Friday, January 20, 2012

Another Toxic Aspect of Innovation

If any serious healing of both the economy and its corollary unemployment crisis is to come from the manufacturing sector, then it is probably time for another cautionary observation that Barack Obama’s mantra about solving problems through innovation is nothing less than the latest brew of Jonestown Kool-Aid.  One would have thought that the aftermath of the Solyndra crash would have been evidence enough.  However, recent news brings a perspective on purported successes in Asia that may support an ugly syllogism:
  1.  Innovation creates markets for new toys
  2. Growing markets make for more manufacturing jobs
  3. To support the increasing demand, manufacturing turns to wage slavery
I like to think of this as the “Foxconn syllogism.”  For better or worse, Foxconn seems to have avoided implications that it has created a new generation of slave labor.  However, as Hanna Stewart Smith reported today in her Unboxing Asia column for ZDNet, Foxconn’s parent company, Hon Hai in Taiwan, seems to be cultivating a vocabulary that is even uglier:

“Hon Hai has a workforce of over one million and as human beings are also animals, to manage one million animals gives me a headache,” said Terry Gou, chairman of Taiwan’s Hon Hai, the parent company of Foxconn.

This was his statement at the end of year party, and considering recent events in Foxconn; Gou picked a regrettable choice of words.

Unfortunately, what could just be poor wording is made much worse by the fact that he also suggested he wanted to learn management techniques from Chin Shin-Chien, director of Tapei [sic] Zoo.

To make matters worse, he invited Chin to speak and asked his general managers to listen to his advice, as well as inviting him to take part in his company’s annual review.

Gou and his general managers apparently listened carefully as Chin provided advice as to how to manage different types of animals, and asked Chin to put himself in the position of Hon Hai’s chairman. It seems, unfortunately, there’s a bit more than just jest to this analogy.

These remarks should resonate with those of us in the United States familiar with the pro-slavery rhetoric that flourished in the years leading up to the Civil War, if not with our own subsequent confrontation with wage slavery that eventually led to the rise of labor unions.

I am not suggesting a Luddite revival committed to the destruction of all machines in factories.  However, the underlying Luddite argument was that innovation was making life better for a select few while making it much worse for the general labor force.  The real toxicity of innovation comes not from the inventiveness of the imaginative mind but from the translation of that inventiveness into benefits for an elite community of investors, taking a public-be-damned attitude to everyone else, even when “everyone else” is a major population sector depending on manufacturing to provide a living wage, whether in Asia on in European countries like Greece.  Meanwhile, that elite community is about to gather, once again, in Davos and play with their numbers and mathematical theories;  and they are likely to continue their games in serene oblivion, since it is unlikely that any of the “Occupy” movements have the scratch to set up camp in Davos!


DigitalDan said...

Very odd James-Burkean analysis. One might infer from it a belief that all innovation is for frivolous purposes, that all leads to overseas manufacturing, and that all or even most overseas manufacturing is run by evil people doing evil things to their employees.

I do believe that the US is in great economic peril from the fact that our role in manufacturing has vastly diminished; we've become a service economy with a spotty record in providing good service, if you will. More manufacturing of goods requiring little or no innovation could help us, as well.

But it seems short-sighted to fault the President's premises based on abuses in some manufacturing sectors that admittedly need to be addressed.

Stephen Smoliar said...

I suppose the fashionable jargon is that, while not frivolous, innovation entails a significant risk of "moral hazard." That risk does not come from the innovators, but from number-crunchers who only want to see the largest return on investment as quickly as possible. This is not so much a matter of how extensive the resulting abuses are as it is one of what happen to be the real priorities of those advising Obama and whether or not the President appreciates the motives behind those priorities.

jones said...

DigitalDan indicated that "our role in manufacturing has vastly diminished." This isn't exactly the case. We've lost manufacturing JOBS, but OUTPUT has increased. Both these trends are due to automation. So any public official who talks about 1) growth 2) technological innovation and 3) more manufacturing jobs isn't offering a realistic outlook.

I would only add that this particular type of growth imperative needs to be viewed in a historically situated context. The era of entrepreneurial capitalism ended in the first half of the 19th Century. It was eclipsed by monopoly capitalism in the second half of the 19th century, and again by the permanent war economy in the mid 20th century. Planned obsolescence and the growth it facilitates is best seen as an institutionalization of battlefield attrition.