is creation an industry?
TRANSCRIPT
The second great transformation
© GERET 2015
Alan Freeman
The strange non-disappearance of labour
30%
40%
50%
60%
70%
80%
90%19
4819
5219
5619
6019
6419
6819
7219
7619
8019
8419
8819
9219
9620
0020
04
UK US Japan Germany
USA
UK
Japan
Germany
Share of employment 1948-2007
0%
5%
10%
15%
20%
25%
30%
1946
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
Retail+Wholesale InformationFinancial Activities Leisure and HospitalityGovernment Health and EducationBusiness services
GovernmentRetail and Wholesale
Business Services Health and Education
Leisure and Hospitality
Financial Activities
Information
Share of employment in US services
What’s really been happening to consumption?
1976
1980
1984
1988
1992
1996
2000
2004
2008
0%
5%
10%
15%
20%
25%
30%
Leisure goods and servicesFood and Non-alcoholic drinksServices
Source: UK Family Expenditure Survey, author calculations. Reproduced from Freeman, A. 2014. Twilight of the Machinocrats: Non-substitutable labour and the future of production. In van der Pijl (ed). The International Political Economy of Production. Routledge
-2% -1% 0% 1% 2% 3% 4%
Leisure goods and services
Transport
Household goods andservices
Dwelling costs
Personal goods andservices
Food and non-alcoholicdrinks
Clothing
Alcohol and Tobacco
Annual Growth Rate of Major Categories of Family Expenditure,
1976-2008
Proportion of major Categories of Family Expenditure, 1976-2008
Do industries still exist? If so, what are they?
• Smith: and industry is a branch of the division of labour• Universal concept in economics
• Physiocrats ‘town and country’• Marx Schemes of Reproduction (consumer goods and means of
production)• Victorian “Production Accounts” (measuring output of various
industries)• National accounts ‘sectors’• SIC/NAICS codes in the national accounts• Leontieff input-output• Sraffa system
• Etc etc etc
Taken as obvious, but it’s not
• Is a grain elevator part of the agriculture sector?
• Is forestry an agricultural activity and if not, why not?
• What do a ship and a train have in common?• What is the ‘industry’ that produces shirts, tractors, chairs and nuclear power plants?
The problematic concept of service• Smith: “The labour of the manufacturer fixes and realises itself in some particular
subject or vendible commodity, which lasts for some time at least after that labour is past”
• ‘Service’ or ‘intangible’ really has not advanced beyond ‘not a vendible commodity which lasts’. Beyond this, definitions differ wildly
• Actually feudal in origin! (it is what a servant does)• What is the use value of a tape recording? Is it the same use value as a CD? Or are
these merely bearers of the same service as a performance?• One extreme: ‘services of capital’ refers to any use delivered over time. So a
toothpaste tube is a service provider• Petit 1987: service requires the direct and simultaneous presence of a human
consumer and a human producer• Both definitions are in common use in statistical circles and nobody points out the
contradiction!
So what’s left of the concept?• Specialisation is a constant of capitalism• It’s driven by competition• It works as Smith describes, by increasing the
productivity of labour• It’s the most ‘primitive’ mechanism for this• But it’s still operative• So we need to ask ‘what do modern capitalists
specialise in?’
The working definition (ISIC manual)
• Resource in common• Process in common• Product in commonNote 1: specialisation in any of these will bring economies of
scaleNote 2: almost no modern industry specialises in all three
• We can therefore begin with the empirical question • Where do we find enterprises that use common resources?• Where do we find enterprises that use common processes?• Where do we find enterprises that produce common products?
A methodological note: on the interaction of empirical
reality and theory in the production of definitions
Freud on culture“[C]ulture, by which I mean everything in which human life has risen above its purely animal circumstances…
includes on the one hand all the knowledge and skill that humanity has acquired in order to control the forces of
nature and obtain from it goods to satisfy human needs, and on the other hand all the institutions that are
required to govern the relations of human beings one to another and in particular the distribution of such goods
as can be obtained.”
Symbolic texts model
“processes by which the culture of a society is formed and transmitted are portrayed in this model via the
industrial production, dissemination and consumption of symbolic texts or messages, which are conveyed by
means of various media such as film, broadcasting and the press”
Concentric Circles Model“This model is based on the proposition that it is the
cultural value of cultural goods that gives these industries their most distinguishing characteristic. Thus the more pronounced the cultural content of a particular good or
service, the stronger is the claim for inclusion of the industry producing it (Throsby, 2001).
