No century in recorded history has experienced so many social transformations as the 20th century. In the developed economies we witnessed a decline of the farmer, the disappearance of domestic servants, the rise and fall of the industrial worker, and the coming of the knowledge age. These significant events will be the last century’s lasting legacy. The transformations have both qualitatively and quantitatively altered the nature of work and the work force, of society and polity in developed countries.  And the transformations will not end with the year 2000. Indeed they have not even peaked.

The social revolutions of the 20th century proceeded smoothly, causing few upheavals. Chroniclers of the rise of the industrial worker tend to highlight the violent episodes, especially the clashes between strikers and police. The most likely explanation for this is the enthusiasm of socialist, anarchist, and communist propagandists to promote the idea of violence as a weapon of revolution.

In fact, the rise of the industrial worker was accompanied by remarkably little aggression. The enormous bloodshed  of the 20th century— two world wars, ethnic cleansings, and so on—was perpetrated from above rather than from below; and it was unconnected with the social transformations underway. Indeed, there is no longer an attempt to explain these great revolutions as part of the crisis of capitalism which, 50 years ago, stood as standard Marxist rhetoric.

From the dawn of history up to 1800, agricultural workers made up almost the entire population. By 1900 they still accounted for a majority in every developed country, except England and Belgium. In all developed countries today farmhands   make up at most 2% of the work force.

The Social Structure Transformed

Around 1900 live-in servants were the second-largest group in the work force of every developed country. Along with farmhands they were considered society’s two lowest classes. Census categories of the time defined a “lower middle class” household as one that employed fewer than three servants. Eighty years later live-in domestic servants scarcely exist in developed countries, except for imported domestic helpers in places like Hong Kong and Singapore.

In today’s developed society farmhands and domestic servants have essentially vanished. Yet these enormous transformations in all developed countries were accomplished without upheaval or civil war, and in almost total silence. But in 1900, society was obsessed with blue-collar workers. Charles Chaplin’s classic portrayal of them in Modern Times captured society’s fixation with workers oppressed by machines. The industrial workers had become socially dominant even though they still made up a fairly small minority of the work force. At most they stood at an eighth, or a sixth, of the total work force in 1900, and were still vastly outnumbered by the traditional lower classes of agricultural workers and domestic servants.

Farmhands and domestic servants were clearly the most exploited people in society, but their plight gained little attention. They were everywhere, but as they were dispersed in farms and homes, they were invisible. More importantly, these traditional lower classes were not organized. Indeed, it was impossible for them to form an organization. The new industrial workers, however, were extremely visible. They lived perforce in dense cities and worked in large factories and their concentration favored ready organization.

The industrial worker became the “social question” of 1900 because he was the first lower-class person in history to gain the opportunity to organize and stay organized. There was widespread acceptance of Georges Sorel’s 1906 thesis that the proletarians would overturn the existing order through violent strikes and grasp power through organization. It was not only Lenin who made Sorel’s thesis the foundation of his revision of Marxism and built around it his Bolshevist strategy in 1917 and 1918. Both Mussolini and Hitler based their tactics on Sorel’s thesis. Mao’s “power grows out of the barrel of a gun” is almost a direct quote from Sorel.

By 1900 the term “industrial worker” had become synonymous with “machine operator” and implied employment in a factory along with hundreds if not thousands of others. These factory workers were indeed Marx’s proletarians–without social position, without political power, without economic or purchasing power.

The workers of 1900 received no pensions, no paid vacation, no overtime pay, no extra pay for Sunday or night work, no health or old-age insurance (except in Germany), no unemployment compensation (except, after 1911, in Britain), and they had no job security whatsoever.

Five decades later, in the 1950s, industrial workers had become the largest single group in every developed country, and unionized industrial workers in mass-production industry had attained upper-middle-class income levels. They had extensive job security, pensions, long paid vacations, and comprehensive unemployment insurance or lifetime employment. Above all, they had achieved political power.

Thirty-five years later, in 1990, industrial workers and their unions were in retreat. They had become marginal in number. By the year 2010, in every developed country, industrial workers accounted for no more than an eighth of the work force, virtually the equivalent of their numbers in 1900, at the dawn of their meteoric rise. Union power has declined equally as fast. No class in history has ever risen faster than the blue-collar worker. And no class in history has ever plummeted faster.

The traditional industrial worker will not disappear but his place is already being taken over by the “technologist”—someone who works both with his hands and with theoretical knowledge. Examples are computer technicians, x-ray technicians, physical therapists, medical-lab technicians, pulmonary technicians, and so on, who together have made up the fastest-growing group in the labor force in the developed economies since 1980. And instead of a proletariat class, industrial workers will be just another pressure group.

