Capitalism and the Jobs Crisis: Charles Andrews' The Hollow Colossus

By Allan Miller

April 25, 2016

Charles Andrews' latest book, The Hollow Colossus (Needle Press, 2015), represents a significant contribution to the debate on the current jobs crisis faced by U.S. workers, characterized by declining real wages combined with persistent unemployment and underemployment. Unlike most analyses, Andrews' book traces the root cause of the crisis to the history and fundamental dynamics of postwar U.S. capitalism.

Chapter 1, "Production Advances But Prosperity Recedes," starts with a description of the dramatic effects of the 2008 "Great Recession" on poverty, unemployment, and wage earnings. As background Andrews notes the stunning fact, referenced often throughout the book:average hourly earnings in the private sector peaked in 1973. Income from work has stagnated and declined ever since. The American dream of a better life from generation to generation is over (page 10).

Andrews then poses the central questions discussed throughout the rest of the book: Why did it happen, and what can be done about it?

The path through this explanation makes for fascinating reading on "the scientific-technical revolution" and resulting changes in the structure of the workforce that began soon after World War 2. It begins with the earliest writings (and prescient warnings) by Norbert Weiner in his path-breaking work on industrial controls during the war, followed by a description of the astonishing growth of the use of computers in manufacturing (7 in 1951, 7,500 by the early 1960's), the rise of the service sector (doubling from 7.5% of the workforce to 15% by 2000), and the decline in production employment in virtually every sector of manufacturing, despite an increase in overall output, between 1950 and 1960. As such, Andrews paints a clear picture of the trends that emerged soon after the war and which have come into full force today.

The Hollow Colossus evaluates and rejects two commonly cited factors behind the jobs crisis: the increasing dominance of financial capital (financialization) and globalization. Regarding financialization, Andrews notes: financialization took off from the early 1980's. This is a decade after the degradation of standard labor began its long decline. Financialization cannot be the cause of something that began before its notable rise (page 67f.).  

And globalization: Is globalization the fundamental cause of the erosion of good jobs in the United States? The history of the U.S. trade deficit in manufactured good shows that this globalization arrived years after the decline of standard labor was underway (page 75). These factors may have amplified the basic development, but were not in place in time to cause it.

A third often-cited factor is the impact of technological change on employment, which according to Andrews "can certainly eliminate jobs, but ... is not a determining force by itself." (page 15)  While displacement of workers due  to technological change is nothing new, the key development is the interaction between the employment impact of new digital technologies deployed in the mid-to-late 20th century and the fundamental dynamics of capitalism in response to technological change. Because of the former, new industries from their beginning do not require much standard labor to produce their products.

Whatever tasks the industry needs performed, equipment based on [digital and robotic] scientific-technical development is soon at hand to do them (page 43). Because of this, technological breakthroughs in production do not benefit the broader society, only a narrow sector of capitalists and a scientific-technical elite. Unlike the past, the scientific-technical phase of capitalist development places a limit on the ability of new industries to generate enough jobs to employ workers displaced by technological change. Hence, secular stagnation in employment has become a permanent feature of the current phase of capitalism.

This important observation is the central point of the book. A new contradiction also emerges in the capitalist accumulation process: When the basis of accumulation developed from industrial innovation to scientific-technical innovation over the latter half of the twentieth century, it broke up the balances and adjustments that supported phases of capitalist prosperity. The march of accumulation no longer rotates standard labor out of shrinking industries into expanding new ones. Scientific-technical innovation expels standard labor, and the take-up of workers for routinized labor falters (page 100).

This change has historic implications: ... the singular historic development is distinct from recurring cycles of accumulation. Cycles result from a fall in the rate of profit built into accumulation; the change from industrial to scientific-technical innovation is long-term and relentless in one direction. Cycles express a contradiction in the ordinary functioning of industrial capitalism.

The sputtering economy since 1973 manifests an emergent contradiction signaling the end of capitalism (page 101). The final chapter of The Hollow Colossus presents a realistic evaluation and analysis of socialism as a solution to the crisis.

It summarizes and extends the key ideas in Charles Andrews' previous book, No Rich, No Poor, putting forward a concrete plan for a solution: We began with the question, why did mass prosperity turn into endless decline around 1973? We found that capitalism could not move beyond standard labor. Three related principles of socialism today respond to the impasse of capitalist accumulation:

 We will move to a common prosperity wage for all.
 We will change corporations run for profit into firms chartered to break even.
 We will guarantee full employment (page 178).

With its description of the origins of the scientific-technological revolution, its impact on the U.S. working class and the capitalist accumulation process, and the presentation of a common-sense socialist solution to the crisis, The Hollow Colossus provides a highly informative and ground-breaking analysis of the current jobs crisis.

The spirit of the book can be best summarized by the following: The disruptions of capitalist accumulation hollow out a colossus that grew for 400 years. It also hardens the terms of class struggle. Working people no longer expand the dimensions of mass prosperity; they fight to slow its disappearance...... Working people enjoyed relative prosperity in the decades after World War Two (in the US), despite significant exceptions.

Good times have turned into insecurity and degraded employment today. ... The principles of a new order call out: this we must do, we can do it, and it will be glorious (page 151, Preface).

Allan Miller works in the tech industry and writes on political economy.

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