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Guest Post: The Knowledge Economy's Two Classes of Workers

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The knowledge economy has important implications for both workers and organizations.

Setting aside that our economy is by and large organized to benefit a State-financial Elite and the technocrat Caste that serves them, let's consider the two classes of worker in what Peter Drucker labeled the Knowledge Economy in his 1993 book Post-Capitalist Society.
At the risk of simplifying Drucker's nuanced account, here is a precis:
The Marxist class division of labor vs. capitalist/management no longer adequately describes the new economy, as knowledge workers own "the means of production" which is first and foremost knowledge. Corporations and government offer an organization within which workers can apply their knowledge (i.e. the means of production in a knowledge economy).
Since the new economy is no longer characterized by capital vs. labor, it is a post-capitalist economy.
Knowledge workers are a minority of the workforce; the majority are service workers, either skilled or low-skilled.
Economist Robert B. Reich divides the workforce into similar categories: "symbolic analysts" (knowledge workers) and two classes of service workers: "routine producers" and "in-person servers."
Since the service workers own and leverage less capital (knowledge), their ability to create surplus value and thereby demand high wages is intrinsically lower than the knowledge workers.
This creates a structural tension, as society has to establish a way to maintain the wages of the service workers in an economy where the value and income they can generate by their labor is capped.
Let's be clear about one thing: it is misplaced nostalgia to pine for the "good old days" of high-paying but soul-deadening factory jobs. Fully 40 years ago, workers were already rebelling against the yoke of rigid machine-driven production: 1970-1972: General Motors, the Lordstown struggle and the real crisis in production:

The other root cause of our present difficulties with the workforce might be termed a general lowering of employees' frustration tolerance.Many employees, particularly the younger ones, are increasingly reluctant to put up with factory conditions. Despite the significant improvements we've made in the physical environment of our plants. Because they are unfamiliar with the harsh economic facts of earlier years, they have little regard for the consequences if they take a day or two off.

For many, the traditional motivations of job security, money rewards, and opportunity for personal advancement are proving insufficient.

Large numbers of those we hire find factory life so distasteful they quit after only brief exposure to it. The general increase in real wage levels in our economy has afforded more alternatives for satisfying economic needs.

There is also, again especially among the younger employees, a growing reluctance to accept a strict authoritarian shop discipline. This is not just a shop phenomenon, rather is a manifestation in our shops of a trend we see all about us among today's youth.

More money, time and effort than ever before must now be expended in recruiting and acclimatising our quality control programs have been put to severe tests; large numbers of employees remain unmoved by all attempts to motivate them; and order in the plants is being maintained with rising difficulty.

That this is not simply a bosses' problem was expressed by youthful Gary Bryner, President of the Lordstown local of the UAW (July 25, 1972):

There are symptoms of the alienated worker in our plant-- the absentee rate, as you said, has gone continually higher. Turnover rate is enormous. The use of alcohol and drugs is becoming a bigger and bigger problem. So has apathy within our union movement towards union leaders and towards the Government ... (The worker) has become alienated to the point where he casts off the leadership of his union, his Government... He is disassociated with the whole establishment.

Here's the key quote from this excellent historical essay:
Modern capitalism can, by and large, cope with the traditional type of economic problem, for instance those dealt with by Marx, it can continue to develop production. It is in difficulties, however, when confronted with a massive resistance to its values, priorities and whole pattern of authority.
In the traditional labor vs. capital framework, we expect the resistance to come from labor; in the knowledge economy, that resistance is arising from those who own and control the means of production, the knowledge workers themselves.
This has important implications for corporations, non-profit organizations and government alike. In Drucker's view, "Every organization has to build in organized abandonment of everything it does. Increasingly, organizations will have to plan abandonment rather than try to prolong the life of a successful policy, practice or product."
In other words, creative destruction is the necessary result of constant, purposeful innovation. Any organization which fails to do so will become obsolete. The same can be said of those providing the knowledge capital to the organizations, the knowledge workers.
One consequence that none dare speak is the absolute reduction of any functional need for layers of management, or anything resembling traditional management.The Internet is a tool for eliminating management, along with generally needless/useless meetings and the other sources of unproductive friction in modern corporate and government organizations.

Management exists to minimize the problems created by its own hiring mistakes.Valve says the secret of their management-free environment is hiring good people. That sounds right to me. We don't have any weak contributors in our start-up so we have never felt a need for management.
One of the interesting aspects of better global communications, better access to information, and better mobility is that collectively it reduces the risk of making hiring mistakes. When employers were limited to hiring people who lived nearby, and the only information at their disposal was lie-filled resumes, every growing company would necessarily absorb a lot of losers. But now that entrepreneurs can hire the best people from anywhere in the world, we have for the first time in human history the ability to create teams so capable they require no management structure. That's new.

I think the manager-free model only works for a business that has high margins and depends more on creating hits than cutting costs. The videogame business fits that model, as do many Internet businesses. And in both cases entrepreneurs can hire from anywhere in the world.

So here's my summary: Management only exists to compensate for its own poor hiring decisions. The Internet makes it easier to locate and then work with capable partners. Therefore, the need for management will shrink - at least for some types of businesses - because entrepreneurs have the tools to make fewer hiring mistakes in the first place.

Management won't entirely go away, but as technology makes it easier to form competent teams without at least one disruptive or worthless worker in the group, the need for management will continue to decline.

Even organizations based on rigid command hierarchies such as the U.S. military are finding that decentralized command decisions based on proximity to information flow, field intelligence and detailed knowledge of local assets trump sclerotic centralized command structures in getting demonstrable results.
If this is true in sprawling bureaucracies, it is certainly true in smaller organizations.
This is the economy that every worker has to understand if they want to navigate it to their own benefit. Every enterprise and organization that wants the most productive workers has to understand that their task is not "managing labor," it is offering workers of all levels opportunities to be effective and to contribute.
In my view, each worker is an enterprise, and the less time, energy and money wasted on management and friction, the more time and energy there will be for wealth creation or value creation, and as a result, more money available for wages.
For more on this topic, please read The Ten Best Employers To Work For (March 28, 2013).

Via correspondent Rui N.P.: America: A Nation of Permanent Freelancers and Temps.


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Fri, 03/29/2013 - 17:09 | 3389517 CH1
CH1's picture

How about this: Hierarchy Sucks.

Fri, 03/29/2013 - 17:38 | 3389593 formadesika3
formadesika3's picture

knowledge is knowing that a tomato is a fruit; wisdom is knowing that you don't put a tomato in a fruit salad.

Fri, 03/29/2013 - 17:43 | 3389605 DJ Happy Ending
DJ Happy Ending's picture

Learn to code bitchez

Fri, 03/29/2013 - 18:43 | 3389779 lewy14
lewy14's picture

The productivity of the media coder is negative.

Fri, 03/29/2013 - 19:32 | 3389889 ACP
ACP's picture

The author forgot the third category of worker; separate government from the other two, because it's neither knowledge nor service.

Fri, 03/29/2013 - 21:18 | 3390273 spinone
spinone's picture

Bullshit.  I doubt you have ever interacted with a high level of government.  The pople at that level are hard working and brilliant.  The scary thing is that they have so much power, if they are bad people they can do really bad things.  But good people at a high level of government can do good things.

I know that its really popular to bash government right now, especially on ZH.  But remember that government workers are silently toiling away on fiber optic networks, transportation networks, communications protocols, 911 systems,, food inspection programs, and hundered of other programs that keep us all safe and healthy and make modern life possible.

Much of what the public sector does are essential services that the private sector abandoned because they couldn't figure out how to make a profit at it.  Thats why government costs money and doesn't make money.  The money making operations are done by the private sector.  Government is for managing the essential services that are money losers.

If you think government is a waste or the private sector can do everything that modern society requires, you need to grow up. 

Then there is graft and corruption, but that discussion if for another day

Fri, 03/29/2013 - 22:07 | 3390462 SafelyGraze
SafelyGraze's picture




Fri, 03/29/2013 - 22:08 | 3390466 Sean7k
Sean7k's picture

Talk about bullshit. 

Much of what the public sector does are essential services that the private sector abandoned because they couldn't figure out how to make a profit at it.

