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Democracy Against Capitalism: Conclusion Part 1

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Index to posts in this series.

I didn’t see a precise definition of capitalism in Democracy Against Capitalism by Ellen Meiksins Wood, though it’s obvious Wood is talking about capitalism in the UK and the US. Here’s a definition I found in a 2006 paper by Bruce R. Scott, the Paul Whiton Cherington Professor of Business Administration, Emeritus at the Harvard Business School. The paper is titled The Political Economy of Capitalism.
Scott offers this definition of capitalism taken from the Palgrave Dictionary of Economics:

Political, social, and economic system in which property, including capital assets, is owned and controlled for the most part by private persons. Capitalism contrasts with an earlier economic system, feudalism, in that it is characterized by the purchase of labor for money wages as opposed to the direct labor obtained through custom, duty or command in feudalism…. Under capitalism, the price mechanism is used as a signaling system which allocates resources between uses. The extent to which the price mechanism is used, the degree of competitiveness in markets, and the level of government intervention distinguish exact forms of capitalism. P. 2-3, fn. omitted.

He comes up with a slightly different definition, and I’ll come back to this paper in another post. I doubt this definition would be acceptable to Wood, because it hides the reality of capitalism. For example, it says that in feudalism, one class “obtains” labor from another, which is probably not how peasants experienced it. She would at least state that almost all social systems enforce some form of expropriation by a dominant class, and discuss the mechanisms of that domination and expropriation in capitalism. She would want to discuss the logic that operates in capitalism, which I take to be something like this.

a. The goal of individual capitalists is to increase the amount of capital under their control.
b. The point of capitalism as a system is to produce returns to capital. Those returns come from producing goods and services for sale at a profit.
c. Capitalists only produce goods and services for sale. Capitalists produce nothing that cannot be sold for a profit.
d. Any means that can be used to increase the returns to capital will be supported by capitalists. These include cheating on taxes, use of tax havens, pollution, screwing workers, supporting tax cuts and tax advantages for capital (lower capital gains rates, ending Estate Taxes, lower marginal rates, special depreciation rules, outright exemptions for certain types of income, extortion of state and municipal governments for tax benefits), fighting unions, bribing legislators, regulators and executive branch officials, the list is endless and as far as I know has never been assembled in one place.

These four points aren’t laws, in the sense of the laws of physics. They are simple observations of the actual behavior of the capitalist class. They paint a bleak picture of capitalism, utterly unlike the way capitalism is portrayed in the media, by the government, by politicians, by educators and even by religious leaders. Wood argues, essentially, that any benefits it confers were forced by workers or governments, and are under constant assault. Violations of laws by capitalists are never punished as the serious crimes they are. Which executive of BP, Transocean or Halliburton went to jail for blowing up a drilling rig in the Gulf of Mexico, killing 11 people and poisoning the waters? No one is accountable for the damage done by capitalists behind the corporate shield, whether to the environment or to the people they employ.

I’ve gotten in the habit of referring to our current system of capitalism as neoliberalism, but for Wood, the capitalism we see today is just the logical growth of capitalism as Marx predicted, following the logic described above. When Marx wrote, capitalism had a solid foothold in England, but it had yet to reach its full extension. In both England and the US there were many artisans and free farmers who owned their own means of production, and were free from the imperatives of the marketplace. They had the ability to feed and shelter their families with little or no recourse to a market economy. They were for the most part free to sell or retain their production for their own use. Outside of Europe and the US, pre-capitalist economies were the dominant form.

That is no longer the case. It is very difficult for any not-rich person to provide for themselves and their families without selling their labor to capitalists. That is just as true of software engineers as it is of doctors and plumbers. No one, even the rich, can provide the necessities of life without using markets.

Wood argues that we have nearly reached the situation Marx predicted: a society of two classes, capitalists and producers. The capitalists provide some level of sustenance to those they hire, and the rest are dependent on the state or they are on the street. Or they die. The difference between the value produced by workers and their pay is sucked up by the capitalists. Although Wood doesn’t mention it, the financial sector eats up some of the sustenance received by the workers. All of us are forced to participate in a system dominated by the rich.

This system is supported by neoliberalism, an ideology dreamed up by economists and other academics. There is no point of contact with democracy. In fact, there is good reason to think that neoliberalism would work better in an autocracy or an aristocracy, and some conservatives, such as the New York Times columnist Ross Douthat, think the 17th Amendment (direct election of Senators) should be repealed as a step in that direction.

The main goal of neoliberalism is to provide a theoretical basis for denying governments the power to interfere with the business activities of capitalists, an utterly anti-democratic goal. Most people spend a huge part of their time working and commuting to work, and thinking and worrying about work. Corporations now make decisions that have massive impacts on individual lives, and on society, with little or no input from government or non-rich individuals or society, and regardless of whether they serve any purpose that outweighs the damage. It’s absurd to say that the bulk of our lives should be controlled by the decisions of the rich and powerful with no democratic control. But it’s just fine under neoliberal theory. To be very specific, holders of private capital have created the current planetary environment, which is rapidly becoming inhospitable to human life. A theory that supports their efforts to do so is suicidal.

As I say, it’s a bleak picture. In the next part I look at a somewhat less somber picture.

Democracy Against Capitalism: Markets

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While the development of capitalism certainly presupposes the existence of markets and trade, there is no warrant for assuming that markets and trade, which have existed throughout recorded history, are inherently, or even tendentially, capitalist. Democracy Against Capitalism, Kindle Loc. 2355

Human beings have always enjoyed markets and trade. In The Histories by Herodotus, written in the Fifth Century BCE, there are many mentions of markets and trade. In this excerpt, he describes a huge excavation project, and adds this:

Now there is a meadow there, in which there was made for them a market and a place for buying and selling; and great quantities of corn came for them regularly from Asia, ready ground. Book VII § 23.

