So, who is hitting your keys?

The New Ruthless Economy
April 30, 2004

The word ruthless in the title of Simon Head's book is a giveaway. The New Ruthless Economy is a polemic, and its polemical bias detracts from an otherwise acute analysis of Work and Power in the Digital Age , as the book's subtitle puts it.

Head argues that during the past decade - "the digital age" - computerisation and new software systems have brought to service companies the harsh rigours and disciplines introduced into production-line manufacturing in the early 20th century. He calls this development "white-collar industrialisation".

Undoubtedly, employees in many service companies are compelled to do exactly what their screens instruct them to. This is true not only of call centres, though they are the epitome of the phenomenon. It happens in sales, distribution, retailing, medicine, travel - you name it. The software provides precise, word-for-word instructions and employees have no latitude whatsoever: their responses are shackled. They are human automata - not unlike the human automata who carry out the strictly defined tasks on production lines. The purveyors of the new software systems call this process "re-engineering". It is an apt neologism. Engineering is in essence predictive - build this structure and it will behave in this way.

Re-engineering is similarly predictive - give employees these directives and they will behave in these ways.

Moreover, their computers not only tell the staff what to do, they record unauthorised utterances and inform the bosses. Consequently the employees suffer what Head calls "skill debilitation". He quotes Alan Greenspan: "Skills are becoming redundant at a pace unprecedented in human history."

And the software purveyors encourage companies to deal brutally with employees who fail to espouse re-engineering with sufficient enthusiasm.

This is where ruthlessness enters the plot. Head quotes one apostle of re-engineering who warns employers that they must be uncompromising: "Extreme measures are sometimes the only way to overcome employees' entrenched opposition... slapping people's wrists instead of breaking their legs is a sign of weakness."

Naturally, all this emasculates employees and weakens their power to fight for freedom in the workplace, or to achieve better salaries. Human automata are interchangeable. New ones can easily replace old ones. As Head shows, this has long been true in manufacturing. But in the 19th and early 20th centuries employees fought back by organising themselves into trade unions.

Unions have always been weak in service industries - and the current political climate makes the emergence of strong unions in the service sector virtually unachievable.

Head contends that in America this has resulted in top honchos, fat cats and shareholders puffing up their earnings by exploiting the newly industrialised, de-skilled white-collar workers. This is Head's polemic.

And certainly the earnings of American workers have lagged well behind those of their bosses in recent years. But has this all been due to "skill debilitation"? There are a host of complex factors at work in the American economy - the influx of Hispano-American cheap labour, the increasing ability of top businesspeople to finagle their way around regulators, the growing power and affluence of the professional classes - each of which has contributed to the widening schism between rich and poor. And re-engineering is not inherently bad: cost-cutting and computerisation are necessary ingredients for economic progress.

Head is a journalist, and perhaps he should not have tried quite so hard to carve out a journalistic "story" - with heroes (the white-collar workers bullied by software) and villains (the purveyors of the software).

Nonetheless, he argues his case cogently, and The New Ruthless Economy is an uncommonly good book.

Winston Fletcher is visiting professor in marketing, Westminster University, and chairman, Royal Institution.

The New Ruthless Economy: Work and Power in the Digital Age

Author - Simon Head
Publisher - Oxford University Press
Pages - 222
Price - £14.99
ISBN - 0 19 516601 9

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