Government took over control of these services and parcelled them out to well connected friends. The reason many services weren't provided was because they would have bankrupted the owner. Guess what, now it just bankrupts all of us through ridiculous tax structures that have demoilished a capable economy.

If government really cared what I thought, they would force me to pay for their brilliant policy. Governments are tyrants, they steal, murder and destroy through selective application of law, undeclared war, 9/11 false flags, poisoning water and food supplies, and those inspectors and other regulators you tout? The ones that are on the dole, giving Americans a false sense of food security or financial security.

You are a spineless fool and government troll to boot. Fuck off. You may love tyranny, but I prefer to kick it in the face. There is no good reason for government, with the possible exception of some organized defensive security. Every thing else is a paen to slavery.

Sat, 03/30/2013 - 06:54 | 3391013 Helvetico
Helvetico's picture

Yeah, man, we should get rid of the Federal Aviation Administration right away! They're just tyrants preventing airplane disasters that would "streamline" the airlines. What about the Coast Guard and all their needless, tyrannical rescues of boaters? What about the interstate highway system? The fucking Internet? Those suck pretty badly, too, don't they? Let's not forget about NOAA and the The National Hurricane Center...who the fuck needs forecasts, huh? You're a fucking moron if you can't structure a reasoned argument about the pros AND cons of the federal government. Like most of life, it's more complicated than you make it out to be, so you focus singlemindedly on one side of the argument, just like a religious fanatic, and froth at the mouth...just as ludicrously and inneffectively as one. 


Now go fuck off to the hills, Unabomber-style, and leave the sane folks alone.

Sat, 03/30/2013 - 08:44 | 3391121 Sean7k
Sean7k's picture

What,  private airports cannot provide air traffic control? Did the FAA catch the Boeing battery problem? Pilots and airlines don't have an incentive to keep the skies safe?. 

Stateless societies would have to maintain some degree of defense, but again, it would never require the overbloated military industrial complex we have today. Intersate highway system? You mean the socialization of costs? Who profits from the system? Transportation industries and business. Why shouldn't they pay to build and maintain it? The NOAA and Hurricane center are useless. They can tell you a hurricane may be forming or a tornado is coming, but they can do nothing to stop it. If the service is worthwhile, people will pay for it and provide it.

The point your missing, is government doesn't give you a choice. It merely creates new services and charges you, whether you want them or not- regardless of the expense or cost to the economy. There are thousands of wonderful services a government could provide: universal massages, free vacations, free food and wine at exclusive restaurants. Unfortunately, it all involves costs, costs that a private economy would have put the brakes on before they started. There is a reason we have excessive debt levels, we can't afford what the government provides, so we all pay a treendous cost in lost productivity, lost capital and interest.

Further, to provide all these great services you need the power of coercion. So, along with your list of wonderful services we get the police state, military imperialism, taxation that precludes property ownership, education to enhance the State, mass propaganda through media and fiancial market manipulation.

There is nothing complicated about it. Some people, like yourself appear to love the drudgery of slavery that is guaranteed by strong central government. Scared little children that are incapable of facing the world without their big brother government. What's the matter? Can't handle a little personal responsibility and true liberty?

Sat, 03/30/2013 - 09:44 | 3391187 spooz
spooz's picture

Would "putting the brakes on" include raising tolls on the privately owned roads? So what if the unemployed peasants can't afford to travel to the minimum wage job because their discretionary funds must pay for private food supply, private education and private health care? You'll be okay if you can spring for private security with your discretionary funds to keep them at bay when they become desperate.

Fuck your version of liberty for the oligarchs.

Sat, 03/30/2013 - 10:01 | 3391208 Sean7k
Sean7k's picture

Every gallon of gas is taxed to pay for those roads. Your minimum wage worker is already paying a toll, it may in fact be higher than if he were charged one. You don't think the minimum wage earner deosn't pay for police protection already? In property tax or as part of their rent? Registration fees on cars, etc.

You assume minimum wage workers GET healthcare, what if they don't? The cost of government has raised the price of heathcare to outrageous heights, well beyond what a private system would cost. Private education could end up being cheaper and of better content, allowing the student to customize their education to meet their needs and wants. Further, what right do you have to take money from me to pay for these entitlements? Who made you the CFO of America? 

The Constitution guarantees our right to private property- this means property the government cannot compromise, yet no one is allowed private property in America. It is all subject to confiscation through requisite taxation. The worker is still taxed on what they purchase, on income and for other taxes. This further diminishes their income. 

We haven't even begun to analyse the effects of socialism on an economy and how it results in debt slavery. Your inability to analyze the effects of government is telling of a government education. 

Trying to smear me with a label fo oligarch is laughable. Get a better argument.

Sat, 03/30/2013 - 12:19 | 3391492 spooz
spooz's picture

I see more danger in "free markets" becoming monopolies than you do, where bottom line is all that matters. I see our country is moving in the direction of more privatization, with a global corporate oligarchy running the show with no reason to provide anything but crumbs to the local labor units. The monopolies they will have over the roads will allow them to charge whatever the market will bear, with special pricing for their partners. 

We've had many years of private health care, and it has resulted in insurance monopolies who are so strong their lobbyists managed to keep the status quo intact while denying us a public option. The health care system is increasingly owned by  private rent seeking interests (insurance, corporate health care, Big Pharma) instead of exploring the VA model for a lower cost public option.  So privitization becomes a monopoly where providing health care is more about denying claims to lower costs than it is about providing low cost, effective health care.

Where in the world do you see a system of private education working for anybody but the haves, as a method of legitimizing their claims to their rightful place in the meritocracy?  The main complaint is that teachers are earning too much.  How about we just automate education and eliminate that job category, too?  Why should any worker unit earn anything more than minimum wage?

As far as private property goes, get a clue sucker.  The oligarchs are ending up with all the marbles while the peasants drown in debt. They've become so powerful they own the legislature.  Inequality isn't discussed, because its the hidden agenda of neolibs.


Sat, 03/30/2013 - 14:28 | 3391827 Sean7k
Sean7k's picture

What you need to learn to "see" is government's hand in those monopolies, governments's influence through regulation that protects industries. This isn'r free markets, it's crony capitalism. It is government that creates barriers to entry and a lack of competition.

Healthcare ceased being private with the creation of the AMA. A private cartel was allowed to dictate standards of care and who would provide it, courtesy of government. Education is mandatory, nothing free market about fascism. Government determines the curriculum, the quality of education and the length of time. Unions create additional inefficiencies and costs that burden us with ourless than stellar system (you do follow global ratings of education systems?)

You are as clueless as they get. The Elites end up with all the marbles, because people like you defend their system of debt slavery. Government is just a tool to control the masses and you have bought it hook. line and sinker. You recognize they own the legislature ( remember to include the executive and judicial branches), how can you look to the government for help? 

Sat, 03/30/2013 - 15:47 | 3392015 spooz
spooz's picture

I see SIZE as being the barrier to functioning free markets.  Do you really think that further deregultion of the predatory financial sysem will end rule by banksters?  Government regulations still function as a pesky nuisance that slows down the looting. 

I agree the AMA has a hand in keeping the cost of health care more expensive, its another example of crony capitalism bought by those who wish to extract as much rent as possible from the system.  They lobbied against a public option, which the rest of the developed world has been able to deliver in a comparitively cheaper and more efficient manner.

As for education, I like to look at real world models.  The Pearson Report on developed world educational systems finds Finland's 100% state funded system to be the best.  Not a single model for the libertarian utopia of "free market" education in the developed world, but lets take a chance on the next generation and give the corporations a try at it, right? 

Exactly what are you proposing as a restraint on monopolies, or is it all a hopey changey thing?

Sat, 03/30/2013 - 19:13 | 3392352 Sean7k
Sean7k's picture

Here's a free lesson in economics: there is nothing wrong with a monopoly, UNLESS IT IS PROTECTD BY GOVERNMENT. Why would a company grow to control an entire market? They provide a service or product that is at the best price possible. Otherwise, other would enter the market and begin to take market share. If the monopolist attempts to raise the price too high, the market finds substitutes and the monopoly fails.

However, if the monopoly is protected by government, then a monopolist can abuse the population, as the market can no longer exert any influence. 

You want to look to the State for examples of excellence, but I don't want State involvement. Now, why is your opinion any better than mine (and vice versa)? I could care less how good Finland's system is, I'm happy creating my own education system. However, the State doesn't allow voluntary compliance, they only function through force. How good is a system if compliance is via the barrel of a gun?

