, no single country has taken the leading role, the way England did in the first industrial revolution. The United States, while inventing much of the technology of this revolution, has often fallen behind in the decisive area of production. Production has become international. The car you purchased last month in Pittsburgh may well have been financed in Japan, designed in Detroit, manufactured in ten countries as far apart as Malaysia and Germany and assembled in Mexico. Goods, capital, information and services, even whole factories, whisk around the globe at breathtaking speed, in a market increasingly dominated by vast multinational enterprises, international financial institutions and speculators.

Today multinational corporations, the driving force of globalization, employ some 10% of American manufacturing workers. US- owned multinationals overseas employ legions of foreign workers. These corporations are increasingly free to locate wherever they wish. This new industrial revolution is also transforming the shop floor. Assisted by robots, computers and high-speed telecommunications, teams of well-trained workers adapt versatile machinery to rapidly changing product specifications. Similar transformations are increasingly evident in the commercial and service sectors.

The most important aspect of this process is not new technology, but the new social relations that develop in the workplace. Rote, physical labor is being replied by labor which is more mental, flexible and cooperative. The 21st Century worker will not need physical strength and "factory discipline" as much as the capacity for analysis, judgment and cooperation. In effect, the new workers are becoming managers in a much more sophisticated production system.

Although our country remains wealthy, inventive and productive -- there is no reason to exaggerate its economic woes -- the trends we describe are drawing away or even eliminating large numbers of our jobs: jobs that supported communities and institutions that in turn have sustained our democratic way of life.

Between January, 1979 and November, 1992, the United States lost 3 million manufacturing jobs, or 14% of its total manufacturing jobs. One million are laid off each year as a result of plant closings or downswing. Wages of production workers as a percentage of gross national product declined from 11.6% in 1949 to 4.6% in 1990. Factory closings produced income shifts: a December, 1992 Congressional Budget Office study affirms that 94% of all gains in real, after tax income of all American families between 1977 and 1989 went to the most affluent 20% of families, with 60% of the gains concentrated among the top 1%. In that same period the average pre-tax income of families in the top 1% grew by 77%, while that of the bottom 40% declined 10%.

Although many in our corporate and financial elites belittle the loss of our manufacturing capabilities, we believe that over time that view will prove to have been terribly short-sighted. Once these industries are lost, it becomes difficult for our country ever to re-enter manufacturing competition -- with the loss of manufacturing we lose job skills, technological know-how, marketing knowledge and an array of suppliers and support services that are part of the warp and woof of our economy. If we do not respond to these trends, we face misery for the many, and prosperity only for a favored few.

Nor, in our concern about the effects of the new industrial revolution, can we lose sight of the personal, social and economic fate of the many Americans who never even were touched by the first industrial revolution. Our concern must not only be to protect those now threatened by economic change, but to engage those who have long been left out of the productive economy.

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Copyright: 1995, SD, USA