Contrary to Marxist predictions, the rise of the industrial worker emerged as the 20th century’s most stabilizing social development. It explains why the disappearance of the farmer and the domestic servant produced no social crises. The flight from agriculture and from domestic service was voluntary. Farmers and maids were not “pushed off” or “displaced.” They went into industrial employment as fast as they could. Industrial jobs required no skills they did not already possess, and no additional knowledge. In fact, farmers on the whole had a good deal more skill than was required of a machine operator in a mass-production plant; and so did many domestic servants.

To be sure, industrial work poorly paid even by 1900. But it paid better than farming or household work. Industrial employees labored long hours. But they worked shorter hours than farmers and domestic servants. What’s more, they worked specified hours: the rest of the day was their own, which was true neither of work on the farm nor of domestic employment.

The history books record the squalor of early industry, the poverty endured by industrial laborers, and their exploitation. Workers did indeed live in squalor and poverty, and they were certainly exploited. But they lived better than those on farms or in domestic households, and they were generally treated better.

For farmers and domestic servants, industrial work was an opportunity. It was the first opportunity that social history had given them to better themselves substantially without having to emigrate. The main reason for this was   their ability to move seamlessly from the land and the kitchen to the factory.  We have witnessed also how the opening of China in the 1980s contributed to the 20th century’s social transformation.

The Emerging Knowledge Society

During that century the productivity of manual work increased fiftyfold. These economic and social gains practically all accrued to the industrial worker, half of them in the form of sharply-reduced working hours with a longer working life and half of them in the form of a twenty-five fold increase in their real wages. There were thus very good reasons why the rise of the industrial worker was peaceful rather than violent, let alone revolutionary. The fall of the industrial worker in developed countries has so far been equally peaceful and almost entirely free of social protest, upheaval, or serious dislocation.

But the rise of the succeeding class is not an opportunity for industrial workers. It is a challenge. Knowledge workers are the newly-emerging dominant group. They make up two-fifths or more of the work force in the United States; a proportion that is larger than manufacturing workers ever attained. The majority of them will be paid at least as well as, or better than, manufacturing workers ever were.

And the new jobs offer much greater opportunities. But the great majority of the new jobs require qualifications the industrial worker does not possess and is poorly equipped to acquire. They need a good deal of formal education and the ability to absorb and to apply theoretical and analytical knowledge. They require a different approach to work and a different mind-set. Above all, they demand a habit of continuous learning. This precludes displaced industrial workers from simply moving into knowledge work or services in the way displaced farmers and domestic workers moved into industrial work. At the very least they must change their basic attitudes, values, and beliefs.

The fall of the industrial worker in the developed world will also have a major impact beyond it. Industry has been transformed and is hungry for the new knowledge worker, not the old industrial worker. Developing countries can no longer expect to base their progress on their comparative labor advantage; that is, on cheap industrial labor.

It is widely believed, especially by politicians and labor-union officials, that the fall of the blue-collar industrial worker in the developed world was largely caused by moving production “off-shore” to countries with abundant supplies of unskilled labor and low wages. But this is factually false. Their old industrial worker has been displaced by their own knowledge worker.

This means that developing countries can no longer expect to base their progress on low wages. They, too, must learn to base it on applying knowledge—just at the time when most of them (China, India, and much of Latin America, let alone black Africa) will have to find jobs for millions of uneducated and unskilled young people who are qualified for little except yesterday’s blue-collar industrial jobs.

But for the developed countries, the shift to knowledge-based industry poses enormous social challenges. Despite the factory, industrial society was essentially a traditional society. This cannot be said of the new knowledge-based society. It is the first one in which not everybody in the community is engaged in the same work, as was the case with farmers or machine operators.

This is far more than a social change. It is a change in the human condition. What it means and what challenges it may present—we do not know. But we do know that much will be different.

Knowledge workers will not make up the majority of society, but they will be the largest single population and work force group. And even where outnumbered by other groups, knowledge workers will furnish the emerging knowledge society with its character, leadership, and social profile. They may not be the ruling class, but they are already its leading class. And historically in their characteristics, social position, values, and expectations, they differ fundamentally from any group that has ever before occupied the leading position.

In the first place, knowledge workers gain access to jobs and social position through formal education. A great deal of knowledge work requires highly developed manual skill and involves substantial work with one’s hands. An extreme example is neurosurgery. The neurosurgeon’s performance capacity rests on formal education and manual skill.