Believe it or not, the market is completely capable of regulating ALL ACTORS. However, we have more regulations than people can read, how well has all that regulation worked? MF Global, JPM, HBC, LIBOR, Madoff, etc Regulations are the means by which special actors get special access to markets.

There is every reason to try something else and every historical reason to try something else. Most important: THERE ARE NO PERFECT SYSTEMS, every system has problems and challenges, but this one has obviously failed, how do you expect a failed system to succeed? 

Sat, 03/30/2013 - 19:40 | 3392465 spooz
spooz's picture

Why WOULDN'T a company want to grow big enough to control an entire market? Once they are big enough they have the staying power to kill any competitors who try to cut prices, using cartels if necessary.  LIBOR price fixing is a good example of how the modern day monopoly of Too Bigs has control of entire markets with no oversight.  When the financial markets are fixed, there is no free market where bids and offers create a price.  How do you expect anybody but the oligarchs to benefit from a system that seeks to extract rents from every corner of the economy?

Besides economies of scale, the monopolist has deep pockets for capital expenditures that can also contribute to techological superiority and control of natural resources.  As the honey flows up, other anticompetitive actions can be taken, like dumping or price fixing.  Concentration of wealth allows monopolies to become powerful enough to make life miserable for the 99% while the economic royalists feed the propaganda machine, talking about liberty.






Sat, 03/30/2013 - 20:12 | 3392534 Sean7k
Sean7k's picture

Of course a company would like to grow. What is wrong with that? Especially if it results in a good product at a fair price? However, it never CONTROLS the market, it participates and if unprotected, is always subject to market discipline.

But there has been oversight. Lots of oversight by multiple agencies on two continents. Free markets are NOT a function of government, but the lack of intervention that comes without government.

How will a system function without a profit motive and price determination. This is the purpose for rent seeking. Why should a person employ you if they cannot profit from it? Why should they risk their wealth?

Simple question: would you pay too much for a product? I can't make it any simpler than that. This is why a monopoly without the ability to raise barriers via state intervention or the ability to force the use of its' product via State intervention will always fail. There can be short term benefits, but it cannot be sustained. The market will find new solutions. Apple exhibited technological superiority, how has that worked out? Just think how difficult it would have been without patents?

I can't give you an education in economics, but you can start with: "Man, Economy and State with Power and Markets" by Rothbard. pages 1143-44.



Sat, 03/30/2013 - 23:53 | 3392756 spooz
spooz's picture

Monopolies CAN and DO control markets when big enough, through the monopoly mechanisms I mentioned above, which you haven't addressed. 

To answer your question, if it comes to something I NEED, I will be FORCED to pay too much for a product when price gouging monopolies are the only ones providing it. They will use the anticompetitive methods I listed in my previous post, and others (link below)  In many parts of the country, there is only one health insurer available, and I am forced to buy (even without a mandate) if I don't want to be bankrupted should I have some bad luck.  Mergers and aquisitions have given these guardians of our health care system control over prices, which is why premiums keep outpacing inflation in the rest of the economy.

There is no reason to believe that the little guys will win out over the monopolies, as there is no example of the utopian free markets anywhere.  But you brainswashed Mises followers have faith that somehow the little guys will win if the big gubmint will just get out of the way.  Sorry, but it doesn't even make intuitive sense, without a real world model.

Wake up. There is critical thinking going on outside your Mises reading list.

Sun, 03/31/2013 - 13:36 | 3393131 Sean7k
Sean7k's picture

Again. you are using an example where government intervention is involved. Insurance companies are controlled by government through a credentialling process that creates a high barrier to entry. Try again. Further, you attach the costs to the insurance industry, while ignoring the medical industry, pharmaceuticals and others that make up the total industry and thereby the total cost of insurance.

Another example of a monopoly is the FED. Total monopoly. Completely protected by government. Absolute barriers to entry and effects everyone in America more than ANY other industry. Want to talk about that monopoly?

A better example would be an industry so remote that it has to provide a company store and housing, much like coal miners suffered in the late 1880's and early 1900's. Still, they CHOSE to remain and live under those conditions. You can say they NEEDED the work, but that is a choice. 

Free markets are not utopian and they exist everywhere- we call them black markets and they function and supply goods and services when governments destroy markets. When governments intercede on pricing and amounts, these markets see opportunity and goods get re-routed to supply demands at real market prices. 

You big governmentt people are so brainwashed, you think fascism is freedom. You think government is helping you, while they destroy the value of your labor through dollar inflation, poison your food supply through preference for industry players, kill your children in unending wars and destroy your meager wealth through taxation. To be so thick, that when faced with the obvious, you continue to rail against what your government has created and maintained and call it private monopoly is why propaganda is so successful.

What you should be asking yourself is WHY you don't see free markets, but see government intervention in every industry. It isn't because of natural monopolies, it is because industries that were once the largest players in their segments wanted to decrease competition and they could do that by using government regulation. Continuous competition is hard, controlling government is much easier.

There obviously isn't any critical thinking going on in your neighborhood at all.

Sat, 03/30/2013 - 08:59 | 3391145 de3de8
de3de8's picture

Yeah, that's all that gov't controls!

Sat, 03/30/2013 - 10:04 | 3391216 Stuck on Zero
Stuck on Zero's picture

Yeah.  Without the FAA the airlines would let their $200 million dollar planes crash every day. 


Fri, 03/29/2013 - 17:46 | 3389612 akak
akak's picture

Knowledge is knowing that the beet masquerades as a vegetable.

Wisdom is running the fuck away from it.

Fri, 03/29/2013 - 17:59 | 3389638 francis_sawyer
francis_sawyer's picture

Knowledge is a bunch of scientists in a lab working for Monsanto... Wisdom is telling them to fuck off...

Fri, 03/29/2013 - 18:07 | 3389670 Yen Cross
Yen Cross's picture

  You're an articulate man F_S.  That one liner was absolute perfection!

Fri, 03/29/2013 - 18:39 | 3389760 Henry Hub
Henry Hub's picture

***Knowledge is a bunch of scientists in a lab working for Monsanto... Wisdom is telling them to fuck off...***

Well try telling Monsanto to fuck off is probably going to land you in a heap of legal problems especially if you're a small time farmer. The Monsanto Protection Act has just been passed.

Fri, 03/29/2013 - 20:52 | 3390127 mkhs
mkhs's picture

An illegal law is not a law.

Fri, 03/29/2013 - 18:27 | 3389723 formadesika3
formadesika3's picture

knowledge is knowing that you deposit your paycheck into a bank.

wisdom is knowing that you don't leave it there.

Fri, 03/29/2013 - 21:24 | 3390289 Chuck Walla
Chuck Walla's picture


If this is true in sprawling bureaucracies, it is certainly true in smaller organizations. This is the economy that every worker has to understand if they want to navigate it to their own benefit. Every enterprise and organization that wants the most productive workers has to understand that their task is not "managing labor," it is offering workers of all levels opportunities to be effective and to contribute.
Except government where creating as many managerial positions as possible is required to absorb all the useless spawn of the big contributors.  The apparatchik class cannot ever truly be done away with as long as it greases the cash flow to politicians pockets.



Fri, 03/29/2013 - 19:45 | 3389919 masterinchancery
masterinchancery's picture

The Brits won the naval war against Napolean because their Captains "knew how to disobey orders" and frequently did so. Same in business--rigid heirarchy equals Death.

Fri, 03/29/2013 - 17:10 | 3389518 Go Tribe
Go Tribe's picture

Each worker is an enterprise? Yeah, right. That sounds like it's coming from a "guru." What's a fuckin' enterprise???

Americans today would kill for those old factory jobs.

Fri, 03/29/2013 - 18:11 | 3389682 Coke and Hookers
Coke and Hookers's picture

I've never subscribed to this knowledge / non-knowledge worker distinction. Knowledge is easily available and everybody can access it more or less but the worker class that dictates how advanced society can be is the group that can actually learn and solve problems. I'm surrounded with university educated people with plenty of knowledge but zero ability to solve problems. They often become drones in support functions in companies where they perform assigned roles like monkeys - when they are not attending some stupid conventions pretending to be cutting edge in their 'fields'. The people who can actually sort shit out and solve problems are few and far between. They are either at the absolute top in the company hierarchy or in senior specialist jobs. The middle manager levels and lower level specialists are often at the end of their ability regardless of their 'knowledge'. This applies to any organization, even software firms where maybe 90% are code writing robots and 10% actually design the software.

