Herman Mark Schwartz in Phenomenal World:
Forty years ago, in 1984, Michael Piore and Charles Sabel published a MacArthur award-winning book, The Second Industrial Divide: Possibilities for Prosperity, that shaped a decades-long debate about the future of markets and the social orders supporting them. Piore and Sabel characterized the 1970s and early 1980s as a second critical inflection point in the history of capitalism. The first shift had been from craft to mass production in the early 1900s. Mass production matched large fixed investments in product-specific production equipment with semi-skilled workers struggling for long-term employment stability. P&S argued that those investments had created an overly rigid production structure vulnerable to almost any shock. And the 1970s and early 1980s presented a multitude of shocks—strikes, unstable oil prices, rising inflation, intensifying conflict between the US and Soviet Union in terms of nuclear threats and proxy wars, the beginning of deregulation and privatization, and new global public health challenges like the AIDS epidemic. Political struggles to reorganize society created an opening for a watershed in economic relations that gave their book its name: a second industrial divide. They argued that enterprises could and would increasingly shift towards what they termed “flexible specialization”—smaller, more equally sized firms using newer general-purpose equipment, run by a more egalitarian workforce, in a more competitive market—because this form was more resilient in the face of shocks. The rules of the game everywhere were about to be re-written, and their speculative sketch of a possible future won their place in intellectual history.
The big questions about the re-written rules were, of course, by whom, how, and with what outcomes? Forty years later, we now know P&S were wrong about how the second industrial divide eventually played out. They were right, however, about the fact of a historical divide in the interaction of labor relations and the supply side of the economy, and about the stakes inherent in the massive shift in the organization of production, consumption, and innovation this entailed. Today we face a similar inflection point—a third industrial divide.
More here.
Enjoying the content on 3QD? Help keep us going by donating now.