The Coming of Post-Industrial Society

by Daniel Bell

  31 I have to leave aside here the problem of measuring information as a “commodity.” Information differs from goods in the crucial respect that goods get used up or wear out over time (like an automobile), but information does not. In some respects information functions as a free good or public good, since it, like knowledge, is not used up. How, then, does one price information and treat it as a source of value?

  This is the theme of an important paper by Kenneth Arrow, a Nobel laureate in economics. In a lecture he gave at the Catholic University in Milan on April 12, 1995, Professor Arrow said, in part: “About fifteen years ago, my friend, the distinguished sociologist, Daniel Bell, suggested to me that I should consider an ‘information theory of values,’ to play the role in the modern economy that the ‘labor theory of values’ played in classical economics. I am afraid that I made light of the suggestion. I explained patiently, with the usual attitude of superiority of the economist to other social scientists, that the labor theory of value was supposed to explain relative prices and that information, however defined, could hardly play the same role. Surely goods did not exchange in proportion to their information context. I argued that in fact goods with high information content were likely to be very inexpensive, because information could be reproduced cheaply, even if the initial protection was expensive; and every neoclassical economist knew that it was the marginal cost, the cost of reproduction, that is relevant.

  “There was nothing wrong with the specifics of my reply, but I had missed the essential point of Bell’s comment Facts are beginning to tell against my view. What is startling is that information is almost the exclusive basis for value in computer software and some other goods. While these are extreme cases, the role of information as a source of productivity and as a source of value is increasingly exemplified in many markets and is increasingly an important component of economic analysis. In this lecture, therefore, I want to link two concepts, both indeed explored in the literature but neither fully satisfactorily: 1) the role of information as an economic commodity, and 2) the identity of firms as loci of knowledge and claims to wealth.” Kenneth J. Arrow, “Information and the Organization of Industry,” Rivista Internazionale Di Scienze Sociali, occasional paper, 1994.

  32 W. V Quine, Quiddities (Harvard University Press, 1987), pp. 108-109.

  33 To the distinctions here, I would add one work of William Nordhaus, whose Invention, Growth and Welfare: A Theoretical Treatment of Technological Change (MIT Press, 1969), “for the purposes of economic analysis,” distinguishes between general and technical knowledge, or the production of either more knowledge or more goods. General knowledge, such as that in the liberal arts, is “not particularly useful for the specialized problems of producing goods.” But in the second tier of technical knowledge he includes computer programs and engineering formulas, which are “useful in producing goods but no additional knowledge.”

  But I find his view misleading; my basic argument in this book is that invention and innovations in technology increasingly derive from the codifications of theoretical knowledge whose programs are directive of change in die production of goods.

  34 There is also, to use the term of Michael Polanyi, “tacit knowledge,” which is the intuitive, often pre-conscious awareness of an answer to a problem that surfaces, so to speak, when an individual begins the process of seeking a solution by reflection or experiment. For Albert Einstein, this awareness was akin to the “visualization” of an answer, which usually preceded his formulations and equations.

  35 As a social system, a class exists where there is a community of interest and a continuity of succession, along with a legitimization of the differential privileges created by the system. Family capitalism and the legitimacy of private property provided the initial justifications of the capitalist system. For a detailed study of this social system, see my essay “The Breakup of Family Capitalism in America,” Chapter 2 in The End of Ideology (Free Press, 1960; re-issued with an afterword by Harvard University Press, 1988).

  36 For a detailed breakdown of the more than fifty specialties in the managerial and professional occupations, see Table 645 in the Statistical Abstract of the United States, 1997.

  37 Given all this, it is little wonder that two young sociologists, reviewing the literature of class, bemoan the fact that “this development constitutes a striking repudiation of our disciplinary heritage.” See David B. Grusky and Jesper B. Sorensen, “Can Class Analysis Be Salvaged?” American Journal of Sociology, vol. 103, no. 5 (March 1998), p. 1188. The two seek, as they say, “a complete remapping of the stratification system” by disaggregating the data and scales and seeking smaller categories of “collective action.”

