Work, Social Capital, and the Rebirth of the Civil Society:
A Blueprint for a New Third Sector Politics
Rapporteur: Mr Jeremy Rifkin, President of the Foundation on Economic
Trends, Washington, DC
<Picture: bouton_Conference.GIF (1078 bytes)>Index
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The global economy is undergoing a fundamental transformation in the nature
of work brought on by the new technologies of the Information and Biotech
revolutions. These profound technological and economic changes are going to
force every country to rethink their long held assumptions about the nature
of politics if they are to adjust to the radical new world being readied for
the 21st century. In the new era, the traditional political spectrum of
marketplace vs government is likely to be replaced by the notion of a
three-legged political stool with the marketplace, government, and civil
sectors each acting as a check and balance against the other in a new kind
of tripartite politics. The new political paradigm is going to have far
reaching consequences, reshaping our very ideas of citizenship in the coming
century.
The revolutionary changes in technology and work are already laying the
groundwork for this historic shift in the exercise of political power.
Sophisticated computers, robotics, telecommunications, gene splicing, and
other Information Age technologies are fast replacing human beings in
virtually every industry. Nowhere is this trend more apparent than in the
manufacturing sector. The number of factory workers in the United States
declined from 33 percent of the workforce to under 17 percent in the past 30
years, even as American companies continued to increase production and
output, maintaining our country's position as the number one manufacturing
power in the world.
For most of the 1980s it was fashionable to blame the loss of manufacturing
on foreign competition and cheap labor markets abroad. In some industries,
especially the garment trade and electronics, that has been the case.
Recently, however, economists have begun to revise their views in light of
new in-depth studies of the manufacturing sector. Economists Paul R. Krugman
of MIT and Robert L. Lawrence of Harvard University, suggest, on the basis
of extensive data, that "the concern, widely voiced during the 1950s and
1960s, that industrial workers would lose their jobs because of automation,
is closer to the truth than the current preoccupation with a presumed loss
of manufacturing jobs because of foreign competition."
Automated technologies have been reducing the need for human labor in every
manufacturing category. Within 10 years, less than 12 percent of the
American workforce will be on the factory floor, and by the year 2020, less
than 2 percent of the entire global workforce will likely still be engaged
in factory work. Over the next quarter century, we will see the virtual
elimination of the blue collar, mass assembly line worker from the
production process.
Until recently, economists and politicians assumed that displaced factory
workers would find new job opportunities in the service sector. Now,
however, the service sector is also beginning to automate, eliminating vast
numbers of white collar workers in the process. In banking, insurance, and
the wholesale and retail sectors, companies are deconstructing. They are
eliminating layer after layer of management and infrastructure, replacing
the traditional corporate pyramid and mass white collar workforces with
small, highly skilled professional work teams, using state of the art
software and telecommunication technologies. Even those companies that
continue to use large numbers of white collar workers have changed the
conditions of employment, transferring workers from permanent jobs to
"just-in-time" employment, including leased, temporary, and contingent work,
in an effort to reduce wage and benefit packages, cut labor costs, and
increase profit margins.
Acknowledging that both the manufacturing and service sector are quickly
reengineering their infrastructures and automating their production
processes, many mainstream economists and politicians have turned to the
emerging knowledge sector, pinning their hopes on new job opportunities
along the information superhighway and in cyberspace. While the "knowledge
sector" will create many new jobs, they will likely be too few to absorb the
millions of workers displaced by the new technologies. That's because the
knowledge sector is, by nature, an elite workforce and not a mass workforce.
Engineers, highly skilled technicians, computer programmers, scientists, and
professionals will never be needed in "mass" numbers to produce goods and
services in the Information Age. Indeed, the shift from mass to elite labor
forces is what distinguishes work in the Information Age from that of the
Industrial Age.
With near workerless factories and virtual companies already looming on the
horizon, every nation will have to grapple with the question of what to do
with the millions of people whose labor is needed less, or not at all, in an
ever more automated global economy.
The reality is that the world is polarizing into two potentially
irreconcilable forces -- on one side, an information elite that controls and
manages the high-tech global economy; and on the other, a growing number of
marginalized or permanently displaced workers who have few prospects and
little hope for meaningful employment in an increasingly automated world.
