Post-Capitalist Society

It was only with the collapse of both Marxism as an ideology and communism as a social system that it became fully clear that we had transitioned to a new, heterogeneous society.

The most important social force in the knowledge society is knowledge workers.

Just as capitalists knew how to allocate capital productively, those who know how to allocate knowledge productively are knowledge managers, knowledge professionals, and knowledge workers. Moreover, almost all of these knowledge workers are employed by organizations.

However, they are different from employees in capitalist societies. They own the means of production themselves. They own the means of production through pension funds, which have rapidly emerged as the only true owners of the means of production in every advanced country. They also own knowledge and can take that knowledge anywhere, which means they own the means of production.

On the other hand, the social challenge in a post-capitalist society concerns the dignity of service workers, who constitute the second class in a post-capitalist society.

Service workers generally lack the education required to become knowledge workers. However, even in all the advanced countries and especially the most advanced ones, the majority consists of these service workers.

Furthermore, a post-capitalist society will be divided by values. But it is not a division into two cultures, literary culture and scientific culture, as shown by C.P. Snow (1905-1980), an English novelist and scientist who was also a bureaucrat. Here, the division in society is between intellectuals and people in organizations. The former is involved with language and ideas, while the latter is involved with people and work. Indeed, new integration that overcomes this dichotomy is the philosophical and educational challenge of a post-capitalist society.

The Industrial Revolution was brought about by the application of knowledge. Knowledge has always been related to existence in both the East and the West. However, it suddenly became related to action overnight. Knowledge became a resource and became practical. Knowledge, which was a private asset, suddenly became a public asset.

- As a first stage, knowledge was applied to tools, processes, and products for a hundred years after the mid-eighteenth century. That was the Industrial Revolution. At the same time, Karl Marx's so-called alienation, class, struggle, and communism were introduced. As a second stage, it began around 1880 and peaked at the end of World War II, when knowledge was applied to work in new ways. The result was a productivity revolution. In the past 75 years, the proletariat has become a bourgeoisie class with an income comparable to the upper class. Thus the productivity revolution defeated class struggle and communism. As a third stage, after World War II, knowledge came to be applied directly to knowledge itself. That was the Management Revolution. Today knowledge is the most important factor of production, surpassing land, capital, and labor.

- Plato said that the purpose of knowledge was self-knowledge, that is, intellectual, moral, and spiritual growth. On the other hand, Plato's rival philosopher, Protagoras, said that the purpose of knowledge was to know what to say and how to say it. For Protagoras, knowledge meant logic, grammar, rhetoric, which later became the core of learning in the Middle Ages and today's general education.

- Within just 50 years after 1700, technology was invented. The very word "technology" was symbolic. It added the suffix "logy", which represents a system, to the secret skill of "tekhne".

- One of the most important books in human history is the Encyclopédie, which was compiled by Denis Diderot (1713-1784) and Jean d'Alembert (1717-1783) between 1751 and 1772, and is a great record of the dramatic shift from skill to technology. The book systematized all knowledge about skill and aimed to make anyone an expert without becoming an apprentice.

- It was written by information specialists, that is, people with analytical, mathematical, and logical abilities. Voltaire and Rousseau wrote...

- The philosophy of the "Encyclopedia" was that the achievements in the material world, such as tools, processes, and products, were created by knowledge and its systematic application. The "Encyclopedia" argued that the principles that produce results in one skill also produce results in other skills. This view was considered heretical by intellectuals and craftsmen of the time. In fact, in the 18th century, there was not a single technical school whose purpose was to create new knowledge. The "Encyclopedia" was no exception. There was no one discussing the application of science to tools, processes, and products, that is, to technology. It would take another 100 years, until 1830, for the German chemist Justus von Liebig (1803-1873) to apply scientific knowledge to invent artificial fertilizers and a method for preserving animal protein. However, historically, what the early technical schools and the "Encyclopedia" did was probably more important than Liebig's achievement. The technē, or skill as a secret art, which had developed over thousands of years, was collected, systematized, and made public for the first time. Experience was replaced by knowledge, apprenticeship by textbooks, and secret arts by methodology, and work was replaced by knowledge. This was the essence of the social and cultural transformation caused by technology on a global scale, which we would later call the Industrial Revolution. This change in the meaning of knowledge was what made capitalism inevitable and dominant thereafter.

