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(See also  and  on PeaceNet)
/* Written by ihandler@igc.apc.org in igc:nfd.ifeatures */
/* ---------- "cy.Rev Vol 1. No. 1" ---------- */
cy.Rev / 1994 July  Article 1 of 11 / 5590 Words


The Cybernetic Revolution
and the Crisis of Capitalism

By Jerry Harris and Carl Davidson
The Chicago Third Wave Study Group

    In the early 1970s U.S. capitalism began to suffer a deepening crisis of
accumulation.  This crisis sprang from the very heart of the modern
industrial system, arising out of fundamental contradictions in its
exploitation of labor and its conditions of production.  But this crisis also
occurred along side a postmodern revolution in microelectronics and
computer technologies, creating significant changes in the forms of
accumulation and wealth creation.  The two dynamics have created a new
historic juncture for rethinking established theories of political and social
change.

        The crisis of accumulation has long been tracked by Marxist
economists such as Paul Sweezy.  Recently key extensions have been
added by eco-Marxist James O'Connor. But radicals also need to take
note of the important contributions of Alvin and Heidi Toffler and their three
waves theory. The Tofflers describe agricultural society as the first wave
and  industrial society as the second wave. They have added new insights
into the nature of changes in the economic base where knowledge has
become the most important tool of production. This became possible
because of the revolution in the means of production, or information
technologies.  Toffler calls this information society the third wave, or what
we'll I'll call information capitalism.

         For about 200 years "second-wave" industrial capitalism was
generally expanding and dynamic.  Although punctuated by cycles of
economic crisis, it grew into imperialism and built a world market.  In the
metropolitan countries, the circle of wealth grew wider, as a substantial
number of workers organized unions and attained "middle class" living
standards.  But in the early 1970s industrial capitalism hit new limitations
to its growth.  The crisis was all sided, including both labor and nature.  In
a frantic race to maintain profits, the system began to toss huge numbers
of people into the wastelands of unemployment and insecurity.

     In itself this is nothing new. Capitalism has always contained the
contradiction between expanding profits and lowering the cost of labor. 
Each business is driven to maximize its accumulation of capital in order to
survive and grow on a field of ruthless competition.  In order to do so, the
pressure to reduce wages and benefits is constant. But this time, the
downturn was not followed cyclically by a "boom" or recovery that could be
measured in higher wages or new job creation for those who had endured
the "bust" period.

POST WAR EXPANSION

        While every periodic crisis has roots internal to the nature of
capitalism, each crisis also has an historic context..  At the end of WW II a
number of factors came together which gave renewed life to capitalism,
particularly in America. There were four basic factors which gave rise to a
tremendous expansion of the U.S. economy and industrial base:

     ~ First and most important was a period of vastly reduced
competition from foreign rivals.  The post-1945 world was America's
market because the industries of Europe and Japan had been destroyed
by the war.  In such circumstances U.S. capitalism quickly grew with an
expanded job base.

     ~ The second factor was a tremendous demand for both consumer
goods and basic industrial equipment and plants.  There was a 15 year
pent-up demand for homes, cars, refrigerators, and much more as a result
of the depression and war.  The organization of basic industry by the CIO
lead to a large scale post war labor offensive which won significant gains
in wages and benefits. This set the social conditions for accumulation,
laying the foundation for the post-war boom, the creation of the suburbs
and the growth of the blue collar "middle class."

     ~ Third, alongside the demand for consumer goods, went the
intensified demand for capital goods--the need for new factories and heavy
equipment, not only in America but throughout Europe and Japan.  This
meant further expansion and the profitability that allowed the liberal social
contract with key sectors of unionized labor.

     ~ Fourth and last was the development of new technologies which
produced large scale industries and jobs.  Jet airplanes, electronics, and
the chemical industries surged forward with resulting spinoff economic
activity spreading throughout society.

        These strengths also increased the power of international financial
institutions.  The Breton Woods agreement set the gold standard to the
U.S. dollar, which then became the sole international currency. And the
International Monetary Fund and World Bank were established as arms of
U.S. finance capital.

