Some notes from the book by Alvin Toffler
First Wave (pre-Industrialization) : Two sectors of people. Sector A : produced for their own consumption. Sector B : Produced for trade or exchange. Sector A was huge and Sector B was tiny
Second Wave (Industrialization) : Most people were engaged in producing goods for others consumption and this gave the market the prominence. No longer people were self-sufficient.
A Market is not inherently capitalist. A marketplace existed long before capitalism. A marketplace is nothing more than an exchange network, a switchboard as it were through which goods and services, like messages, are routed to appropriate destinations.
The explosive expansion of the market contributed to the fastest rise in living standards the world had ever experienced.
One need scarcely be a Marxist to agree with The Communist Manifesto's famous accusation that the new society "left remaining no other nexus between man and man than naked self-interest, than callous 'cash payment'. Personal relationships, family bonds, love, friendship, neighborly and community ties all became tinctured or corrupted by commercial self-interest".
For the obsessive concern with money, goods, and things is a reflection not of capitalism or socialism, but of industrialism. It is a reflection of the central role of the marketplace in all societies in which production is divorced from consumption, in which everyone is dependent upon the marketplace rather than on his or her own productive skills for the necessities of life. In such a society, irrespective of its political structure, not only products are bought, sold, traded, and exchanged, but labor, ideas, art, and souls as well.
Principles of Industrialization:
- Standardization : Frederick Winslow Taylor decided that there was one best (standard) way to perform each job, one best tool to perform it with, and a stipulated time in which to complete it. Standardization help mass production.
- Specialization
- Synchronization : In all second-wave societies regardless of profit or political considerations, social life, too, became clock-driven and adapted to machine requirements
- Concentration : Concentration of people. Concentration also in capital flows, so that it gave birth to the giant corporation and beyond that the trust and monopoly
- Maximization : Governments in Germany, Britain, and other countries actively encouraged mergers to create even larger companies, in the belief that larger scale would help them compete against the American giants. Second wave governments around the world entered into a blind race to increase GNP at all costs, maximizing "growth" even at the risk of ecological and social disaster
- Centralization : Centralization of Governance, of Companies and Also the Capital i.e the Central Bank
Industrialism, as we have seen, broke society into thousands of interlocking parts- factories, churches, schools, trade unions, prisons, hospitals, and the like. In doing so it shattered community life and culture. Somebody had to put things together in a different form.This need gave rise to many new kinds of specialists whose basic task was integration. These were the integrators. They defined roles and allocateed jobs. They set the rules under which organizations interacted. In both capitalist and socialist nations, it was the integrators who rose to the top.
Thus a new executive elite arose whose power rested no longer on ownership but rather on control of the integration process. The new power of the integrators was, perhaps, most clearly expressed by W. Michael Blumenthal, former U.S. Secrertary of the Treasury. Before entering government Blumenthal headed the Bendix Corporation. Once asked if he would some day like to own Bendix, Blumenthal replied : It's not ownership that counts -- it's the control. And as a Chief Executive that's what I have got ! We have a shareholder's meeting next week, and I have got 97 percent of the vote. I only own 8000 shares. Control is what's important to me.... To have the control over this large animal and to use it in a constructive way, that's what I want, rather than doing silly things that others want me to do.
Free marketers have argued that governments interfere with business. But left to private enterprise alone, industrialization would have come much slowly. Governments quickened the development of railroad. They built harbors, roads, canals and highways. The operated postal services and built or regulated telegraph, telephone, and broadcast systems. They applied foreign policy pressures and tariffs to aid industry. They subsidized energy and advanced technology, often through military channels. By setting up mass education systems, governments not only helped to machine youngsters for theri future roles in the industrial workforce (hence, in effect subsidizing industry) but also simultaneously encouraged the spread of the nucelar family form. By relieving the family of educational and other traditional functions, governments accelerated the adaptation of family structure to the needs of the factory system.
Time and again during the past 300 years, in one country after another, rebels and reformers have attempted to storm the walls of power, to build a new society based on social justice and political equality. Temporarily, such movements have seized the emotions of millions with promises of freedom. Revolutionists have even managed, now and then, to topple the regime.
Yet each time the ultimate outcome was the same. Each time the rebels re-created, under their own flag, a similar structure of sub-elites, elites and super-elites. For this integrational structure and the technicians of power who ruled it were as necessary to Second Wave Civilization as factories, fossil fules, or nuclear families. Industrialism and the full democarcy it promised were, in fact, incompatible.
"The Law of first Price" : Where no previous history of trade existed for a given commodity, the price set in the first transaction was crucial. Typically set in the absence of competition, almost any price was acceptable to a lord or tribal chief who regarded his local resources as valueless and found himself facing a regiment of trooops with with Gatling Guns.
Cultures that had subsisted for thousands of years in a self-sufficient manner, producing their own food supplies, were sucked willy-nilly into the world trade system and compelled to trade or perish.
Nevertheless, once torn out of self-sufficiency and complelled to produce for money and exchange, once encouraged or forced to reorganize their social structure around mining, for example, or plantation frarming., First Wave populations were plunged into economic dependence on a marketplace they could scarcely influence. Often their leaders were bribed, their cultures reidculed, their languages suppressed. Moreover, the colonial powers hammered a deep sense of pshychological ingeriority into the conquered people that stands even today as an obstacle to economic and social development.
In 1492, when Columbus first set foot in the New World, Europeans controlled only 9 percent of the globe. By 1801 they ruled the third. And by 1935 Europeans politically controlled 85 percent of the land surface of the earth and 70 percent of the population. Like Second Wave society itself, the world was divided into integratotrs and integratees.
As early as 1941 U.S financial strategists had begun to plan for a postwar reintegration of the world economy along lines more favorable to the United States. At the Bretton Woods Conference in 1944, held under US leadership, 44 nations agreed to setup two key integrative structures - the IMF and the World Bank. The IMF compelled its member nations to peg their currency to the American Dollar or to gold - most of which was held by the United States. (By 1948, United States possessed 72 perecent of the whole world's gold reserves). Soon a third component was added to the system - GATT. This agreement promoted originally by the United States, set out to liberalize trade, which had the effect of making it difficult for the poorer, less technologically advanced countries to protect their tiny fledgling industries. The three structures were wired together by a rule that prohibited the World Bank from making loands to any country that refused to join th eIMF or to abide by the GATT.
Second-Wave civilization cut up and organized the world into discrete nation-states. Need the resourced of the rest of the world, it derw First Wave socieiteis and the remaining primiteve peoples of the world into the money system. It created a globally integrated marketplace. But rampanant industrialism was more than an economic, political, or social system. It was also a way of life and a way of thiniking. It produced a Second Wave mentality.
Three ideas that bound all second-wave nations together and differentiated them from the rest of the world:
- Nature is an object to be exploited by humans aka The War with Nature
- Humans were not merely in charge of the the nature, they were the pinnacle of a long process of evolution AKA The importance of Evolution
- The progress priniciple : The idea that history flows irreversibly toward a better life for humanity
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