Fri, 03/29/2013 - 18:26 | 3389719 The Abstraction...
The Abstraction of Justice's picture

I can write novels and screenplays in comparison to the legions of literary critics who write nothing, yet I am barely recognized. The people at the top were give money by their parents, or from the State, for selling out. This includes writers. Most of the best seller list is torture porn, murder porn and immigration porn. When it is is not such porn, it is invariably ghost written celebrity biography chaff. We do not live in a meritorious age.


There is no such thing as a code writing robot. Every programmer without significant creative or analytic ability does not write code, they write bugs.

Fri, 03/29/2013 - 18:30 | 3389737 Coke and Hookers
Coke and Hookers's picture

"We do not live in a meritorious age."

That's putting it mildly. We live in an age that worships vacuity in all its forms.

Fri, 03/29/2013 - 18:59 | 3389809 MachoMan
MachoMan's picture

In philosophy/economics terms, that would be "capital" winning the battle against "labor"....  you can try and church up the age old distinctions, but they still ring true...  at some point, the infrastructure becomes so captured that innovation is corrupted and stolen.  The author has been able to pinpoint industries that act to the contrary, but fails to acknowledge that this is the exception and not the rule.  The internet CAN cure much of what ails us, but like all mechanisms, it too can be corrupted and compromised...  or, to put it another way, owned.

Real, tangible innovation is few and far between...  the knowledge producers the author espouses are really just "peers" to existing entrenched power...  it isn't that folks at the top of the chain can't produce in the same way, it's just that they've largely moved past it at this point, given rent seeking is vastly more efficient or other endeavors simply pay more.  This is what our society incentivizes...

It's also really strange to draw a distinction between mechanisms that have already been described ad nauseum for centuries (at least)...  because the internet comes along, we need to invent new terms for workers?  We need to ignore cycles that happen over and over and over again?  It stinks to high hell of someone desperate for an academic schtick.

Fri, 03/29/2013 - 18:51 | 3389803 Henry Hub
Henry Hub's picture

***10% actually design the software.***

I have worked in software development companies where the really bright developers are slowly pushed out by morons who are great at schmoozing and office politics but couldn't write a line of of code never mind design an application. The world is powered by bull shit.

Fri, 03/29/2013 - 18:56 | 3389818 MachoMan
MachoMan's picture

This is inevitable in every bureaucracy...  you have to be able to play the game if you want to succeed...  this is eventually why the sociopaths end up running the asylum.

Fri, 03/29/2013 - 20:17 | 3389998 Clark Bent
Clark Bent's picture

In a free country, the workers are the knowledge. In the early summer of 1944 American GI's were met with the insoluble problem of French hedgerows making every half-acre plot into a squared-off mini-fortress that made a breakout of armor impossible. Before the upper-echelon geniuses had even grasped the problem, local GI's figured out that if you welded a "comb" of angle iron from the beach tank defenses onto a Sherman tank, you could take a run at a hedge and break through it. 

Free countries breed individuals who believe that it is their responsibility to save their own lives. The highly organized, rigidly heirarchical Germans were rarely as innovative. 

The so-called "knowledgeable" in this country are largely the caste that makes it to Ivy Leagu schools. They also share "progressive" slave minded solutions to what to do with all these unuseful persons. Real achievement is not much appreciated, only novelty itself. 

Fri, 03/29/2013 - 21:02 | 3390079 Coke and Hookers
Coke and Hookers's picture

The German army actually encouraged independent thinking in their frontline commanders and soldiers. Tactical decisions were usually made by commanders on site and initiative was rarely punished. The German army was probably the first to do this which is surprising considering how rigid German society was.

Sat, 03/30/2013 - 16:53 | 3392184 Hive Raid
Hive Raid's picture

Each worker is an enterprise. Absolutely.   I am the CEO of my little piece of the economy. I am my own business, with a single customer who furnishes me with a computer in their office, who loves me because I require no management.


As for the rest, interesting stuff to think about but it sounds like the thousand other "cutting edge perspective" articles delivered every month between glossy covers. Smile, your economy has been gutted and shipped offshore, so the only decent paying jobs are the professions and high-tech, which we will now call "knowledge workers". There is no capital left, so we will say that these skilled people are the capital; and by that formula, "the people" now hold the power. The revolution is a success comrades! No more evil bosses! ... no more jobs that will feed a family for the common man.


" Let's be clear about one thing: it is misplaced nostalgia to pine for the "good old days" of high-paying but soul-deadening factory jobs."

Few people have the intelligence and mental endurance to succeed as knowledge workers. The bulk of people need decent paying jobs where they can be productive by operating the capital--factory jobs. Now the bulk of people are permanently adrift on the open sea. This is a good thing if you hate the people of a country, as our ruling Jews do. Also, factory production is no less harrowing than retail work.


"Many employees, particularly the younger ones, are increasingly reluctant to put up with factory conditions. " - 1972

Factories' cultures can exhibit sufficient morale, if the pay and culture are adjusted properly. Japan succeeds. National culture is a primary factor which has not been mentioned here. By 1972, the second Jewish Bolshevik Revolution was well under way in America (the Jews murdered 20 million Russians with the first, less than a century ago), and traditional American culture was in disarray. By design, Americans were losing the sense that this was "their country", so willingness to endure for the collective good was diminished; compare that to factory productivity and morale during WWII (in which Jewish banks and media conned the people to enthusiastically engage in the bloodletting of their European brothers).


Fri, 03/29/2013 - 17:13 | 3389526 Vashta Nerada
Vashta Nerada's picture

I really don't see the kibbutz business model generating beaucoups of FCF.

Fri, 03/29/2013 - 17:22 | 3389551 optionsman
optionsman's picture

this is such bullshit. knowledge is freely available. information is freely available. that has been the case over the last 20 years. are you suggesting that only 1-10% of our society is taking advantage of this freely available knowledge and information? the situation has never changed. those that own real assets and means of production is one of its kind they have faired very well in this post capitalist world. those that own just knowledge are a dime a dozen. and that knowledge's half life is about 10yrs at best as well.....

just saying.....

Fri, 03/29/2013 - 17:36 | 3389586 Diamond Jim
Diamond Jim's picture

nah...he's is suggesting that only 1-10% of the population has the capacity to take advantage of "freely available knowledge". Have you checked to see if high school kids today can read, write or interpret a simple sentence ??? Do they know anything about economics or science ???

Fri, 03/29/2013 - 18:14 | 3389690 Coke and Hookers
Coke and Hookers's picture

He should call it what it really is: Intelligence. Smart people run the show and keep the machine running. The less intelligent perform simpler duties regardless of their 'knowledge'.

Fri, 03/29/2013 - 18:21 | 3389710 The Abstraction...
The Abstraction of Justice's picture

I know plenty of smart people with no money. The wealthly people I know were all born wealthy - either that or they are Politically Correct Zionist sell outs.

Fri, 03/29/2013 - 18:24 | 3389718 Coke and Hookers
Coke and Hookers's picture

I know plenty of stupid people with shitload of money they 'earned' themselves. Most of them are either mildly sociopathic or total genetic sociopaths. It seems sociopathy is a real asset in the labor market these days ...

They tend to be bankers, real estate agents or in 'import/export'.

Fri, 03/29/2013 - 18:30 | 3389733 The Abstraction...
The Abstraction of Justice's picture

I know the type, finances their business with drugs. Spend all day gambling with other people's money, then tell the world how wise they are when the ball lands on red.

Fri, 03/29/2013 - 17:57 | 3389635 wee-weed up
wee-weed up's picture

Knowledge workers... service workers... skilled workers... low-skilled workers...

In the end, the government makes sure were all just serfs.

Fri, 03/29/2013 - 18:56 | 3389821 Henry Hub
Henry Hub's picture

In the end, the oligarchy makes sure were all just serfs.


Fixed it for ya.