        A vital part of this growth was the state's expanded role in
reproducing the conditions of production.  This is defined as the second
contradiction of capitalism by O'Connor. He describes it as "everything is
treated as if it is a commodity even though it is not produced as a
commodity with the law of value, or law of markets". (The Second
Contradiction of Capitalism: Causes and Consequences, page 1) This
includes land and nature, urban space and labor power itself in the form of
the next generation of workers.

      It became the state's role to assume the cost and regulation of
these conditions through policies on education, health care, welfare,
transport, zoning, water, air, forest and many other examples.  This was
made possible by the Great Depression when the New Deal redefined the
role of the state as an important and direct economic player. To help save
capitalism from its own cyclical  crises of overprotection,  the state began
to regulate more and more  aspects of the market, and assume greater
cost in maintaining the economy. This was particularly important in the
postwar recovery period.

        All these factors gave new life to industrial capitalism, and the
ensuing economic boom lastly about 25 years.  But the underlying
contradiction of overprotection reasserted itself. Living standards could not
keep pace with production.  The tensions between wages and profits
emerged in full force creating permanent economic stagnation.

        Alongside this first contradiction is the second--increasing the scope
of reproduction while decreasing the ability of society to bear the cost.
Industrial capitalism needs to grow. Not only is it pushed on by its need to
accumulate, its nature is that of an expanding mass society.  Mass
production, mass markets, and mass consumption are all part of industrial
civilization. It therefore needs more space, more materials, more energy,
and more labor.  It needs to expand its use of the conditions of production,
and "externalize" their cost.  This not only lead to the crisis in nature, but
also in our cities and infrastructure.

STRUCTURAL CRISIS OF INDUSTRIAL CAPITALISM

        This crisis began with the reintroduction of fierce competition from
Europe and Japan.  Nixon was forced to recognize this when he ended the
Breton Woods agreement in 1971 and the dollar had to compete with other
currencies.  By 1973 U.S. profitability had fallen to 9.5% compared to
16.5% in 1952.  (N.Y. Times, March 28, 1983). This renewed competition
meant the liberal social contract between labor and capital was at an end. 
American living standards peaked in 1973, and have been on a steady
decline every since.  In what was now a more competitive world,  the
struggle for accumulation become more fierce, driving down the wages
and benefits of workers.

        This crisis hit full force in the 1980s when unions were forced into
contract concessions resulting in billions of dollars in givebacks throughout
the economy.  While this helped profits, it meant less money for
consumption.  The results have been staggering.  U.S. income has
dropped from number one in the world to number ten.  Real weekly
earnings are 19% below 1973 levels, while the median income of families
headed by those under the age of 30 has fallen 32%.  Over 20% of our
children live in poverty. Since 1988 the average net worth of American
households has fallen 12%, or about $5,000 per family.      These
figures also expose the racist nature of the U.S. economy: median white
households are worth $44,408; Latino households $5,345; and Black
households $4,604. (Chicago Tribune, January 1994). Its no wonder that
American factories are shutting down, they simply can't sell to a population
making less real income than the generation before it. 

        Capital flight has been a major tool to reassert profitability.  The
continuing pressure to lower wages and other costs has meant shutdowns
and layoffs here combined with greater penetration into the Third World.
Corporations make use of a global labor market where wages often
average $4 a day.  Why pay Detroit auto workers $12 a hour, when Ford
can pay 75 cents a hour in Jalisco, Mexico?  NAFTA is only the latest
result of this trend.  

        These drastic drops in working-class income were also accompanied
by the large Reagan cuts in welfare and urban spending.  Just as
corporations attacked workers to lower the cost of their first contradiction,
the state cut spending to lower cost in the second contradiction.  As
individual capitalists  "externalized" or dumped more of their potential
costs, such as pollution, on the public, they also  weakened the overall
health of capitalist society.  Government debt, the tax crisis, urban decay
and violence are all reflections of the crisis in the conditions of production.
As profits become weaker in the  private sector, the corporations attack
the wage structure and force the state to assume more of their costs.  In
turn the state finds itself  deeper in debt and crisis, and must cut costs by
attacking its social programs, selling off its forests, letting the infrastructure
decay, etc.