While our political leaders have embraced the Information Age, extolling the
virtues of cyberspace and virtual reality, they have, for the most part,
steadfastly refused to address the equally important question of how to
ensure that the dramatic productivity gains of the new high-tech global
economy will be shared broadly among every segment of the population. Up to
now, those productivity gains have been used primarily to enhance corporate
profit, to the exclusive benefit of stockholders, top corporate managers and
the emerging elite of high-tech knowledge workers. If the trend continues,
chances are that the widening gap between the haves and have nots is only
going to lead to greater social unrest and more crime and violence in every
country. Millions of middle and working class people, caught in the middle
and worried over their own eroding economic fortunes, including loss of job
security and falling real wages, are going to become easy prey for the
nascent fascist rhetoric of the extreme right. The politics of scapegoating
is already gaining political currency in many countries, as ultra right wing
politicians blame ethnic minorities, illegal aliens and immigrants, cheap
labor abroad, and the "international banking conspiracy" for the deepening
economic malaise.
The antidote to the politics of paranoia and hate is an open and sober
discussion of the underlying technological and economic forces that are
leading to increase productivity on the one hand, and a diminishing need for
mass human labor, on the other. That discussion needs to be accompanied by a
bold new social vision that can speak directly to the challenges facing us
in the new economic era. In short, we need to begin thinking seriously about
what a radically different world might look like in an era when less human
labor is needed to produce the goods and services of an ever more automated
global economy.
In the past, when new technologies dramatically increased productivity --
for example in the 1920s when oil, electricity, and the assembly line
replaced coal and steam powered plants -- workers sought after a share of
the productivity gains and organized collectively to demand a shorter work
week and better pay and benefits. Today, however, instead of shortening the
workweek, employers are shortening the workforce -- effectively preventing
millions of workers from enjoying the benefits of the new technology
revolution.
We are past due for a debate in every country on shortening the work week to
30 hours by the year 2005, to accommodate the new reality of the emerging
Information Age economy. New laborsaving technologies, after all, are
supposed to free us for greater leisure, not less pay and growing
underemployment and unemployment.
Of course, employers will argue that shortening the workweek and sharing the
productivity gains with their workers will be too costly and threaten their
ability to compete both domestically and abroad. That need not be so.
France and Italy have passed legislation to reduce the workweek from 39 to
35 hours without loss of pay. The governments have agreed to provide
generous tax credits to the companies to ease the change and make sure they
remain competitive in a tight global economy. While the governments will
lose tax revenue on the front side, economists argue that they will make up
the difference on the backside. At a reduced workweek, more people will be
working. Fewer people will be on welfare. And the new workers will have
purchasing power and be taxpayers, all of which will benefit employers, the
national economies, and the government.
For many, the prospect that employers might seriously entertain the notion
of sharing the productivity gains with workers, in the form of shorter work
weeks and better pay and benefits, seems far fetched. Still, there are other
powerful forces at work that increase the likelihood of a new accommodation
between management and the workforce. To begin with, while reducing the
labor component in the production process often translates into short-term
gains for each company, in the aggregate, employers are beginning to see a
troubling decline in consumer purchasing power. As more and more workers are
placed in temporary, part-time, and contingent employment and experience a
decline in wages, purchasing power diminishes. Even those workers with
permanent jobs find their wages falling in the midst of rising gains in
productivity. The quickened pace of corporate re-engineering, technological
displacement, and declining income can be seen in stagnant inventories and
sluggish growth, which in turn, sets off new rounds of re-engineering,
technology displacement, and wage cuts, continuing to fuel the downward
drift in consumption.
The second Achilles heel for employers in the emerging Information Age --
and one never talked about -- is the effect on capital accumulation when
vast numbers of employees are reduced to contingent or temporary work and
part-time assignments, or let go altogether, so that employers can avoid
paying out benefits -- especially pension fund benefits. As it turns out,
pension funds, now worth over 7 trillion, keep much of the capitalist system
afloat. For more than 40 years, the pension funds of millions of workers
have served as a forced savings pool that has financed capital investments.
Workers' pension funds account for 74 percent of net individual savings in
the U.S., and own more than one-third of all corporate stock and nearly 40
per cent of all corporate bonds. Pension assets exceed the assets of
commercial banks and make up nearly one-third of the total financial assets
of the U.S. economy.
If companies continue to marginalize their work forces and let large numbers
of employees go, to make room for corporate re-engineering and the new
automated Information Age technologies, the capitalist system will slowly
collapse in on itself as it is drained of the pension funds necessary for
new capital investments.