  For the locus classicus on class as occupations, see Peter M. Blau and Otis Dudley Duncan, The American Occupational Structure (Wiley, 1967). The Marxist point of view is held by Erik Olin Wright in Classes (London, Verso, 1985). For a comprehensive and convincing attack on the utility of die present-day use of class, see Jan Pakulski and Malcolm Waters, The Death of Class (London, Sage, 1996).

  38 Milovan Djilas, The New Class. Actually, the theme of a bureaucracy as a new class had arisen earlier in the Trotskyist movement in the debates as to how to characterize the Soviet Union and Stalin in Marxist terms. In his book The Revolution Betrayed, Leon Trotsky characterized Stalin’s rule as “Bonapartism,” following Marx’s analysis of the role of Louis Napoleon in France as a man who held political power but could not change the underlying economic system. Trotsky declared thus that the Soviet Union, having abolished private property, was still a socialist state, though “deformed” by Stalin’s Bonapartist political role. His opponents in the Trotskyist movement declared, however, that a new system of bureaucratic collectivism was being institutionalized and that a new “social formation” was therefore now in place. Djilas, by concretizing tire issue with the phrase “the new class,” gained the credit for the idea. For a detailed discussion of the issue, see chapter one, on “The Soviet Union: Bureaucracy and die New Class,” of this volume.

  39 On Kristol’s ideas, see Barry Bruce-Briggs, ed., The New Class (Transaction Books, 1997), pp. 5-6. There he makes a sweeping, breathtaking claim: “It could be maintained that the New Class largely controls or dominates: the humanities and social-science faculties of prestige private and state universities, professional schools, and teachers colleges; most of the national media organizations— the prestigious daily newspapers, much of the periodical press, the book publishing industry, the commercial television networks, recording, films, and most educational media; the fine arts; the establishment foundations and other non-profit eleemosynary institutions concerned with influencing public opinion; research organizations; a good part of congressional staff; the federal social welfare bureaucracy; and the government regulatory apparatus. It is thought that New Class values and sensibilities are penetrating into: the natural science faculties; the business schools; the rank and file of school teachers; state and local government bureaucracies; the clergy; advertising; trade union staff, especially of government and white collar employees; salaried professionals of all kinds; and even business corporations, especially in public relations, long-range planning, and internal education programs. These disparate groups have this in common: they are staff, not line, and they produce or deal in ‘ideas1 or words and hold their positions by possession of analytical and literary skills usually obtained through formal education.”

  I have stated my objections in greater detail in my essay “The New Class: A Muddled Concept,” in my book The Winding Passage (Abt Books, 1980; reprinted by Transaction Books, 1991).

  The claims of the “new class theorists” have been subjected to careful empirical analysis by Stephen Brint in An Age of Experts (Princeton University Press, 1994). He finds that the “New Class” is splintered along demographic and economic lines and that the political preferences of professionals are more closely linked to business owners and executives and that the distinctive relationship of
the professional stratum to liberal values has been overstated. See pp. 8-19. As Brint writes: “Survey evidence indicates that even the most liberal segment of professionals—the people who would be counted as members of the ‘New Class’ in any version of the theory—are, by and large, far from unconventional in their tastes or decidedly left-of-center in their political views, and they certainly show little opposition to the basic organizing principles of a business civilization” (p. 19).

  40 For detailed breakdowns, see Table 645, “Employment by Occupation, Sex, Race and Hispanic Origin,” in The Statistical Abstract of the United States, 1997.

  41 To illustrate: In 1965, the American Academy of Arts and Sciences chartered the Commission of the Year 2000, which I chaired. Its report, Ttmard the Year 2000, was reprinted by MIT Press in 1997. Most of the forecasts, largely structural changes in society, held up remarkably well. Yet the one feature that was not anticipated was the changing role of women in the post-industrial sector. It was in 1970, which was the turning point, when women returned to work in large numbers.