        O'Connor sums it up well in his essay "Socialism and Ecology":  "The
vitality of Western capitalism since World War II has been based on the
massive externalization of social and ecological costs of production.  Since
the slowdown of world economic growth in the mid-1970s the concerns of
both socialism and ecology have become more pressing than ever before
in history.  The accumulation of global capital through the modern crisis
has produced even more devastating effects not only on wealth and
income distribution, norms of social justice, and treatment of minorities, but
also on nature or the environment.  Socially the crisis has lead to more
wrenching poverty and violence, rising misery in all parts of the world,
especially the South, and, environmentally, to toxicification of whole
regions, the production of drought, the thinning of the ozone layer, the
greenhouse effect, and the withering away of rain forests and wildlife."

        Industrial capitalism, structured to build and feed a mass market, has
thus reached new limits of growth.  On one hand, it must maintain its
profitability and increase its accumulation. On the other hand, it can no
longer afford the unrestricted expansion of mass consumption, especially 
its "externalities."  The new limits are both economic and ecological. Thus
the present structural crisis is all sided and deep.

THE CRISIS AND INFORMATION CAPITALISM

        Coinciding with the crisis of accumulation, however,  was a
revolutionary development in the means of production. Advances in
computer, microelectronics and telecommunications technologies have
brought major changes to  the basic character of industrial capitalism.  The
application of knowledge is now the primary means of new value
production.  Of course,  all labor has always contained two parts--the
knowledge of how to produce something and the physical effort necessary
to make it.  In first wave society, physical labor encompassed the vast
majority of work, whether it took the form of  growing corn, weaving wool
or maintaining feudal manors.

     In second-wave industrial society, however, machine technology
and manufacturing increased productivity by a factor of 100.  The
knowledge of building a lathe or steam engine reduced the proportion of
input of physical labor.  But still the factory system relied mainly on
physical labor and large scale material assets and inputs to produce value. 


     But In third wave societies, the application of micro-electronics
technology has already increased computer productivity by one million.
Intellectual capital, developed and held by knowledge workers and
encoded in software and smart machines, is the key element of wealth in
today's information capitalism.  Physical labor and industrial machinery are
now secondary to the value added by information. This has had a dramatic
impacted on both finance and manufacturing, as is allowing capitalism to
develop along new lines.

        The application of new information technology has meant that
industry can produce more with less resources, less energy and less labor.
Plastics have replaced metals, fiber has replaced copper, and chips are
made of sand and clay.  In fact computer technology consists almost
entirely of intellectual capital, with raw materials costing only 1% and
unskilled labor 5%.

        By 1988 the U.S. required only 40% of its blue collar labor force to
produce the amount of manufactured goods equal to the that produced in
1977.  From 1967 to 1988, weight per dollar value had fallen by 43%.  By
1985 Japan had increased its output two and half times with just the same
consumption of raw materials and energy as in 1965.  Cars used to
contain 1600 pounds of steel; much of that weight is  now  replaced with
plastics. Thus the application of intellectual capital--in this case in the form
of design--has meant the drastic reduction of both physical capital and the
labor force.

        But the restructuring goes even further.  Because the speed of
processing  information has increased, on-time warehousing, niche
marketing, and the elimination of middle management have become
possible.  Second wave Industrial society produced mass products in huge
factories with a giant labor force. This necessitated a huge number of
middle managers to count production, oversee workers and move
information along the command hierarchy. Now the rapid acquisition and
deployment of information is the primary goal of management and
corporations have restructured to insure its movement.  With expanded
information technology and cuts in employees, middle managers are a
disappearing breed.

        Timely information--which has led to shorter product runs, lower
supplies, and niche marketing--also means rapid change and innovation. 
In essence the "creative destruction" of capital has been speeded-up.  Its
reflection in the labor force means more part-timers and  more temporary
workers.  The most rapidly growing job category is contingent labor,
forming 60% of all new jobs in 1993.  This has increased the downward
pressure on wages further.  Even during the "jobless" economic recovery
of 1993, while profits made a healthy recovery, the median hourly wages
for males fell another 2.7%, 

        New technologies, corporate flight, and wage cut-backs have laid the
basis for renewed accumulation, even in manufacturing.  But this
restructuring has increased poverty and class contradictions throughout
society. The urban crisis, greater economic insecurity and political
instability are spreading in ever widening circles. Like Catch 22, the
system resolves one crisis only to create another with similar features.

