The use of modern technology could take us swiftly to a socialist society, where physical and mental labour is reduced to a minimum, leaving human beings free to develop their potential.
Yet many people see this as a far-off dream. Technology appears to them as a destructive tool that is used to intensify work, put people out of jobs and threaten the environment.
This is because technology is under the control of a narrow group – the capitalist class – who use it solely to try and enhance their profits.
It is vital, therefore, to understand how technology, while it is part of the exploitation process, also has a potential to liberate humanity, if used within a co-operative framework.
When we examine the role of technology in modern, global capitalism, we also find that it is a double-edged sword, for employers as well as workers.
The use of technology to increase the productivity of labour actually tends to reduce the rate of profit, as we shall see. This pressure on profits intensifies competition, leads to ever-increasing monopolisation and trade war, together with economic and financial slump.
A capitalist constantly requires increases in productivity to cut the cost of his commodities. This is the driving force behind the development of technology. But a problem arises immediately because new equipment by itself cannot produce profits.
As Marx showed more than 100 years ago, only living labour – real human beings – can add value to capital. The creation of what Marx called "surplus value" is achieved by the employer paying in the form of wages, only part of the value added by the worker. Profits come from this surplus.
So when a capitalist invests huge amounts of money in research and equipment – which we call "dead labour" – this capital increases in proportion to what Marx called "living labour", which is the number of workers employed. The rate of profit is calculated against the total capital investment. So the higher the proportion of this capital, the harder it is to maintain the rate of profit.
The increased productivity expected from deployment of such technologies also takes a long time to come to fruition. Recent research shows continued massive expenditure on computer hardware, software, networks and the people needed for computer support and training – amounting, in 1996, to $500 billion dollars in the US and more than $1 trillion dollars worldwide.
These investments in hardware alone exceed the amounts invested in factories, vehicles or any other type of durable equipment. Despite this, productivity growth measured in the seven richest countries has fallen precipitously in the past 30 years, from an average of 4.3% per year during the 1960s, and the advent of computing, to a rate of 1.5 % in the 1990s.
Yet the very nature of capitalism requires a constant expansion of capital itself. Today, this expansion takes a variety of forms. The mushrooming of computer technology based on micro-switches and fibre optics has facilitated new trends which involve virtual reality, including such things as "smart" cards associated with networking and computer connectivity.
The impulse to expand capital is shown by the fact that about 82 million computers worldwide will be linked to the Internet by the end of this year, up 71% from 1996. The growth in connections is being driven by increased business use of the Internet. The market is expected to continue to grow, linking 268 million computers by 2001.
In an effort to counteract the tendency for profits to decline, advanced communication and information technology is used to create "lean", just-in-time production methods.
These demand the integration of planning and production across countries, regions and time-zones, and the adaptation or elimination of cultural differences. These new production and distribution systems in turn lead to a rapid internationalisation of the division of labour.
At the same time, competition between companies and countries for markets constantly intensifies. Trade war tendencies are illustrated by the fact that despite an anti-tariff agreement on Internet technology signed by members of the World Trade Organisation this year, the United States has no intention of letting its advantage slip.
Within days of President Clinton welcoming the agreement, came the news that the US Department of Commerce had decided to hit the Japanese electronics giant NEC with so-called anti-dumping duties of 454%, Fujitsu with a lower but equally damaging 173% and all other Japanese super computers with punitive duties. This confirmed fears among Japanese manufacturers that the US authorities are intent on keeping them out of the market for government procurement at all cost
NEC, the company at the centre of the dispute, has stood its ground against charges of dumping and insisted its winning bid to supply the National Centre for Atmospheric Research (NCAR) with its SX-4 super computer was fairly priced. In an unusually aggressive move, NEC responded to dumping charges by Cray, the leading US producer, with a counter suit and called for a permanent injunction against the anti-dumping investigation launched by the Commerce Department.
Fibre optics communication has facilitated the massive growth of international financial markets, which in turn reinforces the problems and contradictions of capitalism. These financial markets create unlimited amounts of fictitious capital – that is capital containing no added value – to try to overcome a shortage of capital for investment and sidestep the falling rate of profit.