- Knowledge is now applied to know how to effectively apply existing knowledge to produce results. This is management. At the same time, it is also applied to clarify "what new knowledge is needed," "whether that knowledge is feasible," and "what is needed to effectively utilize that knowledge." In other words, knowledge is also applied to systematic innovation. The third stage of change related to this knowledge is the management revolution. Today, this management revolution is sweeping the world, just like the previous two changes, the application of knowledge to tools, processes, and products, and the application of knowledge to the work itself. It took 100 years from the mid-18th century to the mid-19th century for the Industrial Revolution to become the dominant trend worldwide. In the case of the productivity revolution, it took 70 years from 1880 to the end of World War II. However, in the case of this management revolution, it only took just under 50 years from 1945 to 1990. In other words, what underlies the Industrial Revolution, the productivity revolution, and the management revolution is the change in the meaning of knowledge. In this way, we have transitioned from general knowledge to specialized knowledge. Former knowledge was general knowledge. In contrast, what is now considered knowledge is inevitably highly specialized knowledge. Until now, discussions about people with specialized knowledge have never been discussed. Only educated people, or those with a general education, have been discussed. Educated people were generalists. They knew what was necessary to talk and write about various things. They also knew what was necessary to understand various things. However, they did not know what was necessary to do something. The protagonist of Mark Twain's (1835-1910) novel, a Yankee from Connecticut, who wrote in 1889, was not an educated person. He did not know Latin or Greek, had not read Shakespeare, and hardly read the Bible. However, he knew everything about machines, from generating electricity to making telephones.

- As organizations become increasingly knowledge-based, it is essential that mobility between organizations become easier.

- Unlike with society, community, or family, organizations compete with each other for the most fundamental resource: dedicated knowledge workers. In other words, organizations market themselves for participation, just like for products or services, to employees or simply supporters. They attract and retain people, recognize, reward, motivate them, serve them, and satisfy them.

- In a post-capitalist society, anyone with knowledge must acquire new knowledge every four or five years in any field, or else risk becoming obsolete.

- Successful organizations incorporate systematic demolition of everything they do within themselves. Every few years, they learn to thoroughly examine every process, product, procedure, and policy, and ask "if we weren't doing this, knowing everything we know now, would we start it?" If the answer is no, they ask, "What should we be doing now?" Instead of reviewing what they've done, they do something else. Moving forward, organizations should plan for deliberate disposal of successful policies, actions, and products instead of trying to extend their lifespan. However, only a few large Japanese companies are doing this today.

- Every organization must incorporate three systematic activities into its structure. First, the organization must engage in continuous improvement, or Kaizen in Japanese, for everything it does. Throughout history, every artist has engaged in Kaizen, or systematic and continuous self-improvement. However, so far, only Japan has been Kaizening the daily activities and work of corporate organizations, perhaps due to the influence of Zen. The purpose of Kaizen is to improve products and services and turn them into completely new ones in two or three years. Second, the organization must expand, or develop new expansions for what is already successful. Here, too, Japanese companies are the most successful. You can see how Japanese electronics manufacturers developed new products one after another based on the American invention of the tape recorder. Third, the organization must innovate. Innovation can be organized as a systematic process. It is something that should be organized in that way.

- In the United States, the largest tier of employees are those who work without pay. In the United States, one in two adults, or 90 million people, work for non-profit organizations. Most of them work for more than three hours a week without pay. They are clearly staff. They think of themselves as volunteers. However, they are volunteers and do not receive payment.

- As income, education, and social status increase, job skills become increasingly dependent on the organization. The post-capitalist society is an organizational society. It is an "employee society." The organizational society and the employee society are just different perspectives on the same phenomenon.

- Compared to yesterday's manual laborers, who were wage laborers, employees in dependent positions performing simple service labor have not changed much in their position.

- They include supermarket cashiers, hospital cleaners, delivery truck drivers, and many others. And now, they make up a quarter or more of the labor force, already outnumbering the factory workers. Their status, productivity, and dignity are the central social issues in the post-capitalist society.

- On the other hand, the position of the other major group in the post-capitalist society, knowledge workers, is entirely different. Knowledge workers can only work if there is an organization. In this sense, they are dependent. But they own the means of production, namely knowledge. Today, in every advanced country, knowledge workers make up one-third or more of the labor force.

- Marx argued that the greatest change brought about by capitalism in society was the alienation of workers. They did not own the means of production. They could only produce by borrowing increasingly expensive machines from capitalists. Knowledge workers also require the tools of production. Moreover, the capital investment required for the tools knowledge workers need is likely much higher than for physical workers' tools. However, these capital investments cannot be productive unless the means of production that knowledge workers own, namely knowledge, is involved. In addition, investment in education for knowledge workers is much greater than for physical workers.

- Without the property of knowledge as a knowledge worker, machines cannot be productive. Physical workers were entirely dependent on machines. However, the relationship between knowledge workers as employees and the means of production is interdependent. Without one, the other cannot function.