THIRD WAVE FINANCE CAPITAL

        The impact of information technologies on finance capital has been
as dramatic as its effects on manufacturing . Telecommunications have
established a global electronic marketplace which functions in real time. 
The most important change has been a tremendous increase in
unregulated, highly mobile speculative capital.  This global infrastructure
with geosynchronous satellites was created just as industrial capitalism
was facing its crisis of accumulation. This allowed information finance
capital to create a huge pool of wealth without creating anything for social
use or consumption.  While industrial capital had reached its limits of
growth, speculative capital used the new technologies to expand and
attract trillions of new dollars.  In fact, the world trade in currency is 40 to
50 times larger than the world trade in goods.  Worldwide the money
market accounts for $500 billion a day, two trillion a year just from New
York firms.

        Third wave technologies have thus been used to develop a global
bourgeoisie.  While finance capital has been dominant since the advent of
imperialism, the national formation of this capital is now less meaningful.
While still seeking to dominate its "own" state, today information finance
capital, independently constituted with multinational currency, seeks an
autonomy above and beyond the restriction or regulation of any state,
anywhere.

 Walter Wriston, past chairman of Citicorp and spokesman for information
capital, has articulated this view in his book The Twilight of Sovereignty. 
He notes that today no currency is tied to physical commodities or any
central bank, but instead is comprised as information on the global
telecommunications infrastructure.  He elaborates: "Money is asserting its
control over (government), disciplining irresponsible policies and taking
away free lunches everywhere" (page 66). International traders take "a
vote on the soundness of each country's fiscal and monetary policies"
(page 67) and this "giant vote-counting machine conducts a running tally
on what the world thinks of a government's diplomatic, fiscal and monetary
policies and this opinion is immediately reflected in the value the market
places on a country's currency." (page 9).

        Wriston clearly thinks this is a revolutionary development in freedom
and democracy for this class.  He goes on to state that  "capital goes
where it is wanted and stays where it is treated well" (page 61), noting that
the "ability to move capital...is fundamental to the continuous efforts of
mankind to live a better life." (page 72) This is free market ideology taken
to is fullest and most abstract development The unhindered movement of
money becomes the highest form of freedom, and the ability of global
financiers to decide the fate of governments and countries the fullest
expression of democracy--all made possible by the electronic infrastructure
and those with the access and  knowledge to use it.

        In this sense one could argue that Ronald Reagan was our first third
wave president.  Reagan's policies clearly favored the rapid development
of speculative capital.  His appointment of Paul Volker at the Federal
Reserve lead to increased interest rates helping to move capital out of
manufacturing and into the new global financial infrastructure.  These
policies helped create 20% profits in finance markets, while pushing
manufacturing profits down to 10%.  This sped the rush to
deindustrialization as money fled to the market of highest returns. 
Reagan's unconcern for America's trade deficit, and his insistence on
deregulation of the market is better understood as an early variant of third
wave financial strategy.

        Information capitalism has also used third wave technologies to
internationalize production even further.  Transnational corporations have
created global manufacturing and marketing alliances where the trade in
products is now replaced by value added activities.  A product may easily
have a dozen parts built in different countries through an alliance of
interlocking global corporations.

        Wriston calls a national trade balance an "artifact of a bygone age".
(page 87) As he shows: "The popular IBM PS/2 Model 30-286 contains a
microprocessor from Malaysia, oscillators from either France or Singapore;
disk controller logic array, diskette controller, ROM and video graphics
array from Japan; VLSO circuits and video digital-to-analog converter from
Korea; and Dram from Singapore, Japan, or Korea --and all this is put
together in Florida...Since there are thousands of such products put
together in similar ways, the old concept of trading one item for another is
obsolete." (page 81) Wriston maintains that the driving force behind the
growing interlock of transnational is the need to access intellectual capital.