Fri, 03/29/2013 - 18:18 | 3389702 rbg81
rbg81's picture

I'm a college professor, and I can tell you that more connectivity does not necessarily increase knowledge.  Kids today have an almost infinite amount of information at their fingertips--instanctly accessible.  Yet the vast majority use it poorly, if at all.  They use electronic devices to create echo chambers where they can only communicate with their friends.   in some cases, they ignore what in front of their [physicial] face in favor of what's on the screen. It almost makes you want to cry to see so much capabilty and potential wasted.  Instead of creating a new generation of geniuses, we are creating a generation of idiots.  There are exceptions to this, and I really hope that I'm wrong, but its what I see.

Fri, 03/29/2013 - 18:56 | 3389820 Coke and Hookers
Coke and Hookers's picture

This is not the only problem. Schools seem to be avoiding 'core' knowledge and skills like math, languages, sciences and the classics in favor of all kinds of pointless stuff that leaves nothing behind. Connectivity is just another method for replacing real education with nothing.

The problem in higher education is scientific dogma that hampers curiosity and breeds uninventive scientis-robots who can't even construct an experiment properly. I was going to be a university professor back in the day but I left academia in disgust. Can't imagine it has changed for the better since then. I could write a book about my disgust and disappointment with academia

Fri, 03/29/2013 - 19:01 | 3389832 Henry Hub
Henry Hub's picture

Wait a minute are you saying my PhD in Gender studies and my Masters in woman studies are worthless? How dare you!

Fri, 03/29/2013 - 19:09 | 3389841 Coke and Hookers
Coke and Hookers's picture

I humbly apologize for my troglodytish rant. I would never suggest such a thing my good sir!


Fri, 03/29/2013 - 19:48 | 3389928 rbg81
rbg81's picture

Actually, its worth quite a bit.  Being a professional victim is a growing and lucarative occupation--don't ya know?

Fri, 03/29/2013 - 22:48 | 3390563 wee-weed up
wee-weed up's picture

Yep, you can thank Liberal control of public education for the past 30 years.

Fri, 03/29/2013 - 19:03 | 3389835 The Abstraction...
The Abstraction of Justice's picture

Starting to think that the legions of theoretical physicists who studied supersymmetry, supergravity, and superstrings were all wasting their time. Makes you wonder the value of all that maths, when the mathematicians step in exactly the same footsteps as each other. All knowledge and no philosophy.

Fri, 03/29/2013 - 19:46 | 3389861 rbg81
rbg81's picture

Connectivity is just another method for replacing real education with nothing.


I kind of disagree with this.  In theory, connectivity is a very good thing education-wise.  The problem is the way its actually being applied.  Most kids use it to Facebook, play video games (even Farmville), watch YouTube (or porn) videos, shop and text.  In short, they can create these electronic wunderlands that make it easier to be intellectually lazy while giving the illusion of being tech savvy.  But that doesn't mean there isn't a lot of great information out there waiting to be exploited.  Unfortunately, many young people don't have the curiosity or motivation to do it.

Fri, 03/29/2013 - 20:09 | 3389966 Coke and Hookers
Coke and Hookers's picture

I think I read a story somewhere recently about research showing negative correlation between 'wiredness' of schools and academic performance after completing said schools. The more wired the schools were, the worse prepared the students were for advanced education. I agree that connectivity is per se not a problem. It's just a tool like paper and pencils and properly used it can without doubt be beneficial. However, I'm certain that many schools use it as a prop, replacing real education. I've seen schools rate themselves high quality wise based on how connected their students are while producing substandard people.

Another prop I dislike intensely are group projects that are considered necessary to develop "critical social and communication skills" and whatnot. Instead they produce two types of people: 1) the people who passed without doing anything or learning anything because they were freeloaders all the time and 2) the people who can't work independently after school because they have never learned how. Both types are useless but they can communicate nicely in meetings and over the net.

Sat, 03/30/2013 - 09:35 | 3391185 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

When tools become toys the learning level goes down. My point is you see people use things all the time and how no clue how these things actually work and why it is. Without that basic understanding you are never more than the equivalent of a drone or cog in the machine. I'll give you an example why does 1 + 1 = 2 and what does it mean. Ask your kids or any adult that question. It is such a basic thing and can anyone remember being taught why in school from a math standpoint?

Fri, 03/29/2013 - 20:23 | 3390022 ghandi
ghandi's picture

Your "professed" opinion is relative. The Enlightenment, for one, bemoaned the lack of "curiosity or motivation" in the general populace.

Talk a walk outside the ivory tower sometime. Being wise is knowing when not to call someone stupid.

Sat, 03/30/2013 - 10:00 | 3391189 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Where did I call anyone stupid, my basic premise anyone can do but most people don't understand why certainly holds true. There is no shortage of educated people with knowledge that don't understand the basics. Answer my question about 1 + 1. Why is it? The answer is not rocket science.

"Being wise is knowing when not to call someone stupid." To counter being wise is being able to apply knowledge, that requires understanding it.

Fri, 03/29/2013 - 17:22 | 3389554 lordbyroniv
lordbyroniv's picture

This is why I am buying up keyword generic domain names....bitchez!!!!!

Fri, 03/29/2013 - 17:46 | 3389615 s2man
s2man's picture

Fax me when you find some good ones.

Fri, 03/29/2013 - 17:26 | 3389564 Arbysauce
Arbysauce's picture

Sweeping unqualified statements like this:

"Management only exists to compensate for its own poor hiring decisions"

Are a sure sign of lazy thought. It's cute so it ropes in the cheap seats.

Fri, 03/29/2013 - 18:06 | 3389664 green888
green888's picture

This sounds like the best way for a traditional bank to be run, no overpaid management as no gambling allowed

Fri, 03/29/2013 - 19:46 | 3389925 Matt
Matt's picture

If the "Traditional Bank" only:

1. provided full reserve demand deposits and term deposits,

2. and only used the term deposits to lend out to other bank customers,

3. with clear expectations set that only term deposits yield interest, in exchange for sharing the risk in lending

4. and other than lines of credit, mortgages and basic transactions, provided no other service (engaged in no other endeavors)

then it would not need much management. It also would not need to have more than one branch, as long as it was part of a network of banks. But at that point, it would basically be a utility, and thats not very exciting.

Fri, 03/29/2013 - 17:29 | 3389569 disabledvet
disabledvet's picture

Interesting thoughts...does the author actually believe them or are we talking "off the top of our head" here? I'm struggling to see who "the decider" is in this seemingly "egalitarian NWO." seems to me we've RE-centralized with all this "knowledge." Economics teaches us that if all comes from above "nothing comes from below." that was the true beauty of the industrial economy...that thing financed entire States. Now we have "oil and food"...and that's it? Everything else "sits in an off shore account"? Wow...thank God no one saw the IMPLICATIONS of 2008 (cough cough Sudden Debt cough cough.) Nay, veerily..."this is the crisis where we know nothing." to know anything is to present complexity, nuance, detail, HISTORY. Nay "we are all part of a string to be strung along." and that is all. Your turn Europe and Korea! "Welcome to the feast."

Fri, 03/29/2013 - 17:30 | 3389574 Yen Cross
Yen Cross's picture

      The middle class is extinct, (masters and slaves) Indentured Servitude.  Kings, under the guise of parliament and Presidency<

Fri, 03/29/2013 - 17:32 | 3389580 TeamDepends
TeamDepends's picture

People with hyphenated surnames are almost always at or near genius-level.  At least in their own mind.

Fri, 03/29/2013 - 17:37 | 3389590 akak
akak's picture

Especially when they are England born-and-bred, whether New or Olde.

Fri, 03/29/2013 - 18:28 | 3389701 The Abstraction...
The Abstraction of Justice's picture

Isn't the USA the land where Californians will not speak to you unless you have two PhDs? What is it they say over there, 'If you are not somebody, you are nobody.' If you think the North Americans have no class system try marrying a Hollywood actor when your job involves nothing more than heavy lifting.

Fri, 03/29/2013 - 17:36 | 3389588 dolph9
dolph9's picture

The knowledge we have now is how much we're getting fucked.

And we're PISSED.

Fri, 03/29/2013 - 17:39 | 3389595 ebworthen
ebworthen's picture

"He is disassociated with the whole establishment."

That sounds about right.