  42 In principle, there are three kinds of exchange: economic exchange, social exchange, and political exchange. Economic exchange is the buying and selling of goods and services and, where long-term, is regulated by contract. Political exchange is where interests and policies are shaped by vote buying, favors for constituents, patronage, etc. Social exhange is where relations (even economic and political) are shaped by status positions, old school ties, and personal bonds. In the modern world, Japan has been one of the few societies that have institutionalized social exchange, though this has been true, to some extent, in English upper class political life.

  43 I have discussed this sociological changeover in greater detail in my book, The Cultural Contradictions of Capitalism (Basic Books, Twentieth Anniversary edition, 1996, pp. 285-295.

  44 The questions of class and status, and the changing composition of occupational and social groups in the societal structure, all pose questions about the nature of post-industrial politics. These are incohate questions whose outlines are only now emerging and the discussion of these would take me far afield. There are, one can say, two axes about which such politics would turn. One is what has been called “identity politics,” that of race and gender, the efforts of minorities and women to achieve equality in the society. This is a move from a politics of exclusion to a politics of inclusion; in that respect, “affirmative action” has been the wedge issue in the political arena. The second is what Ronald mglehart has called “post-materialist” politics, issues which affect security and the quality of life. These are environmental and zoning issues, questions of abortion, and apprehension of personal security, giving rise, in many sections of the country, to “gated communities” in which new housing developments become walled off from surrounding areas.

  Many of these issues shade off into the “cultural wars” in which the fundamentalist right and neo-conservatives, and liherals, contend about the alleged “moral decay” of the county and the responsibility for that presumed state of affairs. Many of the latter divisions cut across the more traditional ones of right and left, conservative and liberal, since one finds Republicans who are libertarian on issues of personal conduct yet conservative on economic matters, and neo-conservatives who believe in the “moral tutelage” of children in schools yet may be liberal on social support and welfare issues. One of the first efforts to establish a net set of axes in politics (contrasting status politics with economic class politics) was the volume The Radical Right that I edited (Doubleday, Anchor, 1964), which included, among others, essays by Richard Hoftadter and S. M. Lipeset. This is being reissued in 2000 by Transaction Books with a new Introduction by David Plotke. I have written on “America’s Cultural Wars,” in The Wilson Quarterly, Summer 1992. Inglehart’s ideas, and inquiries in 43 countries, can be found in his book, Modernization and Post-Modernization (Princeton University Press, 1997).

  45See Wired, July 1998, p. 69.

  46 See “The Future World Disorders” (1977), reprinted in my book The Winding Passage.

  47 Fang Lizhi, “Intellectuals and Intellectual Ideology,” interview with Dai Qing, Beijing Review, December 15, 1986, pp. 16-17. The fact that the interview was published in the government-run periodical indicated that Fang’s views had support then among reform-minded circles in the Chinese Communist Party and the think tanks that had been close to Zhao Ziyang, the Secretary of the Party. But after the protests in Tiananmen Square in 1989, Zhao was stripped of his post and placed under house arrest, where he remains to this day. Fang Lizhi is now in exile in the United States.

  1 Perhaps the major misconception is to identify the idea of the post-industrial society with the expansion of the service (or tertiary) sector of the economy and dispute its importance. Some writers using the term (e.g., Herman Kahn) have emphasized this feature. To the extent that some critics identify me with the centrality of a service sector, it is either ignorance or a willful misreading of my book.

  2 For Marxists, fascism was the “last” stage of monopoly capitalism. While many capitalists did support fascism, the character of the system derived from the déclassé who led the movement, and the lower middle class which formed its mass base. Fascism is a cultural-political phenomenon. Curiously, we still have no comprehensive Marxist anlaysis of fascism, nor even a “Marxist analysis” of the new class structure of the Soviet Union itself.