- Throughout history, workers have been supervised. They were told what to do, how to do it, and at what speed to do it. In contrast, employees as knowledge workers cannot be supervised. Rather, they are useless in every way if there is someone who knows more about their specialty than they do.

- In the employee society, employees require an organization. Without an organization, they cannot produce or work. However, they have the freedom to move, and they can move while retaining their means of production, namely knowledge.

- The organization is the one that owns the physical means of production. However, organizations and knowledge workers need each other. Neither can produce alone. In other words, neither is independent nor subordinate. They are interdependent.

- Loyalty cannot be obtained through wages anymore. Loyalty can only be obtained by providing excellent opportunities for performance and self-realization to employees who are knowledge workers.

- Moreover, even low-skilled service workers are no longer proletarians in a post-capitalist society. They own the means of production as a group. There are hardly any rich people among them, and they do not have much wealth. However, they own the means of production as a group through pension funds and trusts.

- Those who exercise shareholder voting rights for the employee owners of the means of production are also employees who work for pension funds as employees responsible for managing municipal pension funds.

- In the United States, pension funds are already the only true capitalists. In other words, in the post-capitalist knowledge society, capitalists are employees. They receive wages as employees and think of themselves as employees. However, they act as capitalists.

- Under capitalism, employees served capital, but under post-capitalism, capital serves employees.

- There is a fierce debate over whether the domestic manufacturing industry in advanced countries needs only the ability to design, market, and have technology, or whether it also needs the ability to manufacture itself.

- Notes: Does it also talk about the superstructure?

- In advanced countries, even if there is a foundation of knowledge, domestic manufacture can be maintained. However, competitiveness can only be achieved when manufacturing is conducted by knowledge workers who serve machines, rather than traditional blue-collar workers.

- Manufacturing must be carried out by knowledge workers who serve machines in order to be competitive. At one electric furnace manufacturer, a computer serves only 97 technicians.

- At the same time, the same kind of problem arises in several advanced countries. In cases where a country still has a minority of people with an education level that is not advanced but still akin to a developing country, it is difficult to change the status quo.

- If manual labor becomes a liability rather than an asset, it will lead to serious social problems and political conflict in the forthcoming conversion period.

- Notes: Isn't this a problem related to the dignity of service workers?

- For advanced countries, the only long-term policy that promises success is the conversion of the manufacturing industry's foundation from physical labor to knowledge.

- Today, the amount of funds held by institutional investors, centering on pension funds, in advanced countries is unprecedented. The amount of funds held by these pension funds is much larger than that held by any capitalist in history.

- Life insurance in the 19th century was actually death insurance, but pension funds are for old age insurance. Pension funds are essential institutions in a society where most people live much longer than their working years.

- As of the end of 1992, institutional investors held over half of the capital stock of large corporations in the United States. Institutional investors also own nearly the same proportion as the fixed liabilities of medium-sized corporations as creditors. There has never been such a concentration of financial power in the United States.

- Pension fund capitalism is completely different from the capitalism of the past. It is also completely different from any socialist economy that has been envisioned.

- The pension fund is a strange entity. It is a phenomenon replete with contradictions. The pension fund is an investor that controls vast amounts of capital and investments. However, the employees themselves who own the pension fund and the pension administrators who operate the fund are not so-called capitalists. Pension fund capitalism is capitalism without capitalists.

- Legally, the pension fund is the owner. But legally, it is merely a trustee. The ultimate beneficiaries are the owners; namely, the future pension recipients. Moreover, the pension fund administrators themselves are financial analysts, portfolio managers, and actuaries who are also employees. They are high-income professionals, but they are not wealthy asset-holders. In the case of major US public pension funds for federal, state, and city employees, they are managed by government officials who receive salaries from their respective governments.

- Pension fund capitalism is also capitalism without capital. Pension fund assets do not fit the definition of capital. This is not a mere problem of terminology. Pension fund assets are in fact deferred wages. They are set aside to pay wages to retired employees.

- According to Marx's definition, widely accepted from the 19th century to the early 20th century, capital is the accumulation of expropriated labor from wage laborers. Some socialist pioneers declared that all property is theft. However, neither definition is applicable to pension fund assets, which continue to be owned by wage laborers.

- "The Modern Corporation and Private Property," a joint work by Adolf Berle and Gardner Means, was published in 1933. The book noted that the legal owners of large corporations, namely the shareholders, no longer control the corporations and do not even attempt to do so. Thus, those who control the corporations become professional managers who do not hold ownership.

