John Cassidy in The New Yorker asks "What happened to the Internet productivity miracle?" This combines two worries of the modern age: techno-pessimism and declining productivity. In a nutshell, US productivity between 1973 and 1995 averaged 1.5%, between 1996 and 2000 it rose to 2.75%, between 2001 and 2004 it peaked at 3.5%, and then from 2005 to 2012 it dropped back to 1.5% (the UK followed a similar pattern). This last stretch was obviously affected by the post-2008 recession, which has pushed annual productivity growth below 1% in recent years, but the underlying trend is clear. Productivity rose quickly around the millennium and then slowed down. Cassidy notes that the inflexion point appears to have come shortly after the infamous O'Reilly Media Web 2.0 conference in 2004, but sees this as a paradox rather than a big fat clue.
In trying to explain this slowdown, Cassidy eschews any exclusively economic or social explanation and points us in the direction of Robert Gordon's "headwinds" paper, with its conclusion that recent technological advances are not a patch on previous industrial revolutions in terms of productivity. He quotes Gordon's observation that innovations like the iPod "provided new opportunities for consumption on the job and in leisure hours rather than a continuation of the historical tradition of replacing human labor with machines". As a counterweight, Cassidy quotes Kevin Kelly, founding editor of Wired and author of the hive mind meme: "Gordon missed the impact from the real inventions of this revolution: big data, ubiquitous mobile, quantified self, cheap AI, and personal work robots. All of these were far more consequential than stand alone computation, and yet all of them were embryonic and visible when he wrote his paper. He was looking backwards instead of forward" (I can't help thinking this new world sounds like the Culture novels of the soon-to-be-missed Iain Banks).
Kelly is a well-known Silicon Valley booster who considers the new golden age to have started with "the dawn of the commercial Internet" (i.e. the Web, circa 1993). His negativity about IT before the early 90s is almost as withering as Gordon's assessment: "Standalone personal computers hardly changed our lives at all. They sped up typing, altered publishing, and changed spreadsheet modeling forever, but these were minor blips in the economy and well-being of most people. Big mainframe computers helped the largest corporations manage financial assets or logistics, but a number of studies have shown that they did not elevate much growth". Gordon thinks low productivity growth in recent years means that IT wasn't so transformative after all, while Kelly thinks the real transformation is just around the corner. Go, robots!
Gordon and Kelly both assume that innovation should lead to the increased automation of labour, which would result in higher per capita productivity. Kelly, like most utopians, is vague on the socio-political implications of his vision. He says: "The real revolution erupts when everyone has personal workbots... Everyone will have access to a personal robot, but simply owning one will not
guarantee success". Indeed. He doesn't explain how we will all come by these robots, or whether there will be rationing. Will it be considered a human right to have one, or will we deny them to the unemployed? Robots are units of capital. They don't come free and they will not be owned by everyone. Most people will be subject to robots, rather than their masters, and I don't mean that in a scary sci-fi way. Robots are just a metaphor for the substitution of labour by technology. When you swipe your Oyster card on the Tube, or scan your groceries in the supermarket, you are interacting with a robot that displaced a worker.
Kelly is wrong to dismiss the pre-networked era of IT. While globalisation, and its concomitant de-industrialisation in the West, was crucially dependent on containerisation, it only really took off when improvements in logistics management (those mainframes) and corporate communication (pre-SMTP email) allowed for more sophisticated supply chains and just-in-time inventories. It's also worth remembering that the rise of financial services, and in particular global capital flows, was facilitated as much by Lotus 123 on PCs in the 1980s as Monte Carlo simulations on mainframes. The impact of spreadsheet modelling on the growth of exotic financial instruments was no "minor blip". Productivity growth is obviously a lagging indicator of the investment and retooling that produces operational efficiency. The boost to productivity in the late 90s coincided with the dotcom boom, but it was actually the product of the maturing technologies of the 80s, such as LANs, CAD/CAM, 3D modelling, corporate Unix, email gateways, MS Office and (perhaps most importantly) the rapid growth in comms bandwidth that would in turn facilitate the explosion of the Internet.