There certainly wasn’t any such thing as capitalism 2500 years ago, but people still bought and sold in markets and carried goods to markets over remarkable distances. Markets and trade are found in all societies as far back as we can see. In a society with complex division of labor, they seem essential as a mechanism for distribution of production. Wood takes up the question of the role of markets in capitalist societies in several places. For example:

It is not capitalism or the market as an ‘option’ or opportunity that needs to be explained, but the emergence of capitalism and the capitalist market as an imperative. Kindle Loc. 2360

One important aspects of the transformation of feudalism into capitalism in England was the enclosure of lands. That concentrated land ownership in the hands of the aristocrats and landed gentry, a very small group. Some small farmers were able to participate in the market for land leases, giving them access to the means of production and maintaining and reproducing themselves. But the only way for them to raise cash to pay their rient was to sell their produce in the market. The small group that controlled most of the land used markets to get cash as well, having no need for all they produced and desiring cash returns. Instead of market as optional means of distribution, markets became imperative.

Agricultural workers with no access to the market for leases were forced to sell their labor to those with access, thus becoming participants in a labor market, and to use their wages to buy the food and other goods they produced. This is the early stage of capitalism, when its drives become clearer and more demanding. Small leaseholders can only raise the cash they need to pay rent by selling their produce. Their profits increase if they can extract more labor from the workers or pay them less. They are competing with other small leaseholders, so they benefit by crushing their competition or by crushing their workers. These are the seeds of the transformation identified by Wood.

Wood is clear that there is nothing inherently problematic with markets as means of distribution. The problem is the ideology and use of markets in capitalist systems, which Wood despises. First, she rejects the theory that markets are self-regulating,

… the guarantor of a ‘rational’ economy. I shall not explicate that distinction here, except to say that the ‘rational’ economy guaranteed by market disciplines, together with the price mechanism on which they depend, is based on one irreducible requirement, the commodification of labour power and its subjection to the same imperatives of competition that determine the movements of other economic ‘factors’. Kindle Loc. 5679,

This is the same idea we see in Polanyi’s The Great Transformation. He describes labor as a fictitious commodity, as I discuss here. Like most European intellectuals, Polanyi was well-versed in Marxist thought, but there is little direct evidence of that in his book, a point Wood makes. Kindle Loc. 3074. It’s another illustration of the way Marx’ historical materialism has influenced intellectuals. It’s the method that’s important, but Marx’ conclusions and even his history and sociology are open to argument and correction. I do think Wood herself is less open to questioning and correcting what she finds in the Marx canon; I can’t find much where she engages with her contemporaries outside her fellow Marxists. I’d welcome a correction on this.

Criticism of the notion of a self-regulating market has recently risen to a level that makes it almost impossible to take it seriously. After the steady string of economic crashes brought on by deregulation, only the most rigid among us cling to that idea. But it’s useful to remember that Wood wrote this in the early 1990s.

Second, Wood says that capitalists use markets to further the ends of capitalism instead of to meet the needs of human beings. The market is a tool to establish dominance and control over producers. Wood puts it this way:

I have suggested throughout this book that the capitalist market is a political as well as an economic space, a terrain not simply of freedom and choice but of domination and coercion. Kindle Loc. 5997.

Indeed, throughout the book Wood argues that the market is an imperative, not a choice in a capitalist society. Few of us have the ability to produce to meet our needs. If we want to eat, we are forced to sell our labor. Even those who can produce goods and services must, as the tenant farmers Wood describes, sell their goods and services to get cash for other needs. Capitalists produce those things they think they can sell without little regard to the long-term consequences, and without any input from interests affected by such production. Wood quotes Marx from Das Kapital:

The real barrier of capitalist production is capital itself. It is that capital and its self-expansion appear as the starting and the closing point, the motive and the purpose of production; that production is only production for capital and not vice versa, the means of production are not mere means for a constant expansion of the living process of the society of producers. Kindle Loc. 2647

In other words, the point of capitalism is to provide returns to capital. The point isn’t to make life easier or better for the vast majority of workers and citizens. In the exact same way, the point of markets is to provide a return to capital, not to provide the best allocation of resources or to provide the lowest price for goods and services. We see this more clearly as neoliberalism tightens its grip on the economy. Big Pharma is a good example.

These two criticisms are closely connected to the division of the political sphere from the economic sphere. We can think of the “market” as a proxy for the economic sphere, which in capitalist systems is separated from the political sphere. Wood puts it this way:

… the so-called economy has acquired a life of its own, completely outside the ambit of citizenship, political freedom, or democratic accountability. Kindle Loc. 4579.

The separation of the political and economic spheres has given private interests the dominant position in the lives of workers. They control the hours worked, the nature of the work, the kinds of things that are produced. This control arises through the property relations established and enforced by the state. With the sanction of the state, these private interests have the power to decide people’s income and whether they are allowed to earn an income at all. We even see private interests setting limits on the speech and assembly rights of individuals. Private interests have the power to limit health care benefits, vacations, and childbirth leave, just to name a few. Legislation to assert the interests of workers is routinely defeated, and when not defeated, is always watered down, in the name of efficiency, or of profit, or of the absolute rights of people/corporate entities to the property they control.

I don’t see any argument here that could not be made by a neutral observer of modern neoliberal capitalism.

Democracy Against Capitalism: Notes on Class

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In this post I described Ellen Meiksins Wood’s view of class from Chapter 3 of Democracy against Capitalism. In this post I look more closely at two aspects of class that seem especially relevant.

