The Class Struggle, Modern-Style
Steven Antler, a/k/a the EconoPundit, has a great article today at TechCentralStation.com, in which he says the coming class struggle isn't between the rich and the poor or the capitalists versus their workers, but between those in the manufacturing sector and those in the services sector. That's a gross oversimplification of his thesis, so I suggest you go Read The Whole Thing. Excerpt:

Consider for a moment the basic differences between goods and services. Goods can be easily stored, services less easily so. We produce most goods with capital-intensive, technology-utilizing methods of production, while services production still relies on humans - to move or decide things, for example.

Advances in goods production are more amazing than the most profound science fiction, while methods of services production evolve amazingly slowly -- if, indeed, they evolve at all. I composed this article on a machine much more powerful than the 1985 "Cray Supercomputer," for example, but when finished I went to a barbershop where the owner cut my hair in the same way, in the same length of time, and I suspect with the same level of skill, as did his medieval English counterpart.

There is an inherent "class conflict" between the goods and service producing sectors because economic growth affects each in a profoundly different way. The goods sector constantly discovers how to produce more per hour as the service sector's hourly output stays relatively constant; and much as we might wish otherwise, you can't manufacture time.

And it is this last melancholy truism that generates an "iron law of service pricing": services inevitably get expensive relative to everything else. The law is visible everywhere, from anecdotal evidence of rising costs of hands-on health care, tuition, insurance, to the fundamental statistics of pricing and employment costs. No matter how you choose to measure price ratios of services to goods - or employment cost ratios of the service to goods producing sectors - we see prices of services continually rising faster than prices of goods. Much of what's normally called "technical progress" is actually the "iron law" of service pricing in action. Postwar advances that replaced household servants with home appliances evidenced this law. We can say the same for the desktop computer revolution. Machines replace people as people get more expensive - a kind of "law of motion" of capitalism, to use Marx's terms.

Don't worry. Antler's not a marxist.

So, if he's right, what does that mean for politics? Plenty. As Antler explains: In the grand alliance making up the Democratic Party, the only substantial service sector component missing is the insurance industry, while the only substantial goods-producing components present are the few remaining non-public sector rust belt trade unions. The Democratic Party is quite close to a grand alliance of service-providing re-distributors. The Republicans, on the other hand, seem fast becoming the party of goods-providing producers.

Among the members of the Democratic alliance, we seem to be witnessing something like the self-organizing and sometimes self-aware political action Marx labeled class-consciousness, typically taking the form of increasingly hostile, even predatory behavior towards the entirety of the outside world. Brandishing evidence of their failure as proof of their ever-increasing need, teachers perpetually demand more resources. In ongoing waves of litigation establishing increasingly obstreperous themes, trial lawyers first fight the environmental battle, now the battle of lifestyle, and soon, perhaps, the battle for direct judicial control of the taxation/spending powers of the legislature itself. Then there is the Democratic Party's profound and puzzling hatred of the pharmaceutical industry, which seems hard to explain except in terms of ritual, as if Democrats were performing some drama of primal and elemental hatred.

And perhaps that's just what's happening. Perceiving themselves correctly as sterile re-distributors incapable of genuine production, perhaps the Democrats are acting out a kind of ritualized self-recognition. Genuine "humans" versus the dehumanizing (but very productive) "machines," as in The Terminator or The Matrix - perhaps this is the self-image Democrats generate for themselves in the predatory wars they wage.

I think Antler is on to something - and has identified an important new way to analyze politics.

UPDATE: The more I mull Antler's piece the more I see it as a mere starting point for what needs to be a lot more research, data-collection, data-sifting and analysis. Here's why: Dividing people into just two categories - goods producers and services distributors - is waaaaay too simplistic for today's very complex modern economy. In Antler's formulation, goods-producers are all caught up in a spiral of ever-growing productivity and wealth, while all service distributors are not. But that's not correct. Some goods-producers are in low-skill, low-tech, non-evolving businesses that produce products that have become commoditized and low-margin - and generate little in the way of progress and wealth creation. Some service businesses are, on the other hand, very much evolving and very much creating wealth and generating progress. eBay is the signature modern service business. It produces no product, yet it evolves and generates progress and wealth based on knowledge work. eBay is an information broker created by knowledge workers.

Antler needs to consider the role of so-called "knowledge workers" in his analysis - workers who are, essentially, service personnel, but who DO bring evolving skills and increasing productivity to the economic equation, resulting in more-rapid wealth creation. I'll have more on knowledge workers in the coming days.