This was ignored by the argument of the late 1990s and early 2000s that the increase in productivity due to massive growth of cheap computing power was the basis of a new era of continuous growth. As we saw in Chapter Three, the more rapidly firms have to replace their fixed capital, the more it cuts into any increase in profits they got from installing it in the first place. What is more, once a new technology has spread beyond the firms that first introduce it, its efect is to reduce the value of each unit of output: the late 1990s and the early 2000s were a period in which the prices of goods produced by the new technology tumbled, leading to increased competitive pressure on all the firms in these industries. A wave of innovation could no more create an endless boom in the late 1990s and early 2000s than it could in the "new era" of the 1920s.
The most important factor in reviving profit rates was not computerisation, or the reorganisation of capital as such, but the increased pressure capital was able to put on those who worked for it as successive waves of restructuring disrupted old patterns of working class resistance. Capitals took advantage of the redundancies and dislocations caused by restructuring to put relentless pressure on workers to work harder while wages were held down.
There was a decrease in the share of national income going to labour in all of the major Western economies. In the United States, "productivity grew 46.5 percent between 1973 and 1998", while the median wage fell by about 8 percent24 and that for production workers by 20 percent25 (with workers only able to protect their living standards by an increase in average working hours from 1,883 hours in 1980 to 1,966 in 1 99726). Western Europe did not see the same increase in hours (apart from in Britain, where unpaid overtime soared) or a reduction in real wages as in the US in the 1980s and 1990s, but governments and firms began to push
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The New Age of Global Instability