The Coming of Post-Industrial Society

by Daniel Bell

  Outside the framework I have been discussing here, the phrase “the new class” emerged in two different contexts in die past fifty years. In 1957, Milovan Djilas, a former leader of the Yugoslav Communist Party and a hero in the resistance with Tito, published a book entided The New Class, which justified his break with Marxist doctrine. In his book, Djilas declared that the nomenklatura, the high Party officials and the heads of the bureaucracy, were a “new class” both in respect to the powers and privileges they had and in their abilities to reproduce that system by fostering access to the major universities and finding high positions for their children. The concept—and the fact—clearly contradicted Marxist doctrine that property relations alone were the basis of class differences. More than that, Djilas showed that the new class system became a means (apart from the terror and the Gulag used to coerce the population) of repressing the proletariat and the farm workers. By and large, the concept advanced by Djilas is now widely accepted in the social and political sciences.38

  In a completely different context, the phrase “the new class” has been used in the United States in the past two decades, most notably by Irving Kristol, the godfather of neo-conservatism, to characterize the anti-capitalist and anti-bourgeois mind-set of leading sectors of the “knowledge elite”—in particular the social scientists and humanities professors in the major universities, the major newspaper columnists and broadcasters in the media, and the higher civil servants in the government. By now, this characterization had merged with the pejorative use of the term “liberal.”

  The source of this conception goes back more than fifty years to Joseph Schumpeter and Friedrich A. Hayek in their sweeping attack on intellectuals. In his Capitalism, Socialism and Democracy (1942) Schumpeter argues that capitalism exists as a “rational and unheroic mode of life,” and “the Stock Exchange is a poor substitute for the Holy Grail.” Intellectuals, says Schumpeter, live on criticism and lack the first-hand knowledge that “actual experience” can provide. Hayek, in his essay “The Intellectuals and Socialism” (1949), argues that in every country that has moved toward socialism, the way was paved by the thinking of the “more active intellectuals.”

  It is true that since the end of World War II, the culture of the West has been predominantly a liberal culture, even an “adversary culture,” as Lionel Trilling put it. But before World War II, the culture of Europe was predominantly right-wing and even reactionary, shaped by the thinking of Ezra Pound and T S. Eliot, William Butler Yeats, and Wyndham Lewis, as well as the aestheticism of the Stefan George circle in Germany or the Catholic thinkers in France such as Paul Claudel and Georges Bernanos. And they, too, were anti-bourgeois.

  In a quixotic kind of economic determinism, Kristol and his epigones have conflated a social location with a cultural attitude. The knowledge class of post-industrial society is a professional class, often deeply involved with policy and hardly the kind of individuals that Schumpeter described as “the scribbling set.” Yet it is true that the educated class tends to be liberal or cosmopolitan in its values, and this mind-set exists even in the Republican Party with individuals who are economically conservative yet socially moderate—on issues such as abortion or gay rights or opposition to the death penalty. As I have observed before, “The term—the idea—of ‘the new class’ is a linguistic and sociological muddle, conflating as it does a new professional and technical stratum with a cultural attitude.” And one can point out that a larger number of the individuals in Silicon Valley, the avant-garde, so to speak, of post-individual society, are libertarian (not conservative) in their beliefs and lifestyles, strongly advocating the free market and entrepreneurial attitudes in the economy.39

  A NOTE ON WOMEN

  One of the most striking social changes in the past twenty-five years is the new role of women in the society, particularly in professional employment. In 1950, the “typical” picture of the labor force was one where 70 percent of the workers were husbands who had a wife and two children at home. Today such men are only 15 percent of the labor force. And more than 50 percent of wives work outside the home.

  Any social change is an intersection of two forces: cultural attitudes and the ability to institutionalize those beliefs in market terms. The cultural attitudes regarding equal rights of women go back a hundred years or more, to the writings of Susan B. Anthony and others. But the ability to institutionalize these sentiments in market terms is a feature only of the past twenty-five years. And that is due to post-industrial society.

  “Work” in industrial society was largely used to refer to a man’s work, either on the factory floor or in corporate sectors of management; women worked in textile mills or garment shops or as typists, secretaries, or salespersons. And in the ethos of that time, when young women, especially those holding “white collar” jobs, married, they retired from work to raise a family—though often, in the South and in the garment factories, women, especially those from minority and ethnic groups, continued to work or went back to work after marriage.