The model asserts that creative ideas originate in the core creative arts in the form of sound, text and image and that
these ideas and influences diffuse outwards through a series of layers or “concentric circles”, with the proportion of cultural to commercial content decreasing as one moves
further outwards from the centre. UNESCO, op cit
Intellectual Property Model“This model is based on industries involved directly or indirectly
in the creation, manufacture, production, broadcast and distribution of copyrighted works (World Intellectual Property
Organization, 2003). “The focus is thus on intellectual property as the embodiment of
the creativity that has gone into the making of the goods and services included in the classification. A distinction is made
between industries that actually produce the intellectual property and those that are necessary to convey the goods and services
to the consumer.”
The concept of non-substitutability• In discussion of automation it is universally assumed
that all labour can be replaced by a machine• So why isn’t all labour mechanised? What happened to
‘post-industrial society’• We must question the assumption that machines and
people are universally substitutable• In fact particular new forms of labour are rising to
dominance whose characteristic is that they are not replaced by machines
Why wouldn’t you replace a human?• Type 1: because there is a social preference
• Care• Child-raising• Performance
• Type 2: because the labour by its nature cannot be mechanised
• Church-Turing theorem• Syntax-Semantic distinction• Tasks which cannot be achieved by repetition• Design is such a task: it works from a partial semantic
description “what the consumer wants”
Non-substitutable labour as a productive resource
[1] [2] [1]/[2]
Group' (creative sector)Creative Jobs in this group
Total jobs in this group
Creative Intensity
Growth 2011-2013
Architecture 65 94 69% 9%Music, performing and visual arts 167 243 69% 16%Design: product, graphic and fashion design 75 122 61% 9%Film, TV, video, radio and photography 141 231 61% 12%Crafts 4 7 57% -2%Advertising and marketing 83 153 54% 3%Publishing 102 198 52% 12%IT, software and computer services 236 576 41% -3%Museums, galleries and libraries 17 85 20% -9%Total Creative Industries 890 1,708 52% 18%Non-creative industries 907 28,027 3% 0%
Source: DCMS January creative industry estimates table 3 and figure 1, pages 9-10, author calculationsAll job numbers in thousandsYear: 2013
Creative Industry Density0.178 to 0.5830.12 to 0.1780.078 to 0.120.046 to 0.0780.003 to 0.046
The production process of creation
• Open Innovation (Chesborough)
• Motley Crew (Caves)• Pre-market selection
(Caves)• Geographical micro-
clusteringCaves, R. 2002. Creative Industries: Contracts between Art and Commerce. Cambridge, Mass.: Harvard University Press.Chesbrough, H.W. 2008. ‘Open Innovation: A New Paradigm for Understanding Industrial Innovation’. In H. Chesbrough, W. Vanhaverbeke and J. West, eds. Open Innovation: Researching a New Paradigm, Oxford: Oxford University Press.
Revenue from recorded music
Revenue from Live music
Music as share of consumer spending
The paradox of live performance
Source: Page, W.; Carey, Chris; Haskel, Jonathan, and Goodridge, Peter. 2011. ‘Wallet Share’. Economic Insight 22, 18 April . http://prsformusic.com/creators/news/research/Documents/Economic%20Insight%2022%20Wallet%20Share.pdf
What is the use value of culture?• Throughout the age of mechanisation, culture takes the form of human
interactions that are excluded from the production process• But actually, it is the ‘hidden’ component of all product innovation• The industrial revolution might equally be termed ‘the clothing
revolution’• Now, cultural products are becoming ‘vendible’ as such• So what, actually, is sold?• The most characteristic feature of cultural commodities is differentiation
– eg fashion, art, performance• Differentiation is now spreading to more and more sectors of the
economy (consider the car)• Reduced to the most abstract, what is sold is distinction itself
The class function of distinction• The ‘use’ of aesthetics is to demarcate class position• Classes reproduce through culture – society does not reproduce itself ‘classlessly’ but in
and through the reproduction of classes• The most important requirement of class is to be distinct.• Inheritance is becoming less and less the key mode of class reproduction (and with it,
the bourgeois family dissolves)• Thus the markers of class – the ‘kind of person you are’ becomes ever more important• This is on the one hand the characteristic feature of the age• And the greatest obstacle to a further great transformation• To realise fully the potential of the new technologies, capitalism would need to abolish
class distinction. This is a central contradiction
If this is an industry, what is it doing?
Source: DCMS January 2015 estimates, figure 5 and table 6
The engine of creation
UK Department of Culture Definition
…those industries which have their origin in individual creativity, skill and talent and which
have a potential for wealth and job creation through the generation and exploitation of
intellectual property
– DCMS Mapping Document 1999