Producers and Consumers

So fundamental are these two functions of contemporary capitalism that it is easy to assume them as a given. However, in order to understand how computer technologies are effecting the relationship between producers and consumers it is necessary to study briefly what we mean when we use these terms and how these functions came to be interlocked at the heart of modern, industrial economies.

Adam Smith first described the emergence of the separate roles of producers and consumers, or the separation of factory and market. Smith described the world he saw; with the start of the English industrial revolution in the mid eighteenth century, vast numbers of the population abandoned the age old necessity of consuming only what one could produce, be it from the land or a cottage workshop, to enter wage employment in the new manufactories; manufactories that fuelled the 'orgy of spending' of the upper and middle classes.

Although the epicentre of this consumer boom was the middle class and their desire to emulate upper class tastes and manners, what has only recently been appreciated is how much the working class consumed. As Neil McKendrick points out in The Consumer Revolution Of Eighteenth Century England;

"Where whole families were employed for long hours at rising wage rates in the rapid growth sectors of the economy, the increased take home earnings could increase dramatically - easily carrying working class families into the class of consumers willing and able to afford not just the necessities but the decencies of life." 4

Because women and children entered the workplace, there was a need for goods hitherto made at home: beer, clothes, textiles and so forth. Because families and women in particular, had the money, there was a market for these products. The founding industries of the early industrial revolution - textiles, candles, pottery - bare out the emphasis on the domestic economy as a driver of industry. Indeed in Wealth Of Nations Smiths uses a pin factory as the basis of his description of the division of labour.

This frenzy of consumption had, by the late eighteenth Century, led observers, Smith included, to recognise the role of consumption in stimulating industry. The 'doctrine of beneficial luxury' took over from the 'utility of poverty.'5 Of course England of the late eighteenth century did not constitute a consumer society as we know it, but from the very beginning of the ascendancy of the market, the dependency of the two functions of capitalism were established; "According therefore as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniences for which it has occasion."6

Mass consumerism in a recognisably modern form originated in America around the turn of the nineteenth and twentieth Centuries. Mass consumerism can be seen as the combination of high volume, low cost manufacture, a relatively affluent (industrialised) workforce and mass marketing. How and why modern mass consumerism occurred and occurred in America is not the subject of this essay, but some aspects of its genesis are relevant to the discussion of modern retail technology. James Beringer, in his classic study of the technological and economic origins of the information society, The Control Revolution, identifies a series of crises in the development of industrial technology. That is, innovations at one level of the economy cause a succession of crises at the higher levels. Hence, the innovation of mass production at the secondary level entails a volume of products that need to be distributed at the tertiary and sold at the quaternary levels, and so forth. Beringer cites the case of the miller of oats, Henry P. Crowell, who in 1882 adopted continuous flow technology for the production of oatmeal. Due to the limited size of the market for oatmeal, Crowell was soon producing twice what the market could absorb. Beringer's contention is that innovations in control technologies were essential for the resolution of such an industrial crisis. In the miller of oats example, Crowell launches a national advertising campaign of a packaged, brand name product directly to the mass market. In Beringer's account, Crowell virtually invents the breakfast cereal, but what is telling here is that mass marketing is seen as a control technology - a control of consumption and thereby a control of the market.7

Whether Crowell, or late nineteenth century America, invented brands and mass marketing campaigns is not important here. What is significant is the proliferation of technologies to control consumption in the USA at that time. In the same way that manufacturers innovated with the embodiment of pre-processing and control in the physical design and layout of factories, manufacturers and retailers of consumer goods innovated with store layout, packaging, customer feedback, distribution, market research and credit. Beringer rightly places these innovations within the context of emerging corporate structure, citing Alfred Sloan's work at General Motors during the 1920s as an example of the development of what has been termed managerial capitalism: divisional structure; devolved operational management; central, strategic, top level management based upon high levels of feedback from operations (sales levels, production costs and so forth).

