ADMINISTERING THE UNIVERSITY OF THE FUTURE
455
The welfare state is in crisis, not because of deficits, not only because
of greed, and not even because, as Oscar Wilde said, socialism required too
many evenings. It is in crisis because the capitalism against which it arose
is in crisis, and has been superseded by technologies that are so transforma–
tive it is a privilege to be alive to witness them. Information technologies
are changing the terms of competition in business. And they're changing
the education necessary for students to be employed. To grasp these changes
look at what has happened to what we used to call "labor."
1.
Labor
is
a fast diminishing part
if
value.
In the 1950s, the cost of a car
included about 55 percent direct labor. Today, less than 11 percent. There
is a revolution underneath that deceptively simple number. Blue-collar
jobs have been made redundant by robotics, flexible machine tools, auto–
mated inventory management systems, others by moving to low-wage
countries. White-collar jobs, correspondingly, have been made redundant
by scheduling, order entry, spreadsheet software, word-processing, and
dozens of other kinds of software-and more recently by the growth of
corporate intranets, the use of the Internet to transform and transfer cor–
porate know-how from one part of the world to the other. Middle
management is disappearing. Some have called this a revolution in re–
engineering. It is really a revolution in computer-integrated production,
and we are only at its beginning. While the market capitalization of the
Fortune 500 has grown three- or four-fold since the early 1980s, their
workforces have shrunk by 25 percent.
2. Lost jobs? Good riddance.
Remember Michael Dukakis's promise of
"good jobs at good wages." His campaign now seems quaint. The new
entrepreneurial economy-the technology companies with five hundred
employees or less-is responsible for virtually all job growth since 1988,
and no federal industrial policy-which one could read between the lines
of Dukakis's campaign-could have precipitated this dynamism. Investors,
not the government, have been picking winners and losers, and on the
whole have not done a bad job of it, especially with the help of trans–
formed financial services companies. Businesses, not Departments of
Defense, have made the necessary investments in crucial technologies. But
what Dukakis neglected to add was that the "good" jobs he wanted to
assure through government industrial policy were mainly boring, soul–
destroying, and intellectually demeaning-production line assemblers, data
processors, the kinds of jobs that were the hallmark of the old manufac–
turing. Frederick Winslow Taylor once wrote that the best businesses were
the ones in which workers "left their heads at home." He was right, which
explains why socialism had always seemed so magical for people who could
not bring it off. Anyway, much of this dehumanizing work is impossible
in the new economy. Manufacturing and service businesses want many
