SPECIAL ISSUE ON ORGANIZING FOR AUSTERITY: THE NEOLIBERAL STATE, REGULATING LABOUR AND WORKING CLASS RESISTANCE

# The Productivity Mantra

## The Profit Motive Versus The Public Good

### DAVE BROAD

Social Policy, Faculty of Social Work, University of Regina, Canada.

#### Abstract

Capital accumulation is the essence of production in capitalist society. Consequently, corporations are constantly driven and workers exhorted to increase productivity in the interest of raising profits. Economic slumps and recessions are used as reasons to argue that there is a productivity crisis and push for increasing productivity at the expense of wages, benefits and social programming, as we see with the post-2007 Great Recession. This essay discusses these trends, theoretical and ideological arguments, and the need for a socialist alternative to the never-ending push to increase productivity for capital accumulation at the expense of workers' rights and social welfare.

#### Résumé

L'accumulation du capital est l'essence de la production dans les sociétés capitalistes. En conséquence, les entreprises sont constamment obligées et les ouvriers constamment exhortés à augmenter leur productivité dans le but d'augmenter les profits. Les ralentissements de l'économie et les récessions sont utilisés pour justifier l'argument qu'il y a une crise de productivité et pour pousser pour plus de productivité aux dépens des salaires et des avantages associés et des programmes sociaux, comme nous le voyons avec la Grande Récession depuis 2007. Cet article analyse ces tendances, les arguments théoriques et idéologiques, et le besoin d'une alternative socialiste à la pression sans cesse renouvelée à l'augmentation de la productivité pour favoriser l'accumulation du capital aux dépens des droits des travailleurs et des droits sociaux.

#### Keywords

capitalism; productivity; work; social welfare

#### Mots-clés

Capitalism; productivité; protection sociale; travail

Dave Broad is a sociologist and Professor of Social Policy at the University of Regina, Saskatchewan. His publications include Dave Broad, *Hollow Work, Hollow Society? Globalization and the Casual Labour Problem*, and Dave Broad and Wayne Antony (eds.), *Capitalism Rebooted? Work, Welfare and the New Economy* (both Fernwood Publishing).

David Broad est sociologue et professeur de politique social à l'University of Regina, Saskatchewan. Parmi ses publications, Dave Broad, *Hollow Work, Hollow Society? Globalization and the Casual Labour Problem*, et Dave Broad et Wayne Antony (dirs.), *Capitalism Rebooted? Work, Welfare and the New Economy* (Fernwood Publishing).
Since the global economic slowdown of the early 1970s we have been
hearing from businesses and governments that one of our most serious
economic problems is a decline in labour productivity. Indeed, much of the
recent discussion on globalization and the so-called New Economy focuses
on the ostensible need for nations and businesses to increase their
productivity to enhance competitiveness in the world market, a call that
has heightened in the neoliberal era after the 1970s. For example, in a
recent article in Canada's national newspaper *The Globe and Mail*, Kevin
Lynch, former clerk of the Privy Council and secretary to cabinet, tells us
that Canada's economy is performing badly because we are headed for a
"productivity trap."<fnref n="1" /> In July of 2010, *The Globe and Mail* ran a series of
articles on Canada's "productivity challenge," has run a series in its *Globe
Investor* column on why investors should care about productivity, and
more recently a cover story in its business section on the so-called
productivity trap.<fnref n="2" /> The message is that one of our biggest woes is the need
to increase productivity for global competitiveness. In arguing that
Canadian labour is less productive than US labour, mainstream economists
and government commentators omit any discussion of the fact that the
United States has moved to an even more "flexible" labour market with
higher levels of exploitation of labour than we have seen in Canada. US
union density is lower, employment is more precarious, and welfare
supports are meager in comparison to Canada. The US vision is the one
that neoliberals have for Canada, couched in the argument that Canada
needs higher levels of productivity.

The argument for increasing productivity is applied to production of goods and services, including public services. Not surprisingly, capitalist governments and international organizations, such as the International Monetary Fund (IMF), the World Bank, and the World Trade Organization

<footnote n="1">¹ *The Globe and Mail*, Saturday, 30 January 2010. I recently spent a sabbatical leave in Australia, which has a national productivity commission with this stated mandate: “The Productivity Commission is the Australian Government's independent research and advisory body on a range of economic, social and environmental issues affecting the welfare of Australians. Its role, expressed simply, is to help governments make better policies in the long-term interest of the Australian community. As its name implies, the Commission's focus is on ways of achieving a more productive economy - the key to higher living standards” (http://www.pc.gov.au/about-us). A key topic in the run-up to the 2010 Australian federal elections has been a debate on the need for increased productivity and “market effectiveness.”</footnote>

<footnote n="2">² *The Globe and Mail*, Wednesday, 15 September 2010.</footnote>
(WTO), constantly argue for increasing productivity.<fnref n="3" /> But labour unions tend to fall in line as well, and the International Labour Organization made productivity the focus of its *World Employment Report 2004-05*, repeating the common argument that improvements in living standards are contingent on increasing productivity (ILO 2005). The current chanting of the exhortation to increase productivity has become a sort of mantra.

Corporate restructuring since the financial crash of 2007 has also focussed on the argument that we need to increase labour productivity, while failing banks in various countries were being given millions of dollars in bailouts, and executives, whose actions had caused the crash, received large bonuses. Meanwhile, workers were being laid off and people were losing their homes as the housing bubble burst. State monies were given to Chrysler and General Motors to stave off collapse of the North American auto industry, which had been poorly managed for years, while workers were being told that the bailouts were contingent on workers in Canada and the United States making major concessions.<fnref n="4" /> And now there is a call to cut social programs to pay for state stimulus deficits, even though labour productivity is actually up in most OECD countries (Pollen and Jay 2010). The supposed need to increase labour productivity has now become part of the push for austerity in both the private and public sectors.