Beringer's account, however, has serious omissions. Mass production and increasing industrialisation not only transformed economies, but they had an impact on the shape of the lives of individuals. As Marx observed in his 1856 lecture to Chartists: "All our invention and progress seems to result in endowing material forces with intellectual life, and in stultifying human life into a material force."8  Thus increasing specialisation meant that, after the example of mid eighteenth century England, workers now needed and wanted pre-processed food stuffs, but they also consumed as they produced, en mass and within social formations defined by the modes of production. As with the eighteenth Century English middle class, the working class of early twentieth century industrial economies consumed in order that they might aspire to the state of leisure: 'The man who buys a ticket transforms himself in front of the screen into an idler and an exploiter. Since booty is placed within him here he is as it were a victim of im-ploitation.'9 We do not have to necessarily agree with Brecht's gloomy analysis of the alienating effect of mass media to accept that industrial production has profoundly shaped individual lives, both within the workplace and elsewhere, and that leisure time is the compensation for giving significant portions of life over to work, much of it deeply unfulfilling.

This implicit agreement is apparent at the key moment in the development of modern mass production, with introduction of the much celebrated five dollar day by Henry Ford. Ford took this step as a way of attracting workers to what was a notoriously soul destroying work environment, but also to prevent the threat of unionisation. In return for giving up their freedom and autonomy to a demanding and capricious factory system, the workers were rewarded with the means to enjoy unprecedented levels of consumer spending. Automobile workers could, for the first time, purchase the fruits of their labour.

With the above in mind, we can detect in accounts of economic change focusing on technology such as Beringer's, the absence of dialectic. Unions and other working class strategies for wage bargaining were key, not only to the establishment of better wages and conditions for the workforce (and therefore the world of Western Democracies), but for an emergent working class and a sense of individual identity. E.P. Thompson, in his celebrated history The Origin of the English Working Class,10 traces early working class self determination to the Non-Conformist churches and temperance movements of the late Eighteenth and Early Nineteenth Century. Here, the congregation was urged into a personal and private relationship with god, a relationship free of the intermediaries of Priest and established church. This new empowered individual was encouraged, impelled even, in a mission of self improvement. Workers institutes, education programmes, cultural betterment, were seen as a way for workers to better their material and spiritual well being. It is these workers, formed into trades unions, who provided the skilled workforce and the emerging consumer market that powered the industrial revolution.

In place of dialectic, Beringer's account locates a unifying purpose within industrial capitalism by portraying it as a homeostatic system. The disequilibrium introduced by new technology leads to further technological innovation that restores order. Within this paradigm, control of consumption is an attempt to impose order on a chaotic world, to mitigate the effects of technological innovation. Two critiques of this view are relevant to our brief history of producers and consumers. Firstly, Alain Lipietz, identifies the importance of domestic consumption and the regulation of wages as key to growth in the post-war Fordist consensus.11 Certainly, we can see during this historical period the golden age of mass marketing, with the rapid development and increasing sophistication of television advertising and branding, as firms competed for the wages of an increasingly affluent work force. As such, demand is influenced as much by political policy as technological innovation. Secondly, and paradoxically given his influence on Neo-Liberals and their response to the Fordist crises of the 1970s, we have Joseph Schumpeter's entrepreneur as the driver of economic growth. Through his or her radical re-configuration of technology, capital and labour to create efficiency savings, the entrepreneur brings about discontinuous changes to the economic environment. For Schumpeter, successful control of the market (i.e. reduction in competition) and, therefore, high levels of profit, dampens this innovation. In this Schumpeter affirms Marx's description of capitalism as a revolutionary mode of production. Whilst there are fundamental differences in their accounts of the economics of the process, there is a shared understanding that markets are inherently unstable, and that the inverse, stability and control, leads to stagnation in growth.

These two, admittedly brief, accounts of economic progress suggest a different reading of the evolution of the relationship between consumer and producers, as mediated by technology. We can see that the relationship between producers and consumers, like that between labour and capital, is dynamic and critical, which is another way of saying it is dialectical. The technologies that define and structure these relationships are created by the economic imperative but the relationship between producers and consumers is cultural and political as well as purely economic. Because of this, technologies are adopted because they not only create profit, but they also serve the needs or desires of individuals and/or social groups, as perceived at that time.

Finally we can summarise the salient features of managerial capitalism as it relates to an analysis of the technologies of marketing:

  • High levels of bureaucratic control over consumption.
  • Consumption as a mirror of the modes of production - we consume as we produce.