1. The small number of classes. Wood pointed out that the concept of class has not received much elaboration. Basically, we can identify three classes, the working class, the capitalist class, and the artisan/small business/professional class. That seems inadequate to describe the class structure of the US. Are there more?

Class is based on social relations, including primarily the relation to the means of production. It’s obvious that people have different levels of access to the means of production and different levels of control over use of the means of production. Meat cutters, Amazon warehouse workers, and the working class generally have no access and no control. At some point in a business hierarchy, that changes. People are given different access and different levels of control. At the top of each organization there are managers who have been given full access to the means of production and full control over their use. All of these higher-ups have control over assets, and more important, control over the people lower in the hierarchy.

It’s hard to see how to use this to identify a nascent class among those with some degree of access and control, such as supervisory and managerial workers. Classes don’t exist just because we can identify structural similarities. There has to be some way for them to connect across employers, so that they can see commonalities in their work lives and their social relations above and below. More likely many supervisory workers identify as producers first and managers second, so that many supervisory workers would see themselves in the working class. That becomes less so as we move up the hierarchy, where people begin to identify more closely with those above them. I’m pretty sure that people at the top of the hierarchy identify with the capitalists. Thus, it’s not likely that we will find other classes in this group.

Maybe a better view would be to identify classes based on actual antagonisms and conflicts. I’m not sure how that would work either. Maybe this difficulty explains why the concept of class has not been expanded.

But maybe it’s not a crucial issue. There are about 126 million private full-time employees in the US. Non-farm production and non-supervisory employment was at 104.5 million. Adding in government and farm workers and others not included would increase that number, so that about 85% of full-time employees are production/non-supervisory workers. It’s safe to assume that all part-time workers are in that category as well. If we take these groups as a proxy for the working class, we are probably safe in assuming that we are accounting for most of the population with our three categories.

2. Domination and hegemony.

Wood, following E.P. Thompson’s The Making Of The English Working Class, says that the working class makes itself as workers experience the relations of production and the relations with other people of their class and of other classes. Once the working class becomes aware of itself as a class, it is able to struggle over the surplus value it creates, and against the system that enables the capitalists to seize all of the profits. She acknowledges the difficulties this poses, including the “people’s own resistance to socialist politics”. Kindle Loc. 1982.

She sees a trend in Western Marxism to downplay or even reject the role of the working class in changing the capitalist system, eventually leading to socialism. But she says that change through the working class is the only way to bring about a socialism that is consistent with democratic values and political realism. Kindle Loc. 2001.

Wood says that the alternative to the leadership of the working class offered by some Marxists is change through other groups, especially intellectuals. She flatly rejects that approach, quoting Thompson from The Poverty of Theory claiming that their premises are profoundly anti-democratic:

… Whether Frankfurt School or Althusser, they are marked by their very heavy emphasis upon the ineluctable weight of ideological modes of domination – domination which destroys every space for the initiative or creativity of the mass of the people – a domination from which only the enlightened minority or intellectuals can struggle free. … it is a sad premise from which socialist theory should start (all men and women, except for us, are originally stupid) and one which is bound to lead on to pessimistic or authoritarian conclusions. Kindle Loc. 2006.

Pierre Bourdier focused his life’s work on the way systems of domination reproduce themselves, according to David Swartz in Culture and Power: The Sociology of Pierre Bourdieu. Here’s Swartz’ discussion of Bourdieu’s concept of symbolic violence:

Bourdieu understands ideology, or “symbolic violence,” as the capacity to impose the means for comprehending and adapting to the social world by representing economic and political power in disguised, taken-for-granted forms. Symbolic systems exercise symbolic power “only through the complicity of those who do not want to know that they are subject to it or even that they themselves exercise it. In using the term “symbolic violence” Bourdieu stresses how the dominated accept as legitimate their own condition of domination. P. 89; cites omitted.

I discussed symbolic violence in neoliberalism here. Wood no doubt accepts the idea that capitalists, the dominant class, try to impose their ideology on the working class, and to create the “people’s own resistance to socialist politics”. Bourdieu doesn’t say that symbolic violence works all the time. People retain their agency; they can change their habitus, the way they are predisposed to understand society and their place in it.

It’s also possible to resist symbolic violence. For example, in White Kids Margaret Hagerman, emphasizes that affluent white kids are not blank slates, but actively participate in forming their own views on racism which may or may not align with the authority figures in their lives. In the same way, all of us can resist the attempts of the dominant class to control our understanding.

Wood says people can throw off the domination that symbolic violence tries to create. Again, she thinks that this is the only democratic and politically realistic way forward. Given the large number of workers and their voting power, that seems true. The hope is that people can see the facts in front of them, and that workers would eventually figure out that they are being dominated and exploited, and that the surplus they produce is being appropriated by the dominant class and that this is wrongful. Some groups of workers have realized this and acted. But most people, including most workers, just keep working without thinking about what’s happening to them.

Wood doesn’t make a lot of room for intellectuals, including herself. Maybe their work is to produce a competing ideology that respects working people?

Democracy Against Capitalism: Class

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Chapter 3 of Ellen Meiksen Wood’s book, Democracy Against Capitalism, takes up the issue of class. She says that class can be defined in one of two ways: “either as a structural location or as a social relation.” Kindle Loc. 1504, ital. in original. The first way takes an index and divides it into parts. For example, we rank everyone by income, then call the lowest quintile the lower class, the next three quintiles, the middle class, the 81-99% the upper middle class, and the rest the upper class.