In the following pages, I will consider how the standard notion of productivity continues to be applied in the post-1970s neoliberal era. The post-industrial society thesis on work is considered as a continuing ideological basis for this practice. The degradation of labour thesis is then examined as a counter to that dominant ideology. While the essay is primarily a theoretical examination of the subject, I will provide some empirical illustrations of the impacts of neoliberal notions of productivity and work in the public services, in relation to social and public policy, the work of human service workers, and promotion of the public good rather than the capitalist profit motive. The essay will conclude with some suggestions for what Baran (1969) would call a more rationally oriented society.

<footnote n="3">³ A search of these organizations' websites reveals numerous articles dealing with issues of productivity and their relation to globalization and the New Economy.</footnote>

<footnote n="4">⁴ Demands for worker concessions were being made despite the fact that newspapers like *The Globe and Mail* were reporting that labour costs only amounted to seven percent of the cost of production of an automobile. See also Albo, Gindon, and Panitch (2010).</footnote>
## Productivity Crisis?

Is there really a crisis of productivity? Critics note that, with advanced technologies of late capitalism, we are producing vastly more with fewer workers. As well, the standard notion of productivity itself is problematic, especially when applied to public sector human services. In this essay, I will provide an analysis of this problem by drawing on insights from the *Monthly Review* school of thought, particularly a series of articles by Harry Magdoff and Paul Sweezy in which these issues were raised three decades ago (Magdoff and Sweezy 1979, 1980; Magdoff 1982a, 1982b). The purpose of this essay is to argue that the claims of a productivity crisis are ideological, and to describe the purpose of that ideology.<fnref n="5" /> Magdoff and Sweezy (1979, 12) tell us that the constant push to increase productivity “has become enshrined as a cardinal myth of the ruling ideology.” It is an ideological argument constructed under a number of guises, most recently as part of globalization and its New Economy, to exhort more work at lower wages out of labour forces around the world. We have seen this again with the post-2007 Great Recession, and now the state austerity drive (Magdoff and Yates 2009). At the core of this obsession with productivity is the economistic nature of production in capitalist society (Marx 1867; Amin 1978), which tends to favour a focus on quantity over quality in production of goods and services.

Contrary to the argument that we need to constantly increase productivity, Magdoff and Sweezy (1979, 12) stated: “We have the productivity and the resources, in fact, to produce all that would be needed to eliminate poverty and provide everyone with fuller and richer lives” and given the world’s problems, we should “be more concerned with *reducing* than increasing productivity.” This was a relevant argument thirty years ago, and is even more so today. Even the IMF (2002) tells us:

> During the 20th century, global average per capita income rose strongly, but with considerable variation among countries. It is clear that the income gap between rich and poor countries has been widening for many decades. The most recent *World Economic Outlook* studies 42 countries (representing almost 90 percent of world population) for which data are available for the entire 20th century. It reaches the conclusion that the output per capita has risen

<footnote n="5">⁵ However, as Quiggin (2010, 3) tells us, “Politically dominant elites don’t see themselves as acting ideologically and react with hostility when ideological labels are pinned on them. From the inside, ideology usually looks like common sense.”</footnote>
appreciably but that the distribution of income among countries has become
more unequal than at the beginning of the century.

If the IMF, one of the prominent institutions entrusted after World War II
with protecting and promoting the capitalist world economy, readily
admits that global production and income rose strongly over the 20th
Century, and that unequal distribution is the problem, why do we so often
hear that there is a problem with economic growth and labour
productivity? If the global economy produces more commodities than can
easily be sold on the world market,<fnref n="6" /> is there really a crisis of productivity?
When we see cities trying to cope with the piles of garbage spewed out by
our global consumer society (Brennan 2003), what logic says we must
produce even more? Why is there an incessant drive to increase
productivity in the face of massive wealth alongside poverty, inequality,
social and labour market polarization, environmental destruction and
waste? And now workers are expected to make more concessions, and
citizens are expected to accept a state austerity drive.

A rational person might well conclude, along with Magdoff and Sweezy, that the cry of a productivity crisis is a false alarm.<fnref n="7" /> For individual capitalists there is a rationality to constantly increasing productivity, because they must compete with other capitalists for market share. They are thus always searching for ways to cut production costs and increase output, despite the fact that markets may be glutted. But, as Marx pointed out, the capitalist system is rife with contradictions. However, from the point of view of satisfying human needs, the capitalist logic is irrational. As the final declaration of The World People's Conference on Climate Change and the Rights of Mother Earth held 20-22 April 2010 in Cochabamba, Bolivia so aptly states:

> The capitalist system has imposed on us the logic of competition, progress, and
> limitless growth. The regime of production and consumption seeks profit

<footnote n="6">⁶ We saw this problem in recent years with the stockpiling of commodities during the Asian economic slowdown and the problem of what economists call a “capital overhang” (Sweezy et al. 2002), and then again with the Great Recession following 2007 (Foster and Magdoff 2009).</footnote>

<footnote n="7">⁷ Baran and Sweezy (1966) and other *Monthly Review* authors long ago established that there is a stagnation tendency under monopoly capitalism, but this is not the same as a productivity problem. The stagnation tendency relates, in fact, to a problem of overproduction and the tendency of the economy surplus to rise, so that there is a lack of sufficiently profitable investment opportunities, thus giving rise to all sorts of waste investment under monopoly capitalism.</footnote>
without limits, separating human beings from nature and imposing a logic of domination upon nature, transforming everything into commodities: water, earth, the human genome, ancestral cultures, biodiversity, justice, ethics, the rights of peoples, and life itself.<fnref n="8" />

If our concern is to promote social development and well-being we should take an approach to productivity quite different than the standard market-oriented one, in which productivity is seen to be a quantitative process, not a qualitative one, with a focus on outputs, not outcomes. We should focus mainly on *what* is being produced and *why*, not *how much*. Our focus should be on human needs and human rights, which would include the right of present and future generations to a clean environment based on sustainable development (Foster 2009). Magdoff and Sweezy (1979, 12) tell us that the constant push for greater productivity “is to satisfy the crazy rationality of capitalism”, not the public good, and brings to mind Galbraith’s (1994, 52) comment on the “mass escape from sanity by people in pursuit of profit.” We can add that the current push for state austerity has nothing to do with the public good, but is intended to shift the burden of the economic crisis onto the backs of the working class.