A steady loss of consumer purchasing power and a decline in workers' pension
fund capital are likely to have a far more significant impact on the long
term health of the global economy than all of the much ballyhooed concern
over national debts and budget deficits. It is very much in the interest of
corporate management to begin seriously thinking about constructive ways to
share the vast productivity gains of the Information Age with their
employees if they want to insure both an adequate stream of purchasing power
and sufficient investment capital in the years ahead.
Of course, even an "enlightened" management is unlikely to heed the warning
signals of a faltering economy without pressure being brought to bear from
both inside and outside the companies. The 30-hour workweek ought to become
a rallying cry for millions of workers. Shorter workweeks, more leisure, and
better pay and benefits were the bench marks for measuring the success of
the Industrial Age in the past century. We should demand no less of the
Information Age in the coming century.
Even with a much-reduced workweek, there may not be enough work for everyone
in the high-tech market place in the 21st Century. For that reason, every
nation is going to have to address the problem of finding alternative forms
of work for the millions of people who are no longer needed to produce the
goods and services of an increasingly automated market economy.
Up to now, the marketplace and government have been looked to, almost
exclusively, for solutions to the growing economic crisis facing the
country. Today, with the formal economy less able to provide permanent jobs
for the millions of working people in search of employment and with
governments retreating from their traditional role of employer of last
resort, the nations civil society -- the Third Sector-- may be the best hope
for absorbing the millions of displaced workers cast off by corporate and
government re-engineering.
The first thing to understand about the Third Sector_the cultural sphere- is
that it is the primordial sector. Throughout history, human beings have
always established social communities first. They develop rules of social
exchange, embed their members in complex reciprocal relationships, and build
up social trust. Only when these relationships, and the trust that is built
from them, are firm can communities enter into commercial trade and set up
markets for exchange. That's because markets, by there very nature, deplete
trust. The old adage "caveat emptor" _ let the buyer beware _ is as true
today as it was at the time of the Roman markets more than 2000 years ago.
The point is that markets are secondary rather than primary institutions.
They are derivative in nature and exist only as long as there is enough
social trust in place to assure the terms of trade. European and American
businesses learned this lesson the hard way, in the aftermath of the fall of
the Soviet Empire. Companies rushed in to set up shop, anxious to establish
trade in the former communist territory. Many of the businesses failed,
because there was not enough social trust _ sometimes referred to as social
capital _ in place to guarantee trade. The communists had eliminated the
third sector, the many cultural institutions that create social trust and
allow markets to function. The result is that business agreements were
difficult and even impossible to arrange and commercial contracts, when they
were entered into, were often unenforceable and not worth the paper they
were written on.
In the West, we have come to take the third sector for granted, often not
realizing the critical role it plays in establishing social trust and making
markets and trade possible. The cultural institutions of a society, its
church's, secular institutions, civic associations, fraternal organizations,
sports clubs, art groups, non-governmental organizations and the like are
the well spring of social trust. Because they exist, they make markets
possible. In communities and countries that have a strong, well-developed
third sector, capitalist markets thrive. Where the third sector is weak,
capitalist markets are more precarious and less successful. Indeed, if the
third sector in the United States, for example, were to disappear overnight,
its unlikely the capitalist marketplace _ or for that matter, even
government _ would survive a fortnight. Although some neo-liberals and
neo-conservatives and most libertarians continue to believe that healthy
economies create vibrant communities, in fact, the reverse is more often the
case. A strong community is a prerequisite for creating a healthy economy
because it alone produces social trust.
Interestingly, international lending institutions like the World Bank are
just beginning to understand the relationship between culture and commerce.
For decades, these institutions have funded expensive economic development
projects in emerging countries in the belief that by creating a strong
economy, they could help foster social development. After years of only
mixed success and many failed attempts, they have begun to shift their
priorities to funding social development projects first, understanding that
strong communities _ a vibrant culture _ are a prerequisite for economic
development, not a beneficiary of it.
The Third Sector cuts a wide swath through society. Nonprofit activities run
the gamut from social services to health care, education and research, the
arts, fraternal and civic organizations, religion, and advocacy. In the
U.S., for example, there are currently more than 1,400,000 nonprofit
organizations in the United States with total combined assets of more than
$500 billion. The expenditures of America's Third Sector organizations
exceed the gross national product of all but seven nations in the world. The
Third Sector already contributes more than 6 per cent of the GNP and is
responsible for 10.5 per cent of the total national employment. More people
are employed in Third Sector organizations than work in the construction,
electronics, transportation, or textile and apparel industries.