The second way is to define class in terms of relationships, the relations of the members to the means of production, relations among themselves, and relations with members of other classes. In this treatment, the working class is people who have no direct access to the means of production and only have their labor to sell. Marx wrote:

“In the process of production, human beings work not only upon nature, but also upon one another. They produce only by working together in a specified manner and reciprocally exchanging their activities. In order to produce, they enter into definite connections and relations to one another, and only within these social connections and relations does their influence upon nature operate – i.e., does production take place.

I saw a folk musical recently in Chicago called Haymarket, about the Haymarket Affair, a general strike that turned violent in Chicago in 1886. The play opened with one actor singing a union song, Solidarity Forever. She encouraged us to join in the chorus, which, of course, I did. It was a great way to demonstrate how organizers of that day worked to instill a sense of comradeship among workers in different industries, a sense that they had a lot in common, a sense that they formed a class in opposition to the capitalists, a/k/a the “greedy parasites”. This is the last element of class in Marxist thinking. The class can be seen objectively, which Marx called a class-in-itself, but when the members become aware of their status as class members and begin to struggle together for a common end, Marx called it a class-for-itself.

This last point is illustrated by E.P. Thompson’s book, The Making of the English Working Class, which Wood discusses at length. The basic class structure is in place long before the members begin to understand that they are a class. People similarly situated in the relations of production experience them in class ways. Kindle Loc. 1614. Shared experiences bring them together. Ultimately the members of the class become conscious of the conflicts of interest and aggravation that are making them miserable, and those become the grounds of struggle. The struggle eventually leads to confrontation. Marx argued that in the long run those confrontations lead to socialism as the only form that gives workers a voice.

Wood identifies the relations of production in capitalism as exploitation, domination and appropriation. Neoliberal capitalism has jacked up these three relations at the expense of all workers. For example, meat companies use government regulations to increase the exploitation of meat cutters by increasing line speeds. Payday lenders suck money out of military families and other low income people, protected by the totally not corrupt Republican Mick Mulvaney. For domination, look at the way Amazon warehouse workers are treated. As to expropriation, look at the latest research on the impact of concentration of businesses on wage rates. Or just check out this simple chart, discussed here. The blue line represents corporate profits in constant dollars; the red line is wages in constant dollars.

The concept of class has received “remarkably little elaboration, either by Marx himself or by later theorists…”, Kindle Loc 1519, but it’s possible to identify several. Capitalists own the means of production and control access to them. The working class owns no assets and has no access to the means of production other than through individual relations with capitalists. They own only their own labor, and rely on their ability to sell that labor to stay alive and reproduce. Slaves don’t own themselves or their labor. Professional people, small business people and artisans own a little property and use it to produce goods and services for sale. Many of them are dependent on the capitalists in the financial sector through loans and leases, which compromises their independence as a class.

In America, everyone is middle class. Barack Obama appointed Joe Biden to chair a multi-agency Middle Class Task Force. The Department of Commerce was the only agency to respond, as I discussed here. The Department offered the following definition of middle class:

Middle class families are defined by their aspirations more than their income. We assume that middle class families aspire to home ownership, a car, college education for their children, health and retirement security and occasional family vacations.

There’s something fabulously American about that definition, so focused on the individual and so utterly indifferent to the context in which people try to achieve their aspirations. Also, who doesn’t want that stuff? The vacuity of the definition makes it clear that we as a nation are not willing to confront the implications of class.

In our highly differentiated economy, it isn’t easy for people to understand that the unpleasantness or worse that they endure in their jobs is common to everyone. That makes the nastiness feel like something specific to the job, a bad manager, bad policies or other excuses. We don’t notice appropriation because the capitalist pumps money out of workers using the “market”, and producers think it’s normal for the capitalist to grab all the profits. Somehow US workers don’t recognize that they are being exploited. They think their long hours and wrecked evenings and weekends and lack of vacations and medical and personal leave and lousy pay and benefits are just fine.

Wood has a different idea. She thinks that capitalism has successfully separated democracy from the economy. Everyone agrees that the government should be controlled democratically. People are taught that the economy is and should be controlled by private interests, and that private control should be sanctioned and enforced by government. Employers exercise domination and control in ways that would not be acceptable if done by the state. Employers restrict exercise of political rights in ways that are forbidden by the Constitution to the government. Fear of losing our income silences most of us at least occasionally.

Wood argues that the economy should not be separated from democratic control. She doesn’t offer a specific mechanism; she thinks that people will eventually demand change, and that the new controls will spring from democratic control over the State. She quotes E. P. Thompson who asked:

By what social alchemy did inventions for saving labour become agents of immiseration? Kindle Loc. 1739.

We can’t begin to solve the problems capitalism creates until we all come to grips with this question. And we almost know the answer, even if we haven’t verbalized it yet. It springs from the relations of the capitalist mode of production: exploitation, domination, and appropriation.

Democracy Against Capitalism: Competing Stories About Wages

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Ellen Meiksins Wood’s book Democracy against Capitalism, tells a story of capitalism at odds with the story economists tell. At the root of this is her view that we make a big mistake when we separate politics from economics. Here’s an example, summarized from three prior posts, one at Emptywheel, and this one and this one at Naked Capitalism. The original posts give more detailed discussions.

Chapter 12 of Samuelson and Nordhaus’ intro textbook Economics (2005 ed.) is titled How Markets Determine Incomes. They rely on marginal utility theory, invented by William Stanley Jevons, an English mathematician and economist and described in his 1871 book The Theory of Political Economy discussed here. Their explanation uses this chart. P. 238.