## What Is Productivity?

Before turning to our theoretical discussion, let us consider briefly the problems of defining and measuring productivity. *Webster's New World Dictionary* (1994) defines “productive” as “of or engaged in the creating of economic values, or the producing of goods and services.” *The Penguin Dictionary of Economics* defines “productivity” as:

> The relationship between the output of goods and services and the inputs of resources (*factors of production*) used to produce them. Productivity is usually measured by ratios of changes in inputs to changes in outputs using *index numbers*. For example, changes in labour productivity, the most common measure, are measured by an index of man-hours divided by an index of output.

But the *Penguin Dictionary* goes on to tell us: “Comparisons between labour productivity in different sectors of the economy, for example between *capital-intensive* manufacturing and *labour-intensive* services, need to be interpreted with care for the same reason” (Bannock *et al.* 1987,

<footnote n="8">⁸ Notes From The Editors, *Monthly Review* 62, no. 2 (June 2010).</footnote>
330). Nevertheless, as Magdoff and Sweezy (1979, 1980) showed when alarm bells went off about a supposed productivity slowdown in the US economy in the 1970s, many economists and state agencies made exactly these mistakes of glossing over differences between industries with different levels of capital intensity, and between manufacturing and services. Magdoff and Sweezy (1980, 6) tell us that there are some service jobs that are routine and repetitive where productivity measures might have some meaning, but go on to ask “how would one go about measuring the productivity of a fireman, an undertaker, a teacher, a nurse, a cashier in a supermarket, a short-order cook, a waiter, a receptionist in a lawyer’s office?” Magdoff and Sweezy (1979, 12) note one problem is that the qualitative is so intertwined with the quantitative.

What needs to be understood is that these data do not take account of the *quality* of the output; at best, they measure only quantity. Significant as this omission may be in the measurement of goods production, it is especially serious in the case of services. For example, the productivity of educational institutions rises as the class load of teachers is increased. But at the same time the quality of education is bound to decline since each teacher has to deal with more pupils and can devote less attention to each one. Are teachers then producing more or less? Similarly, the closing down of a hospital in a neighbourhood and the transfer of patients to a hospital in a distant area may appear to boost the productivity of the hospital workers, but at the cost of the quality of medical services. Measures of quantitative output in these and other service occupations are of necessity biased and can only have an ambiguous and limited significance.

Overall, Magdoff and Sweezy (1980, 6) argue that “there is no such thing as a straightforward or ‘true’ measure of productivity.” The essence of their argument was that the standard measure of productivity is flawed not only due to the complexity issues raised above, but because the measure of output used is one that relies on market prices. The presumption is that labour input in terms of hours worked can be measured in output according to market prices attained for the goods or services produced. But as they pointed out, because they are often not based on actual production costs, market prices bear no clear correspondence to material or labour inputs. This approach becomes especially problematic when applied to the services, because it is a quantitative measure and there is no way to translate the qualitative nature of most service work in quantitative
terms.<fnref n="9" /> The issue becomes even more problematic when applied to public services that are not intended for trade on the market. In measuring productivity, agencies such as Statistics Canada are careful to distinguish what they call the business sector from government and non-commercial activities (Statistics Canada 2010; Baldwin 2004). But this has not stopped some economists and politicians from using the standard definition of productivity as an ideological weapon, especially in the era of neoliberalism when deregulation and privatization of state services have become the name of the game, as the discussion of human service work below reveals.

Magdoff and Sweezy (1982) also identified the issue of the increasing financialization of capitalism. With respect to understanding productivity comes the problem of distinguishing the real economy from what some economists call the paper economy (Stanford 1999). A particular problem in the current era of monopoly finance capital, as we have seen in the recent financial meltdown, is that much activity on the stock market has nothing to do with production of actual goods and services (Foster and Magdoff 2009), which further complicates any clear understanding of productivity.

The main reason why one narrow definition of productivity holds sway is because of the ideological dominance of the classical liberal, and now neoliberal, theory of the economy and economic growth. The standard definition of productivity is ideologically derived from what can be called the growth imperative that is endemic to capitalism (Altvater 2002). The drive to promote economic growth for capital accumulation is incessant. As Marx (1876, 742) so colourfully put it in the first volume of *Capital*, "Accumulate, accumulate! That is Moses and the prophets!"<fnref n="10" /> The result is an underlying economism in capitalism, and equation of development with economic growth by classical liberal and neoliberal theorists. This issue

<footnote n="9">⁹ Those who have read Robert Persig's (1974) *Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values* will recall that the theme of the book is the academic protagonist's dilemma of trying to understand whether "quality" can even be defined, let alone measured. This philosophical problem led the protagonist to a mental breakdown, but apparently poses no problem for the economists of capitalism.</footnote>

<footnote n="10">¹⁰ For Marx, productivity plays a significant role in capitalist's drive to accumulate, thus the productiveness of labour is important and becomes contested terrain. As Wallerstein (2011, 32) puts it: "The driving underlying objective of capitalists in a capitalist system is the *endless* accumulation of capital, wherever and however this accumulation may be achieved. Since such accumulation requires the appropriation of surplus value, this drive precipitates the class struggle."</footnote>
caused a major debate in the sociology of development in the 1970s when
dependency and world systems theorists were challenging the precepts of
modernization theorists.

An important part of the critique of modernization theory was that
economic growth was being conflated with development. In his discussion
of this Mason (1997, 407) asks: “What was development?” He answers:
“‘Development’ was the promise of universal economic growth along the
routes pioneered by the leading countries of the West. ‘Growth’ implied
steady economic expansion and sophistication in the form of
industrialization.”<fnref n="11" /> However, in the late 1960s critical analysts had noted
that growth is a quantitative process, involving mainly the extension of an
already existing structure of production, while development suggests
qualitative change, the creation of new economic and non-economic
structures. This distinction became important enough in critiques of
development that in the 1970s even the World Bank began to package its
development assistance programs as being more than just economic
growth. World Bank literature adopted the terminology of a “basic needs”
approach to development being advocated by many non-government
organizations in the 1970s, which defined basic needs as moving beyond
simply food, shelter and clothing (for examples, see World Bank 1980a,
1980b). But the changes to World Bank programming were largely
rhetorical, a practice which continues with the Bank espousing poverty
reduction as a goal, while it follows its sister institution the IMF in
promoting neoliberal structural adjustment programs that emphasize
privatization of state services and concentration on increasing productivity
to promote economic growth (Black 2007). In short, dependency theory
had defeated modernization theory in academia, but not in the realm of
public policy.

