(This essay was published in South China Morning Post on 29 March 2017.)


Knowledge will be the key resource of society in future. In rich countries, knowledge workers are already half the workforce and growing in numbers. What will this mean for society, politics and the economy in future?


The impacts are likely to be greater in the social sphere than the economic one.

The first thing to note about knowledge workers is that they are capitalists because their specialized knowledge represents their human capital.


High knowledge workers – doctors, lawyers, scientists, clerics and teachers – have been around for a long time, but increasingly knowledge technologists – who work with their hands but use a lot of knowledge acquired through formal education (not apprenticeships) – will dominate the workforce.


Their strong identity with their work and professional knowledge makes them cohesive, often well-organized groups and autonomous associations.


New technological progress since the 1970s have been biased towards those with knowledge. As a consequence, the relative wages of better-educated workers have risen relative to less educated ones. This has been the primary driver underlying economic inequality and also the intense competition that students and young workers face today.


Another interesting and related trend is that the knowledge economy will be characterized by people spending fewer hours at work earning income and longer hours at acquiring knowledge and enjoying leisure.


Professor Robert Fogel has estimated the average American male household head spent 80.6% of their non-essential hours (essential being things like eating and sleeping) on income-earning work in 1880 and 41% in 1995 and was projected to spend only 23.6% on that in 2040. The rest was spent on “voluntary work hours” which includes such things as leisure and learning time but also caring for others and community involvement.


Increasingly, the coming generation will be more concerned about their interests outside the work market. For them, personal or spiritual satisfaction will be as important as, if not more important than, material satisfaction.


The impact of all this on politics is that the knowledge economy has created a new pluralist society of specialized knowledge workers. Exerting political power means having to be well organized and well connected.


Large business enterprises, universities and, more recently, the third social sector of (mostly nonprofit) community organizations are all examples of well-organized non-government organizations.


The market has facilitated business organizations by mediating conflicts through the price mechanism. Among non-profit organizations, though, politics is the only mechanism for mediating conflicts unless the bulk of their funding is borne by the clients they serve. Very often it is sensible to fund through vouchers spent by clients rather than direct subventions to organizations if the government is the primary funding source for non-profits.


Single-cause interest groups can dominate the political process and subordinate the common good to their own values. How to balance the common good and the special purpose of the non-profit organization is a question that must be answered if the new pluralism is not to destroy the community.


Earlier pluralist societies imploded because no one took care of the common good. To avoid this, the leaders of all institutions will have to learn to be leaders beyond their own walls and become leaders in the wider community.


The specialist, pluralist characteristics of the next society will mean more splintering into numerous institutions, each more or less autonomous, each requiring its own leadership and management, each having its own specific work. These will be the source of society’s strength. Pluralism is necessary. The challenge is to protect this strength from its own destructive forces.


History has shown us that divisive interests can have destructive powers. Agriculture declined in the wake of industrialization, which led to widespread protectionism. Manufacturing is also declining and being accommodated with similar protectionism, such as subsidies, quotas, and regulations. One would expect the transition to the knowledge economy to also be accompanied by greater regulation of the economy to protect declining sectors. Can we learn to avoid the follies of the past?


As knowledge technologists become dominant in society, they will become a political force. They have invested heavily to acquire a specialized skill and become a human capitalist. They will be keen to protect the value of their investments. But in facing competition from around the world, they will not be averse to protective regulation and legislation. This would weaken the market mechanism for mediating conflicts among groups and organizations.


In a globally integrated world, leaders must see beyond not only the walls of their own organizations, but over national borders. The tribe in the twenty-first century is the global tribe. The new pluralism requires civic responsibility, which means giving to the community in the pursuit of one’s own interest.


It is not apparent what kind of new politics is needed to balance the common good against the pursuit of personal interest. Meanwhile, politics has taken a direction for the worse. It will take time to sort things out.




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