For more than 200 years, Third Sector activity has shaped the American
experience. The nation's first schools and colleges, its hospitals, social
service organizations, fraternal orders, women's clubs, youth organizations,
civil rights groups, social justice organizations, conservation and
environmental protection groups, animal welfare organizations, theaters,
orchestras, art galleries, libraries, museums, civic associations, community
development organizations, neighborhood advisory councils, volunteer fire
departments, and civilian security patrols are all creatures of the Third
Sector.
Today, Third Sector organizations serve people in neighborhoods and
communities around the world. Their reach and scope often eclipse both the
private and public sector, touching and affecting the lives of citizens,
often more profoundly than the forces of the marketplace or the agencies and
bureaucracies of government.
The opportunity now exists to create millions of new jobs in the civil
society. Freeing up the labor and talent of men and women no longer needed
in the market and government sectors to create social capital in
neighborhoods and communities will cost money. Taxing a percentage of the
wealth generated by the new high-tech, network-based economy and redirecting
it into the neighborhoods and communities of each country and to the
creation of jobs and the re-building of the social commons, provides a
powerful new social vision and a strong countervailing force to the more
impersonal forces of the global marketplace.
Re-envisioning work, however, requires that we rethink our notion of the
body politic. While politicians traditionally divide society into a polar
spectrum running from the marketplace, on one side, to the government, on
the other, it is more accurate to think of the society as a three-legged
stool made up of the market sector, government sector, and civil sector. The
first leg creates market capital, the second leg creates public capital, and
the third leg creates social capital. Of the three legs, the oldest and most
important, but least acknowledged, is the Third Sector.
In the old scheme of things, finding the proper balance between the market
and government dominated political discussion. In the new scheme, finding a
balance between the market, government, and civil sector becomes paramount.
Thinking of society as creating three types of capital -- market capital,
public capital, and social capital -- opens up new possibilities for
reconceptualizing both the social contract and the meaning of work in the
coming era.
It should be noted that in the 1980s President Reagan emphasized the
importance of the civil society. The Reagan forces realized, early on, the
potential symbolic and emotional power of Third Sector images and used them
to their advantage, building a Republican mandate in the 1980s. In both the
Reagan and Bush White House, Third Sector themes were continually
manipulated in a cynical effort to mask a free market agenda. "Returning the
government to the people" became a convenient euphemism to push for
de-regulation of industry, fewer corporate taxes, and cutbacks in social
services and entitlement programs for the working poor and those trapped
below the poverty line. In the end, the civil society was seriously
compromised and undermined by the very political forces who professed to be
its leading champions and advocates.
The key to a genuine attempt to recast the political landscape will depend
on the political will to increase the clout and elevate the profile of the
civil society, in every country, making it an equal player with both the
marketplace and government. The point is, the Third Sector needs to become a
powerful political force that can make demands on both the market and
government sectors to pump some of the vast financial gains of the new
Information Age economy into the creation of social capital and the
restoration of the civil life of every country.
The potential for a new third force in political life exists but has not yet
been galvanized into a mainstream social movement.That's because, up to now,
the millions of people who either volunteer or work in this sector have not
seen themselves as part of a potentially powerful constituency -- one that,
if politicized, could help reshape the national agenda. While third Sector
participants come from every race and ethnic background, and from every
class and walk of life, they share the belief in the importance of service
to the community and the creation of social capital. If that powerful shared
value can be transformed into a sense of common purpose and identity, we
could redraw the political map in every country. Mobilizing these millions
of people into a broad based social movement that can make tough demands on
both the market and public sectors will be the critical test of the new
politics of social capital.
The wild card in the new political dynamic is government. We need recall
that nation states are a creature of the industrial era. Capitalism required
political institutions large enough to oversee and secure broad geographical
markets. Now that commerce is moving from the Industrial Age to the
Information Age and from geography to cyberspace, spatially bound nation
states suddenly find themselves increasingly irrelevant and without a
clearly defined mission.
In the new world that's emerging, government is likely to play a
much-reduced role in the affairs of commerce and a far greater role with the
Third Sector. Together, these two geographically bound sectors can begin to
exert tremendous political pressure on corporations, forcing some of the
gains of the new global commerce back into the communities.