This kind of work varies tremendously in the amount and kind of formal knowledge required. But even if the knowledge itself is quite primitive, only formal education can provide it. Education will become the center of the knowledge society. What knowledge must everybody have? What is quality in learning and teaching? These will of necessity become central concerns of the new society, and will be central political issues.

We will inevitably redefine what it means to be an educated person. In the past the educated were individuals who possessed a prescribed stock of formal knowledge. Increasingly, an educated person will be somebody who has learned how to learn, and who continues learning, especially by formal education, throughout his or her lifetime.

Knowledge and Competition

A society in which knowledge workers dominate is under threat from a potential class conflict: between the large minority of knowledge workers and the majority of non-knowledge service workers, that is, those who will make their living traditionally. The economic challenges of the knowledge society will spring from the productivity of knowledge-based work. The competitive position of every single country, every single industry, and every single institution within society will depend upon it. Meanwhile the social challenge of the knowledge society will be rooted in the productivity of the non-knowledge, services worker.  Will the knowledge society be able to provide non-knowledge workers with decent incomes, dignity and status?

No society in history has faced these challenges. But equally new are the opportunities it presents. In the knowledge society, for the first time in history, the possibility of leadership will be open to all. Also, the possibility of acquiring knowledge will no longer depend on obtaining a prescribed education at a given age. Learning will become the tool of the individual, available to him or her at any age. Will inequality widen in society? Will it eventually narrow?

How well an individual, an organization, an industry, or a country does in acquiring and applying knowledge will become the key competitive factor. The knowledge society will inevitably become far more competitive than any society we have yet known for the simple reason that with knowledge being universally accessible, there will be no excuse for nonperformance. In fact, developed societies are  already infinitely more competitive than those of the early 20th century.

The knowledge society offers tremendous opportunities to the individual. It makes possible a career as a specialized knowledge worker. But it also presents new problems and challenges. It demands for the first time in history that people with knowledge take responsibility for making themselves understood by people who do not have the same knowledge base. The knowledge worker must acquire new communications skills to be understood.

How Knowledge Works

When knowledge becomes highly specialized to be productive then knowledge workers must be part of an organization and must work in teams. By itself, specialized knowledge does not yield performance. The surgeon is not effective unless there is a diagnosis, which is not the surgeon’s task and may not even be within the surgeon’s competence. And this requires that the specialist have access to an organization. Only the organization can provide the basic mechanism that knowledge workers need in order to be effective. Only the organization can convert the specialized knowledge of the knowledge worker into performance. The individual alone is a cost center rather than a performance center. It is the organization that performs. And the organization will have to learn to use different kinds of teams for different purposes.

There was no way, Marx pointed out, for the worker to own the steam engine and to be able to take it with him when moving from one job to another. The capitalist had to own the steam engine and to control it. Increasingly, the true investment in the knowledge society is not in machines and tools but in the knowledge of the knowledge worker. Without that knowledge the machines, no matter how advanced and sophisticated, are unproductive.

The surgeon needs the hospital. But the surgeon’s true capital investment is his training and knowledge, which the surgeon takes from one hospital to the next. Without that knowledge hospitals have no value. This is true whether the knowledge worker commands advanced knowledge, like a surgeon, or simple and fairly elementary knowledge, like a junior book keeper.

The industrial worker needed the capitalist infinitely more than the capitalist needed the industrial worker. In the knowledge society organizations need knowledge workers far more than knowledge workers need them. In a genuine sense, knowledge workers actually own the critical means of production. They are therefore capitalists, and not workers.

The United States was the first country to complete the transition from the blue collar industrial worker to the knowledge worker; it took some 50 years. The closing of China in 1949 and the advent of the Korean War prompted Hong Kong to embark on a process of export-oriented industrialization in the late 1950s. It transformed the economy and society. Immigrant labor from Guangdong province, mainly farmers, and their children provided the backbone for the industrial labor force. It was for many a golden age, there was some social discontent and rioting in the 1960s, but the transition was incredibly smooth. By the 1970s the low cost industrial economy was running out of steam, and in response, government sought to introduce some changes in its report on industrial diversification. The opening of China in 1979 stole the march and provided a rapid impetus for industry to move across the border and Hong Kong became a de facto service economy within one decade. How well-prepared Hong Kong is for this unforeseen rapid transition should be the subject of another article.


Peter Drucker, The Age of Discontinuity, Harper and Row, New York. 1969.

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