- According to Barley and Means, the only way for large corporations to meet their funding needs is by going public with their stocks. As they grow, large corporations require funding that no single owner or group of owners can provide. They raise funds by numerous people making investments. None of the investors hold enough ownership to control the corporation on their own, but they do obtain enough ownership to be interested in the corporation’s management.

- Barley and Means note the transformation of ownership to investment.

- Management that only focuses on shareholder interests excludes knowledge workers. However, the fate of the corporation today is decided by the dedication and enthusiasm of these knowledge workers. Technical workers are motivated to help create profits that benefit speculators.

- In the 1930s, specialist managers were responsible for management that ensured the ultimate achievement of satisfactory short-term and long-term results, as well as balanced profitability among various interested parties in corporate activity. In fact, this perception was correct. Fortunately, we know what was not known in the 1950s today. That method is to...

- Investors can always sell the stocks they own. However, even large-sized pension funds and mid-sized pension funds can hardly sell the stocks they own in great quantity. They are forced to sell to other pension funds. This means that pension funds can neither manage nor leave the corporation. Therefore, pension funds must ensure that corporations are properly managed.

- What should this social structure be called? When I first tackled this problem in the 1970s, I called it pension fund socialism. However, it may now be more appropriate to call it employee capitalism.

- The lowest productivity is that of government employees. Moreover, in every country, the largest employer of service workers is the government. For example, in the United States, one-fifth of the employed population works primarily in routine clerical jobs in federal, state, and local government agencies. In the UK, this proportion is 30%.

- Knowledge workers may be able to earn significant income regardless of their own productivity or the overall productivity of the national economy. They are a minority and have a high degree of job mobility. However, even they will face a decline in real income if they do not improve their productivity in the long run.

- On the other hand, a vast number of service workers engage in low-skilled and low-education jobs. In economies where the productivity of service workers is low, paying wages that are significantly higher than their productivity will ultimately result in inflation lowering the real income of everyone. Soon, that inflation will cause serious social tensions.

- In jobs that involve making or delivering goods, the work is given and the content is constant. When Frederick W. Taylor analyzed shoveling sand, he assumed that the act of shoveling sand was constant. Moreover, most work involved in making or delivering goods is done at the pace of a machine. In other words, humans serve machines in these jobs.

- However, most jobs for knowledge workers and service workers serve humans rather than machines. The work is not given. It must be determined. Former job analysis and scientific management methods did not ask the question, "What should be expected from this job?" However, it is essential to ask this question for knowledge workers and service workers to become productive.

- There is another major difference between the productivity of knowledge workers and service workers and that of manual workers. In knowledge work and service work, it is necessary to determine how to organize the work and what type of organization is appropriate for the work and its flow.

- There are three types of teams for work. To increase work productivity, it is necessary to choose the optimal team for the job and work flow from among these three types of teams. The first type of team is a baseball team or a surgical team in a hospital. In this type of team, each member forms the shape of the team, but everyone moves together as a unit. In baseball or cricket, players have fixed positions. Fielders just need to hold their respective positions. They cannot directly help each other. In baseball, it has long been said that "the batter's box is lonely." Similarly, an anesthesiologist may assist a nurse or surgeon, and vice versa, but in this type of team, members move as a team. They work while coordinating with each other for their respective roles.

- The second type of team is a soccer team or an orchestra team. It is the hospital emergency team that rushes to a patient with a heart attack at two in the morning. In this type of team, players have fixed positions. A tuba player does not play the double bass score. They only play the tuba score. In the hospital emergency team, an emergency medical technician does not perform a chest incision to stimulate the heart. However, in this type of team, team members move as a team. They work while coordinating with each other for their respective roles.

- The third type of team is a tennis doubles team. It is a small jazz band or the top management of an American company consisting of four or five top executives. This type of team is small in size, with a maximum of seven to nine members. Team members do not have fixed positions, but only have priority positions to cover each other's areas and adjust each other's strengths and weaknesses. The backcourt player plays according to the strengths and weaknesses of the frontcourt player. In a doubles team, they can reflexively adjust to the strengths and weaknesses of other members, and function as a team only when they can run to cover the backside, which is the weakness of the frontcourt player, as soon as the ball leaves the opponent team's racket.

- These three types of teams cannot be used together. In the first place, the same team does not compete in baseball and soccer at the same time in the same stadium. An orchestra cannot play in the same way as a jazz band. Moreover, these three types of teams are purebred. They do not function in hybrid form. Transformation into other types of teams is difficult and painful, and such a transformation destroys important human relationships that have existed for a long time. However, changes in the nature of work, tools, processes, and products require the transformation of teams.

- In the case of knowledge work and service work, which do not require machines or require machines to be used, it is necessary to consciously eliminate all non-contributing tasks.

