The New Ruthless Economy: Work and Power in the Digital Age [Hardcover]

Simon Head (Author)

Book Description

Publication Date: November 6, 2003 | Series: Century Foundation Books (Oxford University Press)

In the great boom of the 1990's, top management's compensation soared, but the wages of most Americans barely grew at all. This wages stagnation has baffled experts, but in The New Ruthless Economy, Simon Head points to information technology as the prime cause of this growing wage disparity.
Many economists, technologists and business consultants have predicted that IT would liberate the work force, bringing self-managed work teams and decentralized decision making. Head argues that the opposite has happened. Reengineering, a prime example of how business processes have been computerized, has instead simplified the work of middle and lower level employees, fenced them in with elaborate rules, and set up digital monitoring to make sure that the rules are obeyed. This is true even in such high-skill professions as medicine, where decision-making software in the hands of HMO's decides the length of a patient's stay in hospital and determines the treatments patients will or will not receive.
In lower-skill jobs, such as in the call center industry, workers are subject to the indignity of scripting software that lays out the exact conversation, line by line, which agents must follow when speaking with customers. Head argues that these computer systems devalue a worker's experience and skill, and subject employees to a degree of supervision which is excessive and demeaning. The harsh and often unstable work regime of reengineering also undermines the security of employees and so weakens their bargaining power in the workplace.
Drawing upon ten years of research visiting work places across America, ranging from medical offices to machine tool plants, Head offers dramatic insight into the impact of information technology on the quality of working life in the United States.

Editorial Reviews

From Booklist

This is a provocative call for the rehumanization of business and society, revolting against the impact of reengineering and massive information technology systems. Journalist Head rationally gathers the evidence and presents the case against mass production: from 1990 to 2003, inflation-adjusted wages and benefits of American workers stagnated, rising less than 1 percent yearly on average. It all started, Head claims, with Frederick Taylor's Principles of Scientific Management (1911), which advocated use of engineering methods to improve productivity. Change continued with Michael Hammer's promotion of streamlining the way service industries (e.g., call centers and modern medicine) do business, accompanied by the installation of huge enterprise resource planning systems. The results? Poor to nonexistent, as the doctor-patient consultation relationship fades, as supervisors micromanage every minute of employees' work, and as once-valued workplace skills and specialties are lost. A dramatic presentation that, unfortunately, includes few specific recommendations for change. Barbara Jacobs
Copyright © American Library Association. All rights reserved

Review

"A welcome caution against believing all the claptrap we have heard about 'empowered' workplaces."--The New Leader

"As this hard-hitting book shows, most American companies have used information technology not to liberate workers from drudgery but to further their regimentation.... A sobering view of the new workplace."--Harvard Business Review

"If you're interested in the U.S. economy, you must read this book. It is full of fresh insights, meticulous reporting, and historical resonance. Simon Head shows us why the new economy is less new than we thought. Investors and policy makers will find reading this well-written analysis a memorable experience."--Bill Bradley

"This extraordinary book puts together the culture of modern capitalism with numbers and hard facts. Simon Head has written a disturbing and brilliant analysis of what ails the modern economy."--Richard Sennett, London School of Economics

"Head's acute and clearly presented book shows how innovations in software are making work more onerous and closely controlled. In each chapter, Head takes the reader to actual work sites employing 'technologies that are essentially human-proof,' i.e., in which personal choice is practically eliminated.... Head provides detailed and disturbing glimpses of how, to take only three examples, digital programs can be applied to assembling automobiles, running telephone centers, and managing medical care, with the result that wages decline and work becomes more tightly controlled."--Andrew Hacker, New York Review of Books

"A provocative call for the rehumanization of business and society, revolting against the impact of reengineering and massive information technology systems. Journalist Simon Head rationally gathers the evidence and presents the case against mass production."--Booklist

"Simon Head rightly criticizes the glib gurus who promote the mechanization of medical care. He appreciates that health care is full of inefficiencies, but that the quirky complexities of illness demand that each individual must always remain our central focus."--Jerome P. Kassirer, M.D., Editor in Chief Emeritus, New England Journal of Medicine

"Provocative and thoughtful."--Library Journal

"Simon Head's important book is sure to provoke a heated debate on the methods of modern enterprise. Can humans be programmed like machines? Head demolishes many of our illusions about information technology and argues powerfully that everyone loses when corporations try to use technology to conquer human nature."--Philip K. Howard, author of The Death of Common Sense: How Law Is Suffocating America and Chairman of Common Good

"Head is similarly tough on another New Economy conceit that underpins advocates' libertarian politics: the notion that high technology is democratizing the American workplace by flattening corporate hierarchies and boosting the knowledge content of jobs. Head's argument takes off from the simple but powerful observation that conditions in many tech-heavy workplaces look a lot more like those on the factory assembly lines of the 19th and early 20th centuries than like the sunny 21st century think tanks of the New Economy. Head asserts that corporate America's ambition to use technology to expand factory floor-like conditions extends well beyond the computer software mills and telephone call centers to the highest reaches of white-collar employment, including health care."--Los Angeles Times Book Review