There is much to be gained from the shift in political perspective away from
the old polar model of market versus government to the new tripartite model
of market, government, and civil sectors. The new schema provides an arena
to mobilize broad public support for restoring the community life in every
country. In the old dynamic, the community was shunted to the margins of
political debate. It had little or no place in the political dialogue over
how much government versus how much marketplace. In the new model, the civil
society becomes the middle kingdom between market and government, and the
most important leg of the political stool. The success of society is
measured as much by its ability to create social capital as market and
public capital.
Taxing a portion of the productivity gains of the new cyberspace economy and
allocating those funds to the creation of jobs and infrastructure in the
social economy is essential to reverse the downward spiral of working
people. Focusing on the creation of social capital rather than the continued
expenditure of public capital puts the challenge and responsibility for
community development directly in the hands of the groups affected. Most
non-profit fraternal, civic, social, and advocacy organizations are created
by people who live in the community and are, therefore, far more accountable
to the neighborhoods they serve. The creation and expenditure of social
capital builds self-determination and sustainability and offers an
alternative to the continued reliance on government-run welfare programs
which create a syndrome of dependency.
Organized labor's hopes also rest, in part, on the emergence of the Third
Sector as a new social force. Unions are finding it harder to recruit
workers in the new Information Age economy. Organizing at the point of
production becomes difficult, and often impossible, when dealing with
temporary, leased, contingent, and part time workers and a growing number of
telecommuters. At the same time, the strike is becoming increasingly
irrelevant in an age of automated production processes. Joining with Third
Sector organizations -- service, fraternal, civic, and advocacy -- to exert
a collective "geographic" pressure on management to share some of the gains
of cyberspace with workers and local communities is labor's best hope for
success in the new era.
Women have long been the mainstay of the civil society, volunteering their
time to create the social capital of the country. Their contribution has
gone unrecognized, in part, because the political importance of social
capital has gone largely unheralded. While the newly emerging Information
Age economy is going to mean a fundamental shift in gender roles, with more
women working in the marketplace and more men at home and in the community,
women are still likely to remain the primary advocates of social capital
because of their long-standing relationship to this sector. A second
feminist wave grounded in the politics of social capital and the restoration
of the civil life of the country, could help create a new third force in
politics over the next decade.
Environmentalists also have much to gain from elevating the role of the
Third Sector and making social capital equal in importance to market and
public capital. The environmental community is currently involved in a
debate on how to convince consumers to simplify their lifestyles in order to
preserve the earth's dwindling resources and promote a sustainable economy.
Unfortunately, as long as most peoples' primary identity is with the
marketplace, the values of expanded production and unlimited consumption
will continue to influence personal behavior. On the other hand, it is
likely that the more time people spend in the Third Sector, both as paid
employees and volunteers, the less consumer oriented they become -- not
because they consciously think about their obligations to the planet, but,
rather, because personal relationships and community bonds replace shopping
as a life fulfilling experience.
Of the three forms of capital, social capital is the most environmentally
benign. Unlike market or public capital, which use large amounts of the
earth's resources, social capital uses relatively few resources, relying
almost exclusively on the few thousand calories of energy each person
requires to maintain a healthy mind and body. The point to emphasize is that
the primary resource that makes up social capital is human energy extended
to others to create a social good.
The ever deepening problem of rising productivity in the face of declining
wages and vanishing jobs is likely to be one of the defining issues in every
country in the years ahead as the global economy makes the tumultuous
transition out of the Industrial Age and into the Information Age . The
growing social unrest and increasing political destabilization arising from
this historic shift in the way the world does work is forcing activists, of
every stripe and persuasion, as well as politicians and political parties,
to search for a "radical new center" that speaks to the concerns and
aspirations of a majority of the electorate. The conventional political
discussion continues to take place along the polar spectrum of marketplace
versus government -- a playing field that becomes increasingly limited in
addressing the magnitude of the challenges and opportunities that exist in
this new age. Redirecting the political debate to a tripartite model with
the civil society in the center between the market and government spheres,
fundamentally changes the nature of political discourse, opening up the
possibility of re-envisioning the body politic, the economy and the nature
of work and society in wholly new ways in the coming century.
Jeremy Rifkin is the author of fourteen books including-- The End of Work:
The Decline of the Global Labor Force and the Dawn of the Post-Market Era
and The Biotech Century: Harnessing the Gene and Remaking the World. He is
president of the Foundation on Economic Trends in Washington, D.C.
http://stars.coe.fr/Dossiers/Societe/E_JeremyRifkin.htm
