Industrial revolutions: The superstructure

The World Economic Forum kicks off its Davos summit this week (January 20-23) under the "Fourth Industrial Revolution" theme. Three prior industrial revolutions were based on steam/water/ mechanical production in the first from the 1780s; electricity and mass production from the 1870s in the second; and electronics/information technological (IT) production from the 1970s in the third. Four previous Davos summits hinted this year's theme: "The Great Transformation" in 2012, "Resilient Dynamics" in 2013, "Reshaping the World" in 2014, and "New Global Context" last year. It is not surprising, then, that the Fourth Industrial Revolution (4th IR), which gives momentum to the 3rd IR digitalisation, is expected to restructure the world by highlighting the nexus between technologies impacting three domains: physical (infrastructures), digital (artificial intelligence, as in robots, drones, and self-driven cars), and biology (nanotechnology, biotechnology, and energy-related).
What does it mean for us all? How is it manifested in January 2016? Why is it relevant for the world in general, but Bangladesh in particular?  A three-part series addresses those questions in the same order. While the 4th IR is fleshed out below, the next article links it with the global market turbulence unfolding before our very eyes this year, while the final piece will show why Bangladesh, by receiving, at best, second-hand 4th IR technologies, might end up boasting relatively more stable economic consequences, if political turmoil is kept at bay.
Since industrial revolutions go far beyond short-term socio-economic changes, a simple way to understand them is to overview the role of the central infrastructure. For the steam/water/mechanical revolution, this was the factory: creating the technology (spinning jenny, for example), training workers, establishing a market (in essence, converting hamlets into towns, towns into cities), and developing supportive legislations (liberalising trade, for example), would occur simultaneously or sequentially. Since constructing the focal factory would take years, then even more years to attain profits, the time-span involved was measured in terms of generations: old factories would eventually face competition from new ones within the same country, then from those outside the country, creating the comparative advantage shifts we are so familiar with. The only source of disruption, other than trade union protests, would be at the beginning: to convert a farmland into a factory, and peasants into proletariats. England's textile revolution exemplified these dynamics two centuries before Bangladesh's.
One century later, England was challenged by the newly-constructed Germany in Europe, the United States, and Japan. What happened? Competition was so intense and market-size so huge, that production, aided by new sources of energy, such as electricity and fossil fuels, transformed production volumes. Mass production changed the spectrum: as pools of workers expanded, labour division and specialisation became more intense, wages were negotiated, unions were recognised, and all sorts of social provisions were legislated (social security, for example, began in Germany first). Factories remained central, but one could now distinguish "blue collar" workers from "white collar," as management, marketing, planning, and R/D (research and development) also expanded.
Over the next century, though, this landscape changed dramatically. As urban congestion and grime accumulated, suburbs appeared, education expanded, and those with the right skills, which were now more intellectual than physical, abandoned their blue-collared brethrens in the cities for white-collared suburban jobs, thus the growth of malls, golf-courses, and so forth. It was a revolution because the intellectual input of software, for example, functions multiple times faster than the physical input necessitated by a factory.
To facilitate World War II logistics, the ENIAC (electronic numerical integrator and computer) initiation at the University of Pennsylvania's Moore School of Electric Engineering in 1943, paved the way for the computer revolution, in essence marking the fastest information revolution in human history (figuratively, from the pony express to Federal Express), such that by the 1970s, digitalisation created prototype robots. It would take less than half a century to get from there, the 3rd IR, to the 4th IR today: we have witnessed how information can be created and destroyed, manipulated for the few against the many, and channelled to make robots displace low-wage workers, drones to substitute for high-wage intelligence personnel, smart-phones to look after communications, boast a portable library, fill the ears with music, supply direction, and sift information to produce our food, medicine, chauffeurs, and children.
What will follow is even more breathtaking. One will now be able to abandon even the suburb for a remote island resort to manage global production, consumption, transaction, and distribution. Schools, colleges, universities, and libraries will suffer since a smart-phone can substitute for them. Grocery stores, malls, and restaurants will turn into warehouses, supplying every telephone order by mail, much like the prototype Amazon does today. By manipulating every food item consumed, gene of a foetus, and element of every desire, the forthcoming push-button age also carries its nemesis: not everyone can get on board, only the intellectually versatile.
Clearly, then, Davos is not about skiing or site-seeing. Business, social, and political leaders convening here each year just happen to be at the frontier of events and developments the ordinary citizen would be impacted by for the next 5-10 years. It has, by definition, got to be a global gathering, since future markets will more likely use the global level of production than the state or region in order to remain viable, raising the interest in building global bridges.  It was not by accident, for example, that the 1990 gathering paved the way for the first regional trade agreement between developed and developing countries: the North American Free Trade Agreement (NAFTA) developed from the proposal Mexico's Carlos Salinas de Gortari made at Davos that George H.W. Bush heard, liked, and pursued. That NAFTA became the prototype of almost all subsequent trade agreements, down to last year's Trans-Pacific Partnership (TPP) should not obscure the central feature: the ability of corporations to take states to court for any reason, no matter how trivial. Weak states watch out; Bangladesh should watch out even more if TPP membership is not in the cards. Only because sovereignty is really at bay, as Raymond Vernon noted in 1971, the states are becoming excessively nationalistic: they cannot keep pace with economic developments, but refuse to always ply with corporate dictates.
Such have been the marriages consummated at Davos. That is not all. As the next piece of this series will show, this technology-driven matrimony is intimately related with economic spurts and hiccups: more immediately, it might inform us better as to why stock-markets have been crashing in the first two weeks of 2016, how long this turbulence might last, and what outcomes we might expect. It will, furthermore, inform us why the outcomes we are expecting today were even anticipated, fairly accurately at that, when the 3rd IR was unfolding 45 years ago. Even, by not missing a simple technological beat, we will find out how and why we cannot change the course of development now to make the future more stable than it will ever be. That's leaping too far ahead today; but leaping one day we must, if we are to be with the in-crowd.
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