Fri, 03/29/2013 - 17:41 | 3389601 b_thunder
b_thunder's picture

as "knowledge workers" constantly make the "smart machines" even "smarten"  the need for the knowledge workers thjemselves will diminish.  one server farm (aka "cloud") with 20 admins can replace 10-men IT departments for 1000 companies. 


Fri, 03/29/2013 - 18:00 | 3389649 s2man
s2man's picture

You're saying 20 admins can replace 10,000 IT jobs?  Even if you throw in 10 each of dba's, app guys and network guys, that's a pretty big leap. Hosting an App suite on the cloud does not keep the internal network, servers and desktops running.  I'd say 20 admins can replace 1-2,000 of those redundant jobs.  The rest will remain to support local infrastructure.

They've been telling management, for years, the servers are gonna be smart enough to support themselves, any day now.  Yup.  I'm still here.

Thank God I'm a knowledge worker.

Fri, 03/29/2013 - 18:31 | 3389736 freedogger
freedogger's picture

You are still there because the company you are with is doing it wrong. Get rid of MSFT, windows, sharepoint etc. Put it all in the cloud. Replace office with google apps, replace exchange with gmail. Replace any shared drives or file caches with google drive. Give all your employees a montlhly hardware allowance and let them connect to work from anywhere with whatever OS they want to use. Move all of your custom apps and servers into Amazon's EC2 and pay about as much as the electricty costs to run your current server farm. Have a few spare laptops and extra monitors for when people's own hardware breaks. 

And yeah, you will still need some app developers that know what they are doing. They should be high-end, able to talk to the business and understand their problems. Prefer off the shelf for simple things that aren't core to what the company does, have the devs focus on apps and features that make the company competitive. 

I'm not talking shite either, we just did this where I work, a company of 200 employees. Oil and Gas, higher end engineering services.


Fri, 03/29/2013 - 19:50 | 3389930 Matt
Matt's picture

Trust everything in your company to Google? Brilliant business model. It's a good thing their motto is "do no evil."

Fri, 03/29/2013 - 21:18 | 3390272 freedogger
freedogger's picture

I trust their security model and infrastructure better than anything we or anyone we could hire could provide. If they want to read our emails, bidness plans and other crap, it really doesn't affect us.

Fri, 03/29/2013 - 17:43 | 3389602 fuu
fuu's picture

Is one of the two minds damaged in some way?

Fri, 03/29/2013 - 19:23 | 3389872 Totentänzerlied
Totentänzerlied's picture

I am paraprhasing someone, I wish I could remember who, who in reference to Charles Hugh-Smith said, "two minds, both, unfortunately, retarded."

Fri, 03/29/2013 - 19:52 | 3389935 Matt
Matt's picture

He used to be "Of Two Minds" when he would try to argue both sides of an issue with himself in his own article. However, about a year ago it seems, he gave up that schtick and now all his posts only have one view.

Fri, 03/29/2013 - 17:42 | 3389604 debtor of last ...
debtor of last resort's picture

Knowledge is nothing when it is being exploited as riverpigs like other forms of labor.

Fri, 03/29/2013 - 18:16 | 3389696 The Abstraction...
The Abstraction of Justice's picture

So true, many ofl those knowledge based workers find their ideas earn them less than the average wage, or they find they are expected to work many hours of unpaid overtime each week, a particular problem of the videogame industry. All the productivity and efficiency gains of the modern worker have been consolidated into the hands of the ruling caste. Consider how many such workers it takes to pay off the mortgage of the average house.

Fri, 03/29/2013 - 17:52 | 3389621 q99x2
q99x2's picture

What's all this BS about work. I haven't worked in over 15 years. Why doesn't someone post articles about not working for a change.

Fri, 03/29/2013 - 18:05 | 3389662 Yen Cross
Yen Cross's picture

   You work for yourself. As do I.  You asked, and shall receive.  Stipend/Per Diem Americana figures.

Fri, 03/29/2013 - 17:59 | 3389639 Binko
Binko's picture

I grew up with the idea that the computer and the internet would empower the worker. Sounded great.

But then I went to work for a large manufacturing corporation. I was there during the whole period of putting a computer on every desk and wiring everybody to the network and teaching them how to use Office Applications and email and network share drives. At first it was wonderful, people's productivity improved because communication was easier and data was accessible.

But then Corporate Central went to work using this new tool to consolidate their power. Instead of empowering the worker it slowly began to enslave them. Corporate HQ now monitored everything happening in the factory in real time. They provided non-stop direction and interference. Having everything become interconnected just meant that those at the top had more strings to pull and more power to make underlings dance to their self-serving tune.

Instead of empowering the "knowledge" worker modern technology has primarily empowered management and allowed for more oversight, more standardization and more control.

Fri, 03/29/2013 - 18:13 | 3389689 The Abstraction...
The Abstraction of Justice's picture

Surely such companies will lose their creative personnel and end up like the do do. Innovation goes hand in hand with freedom.

Fri, 03/29/2013 - 20:42 | 3390097 Binko
Binko's picture

Once a big corporation establishes a top-down Soviet management system that uses connectivity to keep watch over literally everything then, from that point, they only care about innovation at corporate level which is then driven down the system as forced "standardization".

One of the break points for me was when corporate big-shots were touring our plant and on one of the assembly lines a supervisor was trying to show them a big display board where a locally developed application displayed real-time defect information to the workers that they actually used to track their performance.

All the big-shots frowned and could only ask "why isn't it showing the standard corporate displays?". A local manager immediately ordered the useful local app taken down and replaced with feel-good corporate propaganda screens.

I'm not sure free-form innovation means much except to pure tech companies. It's just the buzzword of the hour to the rest. What they really care about is standardization and control which are the prime enemies of any local innovation.

Fri, 03/29/2013 - 18:37 | 3389757 Gimp
Gimp's picture

Great insight Binko, agree.  Corporate central uses CRM and other apps to monitor and control  the workforce. The masters are back on the plantation!

Fri, 03/29/2013 - 18:01 | 3389647 Oldwood
Oldwood's picture

And that is why our educational system has been allowed to devolve, so we can have more low skilled/non skilled workers to serve the elite Information holders. As a small businessman, I own and use a variety of computerized equipment. As the years have gone by, while the equipment has supposedly become more "user friendly" it has become increasingly more complex. Now it is impossible to obtain true operational service manuals for equipment that cost in excess of $300k. I'm told there are no books. Their technicians have no books. Everything is taught by word of mouth from the manufacturer. They want to OWN the information, and let it out in dribs and drabs, with you paying each and every time you need a little help, instead of providing a manual. I was brought up on books. Older machines had books inches in thickness that we might have to peruse for hours, but the info was in there. Not now. We can't own anything that could be transferred to anyone else without transcribing or through the spoken word. More and more I think big business doesn't want to sell us anything other than a rental contract. Kind of like the idea of making a light bulb that never burns out. Instead of planned obsolescence we now have planned dependency on everything.

Fri, 03/29/2013 - 18:09 | 3389675 The Abstraction...
The Abstraction of Justice's picture

Part of the problem is that modern software is always 'under development' and that in-house manuals are out of date. The real authorities are the programmers. Unfortunately most software houses, have high turnover, which means much software is neither documented or comprehended. In this case literally nobody in the world understands the software.

Fri, 03/29/2013 - 18:21 | 3389705 GFKjunior
GFKjunior's picture

I go through tons software, from hr java apps to weird trading protocols, and one thing you eventually learn is that you should never trust the documentation.


The source code is the most up to date 'doc' and the only thing you can trust.



Fri, 03/29/2013 - 18:28 | 3389727 The Abstraction...
The Abstraction of Justice's picture

Never trust the source code, it almost never tallies with the executable.

Fri, 03/29/2013 - 18:34 | 3389746 freedogger
freedogger's picture

People need to be fired if it doesn't. 

Fri, 03/29/2013 - 19:11 | 3389848 Henry Hub
Henry Hub's picture

***Never trust the source code, it almost never tallies with the executable.***


I think you mean the documentation. The source code is the executable when complied.

Fri, 03/29/2013 - 19:55 | 3389949 freedogger
freedogger's picture

No, he means the source code doesn't match what is running in production. Happens a lot, people don't use source control properly, or cowboys change stuff on the live production boxes. For anything important (and that is usually everything), it should only be deployed directly from a fresh checkout of source code. This should really be scripted so that the easiest thing is to do it the right way.

