THE time: now.
The place: a coffee house somewhere in the great beyond.
"I TOLD YOU it wouldn't work in Russia. You can't skip the capitalistic phase, Vladimir. In Russia you never got out of the feudal period; you went from nobles and serfs to party members and proletariat."
"But Karl, we established the dictatorship to bring them up to date. They are backward. They are peasants. We had to do it all."
"You don't understand. The capitalistic phase develops individual identity, Vladimir..."
"Yes, Karl, for America, for England, and maybe even for Germany. But Russians are different. The national character... the inherent backwardness ... the superstition... the ethnic problems. Look at them now, fighting over ethnicity. They don't think the way you and I do. They've lived in a modern world and yet they are still fighting old, dead, and forgotten wars. It's inherent, part of the culture: conservative and backward!"
"No! it's not inherent! It is learned. Look: as the means of production change, the relations of production change. These become the social relations of the society. Yes?"
"As the relations of production change, people learn the social relations that emerge from that production system, as if they were the only social relations possible. This was my point when I said that Darwin had neatly made his theory predict the English bourgeois of his day as the pinnacle of evolution."
"I know, I know. But, Karl, the USSR has been industrialized. The means of production have changed. But the people haven't changed. They're still the same. Like I keep telling you, it's the character of the people."
"But the capitalistic phase! Vladimir, they never went through the capitalistic phase, they never negotiated for labor, labor was never alienated, they never developed relations of formal equality, they never sold their labor as a commodity!... Look, Vladimir, there is an implied negotiation inherent in the sale of labor as a commodity.
The negotiation develops the notion of the individual as distinct from the social group because there is an implied contract. A contract implies that the twd parties are capable, and that implies a formal equality. This takes place under capitalism! Why can't you see it, man?
"In the USSR, people are either party members or they are workers. They don't negotiate. They are paid what the government decides. As a result, they haven't developed relations of formal equality and they are identifying as Serbs, or Abys-sinians, or Lithuanians, or Ukrainians, or Georgians, not as individuals or workers.
"People must join together to demand their portion of the profit produced by their labor. Petty distinctions between groups, like race, religion, or ethnicity, keep workers dividend. So first they need to identify as equal individuals. This happens as a consequence of the sale of labor because of the formal equality of the relation. But formal equality is not economic equality. The demands of the owners — of capital — for profit plxmder the system. They siphon off wealth made possible by the workers. This is the inherent contradiction of capitalism and this leads to crisis. Each crisis is resolved in a way that improves production. This will lead to the ultimate triumph of socialism, because workers will come to own the means of production."
"Wait just a minute, Karl. Which is the contradiction? The relation between labor and management or the relation between production and capital? You don't make that clear."
"Both. A capitalist entrepreneur invents sonie way of making some thing, machinery or process to make something or other. He hires laborers and they make the thing — their labor, organized together or magnified by the machinery, adds surplus value. The capitalist appropriates this surplus value and accumulates capital in the form of profit. His inclination is to take that profit and keep it. But for production to improve he should re-invest it into the means of production — the machinery and the people whose labor is generating the surplus worth. The contradiction is that the desire of the capitalist for profit and the needs of improving production are inherently opposed.
"Crises occur because the entrepreneur makes goods the impoverished laborer can't buy.There is overproduction because of the focus on profit. It is a competitive system, so each crisis is resolved in favor of the most efficient form of production."
"Look at the United States, Vladimir. They started serious industrial expansion with the railways. In 1855, Daniel Mc-Callum introduced a management hierarchy and rationalized management methods to the Erie Railroad. For the first time the lines of communication were restricted to individual relations between two nodes in a hierarchy. By the 1880s, Mc-Callum's methods were standard operating procedure on all railroads, and by the turn of the century the rationalized management structure was spreading to distribution and manufacturing. The new relations of production allowed businesses to expand — to vertically integrate. They could use planning in their allocation of resources instead of relying on market structures. Organization and communication: the new relations of production, Vladimir, just as I said."
"Yes, but what about the exploitation, oppression, what about the crisis inherent in the contradiction of capitalism?"
"Crisis, you say, yes, of course there was crisis."
He pulls scraps of newspaper out of his pockets.