These financial dealings appear to defy the need for real value to be produced. Yet the current collapse in South-East Asia shows that the law of value can only be defied for limited periods of time, and then returns with a vengeance, as was shown in the 1987 shares collapse known as "Black Friday", which still haunts the money markets.
The "Tiger Economies" had been held up as evidence of the viability of hi-tech globalised capitalism. But last month Thailand was only the first of many countries in the region to be forced to sever the connection between its currency and the dollar. The International Monetary Fund had to step in with a $16.7 billion rescue package.
Currencies were pegged to the dollar – in part to fight inflation and in part to allow each country's banking system to import dollars to finance a credit and investment boom. Each banking system became reliant on booming property markets and easy credit to sustain it.
Thailand’s foreign debt as a result stands at $89 billion and its stock market has fallen by two-thirds in three years. Growth rates in the region have been 7% plus per annum, but these are now forecast to slump to 3% or less. The world’s major economies are desperately hoping to keep this financial collapse away from New York, London and Frankfurt.
The IMF package for Thailand involved savage deflation and the closure of half the country's finance houses. Will Hutton, the leading economics commentator, remarked: "A severe economic contraction in the next two years is inevitable and a military coup probable – and those international banks with lending in Thailand are going to suffer loan write-offs. The interaction of corrupt governments, unsustainable dollar pegs, a property boom and deregulated global capital markets is proving deadly."
The dispersal of labour forces from traditional industrial centres to new locations is often taken as "proof" that the working class has shrunk, or even disappeared in major capitalist countries. But globalised firms have bigger labour forces than ever, though they no longer work in big enterprises with large numbers massed in one location.
This geographic dispersal is counteracted by increased socialisation of production and communications and media revolutions, which allow instant contact between workers in different countries.
Capitalism’s uneven development has already produced sharply-increased income inequality between the developed and less-developed countries, and within countries in the developed world. Global income inequality in the 1990s is more extreme than at any time since the start of the industrial revolution.
The crisis over technology, profits and costs drives the world economy in the direction of low-skill, low-wage, labour-intensive production and assembly of high-tech products. The intensification of the class struggle is inevitable under these conditions.
The recent strikes by United Parcel Service workers in America and British Airways cabin staff, show how trade unionists internationally are resisting wage cutting as employers desperately seek an edge in international competition.
UPS is the giant American firm that dominates parcel deliveries world-wide. Its 1996 revenues totalled $22.4 billion. The strike by 185,000 members of the Teamsters union was over two issues – the conditions of part-timers and the company's plans to reduce its pension scheme.
Of the 40,000 new jobs UPS has created since 1993, 80% have been part-timers who are paid at less than half the hourly rate of full-time workers. The strikers demanded the same hourly rate for both groups.
Meanwhile, the BA staff resisted a plan to cut their salaries and conditions as part of the global carrier’s plan to reduce costs by £2,000 million by the year 2000.
These confrontations between global capitalist companies and organised labour are indications that technological change does not offer a panacea for capitalism, but creates the potential for socialist transformation. Globalised capitalism has created a highly complex, interdependent economic system which is social in character yet run for the narrow pursuit of profit. This basic contradiction results in a system in permanent crisis, producing mass unemployment, the destruction of welfare states and social instability.
Yet the unparalleled growth in the size and nature of the productive forces shows that capitalism contains its revolutionary opposite. The advances in technology and the sharp increases in productivity of labour means that every country can make a rapid advance to a socialist society.
The IT revolution has enabled millions to communicate and access information outside of government control. It creates a continuous crisis for governments who seek to withhold information from ordinary people.
Socialists in all countries must now work together to formulate policies for harnessing the processes which drive globalisation. The perspective has to be for the socialisation of ownership, drawing on the capabilities of the 44,000 multinational enterprises.
To make technology a liberating force requires democratic mass ownership and control of production, removing the power of the capitalist class and abolishing production for profit. Production plans would be drawn up by workers and the wider community on the basis of need.
The capitalist state has to be broken up and reconstructed to abolish privilege, bureaucratic structures and the forces of repression that prop up capitalism. In its place a socialist state would use IT to ensure complete democratic control of the political process.
This article first appeared in Socialist Future