With a growing crisis of global capital accumulation after the 1960s,
transnational corporations, their respective states and supporting financial
institutions were already beginning a response to the crisis in what came
to be called globalization in the 1990s. Sweezy *et al.* (2002, 2) observe:

<footnote n="11">¹¹ The core of the modernization argument was captured by W.W. Rostow (1991) in his book *The Stages of Growth: A Non-Communist Manifesto*, first published in 1960, and subsequently republished in various editions. Rostow argues that there are five stages that societies go through in developing: (1) the traditional society, (2) the preconditions for take-off, (3) the take-off, (4) the drive to maturity, and (5) the age of high mass consumption. Not only is this depiction purely economistic, it encompasses the notion that production is for and should be measured as success in producing commodities for consumption, therefore the standard measure of productivity.</footnote>
"This notable [post-1960s economic] slowdown has also taken place alongside a major leap in technology (the so-called New Economy) and the widening globalization that increased exploitation of the third world." This involved what some authors called a new international division of labour (NIDL; Frobel et al. 1980).

Accompanying these economic changes were changes in public policy which, with the recessions and long-wave economic downturn, took a turn against post-World War II Keynesianism and a shift towards a neoliberal free market approach (Teeple 2000). The elections of Margaret Thatcher in the United Kingdom in 1979 and Ronald Reagan in the United States in 1980 marked a shift in the role of states in the world economy, arguably a return to unfettered capitalism, which was being espoused as a good thing. In terms of post-World War II development theory, in official policy and practice this brought the resurgence of the assumptions of modernization theory. The neoliberal 1980s thus witnessed an acceleration of the new international division of labour, and state policies of privatization, deregulation and cutbacks to state welfare services, now being pushed with a vengeance with the Great Recession austerity campaign (Merret 1996; Sears 1999; McBride 2005; Broad and Hunter 2009).<fnref n="12" /> The neoliberal era also witnessed a revival of discussions of post-industrial society, which underlies the ostensible need to cut production costs and increase productivity to enhance competitiveness.

## The Coming of Post-Industrial Society?

In the early 1970s, changes producing what has more recently been called the New Economy gave rise to notions that industrial capitalism as we knew it was being superseded. One of the best-known works from this era is Daniel Bell's (1973) book *The Coming of Post-Industrial Society*. The gist of Bell's argument was that new technologies were producing a shift from a manufacturing-based society to a service society, that blue-collar workers of the old industrial society were being supplanted by "knowledge workers" in the post-industrial society, that knowledge was the ascendant form of capital ruling this society, and that workers who possessed this knowledge capital would become the favoured class in this new society. In one sense, this was a repackaging of the old post-World War II mainstream

<footnote n="12">¹² The 8 November 2010 issue of *Maclean's* magazine has a cover story entitled "Europe Throws A Tantrum: A Pampered Continent Protests the Rollback of Its Lavish Welfare State." The propaganda against European labour and popular struggles and against the welfare state is obvious.</footnote>
sociological notion that we were all becoming middle class, a myth that has
resurfaced lately with right-wing attempts to outlaw collective bargaining
in US states like Ohio and Wisconsin.<fnref n="13" /> In 1955 Bell himself had written
about “the disintegration of capitalism,” but by the 1970s his tune had
changed (Lavaca Collective 2007). The post-industrial society thesis also
underpins discussions of the New Economy.

A later version of Bell's thesis, touting the merits of the "knowledge society," appears in management guru Peter Drucker's (1993) book *Post-Capitalist Society*, with the discussion most recently surfacing with respect to knowledge workers in the information age. Drucker's perspective, which has a decidedly neoliberal slant, provides a useful summary of the New Economy thinking that lingers on, despite the 2001 dot-com crash and post-2007 recession (Broad and Antony 2006). His book also captures and applies to the subject of productivity the thinking of a post-1970s trend called the New Public Management (NPM) typified by the work of Osborne and Gaebler (1992). They list ten features of what is called New Public Management: (1) the catalytic role of government, (2) empowerment of citizens, (3) efficiency and economy in performance, (4) emphasis on goals rather than rules, (5) customer-oriented government, (6) competitive government, (7) anticipatory approach, (8) enterprising government, (9) decentralization of authority, and (10) emphasis on the market mechanism. These features belie the neoliberal basis of NPM thinking, emphasizing market liberalism, privatization, contracting out, and the conceptualization of citizens as consumers.<fnref n="14" /> The focus of NPM is on management, not policy, with an emphasis on productivity and cost effectiveness. These themes are clear in Drucker's discussions of productivity.

Drucker (1993, 82) claims:

> The new challenge facing the post-capitalist society is the productivity of knowledge workers and service workers. To improve the productivity of knowledge workers will in fact require drastic changes in the structure of the organizations of post-capitalist society, and the structure of society itself.

Noting that three quarters to four fifths of the workforces in the developed countries are employed in the service sector, Drucker (ibid, 83) exclaims:

<footnote n="13">¹³ Of course, the growing importance of white-collar service workers had already been noted by Mills (1953) two decades before.</footnote>

<footnote n="14">¹⁴ For a discussion of these traits of neoliberalism see Broad and Antony (1999).</footnote>
note as well that, at the same time Drucker was writing, critical authors
were taking a quite different view of the restructuring that was going on in
health care (for examples, see Armstrong *et al.* 1994; Armstrong and
Armstrong 2008).