The y-axis is the marginal product of labor, with all other inputs held constant. The x-axis is the amount of labor, here the number of employees. We treat the labor as continuous so we can have a nice smooth curve, but in the real world it would look like a flight of stairs. The authors tell us that the employer will add workers until the marginal increase in revenue from the last worker is zero. They tell us that the bottom rectangle is wages, and the top triangle-ish shape DEN is rent. That’s because they are basing their explanation on John Bates Clark’s model from about 1900, and the idea is that this chart describes a farm. But they mean that this works for the economy as a whole, so it includes all workers on one hand, and all capitalists, that is, those who own the factories, smelters, coal mines, etc. on the other. This is their discussion:

Clark reasoned as follows: A first worker has a large marginal product because there is so much land to work with. Worker 2 has a slightly smaller marginal product. But the two workers are alike, so they must get exactly the same wage. The puzzle is, which wage? The MP (marginal production) of worker 1, or that of worker 2, or the average of the two?

Under perfect competition, the answer is clear: Landlords will not hire a worker if the market wage exceeds that worker’s marginal product. So competition will ensure that all the workers receive a wage rate equal to the marginal product of the last worker.

But now there is a surplus of total output over the wage bill because earlier workers have higher MPs than the last worker. What happens to the excess MPs…? The rest stays with the landlords as their residual earnings, which we will later call rent. Why…? The reason is that each landlord is a participant in the competitive market for land and rents the land for its best price. 237-8, emphasis in original.

Clark saw this as the result of the Natural Law, and pronounced it just. This is the model taught to generations in introductory economics. The logic seems questionable, but it doesn’t matter because it isn’t how things actually happen, as I demonstrate in the linked posts.

How would a Marxist like Wood describe this model? She divides society into two groups, the producers, in this case, the farmers, and the appropriators, in this case the landlords (ignoring detail), or the workers and the capitalists. At an earlier part of the history of this society, the land was handed to the landlords, or they took it violently when government was fragmented and power represented government. Wood is talking about England, but something similar happened in the US. As a result, the producers, here the farmers, were separated from the means of production, meaning the land and perhaps some of the tools and animals needed to grow crops, and the landowners were able to expropriate the surplus created by the producers. This is a rough description of what Marx called primitive accumulation (again ignoring details and not precisely following Wood).

Primitive accumulation didn’t happen by accident. It was done by some form of coercion by some sort of ruling class. Gradually the ruling class consolidated into states, and the process continued through the arms of the state. As an example, consider Polanyi’s description in The Great Transformation of the process of “enclosure” as it was called in England.

Turning to the chart, we ignore the marginal productivity stuff and treat the line NE as the level appropriators currently pay the producers. It is as low as the appropriators can make it, using both their control of the state, and their control of the process of production. If you have any doubts about that, read the discussion of the Phillips Curve and especially a paper by Simcha Barkai here. The capitalists appropriate the triangle DEN, which represents the surplus labor, for themselves.

As always, the disposition of surplus labour remains the central issue of class conflict; but now, that issue is no longer distinguishable from the organization of production. The struggle over appropriation appears not as a political struggle but as a battle over the terms and conditions of work. Kindle Loc. 804-806

The organization of production is controlled by the appropriators with the coercive assistance of the State as needed. If the producers were smart, they would struggle with the appropriators over that surplus. They’d elect governments that would take their side in the struggle over the allocation, they’d resist and force change. There is nothing but political power that requires payment of all of the surplus labor to capital.

So now we have two stories. To me, the Samuelson/Nordhaus/Clark story is dumb. It takes the economy as a given, as if things had always been this way. In other versions of their story, we get a few shards of carefully selected history that pretend to find seeds of capitalism in earlier times. Mostly, though, it’s a vision of capitalism as an inevitable and fixed system as available for study as a cadaver.

In addition, this story makes the outcomes seem pre-ordained, and leads people to think that interference with the process is both useless and somehow dangerous, certain to produce even worse results. And, it’s a just-so story: all the numbers appear to come out in perfect equilibrium as if by magic.

Wood’s story is easy to understand. It’s based in history, none of that man-made natural law mumbo-jumbo. It doesn’t call for absurd assumptions to make everything work out beautifully. It’s easy to see how this story can motivate action, and, of course, reaction. And here’s the key point: it’s easy enough to tell the this story without direct reference to Marx.

Marxian Tools and Conservative Caterpillars

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May 5 was the 200th anniversary of Karl Marx’ birth, and Jonathan Chait decided to take a slap at him in a piece titled Trump Handed the Agenda to Conservatives and They Blew It. The title concept was addressed several weeks ago by Mike Konczal in a smart essay. Konczal asks why the Republicans who control all branches of government haven’t accomplished more, gives several examples of legislation that never moved, and asks why there is no discussion of these failures by conservative theorists.

Chait begins with an attack on an op-ed in the New York Times by Jason Barker, an associate professor of philosophy at Kyung Hee University in South Korea, titled Happy Birthday Karl Marx. You Were Right!. What was the point of attacking the birthday boy? Chait writes:

It is philosophically irrelevant that every nation-state founded on Marxist philosophy almost immediately metastasized into a repressive tyranny, [Barker] breezily insists. Perhaps this has something to do with the fact that the parties that ruled them all shared a common philosophy, and that this philosophy identified within their society an oppressor class whose political rights could and should be eliminated? No, no, reply the Marxists. All these real-world examples of governments attempting to actualize Marxist principles tell us nothing about Marxism.

Is Chait saying that Leninism is the same as Stalinism is the same as Marxist philosophy? Does he think the capitalists of Marx’ day didn’t oppress the workers? Does he think that early capitalists were tender shepherds to their employee sheep, or that the current billionaire class is the apex of Christian love and respect for their independent contractors? Who knows? This is just trite rhetoric, so he can ignore the thrust of Barker’s discussion of the obvious fact that efforts to put dialectical materialism into practice have failed. Barker says there’s a good reason for this. Marx was first and foremost a philosopher. He was a follower of Hegel, developing Hegel’s ideas of dialectical materialism into a broader theory of society. Barker explains:

… let’s be clear: Marx arrives at no magic formula for exiting the enormous social and economic contradictions that global capitalism entails (according to Oxfam, 82 percent of the global wealth generated in 2017 went to the world’s richest 1 percent). What Marx did achieve, however, through his self-styled materialist thought, were the critical weapons for undermining capitalism’s ideological claim to be the only game in town.