Fri, 03/29/2013 - 18:39 | 3389761 freedogger
freedogger's picture

Yep, the code is the design, it pays to write it well.


Fri, 03/29/2013 - 19:32 | 3389891 socalbeach
socalbeach's picture

Don't trust source code comments either, comments don't execute.

Fri, 03/29/2013 - 20:07 | 3389961 freedogger
freedogger's picture

Comments are a smell. Any time you feel the need to comment a block of code, you usually should extract that block of code to a decently named method. 

Unit tests are the way to comment what a class or module does. These execute. They give you the freedom and courage to change the architecture and continously refactor code to make it better.

Unit tests tell you exactly where and why one of your changes broke an existing feature.

Anyone in management that pays for code without backing unit tests is incompetent. 


Fri, 03/29/2013 - 18:03 | 3389655 Gooseone
Gooseone's picture

 Ricardo Semler's philosophy is this article put into practice.

Within the precept of our modern global economy, it would be an improvement to let coorperations function like this.


Fri, 03/29/2013 - 19:03 | 3389836 bank guy in Brussels
bank guy in Brussels's picture

That Brazilian CEO Ricardo Semler is indeed an important guy

To a degree that is also why Germany is so successful, they have a strong worker input in companies, even on the boards of directors ... it is still not quite so toward the anarchic-democratic, the Germans do still have their hierachy and order thing, but 'with German characteristics' it is in that direction

It's a shame that Germany's many virtues are currently being obscured by the German elite's misconduct in this euro-zone mess with their brutality in the Troika dictatorship

Fri, 03/29/2013 - 18:04 | 3389659 css1971
css1971's picture

Romans introduced coinage to supply their armies.

Produce coins, pay soldiers with them, tax the populace. The populace produce the stuff the army needs. There's a hugely complex system there all coordinated, but the top down management is simple. The money carries information about what's most important and when. People self organise around that.

When you debase the money, you're distorting and destroying information.

Fri, 03/29/2013 - 18:11 | 3389684 The Abstraction...
The Abstraction of Justice's picture

With the developing world rapidly becoming fully developed, any metal based currency is bound to suffer extreme deflation.  Goods and services increase exponentially, but precious metals remain comparitavely fixed. There is no golden bullet to economic problems.

Fri, 03/29/2013 - 22:54 | 3390575 akak
akak's picture

And just what is wrong, exactly, with money which actually GAINS value over time, instead of losing it?

The highest rate of economic progress in modern history happened during a deflationary period (1870s-1900s).  But that, of course, is overlooked or denied by Keynesian lackies and apologists for the sociopathic PTB, who continually rape the world's population with ever-debasing fiat currency.

Sat, 03/30/2013 - 05:30 | 3390955 The Abstraction...
The Abstraction of Justice's picture

The problem is not with the money, but with the economy. Having silver is a no brainer, but don't tell me all our problems will be fixed by a currency that requires physical delivery with every trade.

Fri, 03/29/2013 - 18:12 | 3389688 oleander garch
oleander garch's picture

This is not a post-capitalist economy.  This is a crony capitalist economy.  The income inequality comes from the fact that a tiny percentage of people use control fraud to suppress the vast majority.  As the heroic Jamie Dimon said, "I am richer than you."  What he meant, of course, is that my wealth measures my worth as a human being and gives me the moral right to make choices for you who have less wealth.  And, he is quite correct in the most elementary Randan way..  

Fri, 03/29/2013 - 18:19 | 3389703 InconvenientCou...
InconvenientCounterParty's picture

"This creates a structural tension, as society has to establish a way to maintain the wages of the service workers in an economy where the value and income they can generate by their labor is capped."

The solution is to arbitrarily raise prices. In the US, it works for medical sevices, pharmaceuticals, insurance, education and financial services.


Fri, 03/29/2013 - 22:39 | 3390545 W74
W74's picture

All of which have monolithic bureaucracies that could be done by 20% of their current staffs.

Fri, 03/29/2013 - 18:29 | 3389729 GOLD AND SILVER...

Off topic here, but why hasn't ZH had any stories all day about the FUBAR situation right now with silver pricing?  Nobody seems to know what the spot price is, with a range as high as 30 cents.  Seems like a perfect algo story for ZH.

Fri, 03/29/2013 - 18:35 | 3389751 The Abstraction...
The Abstraction of Justice's picture

Currently in Germany, on ebay you can sell 1kg silver bars for about 820 Euro, which works out at about 735 Euro after Ebay's fees.

Fri, 03/29/2013 - 18:40 | 3389764 Yen Cross
Yen Cross's picture

     Last time checked E-Farces fees they were just over 9%. E-Bay is a joke!

Fri, 03/29/2013 - 19:00 | 3389829 The Abstraction...
The Abstraction of Justice's picture

Post your alternatives here.

Fri, 03/29/2013 - 18:37 | 3389753 reader2010
reader2010's picture

Fuck the term "Knowledge." There is no knowledge in the classical sense because what you mean by "knowledge" in fact is information only. What information workers are you talking about here? Are you talking about those coding monkeys H1B wage slaves?  You think that giant was wrong?

Fri, 03/29/2013 - 18:56 | 3389819 Kastorsky
Kastorsky's picture

the author seems to lack knowledge of what knowledge is.

the whole article is one sophism stacked on top of another.

Fri, 03/29/2013 - 19:54 | 3389943 socalbeach
socalbeach's picture

One of his better writings, couldn't figure out the point he was trying to make.

Fri, 03/29/2013 - 19:09 | 3389844 Mr. Magniloquent
Mr. Magniloquent's picture

My primary grievence with the author's premise, is that "Knowledge Workers" is a misnomer. "Pedigreed Workers" would be a more appropriate term. We live in a credentialist society where results don't matter so much as your resume. Most hiring is done through an automated filter, where anyone who doesn't meet an arbitrary criteria is automatically discounted. Should anyone slip through, credentials are always defered to in preference over all. I knew alot of brilliant engineers in college who dropped out because they couldn't tolerate the bullshit. Conversely, I would say about 1/3 of my biochemistry cohorts passed merely because they had a capable lab partner.

Fri, 03/29/2013 - 19:26 | 3389881 Coke and Hookers
Coke and Hookers's picture

Very good points. The hiring process is particularly interesting. One of my pet peeves there is the use of personality tests in hiring. Well constructed personality tests are per se useful but filtering people with them is exceedingly dubious and invasive. They are often used by people who don't understand them and look at independent traits/labels rather than patterns. Basically the same personality trait can be called both 'disagreeability' and 'independent thinker' depending on the test - with the labels used for the traits determining if you get hired or not. The tests often function as a 'groupthink' filter, ensuring you only get a particular type of people for a particular class of jobs determined by criteria based on either 'theory' or statistically derived classification - while ignoring skills and creativity.

Fri, 03/29/2013 - 19:24 | 3389873 Free Wary
Free Wary's picture

I am a knowledge worker stuck working in a large corporation with 6 layers of management over my head. My main function is operations forecasting, and thanks to technology (like HTTP, XML, R and SAS) I could easily produce and maintain the entire work of my team of 8 forecasters alone, except the middle managers have no interest in efficiency, they want a large roster to lord over and justify their salaries. It's an interesting arrangement that survives because my company is shielded from competition by regulation.


So I'm not convinced that knowledge workers truly have an edge in companies like mine, I think the new capitol is actually control of govt regulations.

Fri, 03/29/2013 - 19:38 | 3389897 Coke and Hookers
Coke and Hookers's picture

There's no necessary relationship between having an edge in a company and being a smart worker. The smart workers keep the company running regardless of whether they are oppressed slaves or not. The notion that the most important workers; the problem solvers, are in a better position than others is totally false. They may be, but usually are not. Most of them are senior specialists like Dilbert, slaving in a cubicle on shitty salary, surrounded by morons. If all the Dilberts in a company quit, the company would go out of business in a day - even if they are only 5% of employees. You could fire any other 5% of the staff, including the entire senior management, without destroying the company.

Fri, 03/29/2013 - 21:47 | 3390391 GeneralMunger
GeneralMunger's picture

Bravo!  Its the old 20-80 rule - 80% of the work is done by 20% of the workers.  This, and the above comments have been my experience in every company I've worked for including the U.S. Army.....especially in the Army.