Drucker (1993, 93, 95) refers to the use of outsourcing to increase
service workers' productivity as “revolutionary,” stating: “Outsourcing is
necessary not just because of the economics involved. It is necessary
because it provides opportunities, income, and dignity for service
workers.” He further says the managers of outsourced companies “are
willing, even eager, to do the hard work needed to improve productivity.
Above all, they take the people who do such work seriously enough to
challenge them to take the lead in improving their work and its
productivity” (ibid, 95). But following Drucker's own description, this
sounds like the old tactic of speedup, with case studies revealing much of
this outsourced service work to be low paid and insecure, and providing
little opportunity or dignity for the workers involved (Aguiar and Herod
2006; Pupo and Thomas 2009). Drucker himself defines this work as low
paid and low skilled, and suggests that we need to narrow the gap between
high paid, high status knowledge work and low paid, low status service
work in order to avert “a new class conflict.” But this is too often being
done by lowering the pay and status of high-status work – sometimes
creating more casual labour, other times exhorting unpaid overtime out of
workers (Broad 2000; Broad and Antony 2006).

While noting that in the Taylorist notion of manufacturing work the
worker serves the machine, Drucker (1993, 85) says:

> In knowledge work, and in practically all service work, the machine serves the worker. The task is not given; it has to be determined. The question, 'What are the expected results from this work?' is almost never raised in traditional work study and Scientific Management. But it is the key question in making knowledge workers and service workers more productive.

As I noted above, this signals a significant problem in applying the
standard notion of productivity to service work, especially human services.
Drucker's formulation is not very fruitful here, because he tends to conflate
outcomes (results) with outputs, meaning the drive to increase the
quantity of work done in a given hour of work, as with the standard
definition of productivity, thus revealing that Drucker is not really
envisioning a post-capitalist society. And despite the promise of the new
technologies, they tend to be applied with the goal of increasing the
quantity of output, in both goods and services production, often displacing
workers in the process. A common complaint by workers regarding use of
the new technologies in workplace restructuring, as with the Japanese
notion of “kaizen” (continuously striving for greater productivity), is that
workers often find their efforts on work teams to be rewarded by
management reducing the number of workers as output increases (Schenk
and Anderson 1996, 1999; Huws 2003, 2006). This, of course, is just
another form of speedup. Symptomatically, along with this, globalization
has brought a revival of labour-intensive sweatshops and informal
economy in the First and Third Worlds (Sassen 1998; Tabak and Crichlow
2000).

The Degradation of Labour

The year after Daniel Bell's *The Coming of Post-Industrial Society* was published came another book with a radically different reading of the emerging trends. This was Harry Braverman's (1974) *Labor and Monopoly Capital*. Braverman revisited Marx and Engels' theories about capitalist society and, using the subtitle of "The Degradation of Work in the Twentieth Century," observed that changes in production were not producing a qualitatively new form of society, nor was the lot of most workers becoming pleasurable and stimulating. Late 20th Century monopoly capitalism was, in fact, producing both old and new forms of degraded labour. There are still exploited blue-collar workers about, and many of the now numerically dominant service workers find themselves in degraded and/or deskilled job situations (Aguiar and Herod 2006; Pupo and Thomas 2009). Braverman's work was widely discussed and debated, initiating a new wave of marxian labour process and labour market studies. One thing that Braverman noted was the continuing adaptation in late 20th Century capitalism of the principles of Scientific Management developed by Frederick Taylor in the late 1800s. Braverman was successful in showing that the fundamental principles of capitalism still impacted structures of work. Too much work still involves alienated labour, with levels of stress and negative health outcomes running rampant (Rinehart 2006). In discussing the growth of "second jobs," Braverman (1975) also foresaw the casualization of labour as another means of cutting costs and increasing labour productivity, and the growth of this precarious employment has increased greatly since Braverman wrote about it in 1975 (Broad 2000; Pupo and Thomas 2009).

In addition to Marxist studies of work like that of Braverman, there
came the emergence of social democratic responses to Bell's post-
industrial society thesis with the counterargument that “manufacturing matters,” that the real base of productive growth is found in goods production, not services. One of the best-known works in this genre is Cohen’s and Zysman’s (1987) *Manufacturing Matters: The Myth of the Post-Industrial Economy*. This argument continues in debates about the real economy versus the paper economy (Stanford 1999).<fnref n="16" />

Turning to the much-celebrated impact of digital technologies on productivity growth, we see that the services have apparently contributed little. Sweezy et al. (2001, 6-7) cite studies showing “that the effect of digital technology on productivity was small on the whole; such advance as there was took place almost entirely in the manufacture of durable goods.” They conclude: “The digital revolution certainly is a technological revolution with widespread effects; the important thing from an economic standpoint, however, is that it is not epoch-making, as in the case of the steam engine, the railroad, and the automobile.”

There was clearly economic expansion in the 1990s based on both an increase in profit rates and investment in new information technologies. But, as Kotz (2003, 23) explains: “It was the historical reversal, after 1973, of the long post-Second World War trend of rising real wages, and its replacement by a trend of declining wages, that is the main factor accounting for the long-term rise in the rate of profits in the 1990s.” He further argues: “Neoliberal restructuring between the late 1970s and the 1990s can indeed claim credit for this” (ibid). Neoliberal regimes reduced the bargaining power of workers by attacking trade unions, deregulating business and lowering barriers to international trade and investment. “This is not the aspect of neoliberalism that its advocates advertise, but it was effective in raising the rate of profit” (ibid). The profit rate increase was also assisted by cuts to taxes on capital, as part of the neoliberal shift of state functioning away from Keynesian social welfare to more explicitly promoting capital accumulation, including privatization and deregulation of the economy. Significant in this shift has been the aformentioned increasing financialization of capitalism (Magdoff and Sweezy 1982).

With neoliberalism, we are constantly being told that we must improve our individual and collective productivity to be more competitive on the global market. In the workplace this means constantly pushing workers to exceed production targets by “re-engineering” production processes. Meanwhile, neoliberal governments have shifted from the

<footnote n="16">¹⁶ Internet web search reveals a variety of sites, supported by both business and labour, devoted to the theme that “manufacturing matters.”</footnote>
Keynesian era trend towards ensuring social rights to promoting individual "responsibilities," so that social assistance is being replaced by "workfare" as we all are being exhorted to increase our economic productivity (Broad and Antony 1999; Broad and Hunter 2009). We have witnessed a recommodifiction of labour and the state, which had been decommodified to some degree under the Keynesian welfare state (Esping-Andersen 1990; Teeple 2000). But with the constant push towards commodification of everything under capitalism (Wallerstein 1995; Broad and Hunter 2009), the market logic has been re-applied to the state under neoliberalism. So not just deregulation, privatization and contracting out occur, but the logic of private sector accumulation is applied to the public sector, as seen with New Public Management. Most recently, the attack on social welfare comes in the neoliberal push for austerity measures to pay for state bailouts of capital. Central to this is the drive to increase productivity in private and public sectors. At my own university the search for "efficiencies" has become very popular amongst the administration.