  3 By information I mean, broadly, the storing, retrieval, and processing of data, as the basis of all economic and social exchanges. This would include:

  (a) Records: payrolls, government benefits (e.g., social security), bank clearances, credit clearances, and the like

  (b) Scheduling: airline reservations, production scheduling, inventory analysis, product-mix information, and so forth.

  (c) Demographic and library: census data, opinion surveys, market research, knowledge storage, election data, and so forth.

  By knowledge, I mean an organized set of statements, of facts or ideas, presenting a reasoned judgment or an experimental result that is transmitted to others through communication media in some systematic form. (For an elaboration, see p. 174 et seq.)

  4 A parallel argument has been made by the German Marxist scholar Jurgen Habermas, who has written:

  ... technology and science [have] become a leading productive force, rendering inoperative the conditions for Marx’s labor theory of value. It is no longer meaningful to calculate the amount of capital investment in research and development on the basis of the value of unskilled (simple) labor power, when scientific-technical progress has become an independent source of surplus value, in relation to which the only source of surplus value considered by Marx, namely the labor power of the immediate producers, plays an ever smaller role. Jurgen Habermas, Toward a Rational Society (Boston: Beacon Press, 1970) p. 104. To that extent, too, one can say that knowledge, not labor, is a social product, and

  that Marx’s analysis of the social character of production applies more fully to knowledge than to the production of goods.

  5 The seminal work on this question of collective goods is Mancur Olson’s The Logic of Collective Action (Cambridge: Harvard University Press, 1965). The question of the “economics of information” has come to absorb the attention of the Harvard economists Kenneth Arrow and Michael Spence. For some initial reflections, see, Kenneth Arrow, “Limited Knowledge and Economic Analysis,” American Economic Review, March 1974, and Michael A. Spence, “An Economist’s View of Information,” in Annual Review of Information Science and Technology, Vol. 9, edited by Carlos A. Cuadra and Ann W. Luke (Washington, D.C. 1974). American Society for Information Science.

  6One intriguing way in which cheap communications technology creates new social patterns is the use of citizens’ band radio as a form of coordinated action. In 1974, independent truckers could create vast slowdowns on a thousand-mile chain of roads in the midwest by radio communication from selected blockade points. In one sense, this i
s little different from the pattern of riverboat pilots exchanging information which Mark Twain described so hilariously in Life on the Mississippi, but in this, as in so many instances, the characteristic of modernity is not the nature of the action but its scale, rapidity, and coordination.

  For an authoritative elaboration of these technical questions, see the monograph The Medium and the Telephone: The Politics of Information Resources, by Paul J. Berman and Anthony Oettinger, Working Paper 75-8, Harvard Program on Information Technology and Public Policy. For this and other materials on information technology I am indebted to my colleague Professor Oettinger.

  7 What is striking is that in the communist world, it is quite clear that situses play the major role in politics. One analyzes the play of power, not in class terms, but on the basis of the rivalries among the party, the military, the planning ministries, the industrial enterprises, the collective farms, the cultural institutions—all of which are situses.

  8 As I indicated in the text (p. 117), the national power of industrial societies was once rated on the basis of steel capacity. Two years ago, the Soviet Union passed the United States in the steel tonnage it produces, a fact that received only passing mention in the business pages of the New York Times. Yet in the development of computers, both in degree of sophistication and numbers, the Soviet Union is far, far behind the United States, a fact that was made vividly clear when the Soyuz and Apollo capsules were linked and the quality of their equipment could be compared.

  9 It is striking that Italy, Germany and France are the countries where industrial employment has increased; the largest increase was in Italy, which had lagged furthest in industrialization in Europe. But in the other countries, the proportion of those in industry has begun to shrink in relation to services. (For some detailed statistics on these occupational shifts, see The Economist [London], November 29, 1975, p. 17.)