Bladerunner vs Ecotopia

        Third wave capitalists are already divided between two wings.  Both
agree that education and the expansion of knowledge is the key to a
strong and competitive society.  An information capitalist like Wriston even
describes knowledge workers as the "new bourgeoisie", noting that  "If
Marx were alive...he would call education the means of production". (page
108).  

     One wing, however,  carries over  the "maximize-profit-in-the-short-
run" values of the second wave, and applies them to both electronic and
traditional forms of capital.  While unabashedly seizing every public
subsidy it can for itself,  it takes an anti-government , "free market" stance
generally. They are fond of quoting Milton Friedman, who emphasizes that
the technological revolution "makes it possible to produce a product
anywhere, using resources from anywhere, by a company located
anywhere, to be sold anywhere."(Fortune 3-8-93)  It vision is of an
unrestrained and unfettered capital, free to roam the globe at will and
exploit an ever changing sea of opportunity, all made possible by the
instantaneous flow of information.

        The other wing emphasizes creating of new  value on a sustainable
basis over the unrestrained making of money. It sees itself as  information
capitalism with a socially responsible human face, with an eye on making
its fortunes in the "green industries" of the future.  Its current main political
representative is Vice President Al Gore, who writes on ecologically sound
economics and calls for universal access to the electronic infrastructure.
On the business side, elder management guru Peter Drucker defines
America as a "post-capitalist" society where the main "social challenge is
to preserve the income and dignity of service workers who lack the ability
to become knowledge workers and to prevent class conflict". (CSM,
August 26, 93). Part of their view is to see a constructive role for an
activist government that promotes the dynamism of the market while trying
to restrain its ecological and social destructiveness .

 THIRD WAVE AND THIRD WORLD

        Both the crisis and new technologies have meant deeper penetration
into Third World economies.  Cheap labor and new markets are seen as
solutions for the accumulation crisis. Information technologies have built a
"global workshop" complete with a global labor force where, as Wriston
and Friedman have pointed out, capital goes where it wants to build
anything it desires. In fact, between 1980 and 1990, foreign investment by
the world's biggest corporations grew from $560 billion to $1.6 trillion.
(U.S. News & World Report, Jan. 24, 1994).

        The effects on the Third World have been tremendous. First, we can
now see many newly industrializing countries accelerating their transition
from rural first wave societies into the second wave.  This has meant a
new division within the Third World between countries still mainly with
agricultural economies, and those with an urban industrial base. Some
Third World Marxists like Samir Amin now use the term Fourth World to
denote these poor, first wave agricultural societies. 

     Second, the transition to second wave industrialism is often creating
ecological havoc, just as it did in the northern hemisphere in the last
century. But today, the capitalism of the North also uses the South as a
dumping ground for exporting the ecological costs of its "second
contradiction."  One of the starkest pieces of evidence of this was an
internal memo written by the World Bank's chief economist, Lawrence
Summers.  He stated: "I think the economic logic behind dumping a load of
toxic waste in the lowest wage country is impeccable...because foregone
earnings from increased morbidity" are low.  He adds that "the
underpopulated countries in Africa are vastly underpolluted; their air quality
is probably vastly inefficiently low compared to Los Angeles...." (The
Economist, Feb. 8, 1992).  These rather cold-blooded economic
calculations expose a global system of ecological destruction where
national borders are viewed only as a footnote to the capitalist market.

     Finally, within some rapidly developing third world countries, a small
but dynamic third wave sector is developing simultaneously with the
second wave. India, for instance, has a growing pool of talented--and
relatively inexpensive--computer programmers ready to work for any
employer reachable by modem or Federal Express.

        The second wave changes are most obvious. Among the top 20
manufacturing exporters in the world are Hong Kong, South Korea, Brazil,
and Singapore. Countries like Mexico, Argentina, South Africa, and Iraq
have decisively entered the industrial era. Others like China and India still
have a majority of the population tied to the land, but have developed
advanced zones in their huge urban centers.