## Productivity in the Social Services

It was noted in the discussion of Drucker's writings above that, despite cautions by critical analysts like Magdoff and Sweezy, the standard narrow notion of productivity commonly applied to the manufacture of commodities is often applied to production of services, including public services. What does this mean for the workers and the services they provide? Studies of technological change and restructuring of human service work in my home province of Saskatchewan, Canada and elsewhere lead to the conclusion that, despite frequent worker empowerment rhetoric, a top-down approach to increasing the output of workers per hour is generally used when employers talk about increasing productivity in the social services.<fnref n="17" /> Here again, productivity is seen to be a quantitative process, not a qualitative one, with a focus on outputs not outcomes. It is not a matter of whether services people need are being provided well, so much as a matter of whether caseloads and costs have been reduced as part of the ongoing neoliberal state austerity agenda. We see here an

<footnote n="17">17 My discussion here is based on secondary sources cited below, and primary research. The primary data presented below is drawn from interviews with provincial and federal human service workers in the province of Saskatchewan, Canada inquiring into their conditions of work and how notions of productivity are applied to restructuring that work. This research was conducted in the early and mid 2000s. See, for example, Foley and Miller (2009).</footnote>
extension of the application of Scientific Management principles to social service work. As Braverman (1974, 309) noted:

> From the beginning, office managers held that all forms of clerical work, not just routine or repetitive ones, could be standardized and “rationalized.” For this purpose they undertook elaborate studies of even those occupations which involved little routine, scores of different operations each day, and the exercise of judgement.... In this way, management began to assert in the office its hitherto unused or sporadically exercised right of control over the labour process.

Beginning in the 1970s, observers noted that the labour process of human service workers was being restructured using Taylorist methods. Social workers, for example, found that their work was being paced and specific tasks classified according to “case characteristics” and “client types.” Patry (1978) examined a pioneering venture along these lines that began in Texas in the mid 1970s, and has now spread throughout North America and Europe. In Texas, an industrial engineering firm, *Interlock*, was hired by the state government to restructure the work of social workers. The goal was, “in the words of its proponents, *an extension of the classical industrial definition of productivity (output over input) to the social services*” (ibid, 31). Patry (ibid, 35) says: “One of the engineers working on the project complained to me that presently workers ‘show no respect whatsoever for productivity,’ spending as much time as is needed to take care of an individual client’s needs. Obviously, this had to be changed.”

Similar to what Drucker advocated for nurses, *Interlock* went about restructuring by: (1) standardizing work methods, breaking it down into clerical functions and personal interaction between social workers and clients; (2) analyzing a number of “case characteristics”; (3) running a multiple regression analysis on the resulting data to discover processing time; and (4) developing a “case classification scheme” for classifying clients into four distinct groups with assigned processing times. The objective was to standardize the time workers devoted to particular clients according to the case classification scheme. The workers’ time was further divided into “productive” and “non-productive” time, and charted on an “actual productive chart.” Patry (ibid, 36) was told that the key to the study “was what was termed the ‘Principle of Economic Motion,’ that is, the shifting of low-level skills to clerks and the de-skilling and fragmentation of social worker functions.” The overall goal was to cut costs by reducing the number of workers needed and by cutting caseloads. This approach has
since been applied across the human services, with the work increasingly
made to fit the new computer programs, sometimes through call-centre
services rather than person-to-person services.<fnref n="18" /> And, as in many areas of
work, harnessing workers to the new machines often means that they are
being tied up in administrative machine-tending, at the expense of working
with clients. In this regard, Drucker is certainly wrong that the application
of new technologies to service work serves the workers.

With neoliberalism, this kind of state restructuring became
standard practice in the 1980s and 1990s. Jones provides a case study of
its impact on social workers in Great Britain under Margaret Thatcher, and
continuing under Tony Blair's New Labour (Jones 2001). In addition to
restructuring work processes along lines that Drucker would approve,
British social workers have been subject to what Parker and Slaughter
(1994), in their US-based studies of the re-engineering of work, call
"management by stress." One result is that, with high caseloads and
insufficient numbers of workers, harried workers require a seemingly
inordinate number of sick leaves. Similar to the situation in health care
discussed above, Jones (2001, 551) says:

> Social workers talked of how commonplace it was to see colleagues in tears. I heard stories of social workers throwing all their papers on to the floor and walking out, of people locking themselves in rooms or just disappearing from the office for hours on end. Going sick for some time each week or month seemed routinized in many agencies and was one of the most cited examples of a stress survival strategy.

Meanwhile, the work is increasingly being contracted out. One social
worker told Jones (2001, 552):

> We are now much more office based. This really hit home the other day when the whole team was in the office working at their desks. We have loads more forms which take time to complete. But we social workers also do less and less direct work with clients. Increasingly the agency buys in other people to do the direct work and we manage it.

In our own interviews with social workers in Saskatchewan we have
frequently heard the complaint: "We don't get to do social work, we just
process people!" A study of the situation of social workers in three service

<footnote n="18">¹⁸ We have seen this in the case of Saskatchewan, and in other jurisdictions as well.</footnote>
agencies in Ontario revealed similar problems resulting from funding cutbacks and overwork (Baines et al. 2002). A community care worker in Britain told Jones (2001, 554):

> Social work is more and more about numbers with managers wanting to hit so many targets which involves turning cases over quickly. They want a case in, sorted and pushed out. We have many unallocated cases so there is great pressure on everyone to take the maximum number of cases. I think the emphasis on turnover is cosmetic, to make it seem that we are giving a service to the public. But we don't give anything. We have nothing to give.

