BOLTON, UNITED KINGDOM - FEBRUARY 09: A derelict mill waits for regeneration in Bolton on February 9, 2015 in Bolton, United Kingdom. As the United Kingdom prepares to vote in the May 7th general election many people are debating some of the many key issues that they face in their life, employment, the NHS, housing, benefits, education, immigration, 'the North South divide, austerity, EU membership and the environment. (Photo by Christopher Furlong/Getty Images)
A derelict mill in Bolton, north-west England. The knowledge economy has displaced manufacturing as the most advanced mode of production in the richest countries © Getty

The problem with the knowledge economy, writes Roberto Mangabeira Unger, is not that it is disrupting the way we work and produce, but that it is not doing so enough. Having long since displaced manufacturing as “the most advanced mode of production” in the richest economies, it “remains the prerogative of an elite”, he laments.

The fact that the most innovative way to organise economic activity remains trapped in small segments of the economy is, for Unger, the root of our greatest challenges, “the single most important cause of both economic stagnation and economic inequality”. The promise of greater productivity across the economy cannot be delivered, Unger argues, without a comprehensive transformation of our society and politics as well.

If he is right, then the visionary programme this new book sets out for universalising the knowledge economy is not just a nice-to-have, but necessary. The Knowledge Economy is indispensable, too, as a study of how to remedy the political polarisation inequality has brought.

Unger is best described as a philosopher of the economy. He possesses the philosopher’s gift of vision — but suffers from an excessive fondness for abstraction. I fear that this means his message will reach fewer readers than it should; his abstruse language is not for the faint-hearted. But for those who make the effort, persistence is well repaid.

Unger characterises the knowledge economy not by its products — whether gadgets or innovative triumphs — but by the social and psychological characteristics of the work that takes place within it. It is in the nature of the knowledge economy, he says, to give freedom to those who participate in it.

This is on the one hand a freedom from hierarchy. Successful knowledge production requires collaboration, autonomy, and open exchange of ideas. On the other hand, it is also a freedom from the machine-like routine at the heart of the previous leading economic sector, industrial mass production (and agriculture before it). The knowledge economy operates on creativity and spontaneity, what Unger calls “the mind as imagination” as opposed to “the mind as machine”.

There are strong echoes of Karl Marx. But unlike the Marxian critique of industrial capitalism, Unger offers the prospect that the next phase of economic change could contribute to social harmony and wellbeing and increase productivity — this is attractive, given that it is the opposite of what has happened since rich economies began to deindustrialise some 40 years ago.

Book cover The Knowledge Economy by Roberto Mangabeira Unger

Unger calls for an “inclusive vanguardism” in which the knowledge economy expands from small high-productivity slivers of activity to broad swaths of economic life. But it is hard to see what that means in practice. The book has little to say about the economic content of inclusive vanguardism: what will people actually be producing and how will they be made to do so. That need not be an indictment. (It is after all in the nature of many economic models, competitive capitalism among them, that one cannot determine patterns of production in advance.)

He does, however, have many useful ideas about what it would take to move towards such an economy. He emphasises that giving more people both the opportunity and the ability to work in the knowledge economy requires not just an economic transformation, but also profound social changes along the way.

That would require a reorganisation of how capital and other means of production are allocated (Unger calls on governments to promote alternative organisational forms to the standard corporation); more collaborative relations of workers to colleagues and superiors; and education reform. All these must happen together. Without educational reform to encourage experimentalism rather than rote acquisition of received knowledge, for example, it is hard to establish the work relations that favour a knowledge economy.

As an economic policy programme, Unger’s thesis needs further development. As a call to think radically, and as a spark of hope that the economy can be made to work for human flourishing, it could not be more timely.

The reviewer is an FT commentator

The Knowledge Economy, by Roberto Mangabeira Unger, Verso, £20, 304 pages

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