Chait suggests that conservatives will blame their leaders, especially Trump, when the actual problem lies with Conservatism. The parallel is supposed to be that this is just the same as Marxists blaming the failure of all Marxist regimes on evil leaders and not the “philosophy” itself. But that’s just not Barker’s position, or anyone’s, for that matter. Scholars, mostly European but a few Americans too, argue about Marxian philosophy, and about his criticisms of capitalism, but never in favor of the dictatorial regimes that attempted to put it into practice.

On the other hand conservatism and its triumphant successor neoliberalism were constructed by their founders and other cultural workers to be a theory of government. They have a theory of the person, an economic theory, and a rough program for transformation of democracy into a form suited to their flourishing. Their failures, including not least the failure to deliver a decent life to the vast bulk of society, are part of their program.

Chait doesn’t take up the issue of the destruction of conservatism and its replacement by full-blown neoliberalism. He thinks neoliberalism is nothing but a slur directed at real liberals by disgruntled leftists. He takes full advantage of the fact that neoliberalism is a denied structure, or at least a deniable structure.

The Conservative Movement, from its formation by William Buckley to its disappearance in 2016, was always a project funded by the rich. It was marketed with whispers of racism, xenophobia, religious fundamentalism, misogyny, patriarchy, anti-intellectualism and boundless militarism abroad and at home. The Conservative Movement was just a Trojan Horse for neoliberalism, when those whispers turned into roars. Think of conservatism as caterpillars spontaneously generated by the John Birch Society, the White Citizens Council and any number of grifting self-titled Religious Ministers until one day new Leaders burst forth in all their neoliberal putrescence and all the Republicans fall in behind them dancing, playing timbrels and chanting MAGA.

And that’s why the few remaining movement Conservative writers are bewildered into silence. They are stunned that their patrons no longer applaud their finely spun theories and their sharply honed plans. They thought they were relevant, when they were, as Konczal puts it, just the entertainment.

On Pierre Bourdieu Part 1: Vocabulary

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The text for this series is David Swartz’ book, Culture and Power: The Sociology of Pierre Bourdieu. I’m starting with a vocabulary of some of the technical words and ideas in the book.

1. Practice. For Bourdieu, practices are the behaviors that people exhibit in coping with their social environment. A simple example is table manners. Manners are taught to us at an early age, and it’s rare that we ever think about them, but they say a lot about us. Emily Post manners are essential for people trying to climb the greasy pole to the C-Suite, just as State Fair eating manners are crucial to political candidates. They’re a necessary but not sufficient condition for entering certain social groups. They also matter in dating, as the charming series Blind Date in the Guardian shows. The paper sends a couple on a blind date to a restaurant and then interviews them about the date. They always ask about table manners. In this one,, the pair went to a Japanese restaurant and apparently tried to shell edamame with their chopsticks, a funny faux pas.

Practices can be complex. How do I interact with higher-ups in my workplace? I don’t have to think about that, I just do it, and it is obvious that I’m not thinking when I do it. One way to describe this is to call it intensive behavior as contrasted with reflective behavior, two terms I learned years ago from an otherwise unreadable book.

2. Capitalist Mode of Production. When I found this term in the book, I knew exactly what it meant, but somehow it made me uncomfortable. After a moment, I realized it was because I associate the term with Marxist analysis, and as a good American boy, I know that all of Marx is evil. But of course, it isn’t. There’s a lengthy discussion of the capitalist mode of production (without the term) in Thorstein Veblen’s book The Principles of Business Enterprise, which I discuss here and here.

Fear and loathing of Marxism is a foundational aspect of neoliberalism; its founders wanted to insure that capitalism would never be threatened by such un-American ideas. But in the intellectual training in France in the 40s and 50s Marxism is a jumping off point.

3. Thinking. Perhaps we all know what this term means intuitively, but there’s more than just self-examination as a way to understand it. I contrast thinking with behaviors that don’t involve thinking, like the practices that Bourdieu studies. Practices are learned behaviors that we emit without being conscious of them. We deploy them as needed in response to the social signals we encounter.

The act of thinking calls on us to become aware of ourselves as thinking. In action, it feels like we are activating a specific part of our mind. Once we start thinking there are various ways to go. One is to ponder an idea, trying to get a grip on it, trying to flesh it out, and generally to meditate on it. Another is purposeful, thinking with a goal. A good example of the former can be found in Plato’s Socratic Dialogs, as Hannah Arendt discusses in The Life of the Mind. Here’s a .pdf; see the two sections starting on page 166.

The latter is what we do when we try to prove a mathematical theorem. We know where we begin, with axioms, theorems, lemmas and corollaries, and a mental image of the problem; and we know to use formal logic. But the choice of steps to take is an art, not a science.

I use the word “contrast” as opposed to define because there are many other contrasting mental states. For example, I could contrast thinking with the kind of mental babble that the Buddhists call the monkey mind. Or I could contrast it with the mental state of practicing a physical behavior.

We live in a complicated society; I think building in complexity is something mammals just automatically do to amuse themselves if nothing else. We can’t comprehend the complexity we jointly create, so we invent mediating concepts to enable us to proceed. The selection of those concepts is an art. The use of those mediating concepts is an art. The Frankfurt School, for example, designed its empirical research around its theoretical concepts as a test of those concepts and as a way of understanding their results. The choice of contrasts is a useful way to add structure to the messy social world.