See all Editorial Reviews

Product Details

• Hardcover: 240 pages
• Publisher: Oxford University Press, USA (November 6, 2003)
• Language: English
• ISBN-10: 0195166019
• ISBN-13: 978-0195166019
• Product Dimensions: 9.4 x 6.3 x 1 inches
• Shipping Weight: 1.1 pounds
• Average Customer Review: 4.7 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #1,222,757 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

11 of 11 people found the following review helpful:

5.0 out of 5 stars Big Brother Is Watching, April 12, 2004

By 

Camille (Warwick, RI USA) - See all my reviews

This review is from: The New Ruthless Economy: Work and Power in the Digital Age (Hardcover)

The New Ruthless Economy by Simon Head is a somber, thought provoking examination of how the American workforce has been dehumanized over the past decade. The widespread use of Information Technology in business was predicted to decentralize decision-making and empower employees through greater team efficiency. The reality of IT is an aggressive return to Taylorism and assembly-line routine and controls that migrated from manufacturing to service industries.

During the 1990?s, wages of top management went through the roof but the average American worker realized little, if any, increase at all. The New Ruthless Economy explores contributing factors to the inequality of wages, loss of job security and weakened bargaining power in the American workforce.

Simon Head drew his conclusions based upon ten years of research across industry lines and geographic boundaries. He discovered that in the name of efficiency, businesses have established highly structured rules, computerized their processes and then implemented technology to ensure these rules were strictly adhered to al? George Orwell.

The author provides concrete examples ranging from software implemented by HMOs that determine a patient?s length of care and treatment to the computer scripting used in call centers for wide-range solicitation. Use of these systems once again separates decision-making from the worker. It devalues an employee?s education, training and experience while subjecting them to excessively close supervision and monitoring.

Head also points to the ?lean production? and ?ERP? (enterprise resource planning) practices that prompted wholesale layoffs in the early to mid 1990?s. Not only did these systems reduce the skill levels of employees but they also significantly increased the level of worker scrutinization. Head explores the relationship between Information Technology and Scientific Management and concludes his book with a discussion of ?the economics of unfairness? where both the National Labor Review Board and employee privacy rights take major hits at the waterline. The New Ruthless Economy takes a look backward and forward where the view for American labor is equally disappointing.

9 of 10 people found the following review helpful:

5.0 out of 5 stars Wake-up call, March 21, 2004

By 

Marissa Carter (Cody, WY, United States) - See all my reviews
(REAL NAME)   

This review is from: The New Ruthless Economy: Work and Power in the Digital Age (Hardcover)

Head picks three areas to primarily study in his New Ruthless Economy: autos, health care and call centers, but the first part of the book is devoted to an excellent review of the basic tenets of scientific management as originally envisaged by the engineer Frederick Taylor, and his lesser-known counterpart in office management, William Leffingwell. Armed with this knowledge, the reader can easily trace developments in the last fifty years or so.

As Head points out, the overall effect of the extension of these principles, especially combined with the vast electronic monitoring provided by recent advances in IT, is the overall dumbing-down of the worker, regardless of inherent or potential skills. The study of Toyota auto plants in Japan and other countries is particularly distressing, and one can easily see that it is only the influence of unions that has slowed down the treadmill. The situation with regard to call centers is appalling: truly the workers there are exploited ruthlessly. One wonders if in the offshoring of American jobs in the service sector, eventually the same massive turnover numbers will appear in developing countries.

Head, in my opinion, saves the best till last?managed care organizations. Here, as one reads both figures rarely published, research findings, and case studies, it becomes all too obvious that MCOs are an absolute disaster. Why are health care costs going up? It?s all here in simple terms. Just this section of the book is worth reading alone if one is worried about health care in America.

ERP (Enterprise Resource Planning), CRM (Customer Resource Management) and a host of other business areas literally reorganized by giant software programs (SAP R/3, for example), are also discussed, and viewed as boondoggles that rarely achieve any desired goals.

The overall trends discussed in this well-written book should frighten both management and employees, and it is unfortunate that the latter so often buy into the consultants? ill-advised mantras.

8 of 10 people found the following review helpful:

5.0 out of 5 stars Fresh perspective on the perils of the new economy, October 14, 2003

By 

olivia c. howard (NY, NY United States) - See all my reviews

This review is from: The New Ruthless Economy: Work and Power in the Digital Age (Hardcover)

This provocative book exposes the dark side of IT productivity gains, in which workers in service sectors such as medicine are being transformed into cogs on an assembly line. Ironically, just when industrial assembly line workers have been empowered to take responsibility for the overall quality of the products, the workers in areas where judgment once reigned supreme find themselves extruded through routines-- what to do, what to say-- that make central planning seem creative. The initial productivity gains are apt to disappear, Head suggests, just as they did in old assembly lines, as numb minds produce bad products.