"Look, Vladimir: crisis 1870, depression brought on by the overexpansion of railroads. Here, 1888, depression in Europe. Look, again: 1896, in the United States, and look at this one: 1929, stock-market crash. I'll give you crises. They go from crisis to crisis, and in each crisis, the ones that are less efficient don't recover. Where the capitalists skim off the profits, the business fails. Where there is only short-term thinking, they go under. Every time, they fail when they don't plow the money back into the means of production — the machinery and the people."
"But, Karl, the people, the proletariat, the exploitation."
"Of course, the exploitation, yes. But, Vladimir, they did what I said. Here, I have it here."
He searches his pockets and shoves a sheaf of paper at Vladimir, pointing to a passage.
"In the first volume of Kapital, look, read!"
As Vladimir begins to look at the passage, Karl snatches it back and reads:
"'The laborers must put their heads together, and as a class, compel the passing of a law, an all-powerful social barrier that shall prevent the very workers from selling, by voluntary contract with capital, themselves and their families into slavery and death. In place of the pompous catalogue of the "inalienable rights of man" comes the modest Magna Carta of a legally hmited working day.' *
"See, that's just what has happened."
"But, Karl, the unions have ultimately served capital. Besides the union movement is dead."
"Yes. Success killed them. Workers have benefits, with or without unions. But even so they had their success, and that was because a union shop was a more efficient shop. The unions increased the efficiency of production. The old-style capitalists went out of business. This helped the whole reform movement. In the United States, during the early days of the twentieth century..."
"But that was because they were afraid of you, Karl. There was a Red scare."
"Flattering but unimportant. The important thing was, tmions understood they could win public support by making a union product a better product, and capitalists learned it was important to have literate, docile workers. So the unions made sure their members were good workers and capitalists dropped their opposition to public schooling, social reform and a shorter work day. The crisis got rid of the less profitable businesses and was resolved in favor of improved production. It happens every time. In fact, Darwin's point: survival of the fit."
"And then, in Russia, came our glorious revolution. They were wonderful times, Karl, wonderful. We toppled an empire."
"Hmm .. .Yes, uhmm, Vladimir? Have you ever read ... But wait, I have it here."
He searches through his papers, slaps his pockets and comes up with a passage. This time he lets Vladimir read:
"'Without a sufficient level of productivity, communal production relations would only result in stagnation and decline in the mode of production — from which class distinctions would reemerge.' ^
"All right, Karl, I realize sufficient production hasn't occurred in the Soviet Union. And I realize you predicted it. But what about your precious America, their union movement and their march toward your glorious vision? They aren't making progress now. They're conservative and the bureaucrats are the agents of capital. Executives get million-dollar bonuses even when their organizations lose money."
"I know. But in the inevitable crisis the inefficient, top-heavy organizations will not survive. The survivors will be different from the organizations of today. As different as the vertically integrated organization of 1940 was from the family-run business of 1840, or as the craft shop of the Middle Ages was from the early capitalist manufacturers of the seventeenth century."
"But, Karl, those are major changes, not only in the production system, but in the entire culture. You're talking about something as big as the beginning of capitalism, about something bigger than the Renaissance."
"Yes, Vladimir, I know."
"Something I overlooked, something I missed: comnaunication and information technology!"
"Computers? They hadn't been invented. How could you have overlooked them?"
"Computers hadn't been invented. But each shift was related to an information technology. Let me explain. When I first wrote, I noticed that the craft production system and the industrialized production system each had its own social structure. I explained this through changes in technology, and I was right. But when I looked at the evidence of the earliest transition between feudalism and capitalism I saw a sudden change in the relations of production that wasn't related to a change in the technology.
"For example, in the early 1600s Jack of Newbury was an ordinary journeyman. But he married his master's widow and built business by hiring weavers to work for him — not as traditional journeymen worked, as members of the family group, but as outworkers. He gave them the raw materials and bought their product. Eventually he had as many as 200 weavers working for him. It was a clearly capitalist relation. He was using the power of capital to increase production. This was clearly more radical than the accumulation of merchant capital, or any other form of primitive accumulation. It came from the craftsmen themselves and resulted in an investment in production. The other forms of prirrtitive accumulation resulted in buying titles and estates." '
"But, Karl, now you are saying that you are right about the technology. 1 don't understand."
