In future the May Day celebration, which commemorates the struggle for labor rights, will likely perish. Or at least, the day will be observed differently.
The day will be abandoned, not only because many of those rights have been fulfilled, but given the fact that at the end of the day the amount of blue-collar workers will sharply reduce. The sunset of the industrial economy and the dawn of the knowledge-based economy (KBE) has radically changed the way of production as well as the need for products. And in the process, the economy needs fewer workers and spells doom for lower-skilled workers.
The industrial economy emphasized mass production, where humans served as living machines. Power and wealth flowed to those who owned the land, factory, machines or other physical properties. At that time, the task of many occupations was well defined, routine and boring. Powerless workers just followed a set of instructions from superiors. There wasn’t much latitude for worker improvisation.
Besides heart-rending stories in the early days of the industrial revolution, a hundred years later people’s welfare rose significantly. The industrial economy had created more value-added jobs. More people enjoyed better education and more access to information. As a result, science and technology thrived enormously.
Then a new trend brought another huge impact. Robots replaced humans in many jobs, especially physically demanding ones. Software decimated many administrative jobs. Many lower skilled jobs came to an end and mass layoffs became inevitable. For some time, developing countries still hosted these lower-skilled jobs. But eventually the robots and software overwhelmed those countries as well.
The new economy commands creativity, out-of-the-box thinking and networking. The structure of hierarchy in companies is dismissive. The layer of management has become thinner, workers have become powerful and have more freedom, but they are forced to cast around continuously for new ideas to survive cut-throat competition. Start-ups with new products have mushroomed in the global market.
Thanks to the high value-added and globalization, those people with creative skills prevail. In January 1992, for the first time in history, the market value of Microsoft, representing a knowledge-based company, tellingly surpassed General Motors, the long-standing automotive company. Microsoft has neither as many factories nor workers as General Motors. The only significant asset of Microsoft is its employees’ brain power. This event marked the beginning of the domination of the knowledge-based economy.
Yet this phenomenon has a twist. During his life, Karl Marx struggled to improve the prosperity of workers by demanding ownership of the means of production. He wanted communism to triumph over capitalism, because in communism the workers — not the capital owner — collectively controlled the means of production.
If Marx was still alive today, he would have been nonplussed by what the knowledge-based economy offered to workers. Marx’s struggle has paid off, but in the different way he conceived the future. At present, workers own the prevailing means of production, which are no longer land, factories, or machines. The best means of production now lie in the cranium of the employee.
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