  Post-industrial employments, particularly in the health, education, and research sectors, are based on higher education, and these are now open to women. In i960, only 6 percent of women twenty-five years or older had completed college, while by 1995 more than 21 percent of women had college degrees or beyond. Today women make up about 49 percent of the managerial class (mostly as office managers in medicine and health, public administration, and personnel work), about 30 percent of the natural scientists, more than 40 percent of college teachers, 30 percent of lawyers, and more than 50 percent of teachers (except in colleges), librarians, designers, and psychologists.40

  The extraordinary change in the status of women has been one of the most remarkable features of change in American society in the past quarter-century, and one that was unanticipated twenty-five years ago.41

  THE LADDERS OF DEVELOPMENT

  The sociological transformation of modern society has come with the rise of the middle class. From 1950 to 1970 (according to estimates by Nathan Keyfitz) the middle class in the United States and Western Europe expanded from 200 million to 500 million persons. By middle class, roughly, I mean those with a standard of living that reduces the old backbreaking drudgeries and begins to emphasize domestic conveniences—washing machines, refrigerators, telephone, radio and television, even an automobile. These are the goods of a mass-production society and the foundation of an economy of consumption that transformed the post-war societies of those countries.

  In the period beginning with 1990, we began to see the transformation of Asian societies—East Asia and Southeast Asia—into middle-class societies. Even in India, where the middle class is a small minority, it is 15 percent of the population, or 150 million persons—one and a half times the population of Japan. The major question for the next decade, obviously, is whether the financial debacle in a number of these countries—Indonesia, South Korea, Thailand—will precipitate social and political disruption or whether growth will resume, though no longer at so rapid a pace as before.

  In the period since the end of World War II, economic development has meant the passage of societies from agrarian to industrial and to post-industrial phases. If one defines a post-industrial society as one where there has been a shift from manufacturing to services, then Great Britain, almost all of Western Europe, the United States, and Japan have entered a post-industrial age. But if one defines the information society as one with a science-based capacity and the ability to transform the knowledge from that capacity into products—what is usually called “high-tech”—then only the United States and Japan can be said to have entered the information age.

  How many other countries will do so? There is, roughly speaking, a “technological ladder” by which one can chart the shifts or changes in the concentrations of the economy for any society. The “technological ladder” can be charted as follows:

  1. Resource base: agrarian and extractive industries

  2. Light manufacturing: e.g., tex
tiles, shoes, etc.

  3. Heavy industry: e.g., steel, shipbuilding, automobile, engineering

  4. High-tech: e.g., instruments, optics, micro-electronics, computers, telecommunications

  5. Future: science-based biotechnology, materials science, space stations, and satellites

  Ronald Dore pointed out many years ago that Japan and most of Latin America came into the expanding world economy at about the same time, more than a hundred and thirty years ago. But Japan progressed and Latin America did not, principally because the elites in those countries, the large landowning classes and the military, resisted modernization.

  Japan is a perfect example of the progression up the technological ladder: in the past fifty years. This progression began after World War II, primarily in light manufacturing. As other countries began to take over that field because of cheaper wages, Japan moved into steel and shipbuilding, replacing Great Britain in both areas. But these were energy-intensive industries, and after the oil shock, particularly after 1973, Japan moved into instruments and optics, microelectronics, and, with new production techniques (aided by computers), into automobiles.

  In principle, there are three capacities that enable nations to move up the technological ladder; a period of domestic peace and stability, so that investors have an expectation of reward; a large entrepreneurial, engineering, technical, and skilled worker class to create and manufacture products; and a quality educational system to train individuals in literacy and numeracy, which are essential for the understanding of the new technologies.

  Just as there is a technological ladder, one can also identify a “consumer ladder” in developing societies. We can, schematically, identify these steps as follows:

  1. Subsistence

  2. Needs

  3. Wants

  4. Discretionary income

  5. Luxuries

  Societies at subsistence levels (e.g., Bangladesh) are those where the largest proportion of income goes for basic food—rice, pasta, bread—often as much as half the daily income. Engel’s law (named for Ernst Engel, a nineteenth-century German statistician who established the variable ratio between household income and expenditures) charted the way purchases shifted from subsistence along the rising slope of income.

  Needs are biologically rooted, common to all people—food, clothing, shelter—often at the rudest level. As societal incomes rise, needs give way to wants. Wants are psychological and vary with individuals as they begin to develop different tastes. Many tastes are based on identification with images from fiction, as in the nineteenth century, or today from movies and television and from advertising. To be “smart” becomes a desire, especially among adolescents, and the focus is on imitation of these models.

  Discretionary income is that income remaining after basic needs and wants have been satisfied. At this stage, money can be used for various purposes—for travel, for jewelry and display, for hobbies, for entertainment.

  Luxuries are sociological. They are the creation of a lifestyle that is a distinctive mark for others to observe. They set standards for comparison with others, and they command recognition. Luxuries can be high-end automobiles, elaborate houses, expensive paintings and prints, and the like.

  None of these definitions is fixed, for societies constantly re-define the different levels. What were once simply wants are now often considered necessities. The mark of the middle-class, in fact, is the re-definition of a standard of living into a life-style. And marketing arises with the growth of the middle class as consumers.

  Mass consumption, the level of needs and wants remains the primary base of any society. But as incomes rise, those at the levels of lifestyles become concerned with status, and more and more demand arises for status goods. (The oldest example is clothing and the rise of the high-fashion industry, which emphasizes individual signatures and custom design rather than mass-produced items, though the makers of mass-produced clothing quickly begin to copy the high fashion.)