        These changes are causing tremendous social upheavals and stress
as class structures are transformed.  Not only is finance capital highly
mobile, but also industrial capital. This capacity to rapidly shift production
has provided continual escape from unionization, where subcontractors
establish sweatshops in newly industrialized rural areas.. It has also
brought millions of women into the Third World workforce in the most
low-paid and insecure jobs.  The growth of temporary and contingent labor
is thus a worldwide trend.

        Capital mobility also reinforces political authoritarianism. Writing on
the Philippines Jane Margold points out..."As a speeded-up flow of capital,
information, goods and services circulates transnationally, foreign
investors are well-positioned to manipulate the Philippines state's fears of
long term economic marginalization....A rational is then produced for the
deployment of military, police and thugs to discipline striking workers..." (p.
8 Philippine Labor Alert, Sept-Dec. 1993). Certainly this is a pattern found
throughout the Third World.

        This mobility is transforming key aspects of imperialism. Where
territorial and resource control were of major importance in past decades,
they are less so today.  The method of international capital laying roots
deep into  a colonial society, and dominating through a permanent financial
occupation, is changing.  Today the control of the overall global market is
more important than national economies. Local labor markets are used
and abandoned in a rapidly changing sea of opportunity and competition. 
With important exceptions like Mexico's relationship to the U.S. via 
NAFTA, the long term exploitation of any one country or bloc of countries
is not the main strategy of imperialism.  Again, as Wriston points out,
capital goes where it wants and stays where its treated well.  Its no
accident that he titled his book, "The Twilight of Sovereignty".  The export
of capital is still the key aspect of imperialism, but capital mobility and the
threat of denying capital is taking precedence over long-term occupation
as a means of control.

        This changing face of imperialism and its impact on Third World
societies is also the basis for new strategies and divisions within the left. 
In first wave countries the traditional Maoist strategy of peasant based
guerrilla warfare still retains considerable validity; throughout the 1970s
and 1980s, it even saw various degrees of continued success in El
Salvador, Namibia, Nicaragua, and Kampuchea.

        But in many newly industrial countries, labor struggles, electoral
parties, and community based organizing for local economic growth have
become the new  focus. This is clearly seen in the experiences of the
Workers Party of Brazil, the mass urban struggles in South Africa, the
labor upheavals and democracy struggle of South Korea, and in the Party
of Revolutionary Democracy in Mexico.  Even with the heroic peasant
uprising in Chiapas, which has electrified the Mexican left, no one expects
Mexico City to be surrounded and taken by a peasant army.  Traditional
industrial Marxism still finds a firm home in most of these societies,
although new concepts on the key importance of democracy, technology 
and the market play a vital role.

        For those countries caught in the middle of transformation the road
for revolutionary change has been very difficult. Countries like Colombia
and the Philippines have rapidly growing urban industrial sectors, but both
have powerful guerrilla armies still well organized in the countryside. They
also have strongly developing urban movements and democratic openings
not present just a decade past.  This has been a basis for debates and
splits in both countries

        In a recent interview ex-commander of Colombia's M-19, Navarro
Wolff, explained ..."Our original idea was that the people would take up
arms and head to the mountains...But two things had changed in
Colombia...we discovered that Colombia is a much more urban country
than we had originally believed..and the country began to open up
politically, which for us came as a great surprise." (NACLA, JanFeb 1994)

        The importance of urban-centered resistance has also been raised in
the Communist Party of the Philippines.  Ever since the Manila based
overthrow of Marcos and resulting democratic openings, there has been
debate over the balance and pace of rural and urban struggles. As always
the issues are many sided and complex, but part of the debate has been
over the role of urban insurrection and its relationship to peasant based
guerrilla war.  Recently there has been an organizational split in which
Chairman Sison still holds to a revolutionary strategy situated mainly in the
countryside.

CHANGING POLITICAL STRATEGIES

        The tremendous changes in the economic base and resulting shifts in
populations and work relations have laid the basis for new political
alignments. These tensions are not just present in the Third World, but
also societies moving from second wave to third wave economies.  The
result has been new challenges for Marxism and radical theory.

