Information Technology is again being invoked as a solution. There is a rush toward university courses online, thereby achieving great economies of scale. Some of these are for sale, albeit at rates far lower than the cost of actual tuition at a bricks-and-mortar institution. Others are offered altruistically for free. Neither method will hinder credential inflation; indeed, both add to it, by putting still more educated persons on the market. As of now, the new kinds of credentials are being labeled as distinct from university degrees, and in that sense not directly competing with them. This remains to be seen; in effect a new form of cheap educational currency is being created, alongside a more traditional and expensive educational currency. If educational currencies are strictly like money, Gresham’s law would apply, and the cheap currency would drive out the expensive one. On the other hand, in economic sociology, as we know from Viviana Zelizer (1994) and Harrison White (2002), high-quality economic objects can exist in separate circuits alongside cheap ones, and that may well continue to be the case in the production of educational credentials.
The dilemma is this: efforts to make education cheaper have the effect of reducing employment in the educational sector itself; if a few famous universities monopolize teaching through online courses, and a few professors can do the vast amount of the teaching with electronic assistance, one more sector of employment becomes technologically displaced. The result is the same through the pathway of old-fashioned tax revolts; a short-term reduction in the population’s tax burden has the roundabout effect of reducing jobs available for that same population.
Of the five escape routes from capitalist crisis, continued educational inflation seems to me the most plausible. An expanding educational system driven by credential inflation reaches a potential crisis point within the educational system itself. This is not necessarily final. One can envision a series of such plateaus, stopping and restarting as our secular faith in salvation through education goes through disillusionment and revival. But if this becomes increasingly government sustained, it amounts to socialism in the guise of education. It is conceivable that liberal governments might find their way to keep expanding educational systems, using them as a Keynesian safety valve, and a form of transfer payments from the capitalists and the diminishing sector of the employed, to sustain the otherwise unemployed. But to get such a government might well take a near-revolutionary disillusionment with capitalism.
WHEN WILL FULL-BLOWN CRISIS HAPPEN?
Computerization of middle-class labor (since the last decade of the 20th century) is proceeding at a much faster pace than the mechanization of the manual labor force (which took approximately the entire 19th century and three-quarters of the 20th). Technological displacement of middle-class labor is not much more than twenty years old; whereas it took almost 200 years to destroy the working-class labor force.
Another estimate of the timing of future capitalist crisis is provided by world-system (W-S) theory. In earlier writing on the capitalist world-system, Wallerstein and colleagues presented a theoretical model of systemic long cycles. The core regions of the W-S in their expansive phase generate their advantage by resources extracted under favorable conditions from the periphery. Hegemony is periodically threatened by conflicts within the core, and especially by semiperipheral zones rising to threaten the hegemon. Eventually the core gets caught up with, just as increasing competition in a new area of entrepreneurial profit brings down the profits once gained by the early innovator; in this respect, the W-S operates like Schumpeter’s cycle of entrepreneurship, but on a global scale. With each new cycle, new opportunities for expansion and profit arise, under the leadership of a new hegemon. The crucial condition in the background, however, is that there must be an external area, outside the W-S, which can be incorporated and turned into the periphery of the system. Thus there is a final ending point to the W-S: when all the external areas have been penetrated. At this point the struggle for profit in the core and semiperiphery cannot be resolved by finding new economic regions to conquer. The W-S undergoes not just cyclical crisis but terminal transformation.
On the basis of past cycles, Wallerstein (also Arrighi, 1994) project the crisis of the W-S at approximately 2030–2045. My own estimate of the crisis point generated by the mechanism of technological displacement of the middle class depends on the rate at which structural unemployment grows. (This must be measured not merely in convenient technical terms such as, in the United States, the number of applications for unemployment compensation, but by our best measure of the proportion of the adult population unable to find work and driven out of the employment sector entirely.) An unemployment rate of 10% is painful, by American standards; 25% (found in crisis economies) is big trouble, but it has been sustained in the past. But when unemployment reaches 50% of the work-capable population, or 70%, the capitalist system must come under such pressure—both from underconsumption and political agitation—that it cannot survive. If we think such unemployment rates are unimaginable, let us imagine again, through the lens of technological displacement of all categories of work by electronic machinery. It is clear that the rate of technological displacement has accelerated in the last fifteen years. We could well reach 50% structural unemployment by the year 2040, and 70% not long after that. In gross terms, this agrees with the W-S projection of a terminal crisis of capitalism around the middle of the 21st century.
ANTI-CAPITALIST REVOLUTION: PEACEFUL OR VIOLENT?
If the crisis of technology displacement becomes severe enough—a highly automated, computerized world in which very few people work, and most of the population is unemployed or competing for menial low-paid service jobs—would there be a revolution?
Here we must leave economic crisis theory and examine theory of revolution. Since the 1970s, the theory of revolution has been revolutionized. Skocpol [1979], Goldstone [1991], Tilly [1995], and others, by their comparative researches on the rise and fall of state regimes, have established what can be called the state breakdown theory of revolution. Successful revolution depends on what happens at the top, not on disaffected and impoverished masses from below. The chief ingredients are: first, a fiscal crisis of the state; the state becomes unable to pay its bills, and above all to pay its security forces, its military and police. State fiscal crisis becomes lethal when it is joined by the second ingredient, a split among elites over how to deal with it. We could add secondary factors, back in the chain of antecedents, typically although not always including military causes; a state fiscal crisis often comes from accumulated military expenses, and elite deadlock is especially exacerbated by military defeat, which delegitimates government and provokes calls for drastic reform. Splits among elites paralyze the state and open the way to a new coalition with radical aims. It is in this power vacuum—what social movement theorists now call the political opportunity structure—that social movements are successfully mobilized. Often they do so in the name of grievances from the bottom, but typically such radical movements are led by upper-middle-class fractions with the best networks and organizing resources. As de Tocqueville recognized long ago, the radicalism of a movement is not correlated with the degree of immiseration; exactly what does determine the degree of radicalism is more in the realm of the ideological and emotional dynamics of exploding conflict, although just how to theorize this remains unfinished.