Two themes arose in our interviews with state social workers in Saskatchewan: (1) their workload is too great; and (2) the department and, consequently, social workers' work is budget driven. When asked if they are finding less time to "do social work," one worker said: "Well, actually, management will say they are having us do more social work, that the caseloads have been lowered. My experience is that is not what the reality is. Yes, our caseloads may be a few lower, but administratively we are swamped." And, as with the British case, Saskatchewan social workers also cope with stress by taking sick leaves.

The neoliberal obsession with budgets has an obvious impact on all the social workers we interviewed. One said: "I think part of the reason we are swamped is that our department is driven by finance." Another commented: "The people making the policy changes have been removed from the front line so long they don't know reality. Their bottom line is money and stats and it doesn't filter down to us in what we need." A third noted: "They measure success by closing cases." Jones (2001) noted that British governments have been infatuated with the idea of getting welfare recipients into waged employment as quickly as possible, and this holds for Saskatchewan governments as well. One worker we interviewed said: "The focus is to get people out to work. But if there are no jobs for them after a certain period they will revert back to where they were." So, apropos of neoliberalism, it is not a quality outcome that is the measure of success, but a quantitative measure of the numbers of clients removed from the state's welfare roles.

Most recently, the Conservative government in Great Britain has begun an aggressive attack on the welfare state, part of its austerity drive to cut budgets and push service users onto the inhospitable labour market. Social workers in the UK are protesting these moves, both because of the impact on their work, and because of the erosion of services (Stringer
2010; Hamer 2010; Sorman 2010; McGregor 2010). In Saskatchewan, the conservative Saskatchewan Party government is busy instituting an austerity program using what it calls the “lean methodology,” which fits with the New Public Management notion of government. In its March 2010 budget the Saskatchewan government announced a 15 percent cut to public service employment over four years. The negative impact on employment and ability of social workers in the province to deliver services will be obvious (CBC News 2010a; CBC News 2010b).

Unfortunately, neither frontline workers nor their clients are usually asked what should be done to improve human service workers' ability to provide quality public services (McKenzie and Wharf 2010). One of the participants in our study said: "We are surveyed to death and we are saying, 'Listen to the frontline staff,' and it is still not being done." As in the Texas case studied by Patry (1978), moves to restructure the labour process of these workers is a top-down process involving outside consultants with clearly quantitative notions of productivity superseding qualitative concerns with service delivery. This takes us back to the question of when the drive to increase productivity is ever satisfied.

## Conclusion: How Much Is Enough?

The question that clearly arises is how much productivity is enough? This question becomes especially urgent in light of the global ecological crisis (Foster 2009). Some important work has been done in developing new ways to conceptualize an economy that would satisfy human needs and environmental sustainability. Suzuki (1989, 1998) has argued for utilization of economic indicators other than gross national product (GNP) or gross domestic product (GDP) as the measures for economic performance. He argues that we need a measure that does not focus just on economic growth in a quantitative way, but a more qualitative approach that includes calculating negative points for such things as environmental costs. Colman (1999; Colman et al. 1999) and others have argued that the old measures should be replaced by a "genuine progress indicator" (GPI), which takes into account paid and unpaid work and the question of whether human needs are being met.<fnref n="19" /> Many authors in the sociology of work have argued that we need a socio-economic system that gives genuine priority to the needs of workers and their conditions of work. The imperative of our current socio-economic system for promoting

<footnote n="19">¹⁹ These and other proposals were recently discussed by participants at the recent degrowth conference held in Paris in April 2008 (Kennedy 2010a).</footnote>
accumulation of capital as its main goal tends to subvert attempts to articulate and implement alternative approaches to economic development. But there is continuing advocacy of more humanly and ecologically sensible approaches in fora such as the World Social Forum and the recent conferences on "degrowth" in Paris and Barcelona (Kennedy 2010a, 2010b). But, of course, Foster (2011) correctly asks if degrowth is even possible under capitalism.

As to the obsession with worker productivity, we must stress that people do not have solely work lives, but personal lives as well. Most people do not consciously choose to "live to work," but would rather "work to live." However, this notion is contrary to the neoliberal ideals of our current socio-economic system, in which people are viewed only as "economic beings" – as producers and consumers. This notion is taken to the extreme in an article on homelessness published in the *Journal of Business Research*, wherein homelessness is seen to be a problem primarily because the homeless make poor consumers (Hill 1994). But what if we suggest that human beings are not "born to shop"? This, of course, is a question that cannot be entertained within the dominant ideology that, along with giving us the Protestant work ethic, construes human beings as *homo consumens*. Baran and Sweezy (1966) wrote about the incredible waste under monopoly capitalism, and Magdoff and Sweezy repeated this theme in the articles on productivity cited above. Braverman (1974) wrote about the expansion of "the universal market," and Wallerstein (1995) has referred to the ongoing "commodification of everything." In the mid-1970s social psychologist William Leiss (1976) published a penetrating study entitled *The Limits to Satisfaction*, on the growing inability of people to distinguish *wants* from *needs* due to the constant barrage of advertising and marketing. Since the mid 1970s this issue has become even more problematic, to the detriment of humanity and the planet. We should note, of course, that capital has been quick to jump on this issue and launch a wave of green marketing (Dardozzi 2010).

It has been noted before that capitalism is an irrational system, with an ideology that both veils the true purpose of production in capitalist society, and forecloses discussion of alternatives (Baran 1969; McChesney and Foster 2010). Based on the conceptual work of Marx and Engels, Colletti (1972) explains how ideological systems have been used historically by ruling powers to obfuscate the manner in which hierarchical social structures benefit the dominant classes through exploitation and oppression of the working classes. In this sense, true liberation would include removing ideological structures so that patterns of social relations
are apparent. This is one of the significant challenges facing us, particularly
in the mature capitalist countries where people have been so bought into
the capitalist market system. Amin (1980) discusses how people are
subject to economic alienation under capitalism. So a process of
disalienation is required for human liberation.

