"Pay my troops no mind; they're just on a fact-finding mission."

Revolutionary Wealth

I recently listened to a recording of
Revolutionary Wealth by Alan and Heidi Toffler

I’d come to think of the idea of a post-industrial ‘knowledge’ economy rather cynically: a flashy dressing to describe an import dominated economy defined by low paying service sector jobs and overwhelming inequality of wealth distribution.

Yet this book certainly caused me to re-think some of my views.
While the Tofflers still seem breathily excited about post-industrial wealth in a way that would have more in tune with the spirit of the 90s, they provide plenty chew on.

Their core premise is how degree of added value to economic activity determines a society’s overall wealth:

Commodities economy: No added value beyond refining, transport.   Most people live at subsistence.

Industry Economy: Some added value but limited by the fact that people and parts are interchangeable.  As industry gets more efficient and eventually culminates in mass production the possibility of a large middle class emerges.

Knowledge economy:  The non-interchangeability of ‘knowledge’ products means more added value and therefore more wealth.  Indeed, the exchange of intangible goods erodes the very idea and usefulness of money over time.
We already see this happening with file sharing and the problems it poses for intellectual property.

One of the signature traits of this knowledge economy will be greater inividualization of products as society moves away from the “massification” that comes with an industrial economy.
Now that I’ve listened to this book I can think of the thousands of varieties of microbrewed beer that have popped up in the last decade.
Or how people can now vote for local startup ideas on sites like kickstarter.

The Tofflers also provide fun challenges to ingrained thinking habits by pointing out how corporations get a free ride from non-paid activity whether we’re using an ATM and paying a fee to be our own teller or potty training a child, a benefit which employers take for granted.

I still find the Tofflers to be fluffily optimistic. Especially with their book released in 2006, just two years before the crash and the years of depression that have followed.

In a knowledge economy what of the people who don’t know very much? Will they fall ever further behind the competitive pack? Does this mean most people will have to settle for barely making it working their entire lives behind a cash register?
The Tofflers fail to deal with the dark side of an economy of intangibles. How do people even tell if the entire economy is made of nothing? Could economic production itself then pop in catastrophic speculative bubbles?

Finally, the Tofflers projections are marred by their thoroughly blue pill perspective of the world. They are totally oblivious of the importance of tectonic changes taking place in society right now along the lines of gender, ethnicity, race, class, and intelligence.
They discuss the drop in fertility in the population but studiously ignore how this trend might affect society.

Overall an enjoyable thought-provoking book. It’s worth a read/listen

Alan and Heidi Toffler

Alan and Heidi Toffler

3 responses to “Revolutionary Wealth

  1. Eric Patton September 1, 2012 at 2:11 am

    The Toffler’s are refreshing in that they shift from the indeterminate view most people take of the world, either going optimistic with no idea on how to move forward because things “change too fast”, or inherently pessimistic, usually because of perceived resource shortages.

    Ray Kurzweil, for instance, has a very good track record at predicting change versus any other futurist alive. But he can, at best, predict the state of the art, not the distribution of the technology. While cellphones and computing have become widely distributed, there are still clear lines between the developed and the developing world. African’s don’t need cellphones for the same reasons Indians do, or for the same reason Germans do, or Americans.

    But as time goes on, it has shifted the balance heavily towards smaller teams, lower economies of scale but requiring higher overall skills. You have to be cross disciplinary.

    Right now, 3d printers are still advancing kind of slowly, the small machines are getting better but the high end stuff is fossilized. And the raw materials cartridges are in the hands of a small collection of companies with arbitrary pricing standards.

    • Giovanni Dannato September 1, 2012 at 10:15 pm

      I’ve got to give them credit for having a clear, hopeful vision of a future beyond an industrial economy.

      All the pundits and functionaries want to “create jobs” or in other words, to make things go back to the way they were.
      Things cannot go back to the way they were.
      The ‘job’ has ceased to be a reliable source of income or security. As such, people will by necessity find other ways to make a living.

      Before reading this book, my own vision of things was rather hazy. I have little affection for a world of massified schools, suburbs, and jobs pressing us into bland conformity through our entire lives.
      But I also like to live life knowing I’ll be able to eat and have a roof over my head next month.
      The way backwards seemed poor enough and the way forward even worse.
      What to do then?
      The Tofflers gave me some important ideas that are already helping me answer this question much better than I could before.

      • Eric Patton September 3, 2012 at 3:08 am

        The thing about creating jobs, in the service industry, or otherwise consumption based, is that majority of the people buying things are women. If you create a capitalist democracy, you have a system which is extremely reactive and focused on consumer needs. This is nice to a point, until you end up with reality TV shows and other pieces of bullshit.

        When you switch over to this new economic model, providing it can be researched and executed properly, the engines of consumption and production change, along with the concept of what constitutes a job and what is valued. I don’t think we will, in the next 20 years, get out of the need of having an economic model, a means of dealing with the scarcity of resources, though. Depends on how much stuff we can consume from asteroids.

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