"Let's go back to the example, and think slowly. Jack learned weaving in the same way as he learned to talk or walk. He grew up with it all around him."
"Because of the availability of printed books. Jack was able to learn how to read. He also learned double-entry bookkeeping. This allowed him to account for production — to keep track of how much wool could be turned into how much cloth. In short, he had a model of the production system."
"This allowed him to alienate the production system. For the activities of production to stand out from the other activities of his daily life. What I didn't realize, Vladimir, was that for a negotiation for labor to take place so that labor could become alienated it was also necessary for the activities related to production to be alienated. Before a capitalist could buy labor he had to perceive production activities as distinct from other kinds of activities. This had to take place before there could be any negotiation for labor."
"Now you are talking about alienation of production. Alienation is the curse of capitalism. It is the source of oppression of the workers, of the isolation of people from the results of their labor."
"Yes, Vladimir, I know. The notion of alienation has taken on all kinds of meanings. But the original meaning, that a thing stands forth as separate, alien, is still a good meaning. Before a thing is alienated it is not distinct from the person as a social being. This is true if we are talking about production or about labor. And after all, in Jack of Newbury's time, it was much the same thing."
"Supposing I accept this. What has it to do with the shift from family business to rationalized business methods and vertical integration?"
"It's the same thing. Information technology. The telegraph and telephone."
"What? How can you say ..."
"Look, before the use of double-entry bookkeeping, the activities of production were part of the activities of daily life. They were intrinsic to the person of the weaver, or miller, or carpenter, or whoever. Before the invention of the telegraph, communication — giving orders, collecting information — was intrinsic to the activities of ownership.
"Once the telegraph and telephone were used to communicate, it was possible for people to see communication as distinct from the other activities of ownership — communication was alienated from ownership. This allowed communication and information gathering to be delegated and fostered the invention of a model of communication — the organizational chart. This was a more efficient way of organizing, so in each economic crisis more rationalized businesses survived."
"Karl, you've become a business apologist, an agent of capitalism. You've forgotten the oppression, the misery. You've been corrupted by the bourgeoisie."
"I have always maintained that capitalism was an essentially revolutionary system. In the Communist Manifesto..."
He pulls papers from his hat; some of them land in the coffee. He holds up a dripping sheet and reads:
"'The bourgeoisie cannot exist without constantly revolutionizing the instruments of production and thereby the relations of production, and with them the whole relations of society.' *
"And it has happened, Vladimir, or it is happening. After each major form of information technology, the relations of production are less oppressive to the worker. For example, before the press the feudal journeyman couldn't marry or live on his own until he was a master. If his master ordered him to slop the hogs he did so. With the press and the beginning of capitalism, he could marry when he chose. Capitalists could oppress him economically but not socially or personally. The worker was formally less oppressed and more equal, although still massively exploited.
"Then, from the early days of capitalism, through the Industrial Revolution, up to the beginnings of rationalized organizations, the worker was subordinate to anyone in the managerial class. Just as, in the military, all privates are subordinate to all officers. But after the invention of electric communications and rationalized business structure, an employee was only subordinate to his immediate superior. The power of the owner was restricted; the worker had more authority. The conductor was within his rights to tell the president of the railroad to get on board, and to tell the engineer to leave the station. It established the notion of a worker's authority to act."
"So, Karl, what about the computer?"
"Computers are alienating the processes around decision making. Mainframe computers used numerical methods to calculate the economic consequences of decisions. Now people are making expert systems that alienate the decision process itself. And the major portion of managerial effort — data collection, analysis and reporting — is becoming trivial. The conductor's watch and the stationmaster's telegraph were tools which kept the railroad on schedule and avoided accidents, the computer is a tool to make decisions and monitor the results.
"There will be economic crisis. Where decisions are made by workers who know the product, know the customer, and see the benefit of the result in their pockets, business will survive. Where decisions are made by the top of the hierarchy for the benefit of capital accumulation, business will fail. Computers turn the hierarchy upside-down. Decision making is the last function of ownership. Capitalists are dependent on workers to control the means of production, so workers will be as owners. I was right, Vladimir, I was right."