Systemic Shock

In the last few years major American technology corporations like IBM, AT&T, and Xerox have fired about half a million employees. All American corporations together are now dismissing about two million employees a year, many from white-collar jobs.

Some of that reduction---about eight hundred thousand people---is fallout from the end of the Cold War; and some of it is the result of cheaper foreign labor pools and increased use of robotics. The recent middle-manager bloodbath, however, even at big conservative corporations, is largely a byproduct of improving computer technology. When computers became good enough and cheap enough, executives saw that they could use them to replace all those people and make more money. So they did.

In 1993, the U.S. Bureau of Labor Statistics announced that for the first time ever the ratio of permanently terminated employees to those temporarily terminated was four to one. Thus, when five people are terminated today, it is not simply that five of us are fired but that four of the five jobs we once held have vanished utterly. The computer has taken most of those jobs.

The conclusion seems inescapable: We're going through a fundamental change in the way we do things, a change at least as momentous as the industrial revolution. And while there's much talk of a "jobless recovery" in Britain and North America, there is little understanding of what's causing it. Government make-work programs may give some short-term balm but not long-term ease. Only reeducation can do that. It's foolhardy to believe that nostrums from the 1930s, when over a third of the workforce were either laborers or farmers and computers didn't exist, can work today. We've always been slow to recognize fundamental change; it's so much easier to believe that things will go along much as they did a generation or two ago.

Systemic retrenchment isn't a problem local to America, Canada, and Britain, and it isn't a problem we can easily fix merely by pumping more money into the economy to create jobs. The jobs that were there before aren't there anymore. They'll never be back.

Computers will inexorably move up from controlling manual labor to controlling corporations and countries, displacing as they go all the people in the chain of command. Eventually, corporations and governments may become hiveminds, persisting regardless of which person is president at the time. All the files and procedures to collect, control, and disseminate information and to design and then control manufacturing devices, processes, and tools might eventually be run by the corporate computers. They'll provide the continuity from one generation of presidents to the next.

A fantasy, you say? Well, it has already happened, but with people (boards of directors and shareholders) doing the controlling. These days there are few robber barons of the stature of J. P. Morgan or Cornelius Vanderbilt, who were able to do exactly as they pleased. And perhaps that's a good thing.

Round Up the Usual Suspects