An important thing we need to do is point out the historical specificity of capitalism. In the long run of history, the drive to work longer hours and produce increasingly more is a relatively recent phenomenon, a product of capitalism and its Industrial Revolution. Prior to the Industrial Revolution people worked long hours in certain seasons, but also had slack times. In fact, habituating people to wage labour and punching the clock was a long coercive process that entailed a good deal of what is now called social re-engineering by some authors.<fnref n="20" /> Some would argue that the increases to production brought by the Industrial Revolution initially did require increasing labour intensity and longer hours of work, though others question this notion (Noble 1995). But with the current global capacity for production, the idea that people need to work harder, and often overtime, is ludicrous. This is especially evident when we see production increases continue alongside increasing unemployment and underemployment – what has been called “jobless economic growth” (Barnett 1993). The ILO has declared this to be one of the most significant outcomes of the most recent recession, along with the inferior quality of much work throughout the world.<fnref n="21" />

Since we are now able to produce phenomenally more goods and
services with fewer workers due to new technologies, perhaps it's finally
time to follow Paul Lafargue's (1883) lead and propose something a bit off
beat. Why don't we all work *less* and produce *less*? Let's *all* work part time,
but on *our* (i.e. human) terms. Is this a crazy idea? In the current political-
economic climate it would seem so. But in the long run of history it makes
perfect sense. It's time to redefine notions of productivity, and show that
current notions of working time as “standard” and “non-standard” are
historical constructs and not written in stone. In Europe, trade unions have
presented the demand for a four-day workweek as an extension of the
historical struggle for shorter hours (Hayden 1999, 2003). Labour in North
America is a bit behind in this struggle, but the idea has gained interest.

Perhaps the current dilemma is one of a loss of human(e) values.
We are constantly told by business leaders and governments that we

<footnote n="20">²⁰ On habituation of workers to the clock see Thompson (1967) and Menzies (2005).</footnote>

<footnote n="21">²¹ See the ILO website, www.ilo.org, for various statements and studies of these issues.</footnote>
cannot do this or that, or cannot afford this or that, because of the
economy. This cry has reached fever pitch with the current neoliberal push
for austerity. Former Canadian Prime Minister Paul Martin once told us
that governments must cut their spending because having deficits violates
"the laws of capital markets" – as if these are natural laws akin to the law of
gravity.<fnref n="22" /> But they are not. Economies and economic laws, if they exist, are
human inventions. They serve (at least some) human purposes. And if they
are not serving us well, we can change them, and develop new ways of
doing things.

If human values are to be central to our model, the economy must
be re-invented. We must begin to ask once again why we work. Work must
be seen to have value beyond producing commodities for profit. We must
see work as a means to improve our *human* lives. So work must be socially
useful, not harmful, and must have intrinsic value. There are plenty of
academic studies and government reports that recognize this issue and
articulate alternatives, but it takes political action and political will to see
results in practice.<fnref n="23" />

As for public services, we need to re-assert the idea of social welfare
and the global commons. Our goal should be to enhance the role of
government in promoting social development and well-being. This means
countering neoliberalism and developing new policy and programs to
deliver better education, health care and social services for the public. For
human service workers, this implies being genuinely involved in the
planning and development of services, and providing sufficient personnel
and resources to deliver *quality* services. In response to neoliberal
objections that we cannot afford to do so, we must reply that governments
seem to be able to find plenty of resources to give financial assistance and
tax breaks to corporations, to build armaments and fight wars, and to
"explore" outer space, while global space and human inner space is too
often allowed to fester and decay.

The central problem in promoting social change is one of dealing
with the *structure* of the capitalist world system with its new international
division of labour. We must keep in mind that it *is still* a capitalist socio-
economic system, not some post-industrial or post-modern utopia. It is the
incessant drive to accumulate capital inherent in this system that says we
have to produce more, faster, and at lower costs of labour and resources,

<footnote n="22">²² *The Globe and Mail*, 18 October 1994.</footnote>

<footnote n="23">²³ In Canada we have seen countless government commissions and reports that too often sit and collect dust.</footnote>
with no apparent end in sight. Under capitalism the question of "how much is enough" has no answer. But since circa 1970 we have been in a structural crisis of the world capitalist system. At present, right-wing political economic tendencies prevail in the world system, but the crisis opens windows of opportunity for those on the left.

Wallerstein (2011) says we are currently witnessing a contest between two forces. One includes proponents of the spirit of Davos (the World Economic Forum), who want a different system, but one that retains the essential features of capitalism – hierarchy, exploitation and polarization. The other includes proponents of the spirit of Porto Alegre (the World Social Forum), who want a relatively democratic and relatively egalitarian system. Taking the side of the second group, Wallerstein (2011, 37) suggests some short-term and medium-term actions we can take: "In the short term, one consideration takes precedence over all others – minimize the pain." This means doing all we can to help those suffering under current conditions. At the same time, we need to maintain the five medium-term goals of (1) emphasizing serious intellectual analysis, and not just by intellectuals, (2) rejecting economic growth and replacing it with decommodification, (3) creating local and regional self-sufficiencies as part of an "alterglobalization" movement, (4) ending the existence of foreign military bases and stopping waste of the world's resources on military uses, and (5) ending fundamental social inequalities. He notes, of course, that everything is contingent upon avoiding the "pending supercalamities" of irrevocable climate change, vast pandemics, and nuclear war (see also Wallerstein 1998; Amin 2008, 2011).

In promoting fundamental social transformation we must focus on *quality* of life, not *quantity*. We must begin with the question "What are we producing and why?" In opposition to capitalism, we must advocate an economy that promotes human needs without putting undue stress on the natural world. In short, a *socialist* economic program is required to develop ideas such as those discussed above. Others have outlined suggestions for carrying out such a program that are worth considering. Developments in countries such as Cuba, Venezuela and Bolivia regarding social priorities and sustainable development are encouraging (Hart-Landsberg 2010). Ultimately, as these and other cases show, improvements in living and working conditions will result from the struggles of social movements fighting for social rights. And this will require creation of a genuinely new economy that favours people and their environment over production for the sake of production and consumption for the sake of consumption. It is
clearly past time to replace the growth-oriented model of capitalist
production with a model of ecological and humane sustainable production.

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