- For all activities of knowledge workers and service workers, it is necessary to ask whether a task is the original job, whether it is necessary for the original job, whether it is useful for the original job, and whether it makes it easier to do the original job.

- It is important to start improving work from the perspective of the workers who carry out the work. First of all, it is necessary to ask them what they can teach us, what they need to learn, what tools they need, and what information they need. In other words, it is necessary to demand that workers take responsibility and manage productivity improvement themselves.

- The continuous change of knowledge demands continuous learning from knowledge workers. Even for service workers, even if it is purely clerical, continuous learning as a continuous self-improvement effort is required.

- In fact, outsourcing is most needed for government agencies, whether it is physical work such as maintenance or administrative work such as billing. Today, the productivity of government agencies is the lowest. Moreover, most of the workers who work for government agencies are engaged in such supportive work.

- In other words, large corporations, government agencies, large hospitals, and enormous universities are not necessarily employers of large numbers of workers.

- In traditional organizations, the boss knew what his subordinates were doing. The boss himself did the same work as his subordinates a few years ago. However, in knowledge-based organizations, the boss is supposed to know nothing about the work of his subordinates. Normally, the boss has experience doing the same work as his subordinates, but in a knowledge-based organization, even someone with knowledge just enough to assess the contributions of experts knows little about the work of the subordinates.

- Every successful social policy between the past ten and fifteen years has been outsourced by the government or local governments to corporations or non-profit organizations.

- Today in America, many social programs such as the Head Start Project or the Juvenile Offender Rehabilitation Program are outsourced.

- In America, 70% of government research and development funds are used for national defense, while in Japan, the figure is less than 5%.

- American defense research attracts outstanding young scientists and engineers, and as a result, the American economy is depleted of what it most requires: knowledge. While highly skilled technicians work on smart bombs in the US, their Japanese counterparts work on developing high-performance faxes or automobiles.

- Social services provided by non-profit organizations have had significant achievements. Therefore, society and politics in the post-capitalist era need a new social sector.

- In the future, social needs will increase in two areas. One is the field of relief services, which has traditionally been seen as charity, which means helping the poor, the disabled, the homeless, and those who have suffered harm. The other is the field of social services that works with communities and individuals.

- In times of historical transition, the number of people in need of relief services inevitably increases. Refugees are found everywhere on the planet, and there are large numbers of victims of wars, social upheavals, persecution based on race, ethnicity, politics or religion, and those who have suffered from the tyranny or incompetence of governments.

- One reason is the rapid increase in the elderly population in all advanced countries. Another reason is the increasing demand for health-related research, education, treatment, and hospital facilities, which are becoming more diverse and complex. Another reason is the increasing need for adult continuing education. Another reason is the increase in single-parent households. Thus, the social sector, especially the social service sector, is becoming a growth sector in advanced countries.

- Governments are turning to outsourcing. Just as companies outsource supportive, administrative, and maintenance jobs, governments must also outsource the execution of their tasks to external social sectors.

- There is another reason for outsourcing social services: the need to improve the productivity of service workers. The government is the largest employer of service workers. However, productivity in service work in the government is at its lowest level. Moreover, as long as they are government employees, it is impossible to improve productivity. Government agencies cannot help but be bureaucratic, prioritizing rules and regulations over productivity.

- In the future, the growth of NPOs in these social sectors will be an important step in enabling the government to change direction. NPOs are the core of meaningful citizenship recovery.

- The social sector is what meets this need. There, individuals contribute and take responsibility. They can make the world a better place as volunteers. This is already a reality in the United States.

- In the United States, there are nearly one million NPOs operating in the social sector. Their activities account for 10% of the GNP. One-fourth of the cost is covered by donations, one-fourth by government spending on medical assistance, and the rest by compensation for providing social services, such as tuition fees for private universities and sales at museum shops.

- Non-profit organizations are the largest employers in America. One out of every two adults, 90 million people, volunteer for at least three hours a week at activities such as churches, hospitals, the Red Cross, Boy and Girl Scouts, rehabilitation programs for alcoholics, shelters for victims of domestic violence, educational programs for African-American children, and more. Eventually, the number of volunteers in America increased to 120 million, with an average of five hours of work per week.

- Civicness in the social sector is not a panacea for the ills of society and politics in a post-capitalist society. However, it is a prerequisite for confronting these ills. It restores the responsibility of citizens as evidence of civicness and the pride of citizens as a symbol of the community.

- In a capitalist economy, the difference between the interest rates on bank deposits and loans inevitably widens, resulting in only banks and bankers profiting and becoming dominant.