        In America there are two growing class strata that need close
attention.  These are the new knowledge workers and the rapidly
expanding contingent labor force.  Contingent labor includes part-time and 
temporary workers and homeworkers. Today temp agencies are the
largest employers in the U.S. This sector, while holding some highly skilled
workers, mainly consists of low paid, low skilled labor.  Knowledge workers
are on the other end of the third wave revolution; they are generally highly
paid and in demand. Technical occupations and professionals will be the
largest job category by year 2000, representing close to 20% of the labor
force. (Tribune, 11-7-93) But even among knowledge workers, there exists
rapid turnover and layoffs.

       Contingent workers, as the most abused sector of labor, contain the
potential for a militant anticapitalist movement. But new methods of
organizing, different from traditional trade unions, need to be created to
match the ways contingent workers experience their oppression. These
will include combining community-based organizing with workplace
organizing.  Social demands like guaranteed annual income, lifelong
education, and universal health care need to be combined with the
traditional economic demands of the union contract.

        Knowledge workers today are in the position of the old industrial
proletariat.  They are key to the enhanced production of surplus value.
Just as blue collar workers contained two sides--the conservative labor
aristocracy as well as the most progressive sector of labor supportive of
democracy and socialism--knowledge workers will divided into two as well.
One sector will form the social base for the defense of information
capitalism regardless of its excesses. Others will deeply understand the
potential the new technology has for creating and sustaining a new social
order. This progressive side also is born from the conditions of  its own
labor, which are enmeshed in the most advanced forms of capital. 

      This was Marx's argument for the importance of the industrial
proletariat.  Not just that they were exploited, but they were organized in
the most modern and important section of capital. Therefore they
encompassed the most advanced forms of political and economic
organization.  The economic organization of knowledge workers
emphasizes less hierarchy, less bureaucracy, more information about and
control of the job process, and greater participation or empowerment at the
site of work.  This lays the basis for socialist norms of labor, and blurs the
lines between mental and manual work, which is the historic division
between management and employee.  The political voice of this strata has
already emerged in today's battles for democratic use and control of
information technologies.

        Lastly the new social movements need to be understood in their
relationship to the crisis in the conditions of production.  The movement of
feminists, ecologists, and community based organizations correspond to
the reproduction of laborpower, the exploitation of nature, and the
pressure on urban space.  Just as the labor movement was born from the
first contradiction of capitalism, these struggles arise from the second
contradiction.

        The feminist concerns over the control of a women's body, health
care, child care; the struggle of young people for education and culture;
the green movement's battles against pollution, global warming and
deforestation; community struggles over housing, industrial location, and
drugs; all reflect the cost of capital externalization and a tightening circle of
available resources.  Since the state controls and regulates the conditions
of production, the focus of these struggles are with local, state and federal
government. Traditional Marxists who view point of production organizing
as the most valid form of struggle need to rethink long held beliefs. The
immediate struggle against capital grows from both economic and social
grounds.

CONCLUSION

        As Marx pointed out long ago: "Modern Industry never looks upon
and treats the existing form of process as final.  The technical basis of that
industry is therefore revolutionary, while all earlier modes of production
were essentially conservative.  By means of machinery, chemical
processes and other methods, it is continually causing changes not only in
the technical basis of production, but also in the functions of the laborer,
and in the social combinations of the labor process.  At the same time, it
thereby also revolutionizes the division of labor within the society, and
incessantly launches masses of people from one branch of production to
another." (Capital, 1954, p. 457)

        The same transformative process goes on today. A revolution in
information technologies is creating fundamental changes in how and
where people work.  It is changing the functions of the laborer, the social
combinations of the labor process, and has launched masses of people
from one branch of production to another. Does this not accurately
describe the world around us? Yes, the traditional crisis of accumulation
has reemerged in full force, but the context and form of these changes has
been the revolution in the means of production.  New technologies have
changed the face of capitalism, effecting the economic base, the relations
of production, and are impacting political strategy.  Our task is to
understand the general crisis, its new forms, and begin to develop new
strategies for appropriate technologies, radical democracy and sustainable
socialism.

                            -- 30 --

     Jerry Harris teaches history at DeVry Institute of Technology in
Chicago. Carl Davidson is the director of Networking for Democracy, a
Chicago-based cooperative assisting grassroots organizations with media
and new technologies.

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