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Class Warfare in the Information Age

by Michael Perelman
Department of Economics
(St. Martin's Press, 1998; 160 pages; $35 hard cover)

INTRODUCTION
The title of this book is intentionally provocative. Mention of class struggle evokes images of a grimy age in which bygone captains of industry callously oppressed armies of overworked and underpaid proletarians. This dark portrait of class conflict stands in sharp contrast with the glorious promise of an information age. Supposedly, with the help of modern computer and telecommunication technologies, we can look forward to life in a well-educated society in which anybody with even a modicum of intelligence and discipline can enjoy a more than comfortable existence.

Unfortunately, the reality of the information age falls considerably short of the futuristic vision of the information age. In fact, the imaginary dystopias of science fiction seem to be closer to the truth than the fantasies of the champions of the coming information age.

Despite our wondrous technological achievements, everybody is grumbling today. The rich complain that they pay too much in taxes and nobody wants to work for them at a reasonable wage. The poor have trouble finding work. When they do, their wages often fail to lift them out of poverty. The middle class rightly fears that their prosperity is precarious, knowing that their numbers are rapidly diminishing.

In this contentious environment, blame is cast about with abandon. Multitudes of groups are singled out for abuse: dark-skinned people, welfare recipients, immigrants, government bureaucrats, homosexuals, atheists, fundamentalists, and vague, but ominous forces that secretly plot against world government. Occasionally, one even finds mention of giant corporations.

This book attempts to make sense of this welter of conflicting claims and accusations in the context of the information revolution....

A PREVIEW.  Although I am an economist, my professional training did little to prepare me to understand the information age. In fact, like most students of economics, I heard almost nothing of conflict, except for complaints about the galling differences between those who accept the prevailing dogma and the ignorant masses who do not.

This simplistic predisposition to assume that competitive market forces somehow automatically induce social harmony dates back at least as far as Adam Smith's Wealth of Nations, published more than two centuries ago. At the time, Smith postulated:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. (Smith 1776, I.ii.2, pp. 26-7)

Unfortunately, not only has economics failed to progress since the far simpler days of Adam Smith; it has actually regressed. On a more subtle level than his oft cited words about butchers and bakers, Smith clearly understood class conflict in a way in which modern economists rarely, if ever, appreciate. After all, Smith himself lived in an age of serious class struggle. Most of his well-to-do contemporaries believed, with good cause, that Britain was on the verge of a civil war (Thompson 1963). Smith himself went to great lengths in delineating the distinctly different interests of landlords, workers, peasants, and merchants.

Despite the tumult of the time, Smith himself was optimistic that the market would eventually defuse the conflict between the contending classes. He prophesied that the market would somehow cut the idle rich down to size, while simultaneously lifting the hard working poor into comfortable middle class affluence and culture. Through this route, class struggle would vanish and society would become harmonious sometime in the future.

Although Smith's views about social harmonies are far more complex than those of the typical economist of today, judging from the contentious world around us, we must recognize that Smith was far off the mark in his predictions about the future demise of class struggle. The market seems to have done little to transcend the conflict between classes. Anger and hatred are more common than ever. True, the generic classes of capitalists and workers seem inappropriate today, but only because these great classes have fragmented into smaller grouplets of angry people.

The flowery rhetoric of the information age rekindles Adam Smith's tattered vision of social harmonies. Popular writers, such as Alvin Toffler and George Gilder, propose that the widespread availability of information at modest prices will topple the old industrial structure, allowing anyone with a modicum of ambition to prosper as an entrepreneur. According to such authorities, we have no cause to grumble. All we need to do is to dismantle the Second Wave institutions of the state and grab hold of the profitable entrepreneurial opportunities that await us (Harvey 1995, p. 9).

I will take issue with the simplistic optimism of the information age as an epoch in which information replaces labor and material goods. I will argue that this conception of the information age is overblown at best. However, to the extent that we are entering an information age-and surely information is becoming increasingly important in our economy-the process will reinforce existing class structures rather than bring us to a classless, harmonious world.

The real information revolution is not that information is suddenly becoming important. Information has always been important. The revolutionary aspect of the information age is the treatment of information as a commodity in ways that would have been unimaginable only a few decades ago.

While the technologies of the information age greatly expand the economic potential of society, the benefits of these technologies are far from equally distributed. In fact, these changes will throw many of the less fortunate into destitution.

The failure of technology to deliver on its promise is not a new phenomenon by any means. For example, well before the information age, as the Industrial Revolution drew to a close, John Stuart Mill despaired of the yawning gap between technology's potential and its effect on the masses of the population. "Hitherto it is questionable if all the mechanical inventions yet made have lightened the toil of any human being" (Mill 1848; 3, p. 756). Mill was hardly a casual observer. On the contrary, he was widely considered to be the foremost economist of his day and his Principles of Political Economy was the most influential text for decades.

Let me warn you at this time that my book is neither about classes nor technology as such. It does concern the reciprocal relationship between class structure and technology. I chose to analyze this subject because I am convinced that a proper understanding of classes and technology is crucial for making intelligent choices about the kind of society that we create for ourselves.

In this respect, I show why an information age is inconsistent with a market system. Specifically, I will discuss why the rules of the market impede the production and distribution of knowledge and information. I will also investigate the manner in which markets contaminate both the flow of and the application of information.

Reprinted with permission from St. Martin's Press