4. Dialectical thinking. I spent hours reading The Dialectical Imagination, and more hours reading texts about the Dialectic, but I am not comfortable with my understanding. Most of what i read was some version of thesis, antithesis and synthesis, That makes sense in the context of dialectical materialism, because we can see that historically one movement is confronted by another. We don’t have to explain why the second movement arose, except that it arose in opposition to the dominant thesis. In The Dialectical Imagination, it seemed to be a braoder idea, based on negation, which I understood to mean that when working in the context of abstract ideas, the thinker would try to work up an opposing thesis and it’s implications.

In The Life of the Mind, Arendt talks about the dialog of the self with the self, which seems to be a form of dialectical thinking. Swartz adds another idea, from the French philosopher of science Gaston Bachelard. He says that science doesn’t proceed from a priori constructs. It does not begin with atoms or cells, but only comes to them after empirical observation, and changes them as new observations are made.

Rather, the movement of thought proceeds from a limited conceptual framework, which is closed to some important aspect of experience, to the development of a broader framework that includes the previously excluded aspect. In this way, for example, Euclidean geometry was not replaced but rather superseded and regionally situated within a broader non-Euclidean, space-time conceptual space. P. 32.

That seems much closer to what I understood from The Dialectical Imagination. Jay quotes Adorno as saying the true dialectic is “… the attempt to see the new in the old instead of simply the old in the new.” P. 69. I’ll leave this here, but I will be alert to this issue.

5. Relational thinking. According to Swartz, Bourdieu’s approach is to define a term as I did above, in opposition to another term. Concepts have meaning in relation to other concepts. This view appeals to me, because it sets up poles in the space of inquiry, which otherwise would feel too unstructured. At the same time, it doesn’t limit us to other contrasts that may open our minds to other possibilities.

That’s my starting point for working on this new area. We’ll see if it holds up.

The Dialectical Imagination by Martin Jay

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I am reading The Dialectical Imagination: A History of the Frankfurt School and the Institute of Social Research, 1923-1950 by Martin Jay (1970). It’s my introduction to the intellectual history of Critical Theory, which might provide a tool for understanding our society. I am encouraged in this view by one of the books on Amazon’s list of suggestions for people who examined Jay’s book. a book by by Michael Walsh. The description of Walsh’s book includes this:

In The Devil’s Pleasure Palace, Michael Walsh describes how Critical Theory released a horde of demons into the American psyche. When everything could be questioned, nothing could be real, and the muscular, confident empiricism that had just won the war gave way, in less than a generation, to a central-European nihilism celebrated on college campuses across the United States.

How could I resist Jay’s book with a recommendation like that?

The Frankfurt School is the name given a group of scholars who worked at The Institute For Social Research (Institut für Sozialforschung). The Institute was formed in Frankfurt, Germany in 1923 with a grant from a German industrialist, Hermann Weil, and his son Felix Weil. Many of the scholars were assimilated Jews, and as the Nazis began to emerge as a serious threat, the members made arrangements to leave. Within a month after Hitler took power, they were all gone, most to Columbia University and the New School where they remained until the Institute reopened in Frankfurt in 1951.

As a group, the scholars of the Frankfurt School were dissatisfied with the explanations offered by the theories of the day to explain the explosive rise of capitalism, and the instability and other problems it created. They rejected to strict versions of Marxism. They were opposed to the fascists, the forms of socialism imposed in Soviet Russia, and to the forms of capitalism of their day. The did like the general approach of the dialectic, which stems from Hegel and on through Marx. They added a new tool, psychoanalysis, on the grounds that Marx and other theorists gave insufficient attention to the role of the individual in the processes of creation of society. Their field of research was primarily sociology and philosophy. They applied those ideas to a close study of the actual forms of society, including work lives, and cultural lives. Jay suggests that their goal was to find conditions that would lead a society to “rational institutions” and to find ways to bring about those conditions. The theory they developed came to be known as Critical Theory.

The name Critical Theory might suggest that the substance of the work of the Frankfurt School was a theory of society. It’s not. It’s a way of examining a society, or sme specific part of a society, trying to understand it in context, and trying to understand it not just in terms of a fixed formal theory, but as the interplay of the various forces active in the society. Critical Theory is a tool, not an answer. Even so, the scholars of the Frankfurt School produced important contributions to our understanding of the forces at work in our lives. A notable example is the work of Adorno on authoritarianism. A clear explanation of a problem often suggests solutions.

The best-known scholars at the outset were Max Horkheimer, Theodor Adorno, Herbert Marcuse, and Erich Fromm. Much of the later work was led by Jurgen Habermas. All of the scholars were steeped in the traditions of German intellectualism; they studied Kant, Hegel, Marx, and Nietzsche among others. Much of their earliest work was devoted to analyzing these earlier works and the problems they saw in light of the then current circumstances.

This book is an intellectual history of Critical Theory. The first chapter is devoted to the history of the Institute, brief biographies, including some of the early writings, of the leading scholars, and their flight from Germany. The author had access to a great deal of material, and was able to interview most of the surviving members in the late 1960s. The second chapter begins the intellectual history proper. It describes the fundamental early ideas of Critical Theory. I’m rereading that chapter now, but I want to start writing about the ideas I have already encountered.

A note on form. I intend to be quite careful in identifying the source of the materials as I write posts. Some of what seems important is Martin Jay’s take on the ideas of the scholars, some will be quotes from those scholars, and some will be my effort to work out what I read and how it applies to our times. I note that the quotes from the scholars of the Institute are selected by Jay, and I do not have the original texts to provide context. That is a potential source of misunderstanding on my part, and should be kept in mind.