Gordon and Cassidy are wrong to see the recent stagnation of productivity growth as evidence of the IT revolution running out of steam, as if there is only ever one active force at work. They fail to think about it in social and historical terms and consider the interplay of contending forces. The first industrial revolution (steam, cotton and railways), between 1750 and 1830 in Gordon's scheme, produced enormous social dislocation in the UK up until the late nineteenth century. The spontaneous social response, the "double movement" of Karl Polanyi's phrase, mitigated this piecemeal until by the end of the century the UK, and other advanced industrial nations, had a patchwork of supportive and regulatory institutions from factory acts through basic education to rudimentary social insurance. The second technological revolution (electricity and the internal combustion engine), from 1870 to 1900, produced the social pressures that were eventually mitigated by the growth of organised labour and the development of the welfare state. My theory (which is all mine) is that the third revolution (IT and comms) has stimulated another counter-movement, but one that took a privatised form rather than a socialised one, in keeping with the ideological tide from the late 70s onwards.
The chief feature of this has been the offsetting of whitecollar productivity gains through a combination of time-wasting and the creation of supernumerary roles. This is where Gordon's insight about triviality is sound. SMTP email and the Web simultaneously boosted and reduced productivity by blurring the boundary between the workplace and the wider world. Initially there was more gain than loss, so this did contribute to higher productivity growth in the late 90s and early 00s. Whereas most businesses gained something from email and the Web, few saw a return from social media (a perfect conspiracy of the idiot and the fraud), hence productivity turned down in the mid-00s. Though the Web 2.0 bubble has now flatulently deflated, most companies have become accustomed to a working environment where staff routinely interact with technologies that provides access to non-work activities. Wearing earphones at your desk or tweeting while in a meeting barely merit comment any more. Many people think our culture has become more selfish and atomised since the 1980s, but it might be more accurate to say it has become more self-absorbed and distracted.
We have been able to sabotage the incursion of robots into the modern office (a PC is a stationary robot) because capital has been able to secure profit growth by automating and offshoring bluecollar jobs. Globalisation and de-industrialisation have produced sufficient wealth to both enrich capitalists and provide a comfortable lifestyle for the key whitecollar electoral bloc, at least for a while. Of course, the inexorable logic of capitalism means that this fragile alliance will eventually crumble. The growing cohorts of educated youth in developing nations, and the continuing impact of technology in mitigating geography, means that those high-tech and creative jobs that we spent the last twenty years cultivating will in turn start to be offshored. As global GDP grows, we will gradually lose our disproportionate share of high pay jobs. The system will tend towards equilibrium.
The results are already visible, from increasing inequality to middle-class bleating about unemployed graduates. The problem is that the decision to opt for a privatised strategy of social change management in the 80s, rather than a socialised one, has left us ill-equipped to resist the next turn as well-paid jobs (and home ownership and further education) become a perquisite restricted to a social elite. Those worried by this change direct their anxiety outwards at the usual scapegoats, the visible underclass - i.e. the people who they fear to become. Instead of solidarity we prefer to beggar our neighbours. Office-based skivers, browsing Mail Online, demand that benefits be cut from all families with more than two kids, as if victimising children who are not responsible for their circumstances would be a just punishment for the imagined moral failings of adults. Meanwhile, Cameron and Osborne stoke the ugly mood by talking of welfare as "subsidising lifestyles", at a time when the top rate of tax is being cut by 5 pence.
It seems fitting that in a week scarred by triviality and fear, the BBC released their Great British Class Calculator, which allows us to see where we fit in the emerging socio-economic hierarchy. I suspect this has been responsible for a temporary 0.1% drop in office worker productivity. As it's Great British Bollocks branding indicates, this is more a marketing device than a genuine sociological tool. The supposed class identifiers are mainly consumption preferences, though the chief factor in positioning you on the "scale" is plain old wealth and income. If you select nothing, the default result is "traditional working class" - i.e. poor and not a user of social media.
The good news for John Cassidy is that once this current recession has passed (which it will), productivity growth will probably move up towards 2 or 3% again. The bad news for most of us is that this will be the result of three forces, none of which bode well for employment: company churn as "zombies" are replaced by new entrants, the unwinding of labour hoarding, and a fresh round of automation that will predominantly affect middle tier jobs (i.e job polarisation). Furiously tweeting how much you hate benefit cheats from your office desk won't save you.