The Internet Didn’t Kill the Middle Class; Laxity and Apathy Did

KodakBldgAtlanta_mcclanahoochie-Flickr_modIn tandem with the release of his book, Who Owns the Future?, Jaron Lanier’s interview with Salon generated a lot of hand-wringing across social media. It seems Lanier, one of our so-called intellectual visionaries, believes that the collapse of Kodak and its 140,000 jobs, and the rise of Instagram and its 13 jobs, exemplifies the killing field of the internet. Lanier theorizes good paying jobs that once supported a thriving middle class have disappeared as internet-enabled firms replaced them. As these jobs vaporized, so did necessary benefits. Here’s a key excerpt from the interview:

“Here’s a current example of the challenge we face,” he writes in the book’s prelude: “At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear? And what happened to the wealth that all those middle-class jobs created?”

What a crock of decade-late shit.

Where the hell was Lanier in the late 1990s and early 2000s, when the U.S. manufacturing sector nose-dived due to government policies created by corporate-acquired elected officials and appointees?

It wasn’t the internet that killed the middle class. The apathy of intellectuals and the technology elite did; too few bothered to point out the potential repercussions of NAFTA and other domestic job-depleting policies. In the absence of thought leaders, corporatists sold the public and their electeds on job creation anticipated from globalizing policies; they just didn’t tell us the jobs created wouldn’t be ours.

It wasn’t the rise of digitization that killed the middle class. It was the insufficiency of protests among U.S. brain power, including publicly-funded academics, failing to advocate for labor and home-grown innovation; their ignorance about the nature of blue collar jobs and the creative output they help realize compounded the problem.

Manufacturing has increasingly reduced man hours in tandem with productivity-increasing technological improvements. It wasn’t the internet that killed these jobs, though technology reduced some of them. The inability to plan for the necessary shift of jobs to other fields revealed the lack of comprehensive, forward-thinking manufacturing and labor policies.

It all smells of Not-My-Problem, i.e., “I’m educated, technology-enabled, white collar; those stupid low-tech blue collar folks’ jobs aren’t my problem.”

Until suddenly it is.

I remember having an argument with an academic in 2006 about the oncoming paradigm shift in in education where intellectual property and its transference became the core product and key competency in the business model. Universities, for example, would be at risk; if information was digitized and commodified, what would happen to the brick-and-mortar campuses? Eventually they would have to rationalize their existence and differentiate themselves if everybody and anybody could obtain the same education online, no matter where students were located. The cost of education could collapse in a commodified environment.

At the time I was told that wasn’t realistic, it would never happen — the academic’s approach to  telling me I was full of shit.

Hello, MOOCs (massive open online classes).

Now academics can finally see the threat to their careers. They couldn’t give a rat’s butt when blue collar workers at dirty, dangerous jobs were threatened. They’re worried now, though, when the jobs of white collar folks supporting cultural creatives like themselves are threatened.

A decade-plus later, an intellectual with a background in technology, suddenly realizes that the paradigm shift is rolling onto and over his his world — oh, and there’s a gaping maw where government policy should be to prevent the destruction of the world as he knows it. Nice latency you’ve got there, bub, the very definition of lax.

Another industry suffering from collapse is construction — see this active timeline and note the location of job growth up to 2008 and the corresponding collapse after the fact. This was another opportunity for visionaries a decade ago to discuss the repercussions of cheap money and inadequate protections against predatory banking. While the construction industry itself didn’t suffer from a shift in technology, it was the increasing use of technology combined with lax regulation and oversight in mortgages, financing, and related derivatives that caused the collapse.

Again, intellectuals and technology folks were mute as middle class jobs bound up in real estate, construction, finance industries were dramatically impacted by the economic meltdown. Safety nets were attacked when they weren’t squashed altogether.

Lanier’s mourning for Kodak is pathetic not only for its narrow comprehension, but its blindness. Kodak’s film business model is non-competitive and obsolete, given current policies combined with globalization. The present is digital; Kodak should have seen this and been looking for an Instagram future of its own years ago. It should have envisioned a new economic ecosystem developed around digital images. Or it should have lobbied harder for policies that would have encouraged on-shoring versus offshoring of manufacturing facilities, jobs, and profits, in order to save its film-based business.

I suggest rapid development of time travel technology so that reactive eulogists like Lanier can beam themselves back to the end of the Clinton and early Bush administrations to fix the roots of these problems.

In the meantime, we should be encouraging pro-active visionaries — true intellectuals who can see the big picture and imagine establishment of government policies preserving pay and benefits while encouraging innovation.

Otherwise we would do well to imagine and plan for a near-term future in which all manufacturing and most construction around the world is replaced by 3D printers. Our kids and grandkids may be reduced to futures in direct competition with a global employment pool of poorly compensated printer designers, printer operators, and printer repairmen, where lowest cost energy as a factor in production reigns supreme.

Perhaps Lanier will write about the horror of such a future a decade later.

12 replies
  1. ApacheTrout says:

    Kodak death was set in motion long before the internet arrive in mass, long before cell phone cameras became commonplace. Kodak’s management made a series of strategic blunders in the early 1990s in failing to recognize the impact and prepare for the digital era that they invented. But equally disastrous was the shift in corporate philosophy from George Eastman’s view that the employee was a invaluable component of the company to one that the employee is a cost burden on the company. My father-in-law was a mechanic for Kodak, saw the writing on the wall, and took the first golden handshake offered to employees. Within six months, many employees who turned down the deal were laid off, sans any of the arrangements in the golden handshake. And thus the ball started rolling downhill.