  In sociological terms, changes in lifestyle are associated with a move from class to status. A class-based society is one in which the central concerns of individuals are economic, e.g. getting a job, having enough to eat, finding a home, etc. The status society is one where the social approval of others, or the adoption of different styles of dress or costume, become the signature of a declared individualism (even if that individualism is a copy of other individualisms). Class is associated with a mass-production, mass-consumption society in which the effort is to lift the standard of living from needs and wants to the levels of discretionary income. Status is concerned with the differentiation of products (as in fashion) and the desire to display one’s taste or gain approval of the social arbiters of the different circles to which individuals may belong. A subtle indicator of status is gift giving, for gift giving is a form of social exhange.42 Japan, for example, is a society highly preoccupied with gift giving, for this behavior is a set of cues as to the rankings between individuals. Thus gift giving becomes a ritual, at different times of the year, in which superiors and subordinates give gifts to one another and the degree of reciprocity and recognition is established.

  The change from class to status, as I have tried to define it, is a characteristic of social mobility, and this has been a repeated feature of human societies. It has been the theme of the great novels of manners and morals such as Stendhal’s The Red and the Black, where Julien Sorel, “the young man from the provinces” seeks to make his way into Parisian society, or the novels of Balzac, such as Pere Goriot,in which Eugene de Rastignac learns about how the world “works” by observing the upper classes.

  But in the late twentieth century, as against the nineteenth, the social aristocracy has been dissolved, and even the idea of “Society” with a fixed upper social class, becomes a set of shadows. Celebrity and social prestige now become established by the media. But what is also evident is the enormous expansion in the numbers of people who move up the consumer ladder, and lacking experience wonder where they stand in the social ladder. For many, consumerism becomes a way of life and the multiplying number of chic and gourmet and leisure and travel magazines become the arbiters of taste for those seeking to live a lifestyle in accordance with their new statuses.43

  As we enter the information age, to the extent that economic growth especially in Asia and Europe can be sustained, these instances of status dilemmas will multiply. For what we can anticipate is the widening of the arena geographically and socially (i.e., the increase in the number of persons rising up the consumer ladder), the multiplication of interactions between individuals through the creation of affinity groups along the Internet and the like, the increased mingling of cultures, and the resistance to these new onslaughts of change by the older and traditional ehtes. What has already begun to happen is a kulturfampf, a set of “cultural wars” between generations and the efforts of many countries to resist “Americanization,” which, especially with soread if American made movies and television programs, is seen as the source of these onslaughts.44

  THE END OF SCARCITY?

  More than thirty years ago, prophets of “die cybernation revolution”—the combination of the computer and the automated self-regulating machine—predicted “a system of almost unlimited productive capacity” that would allow us to sever the link between work and income (see the coda, section four). This prediction was based on a mistaken anticipation regarding the promised rise in productivity, and prophets did not foresee the expansion of services.

  In a similar euphoria today, proponents of the idea of a “new economy” posit that information overcomes (at least one problem of) scarcity because information, once published or disclosed, is available to all and, if put in storage, is easily retrieved. Thus, unlike goods, information is not “used up.”

  The difficulty with that argument is that it ignores the transaction costs involved in finding relevant information and, more important, ignores the essential determinant of the validity and use of information, namely judgm
ent—and judgment cannot be measured.

  There is a more important problem. In economic and social terms, there is a crucial distinction regarding the nature of scarcity—the distinction between distributional goods and positional goods. Distributional goods, be they automobiles or computers or electrical appliances, can be multiplied at relatively decreasing costs, making them more and more available to people. But positional goods are inherently scarce. A positional good may be the house on top of the mountain or vacation homes along a shore, the position as the head of a company or university department, place in a queue to use recreational facilities at Yosemite or some other national trust. Only a limited number of people can enjoy the positional good. Thus, only a limited number of persons can live on an island such as Martha’s Vineyard without choking the island or sinking it into the sea.

  As I pointed out in these pages, the end of scarcity was, for philosophers from Hobbes on, the necessary condition for the end of conflict and competition in society, and this was the condition for social place, and even Utopia. Yet while living standards may rise and distributional goods may multiply, the competition for status and positional goods—and their scarcity—increasingly become sources of competition and conflict in a post-industrial society, especially in the areas of work.

  THE MANAGEMENT OF TIME

  In the goods-producing or industrial society, the key problem for a business is the management of inventory. If one has too much inventory on hand, one has to pay for the “up front” costs of production and for storage of the over-produced goods on hand—and also absorb losses when stored goods reach the end of their “shelf-life.” If one has too little inventory on hand when there is demand, one loses the sale to a competitor who has the rival goods at hand. Management of inventory is the fulcrum of profit. (In a creative innovation, Frederick Smith, who founded Federal Express, showed companies that his airlines and services constituted a “flying inventory” between orders and scheduled deliveries and thus reduced the need of large stock.)