A note on my background in this area. I have only the barest understanding of Marxism, and know nothing about current Marxian writers. I have some familiarity with the philosophical terms I encounter, like phenomenology, epistemology, ontology and many more. I’ll try to focus on the ideas about society, social change, and the role of theory in political practice, and stay away from hardcore philosophy.

I am reading this book because I firmly believe that the left requires a theory as well as a political practice. The left clearly has a preferred group of policies and specific ideas about preferred forms of society. Theory organizes our thinking so that we can have confidence that our preferred policies are part of a coherent view of what society can and should be, and gives us a framework for explaining our views. That seems more important than ever now, when the party in power and its adherents are utterly incoherent.

The Great Transformation Part 5: Polanyi on Marxian Analysis

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Previous posts in this series:

The Great Transformation: Mainstream Economics and an Introduction to a New Series

The Great Transformation Part 1: The Market

The Great Transformation Part 2: More on Markets

The Great Transformation Part 3: Neoliberalism Before It Got Its New Name

The Great Transformation Part 4: Reaction and Counter-Reaction To Self-Regulating Markets

The Great Transformation is an examination of the origin of the theory of self-regulating markets and its errors. Polanyi’s argument is that when a society is threatened by violent intrusions, such as the sudden introduction of markets as the dominant new organizing principle, it fights back. As discussed in Part 4, beginning in the 1840s or so there was a general feeling among the upper classes that the self-regulating markets were so destructive that social control had to be imposed to reduce the damage and prevent further harm. There was no theory, and no plan, just case-by-case legislative action. Factory and agrarian workers and other members of the lower classes could not vote, so that impetus came from other classes.

Polanyi says that for the society to survive, it was necessary for laborers and the impoverished to come into existence as a class with the right to make demands and expect to see them answered. Under the Speenhamland system and the Poor Laws in effect in the early 1800s, this was difficult, perhaps in part because of the split between those on relief and those with miserable poorly-paying work. When those laws were repealed and the poor put on the street where they served as the army of unemployed to keep wages at very low levels, it became possible for them to identify as a class. This sounds a bit like Marxian analysis. And, in fact, Marx agreed with the economic liberals of that day that the natural level of wages was the subsistence level. This is from the Paris Manuscripts:

The lowest and the only necessary wage rate is that providing for the subsistence of the worker for the duration of his work and as much more as is necessary for him to support a family and for the race of labourers not to die out. The ordinary wage, according to [Adam] Smith, is the lowest compatible with common humanity, that is, with cattle-like existence.

The reference to Smith is to Chapter VIII of The Wealth of Nations. Smith’s analysis of the wages of labor is much more complicated than this quote from Marx shows. He says that wages depend on a number of factors including whether a nation is declining or thriving. He says that in England in the 1770s wages were above mere subsistence, and the lives of workmen were improving. That helps explain the reaction to the intrusion of the free market in labor brought on in the early years of the Industrial Revolution. The sudden change from a reasonably pleasant life to a much more miserable existence contributed to the social demand for restraining the self-regulating market. Smith seems to approve of the higher wages workmen were receiving:

Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage, or as an inconveniency, to the society? The answer seems at first abundantly plain. Servants, labourers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part, can never be regarded as any inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.

The laissez-faire cheerleaders of the 1800s and their neoliberal counterparts don’t agree, and perhaps Marx’ pessimism is more realistic than Smith’s approbation.

In Chapter 13, Polanyi gives two reasons for his disagreement with Marxian analysis. First, Marx teaches that classes are the basic elements of society. Polanyi says that far more often classes arise to suit the form society has taken. When a society is stable, class interests can be used to understand the evolution of the society. When society undergoes structural changes, the class structure may fracture. A class that has become functionless may disintegrate and be replaced by other classes or not at all. These structural changes may be environmental, the result of war, technological advance, or the rise of a new enemy. In such cases, class theory doesn’t predict the outcome.

Secondly, there is the equally mistaken doctrine of the essentially economic nature of class interests. Though human society is naturally conditioned by economic factors, the motives of human individuals are only exceptionally determined by the needs of material want-satisfaction. That nineteenth-century society was organized on the assumption that such a motivation could be made universal was a peculiarity of the age. … Purely economic matters such as affect want-satisfaction are incomparably less relevant to class behavior than questions of social recognition. Want-satisfaction may be, of course, the result of such recognition, especially as its outward sign or prize. But the interests of a class most directly refer to standing and rank, to status and security, that is, they are primarily not economic but social. P. 160.

Of course, the assertion that human behavior is motivated solely by material want-satisfaction wasn’t just a peculiarity of the 19th Century, it’s the dominant idea of neoliberal economics. The idea that human beings are solely devoted to getting stuff at the best price is central to their models, and to their understanding of their ill-defined markets. It is just as false today as it was in Marx’ time. I googled the term “experiment pay compared to other people”, and got a bunch of papers and articles saying that pay isn’t the important thing. Other factors, including comparative pay levels, and the intrinsic rewards of the tasks are more important. Here’s one. Beyond that, we know humans have needs that go far beyond material goods. Just take a look at Maslow’s hierarchy of needs. Material goods satisfy the needs for safety and security, but stuff by itself isn’t going to get you much in the way of love and belonging, esteem or self-actualization.

One of the goals of neoliberalism is to re-imagine human beings as the utility maximizers of their theories. Here’s a paper that flatly says that money isn’t the important issue even for the most sociopathic set, CEOs. Giving them huge bonuses for increasing stock prices doesn’t produce higher stock prices. Even the John Galts of the Corporate Jungle aren’t good little neoliberals.