  2. allan says:

    @ApacheTrout: “failing to recognize the impact and prepare for the digital era that they invented. ”

    Actually, Kodak did see the digital train coming towards it,
    but spent enormous amounts of money (including CEO compensation) positioning itself into one of the world’s most competitive industries, digital cameras, while failing to capitalize on many technologies
    that had been developed in its research labs (like organic light emitting diodes.) The rise of smart, camera-enabled phones killed it off, and the jackals are still working on the body.

  3. john francis lee says:

    The ‘business’ class are lazy gangsters, basically. I’m glad all those photochemicals are gone. Kodak, when it was fat, should have seen the future … there were definitely people who did see the future in Rochester, just not in management. American management’s idea of coping with change was/is buying a legislature and outlawing it.

    The petrochemical industry … the one that’s the drive wheel behind our ongoing series of US aggressions – war crimes – in this century … is another case in point. They’re fracking the earth, mixing methane and poisonous chemicals with our groundwater and strip mining appalacia and the permafrost … all in order to increase the CO2 combination of our atmosphere and wrecking our planet’s climate !

    The copoarte gangster class should be in jail along with BOb of the Nobel Peace Prize, and the other war criminals in the political class … and throw away the damn key!

    Meanwhile, countries like Japan, Korea, Germany, and China are going to develop photosynthetic hydrogen and sell us the hydrogen producing organisms and the storage and fuel cell conversion technologies. If we put enough dollars in our whellbarrows to pay for same.

    All those desolate countries in the oil patch will have been devastated, depopulated, and covered with depleted uranium … for nothing. We’ll be hated by all the ordinary people on the planet as the renegade murderers we are, and left to pay the bill as well.

    Next time, maybe we’ll pay attention to the ‘wiseguys’ … the corporate gangster class … who bought our government, sold us all out, and got not ‘just’ us but the whole damn world into this mess.

    I do hope the criminal corporate class is bankrupted for reparations set to do serious prison time after the crash, along with our war criminal politicians.

  4. Jeff Kaye says:

    Ongoing technological development that destroys the older manufacturing elites and replaces them with more intensive exploitation of ever fewer workers, making for a larger and larger reserve army of the un- or under-employed…. An irrational, unplanned frenzy to maximize profits, no matter what the cost to people, or the nation… The continuing appearance of market or financial “bubbles”, massive wealth and massive immiseration. Yes, who could have thought of that?

    Karl Marx did.

    It is not laziness or apathy, but commitment by the intellectual elites to the capitalist system that blinds them, and us.

  5. Arbusto says:

    Anyone that still think a two(three)car garage, two cats and two kids is the America dream hasn’t noted that for the last half century we have an excess of labor and that the situation is exacerbated by neoliberalism gripping the elites. Neoliberalists only want consumers, not employees. Of course they have no answer on purchasing goods and services while unemployed or under employed. That’s not their problem.

  6. Rayne says:

    @ApacheTrout: Thanks for that feedback; in a nutshell, Lanier is arguing, “What about the people?” and Kodak’s management shifted its view of people from assets to fungibles.

    But Lanier wasn’t yelling about the people a decade-plus ago, when Fortune 500 corporate management teams made the same general shift in attitude about their employees. I can almost trace that right to General Motors’ doorstep, and to the management practices of José Ignacio López de Arriortúa; his race to the bottom on purchasing based not on quality but pricing affected the business classes I took during 1990s, though his shady ethics weren’t discussed at the same time.

    @allan: That suggests they didn’t invest in future forecasting in a way that helped them identify assets that would differentiate the corporation in the years ahead. Some of those assets weren’t just IP but the brains that developed the IP. A real pity.

    @Phil Perspective: Didn’t see that, thanks — Naomi Klein’s “disaster capitalism” is the equivalent of “universal fascism,” based on creative destruction pushed hard by Michael Ledeen as a consultant for the Bush Pentagon. Far too many folks in current corporate management were encouraged to believe in corporate Darwinism through Friedman’s shaping of the Chicago School of Economics. Our entire business school system is an indoctrination system, insisting “free markets uber alles,” and collapse of businesses is merely an opportunity in the so-called free market.

    @Jeff Kaye: We’ll agree to disagree; I’m sure most of the educated folks I met in 1990s/early 2000s could recall Sinclair Lewis’ quote:

    “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

    @Mark: Yup, and I haven’t forgotten what happened to Perot, either.

    @Arbusto: We had plenty of labor, but it came at what expense? Many folks worked in excess of 40-hour weeks while their kids needed more guidance at home–the system wasn’t organized properly, and propaganda from the corporatists persuaded Americans that to be like the Europeans (assured a less than 40-hour work week with a living wage, a month’s vacation, adequate maternity leave, etc.) was somehow evil when not merely “old Europe” quaint.

  7. Jonathan says:

    Lanier has been a hand-wringer for 20 years. His current polemic should come as no surprise.

    But that said, putting this on “policy” and “academics” is oversimplified. It depends on what “policy” we are talking about. Ultimately, the problem is that labor became a global market even as unions and health care kept jacking up labor prices. Protectionist labor policy can’t fix that. What was (and is) needed was three things:

    1. Investment in retraining and differentiation to open up new, competitive jobs that had a low education requirement.
    2. A national single-payer health care system.
    3. A country willing to look for long-term solutions rather than next week’s fixes

    As comforting as it is to blame academics, we live in a country where people are responsible for their own success. It wasn’t just academics who failed to lobby. It was the millions of blue collar workers themselves, most of whom continued to vote (through their unions) for salary and benefit increases and against a single-payer health care system even as the international price of labor dropped like a rock.

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