Fri, 03/29/2013 - 22:35 | 3390534 W74
W74's picture

"...especially in the Army."

Muh brutha.  I remember the first time I ever had to work with females. Horrible, Horrible, Horrible.  The petty office politics were unbelievable and you just KNEW that if it came down to it none of them would save your ass in a fight, whereas a dude wouldn't hesitate.

Fri, 03/29/2013 - 23:43 | 3390690 Miffed Microbio...
Miffed Microbiologist's picture

Comments like yours just make me cringe with embarrassment. I work with all females and most are what you say. Some regularly attempt to throw me under the bus to curry favor with the boss so I always must watch my back. At least I'm just in a hospital lab. I can imagine what it would be like under live fire. You have my condolences and hope you don't have ill will toward all women.


Fri, 03/29/2013 - 19:34 | 3389895 Pike Bishop
Pike Bishop's picture

Many employees, particularly the younger ones, are increasingly reluctant to put up with factory conditions.

Why would they. They grew up in air-conditioning and flourescent lighting.

Whether that's good or bad, I can't say. I know one thing for sure...

If this country had today's equivalent back in the '50s and '60s, we would have been fucked.

That includes my fellow pencil necks who never met a meeting they didn't like. I'd love to watch them unload trucks on a summer day. Instead of trying to figure how those who can do it, should be compensated less than nothing.

Don't worry. Let Food Stamps pick up the slack in pay. Yeah, that's the ticket.

Fri, 03/29/2013 - 19:42 | 3389901 Hohum
Hohum's picture

Charles, Charles, Charles

Practically NO workers create "surplus value (a bit Marxian, I think)."  And I'm surprised no connection to energy.

Repeat after me: energy does the work that gets the growth.  Although not for the last 40+ years or so.

Fri, 03/29/2013 - 20:02 | 3389957 Matt
Matt's picture

You're talking about the "physical" economies of food production, resource extraction and manufacturing, which altogether only need ~10% of the work force.

Other than a bit of electricity, the knowledge economy is seperated from the energy paradigm. Usually, less energy equals more output in the knowledge economy.

Sat, 03/30/2013 - 14:19 | 3391807 Hohum
Hohum's picture


Why don't you quantify that?  "A bit of electricity" which is powered by what.  Why does less energy equal more output?  More than your fantasy, please.

Fri, 03/29/2013 - 22:12 | 3390472 GeneralMunger
GeneralMunger's picture

Last week I received info on the following job opening.  Requirements are pasted below.  This is for a 4-6 month contract position.  Some ZH readers might ascertain that there is a shit-load of work that can be inferred by carefully reading through the requirements.  The contract pays $20-$25/hr.  In short, I've worked on jobs ten years ago where all of these skills/tasks were spread across a team comprised of 3 engineers working with at least 2 skilled techs.

The bottom line and my reason for posting is simply to say that corporations are putting the screws to every class of worker, knowledge or menial.  They're squeezing blood out of the turnip.  And increasingly if you want to work and provide for your family you don't have much choice but to suck it up and drive on.....more tasks, longer hours, less pay, worth-less money, fewer benefits, no job security, when the job is done you're out the door.

I'm not afraid to work; in fact I enjoy it.  But I'm simply not going to do this anymore.  There has to be a better way, as Clark Griswold said: "Merry Christmas, Merry Christmas, .....kiss my ass. Kiss his ass. Kiss your ass. Happy Hanukkah."

Job Details-
A. Assist in estimating resources required to complete projects including labor, materials, necessary skills and duration. Provide testability input to new product designs and guidance in the completion of qualification programs to ensure that goals and objectives are met.
B. Develop test plans, write acceptance and qualification test procedures, conduct tests and generate test reports.
C. Oversee qualification programs to ensure tests are completed accurately and on time. Perform data analysis and write qualification test reports upon completion of testing.
D. Design and document both manual and automated test equipment to support engineering development and production (manufacturing) for new and existing programs.
E. Participate on multi-discipline concurrent development and corrective action teams.
F. Maintain/Create PM schedule for all new and existing ATE systems
G.Develop software for ATE (Automatic Test Stations) and Test Adaptors (ITA's), capable to establish software test requirements. Able to write/document/ test complex ATE control software, integrate ATE software and demonstrate ATE products to both internal and external customers.
H.Write SOWs for manual and automated test equipment and fixtures, including human interface/ screen requirements, software descriptions and test flow charts
I.Provide design-for-testability feedback to design engineering during product development
J. Performs other duties as necessary


•Bachelor’s degree in Electrical Engineering.
•Minimum of 10 years experience in aerospace and test engineering.
•Must be experienced in developing test procedures and performing qualification testing to commercial and military specifications such as RTCA DO-160, MIL-STD-704, MIL-STD-810 etc. to support new products in development.
•Experienced with environmental testing (altitude, moisture, temperature, shock, vibration, EMI etc.) and highly accelerated life testing (HALT). Must be able to work independently with common hand tools and bench top instruments.
•Experienced in electrical and mechanical test setups and test equipments.
•Manual test equipment and ATE development/programming experience with LabVIEW and Entivity are required.
•Knowledge of Data Acquisition Systems. Use of software to control data acquisition system. Added plus some experience with Analog and Digital board design.
•Must have the ability communicate technical information, whether written or verbal to other functional departments throughout the organization. Includes creation and participation of group presentations.
•Experience with Microsoft applications such as Word, Excel, PowerPoint and Project.
•Experience with DOORS management tool a plus.

Fri, 03/29/2013 - 22:14 | 3390494 JMT
JMT's picture

 1) the people who passed without doing anything or learning anything because they were freeloaders all the time and 2) the people who can't work independently after school because they have never learned how. Both types are useless but they can communicate nicely in meetings and over the net.


Unfortunately, this is more common than not especially with younger people who have this extreme deluded sense of self confidence & entitlement. 

Sat, 03/30/2013 - 06:40 | 3391000 Disenchanted
Disenchanted's picture





He is disassociated with the whole establishment.


That's me to a 'T'...or as I put it awhile back, this society/establishment is dead to me.

btw I'm not a factory worker...

Sat, 03/30/2013 - 13:08 | 3391614 MagicMoney
MagicMoney's picture

It's Karl Marx dialectic class struggle between the stupid, and the knowledgable. The clash between these two sides is inevitable, and the stupid will win.


Robert Reich isn't a economist, or even a academic. He practices a religion. He actually believes that Ronald Reagan cut spending, and that hurt the working class.

Sat, 03/30/2013 - 15:46 | 3392013 FunkyOldGeezer
FunkyOldGeezer's picture

There's a basic flaw in the assumption that service workers are intrinsicly worth less than knowledge workers. WHO gets to set the rules, whereby relative worth is established and could it ever be turned on its head?

In a society where 99.999% of workers wouldn't want to be garbage collectors, shouldn't that mean that garbage colectors should have massive wage bargaining power? With so many lawyers being created each academic year, shouldn't their worth be considerably less?

Sat, 03/30/2013 - 17:12 | 3392225 Mototard at Large
Mototard at Large's picture

For God’s sake, please don’t tell anybody outside of the ZH forum, but I hacked into the Bureau of Labour Statistics (BLS) last night to find out their secret statistics-making methods. I found an encrypted file marked “statistics production” and this was what was in it. They use: Anthropomancy – the entrails of unemployed men are read to determine U6 figures. They have a series of other methods to find other economic statistics. They include Gastromancy (U3) , Gyromancy, Myomancy, Omphalomancy , Onychomancy, Tyromancy, Belomancy and Necromancy (401K stuff. You really do not want to know about the last one.....) ZH readers can see the full report at:

Sat, 03/30/2013 - 19:58 | 3392509 cape_royds
cape_royds's picture

Drucker was all wet. The notion of post-capitalism is false.

The most astonishing thing about our so-called "knowledge economy" is how little difference it has made to class structures in society.

Most "knowledge workers" still have to sell their labour to live. That means that they are proletarians. That's all there is to it. It really is that simple.

Unless and until the "knowledge worker" can convert his knowledge into capital, that he gets paid for simply for the sake of his control of it, then that knowledge worker is still nothing but a prole, who sells his labour in order to life.

Working class people have always possessed knowledge about how to do things. Knowing how to do things is why workers have always been able to do so many things.

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