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Max Weber: The Protestant Ethic and the Spirit of Capitalism (Revision Notes)

Weber argued that the values of the protestant religion led to the emergence of Capitalism in Western Europe around the 17th century.

Weber observed that Capitalism first took* off in Holland and England, in the mid 17th century. He asked himself the question: ‘why did Capitalism develop in these two countries first?’

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Protestant Individualism and the Emergence of Capitalism 

Based on historical observation and analysis, Weber theorized this was because these were the only two countries in which Protestantism was the predominant religion, rather than Catholicism, which was the formal religion of every other European country.

Weber theorized that the different value systems of the two religions had different effects: the values of Protestantism encouraged ways of acting which (unintentionally) resulted in capitalism emerging, over a period of many decades, even centuries.

Protestantism encouraged people to ‘find God for themselves’. Protestantism taught that silent reflection, introspection and prayer were the best ways to find God. This (unintentionally, and over many years) encouraged Protestants to adopt a more ‘individualistic’ attitude to their religion by seeking their own interpretations of Christianity.

In contrast, Catholicism was a religion which encouraged more conservative values and thus was resistant to such changes. The Catholic Church has a top-down structure: from God to the Pope to the Senior Bishops and then down to the people. Ultimate power to interpret Catholic doctrine lies with the Pope and his closest advisers. Practicing Catholics are expected to abide by such interpretations, they are generally not encouraged to interpret religious scripture for themselves. Similarly, part of being a good Catholic means attending mass, which is administered by a member of the Catholic establishment, which reinforces the idea that the church is in control of religious matters, rather than spirituality being a personal matter as is more the case in Protestant traditions.

Part of Weber’s theory of why Capitalism first emerged in Protestant countries was that the more individualistic ethos of Protestantism laid the foundations for a greater sense of individual freedom, and the idea that it was acceptable to challenge ‘top down’ interpretations of Christian doctrine, as laid down by the clergy. Societies which have more individual freedom are more open to social changes.

Calvinist Asceticism and the Development of Capitalism

Weber argued that a particular denomination of Protestantism known as Calvinism played a key role in ushering in the social change of Capitalism.

Calvinism preached the doctrine of predestination: God had basically already decided who was going to heaven (‘the saved) before they were born. Similarly, he had also already decided who the damned were – whether or not you were going to hell had already been decided before your birth.

This fatalistic situation raised the question of how you would know who was saved and who was damned. Fortunately, Calvinism also taught that there was a way of figuring this out: there were indicators which could tell you who was more likely to be saved, and who was more likely to be damned.

Simply put, the harder you worked, and the less time you spent idling and/ or engaged in unproductive, frivolous activities, then the more likely it was that you were one of those pre-chosen for a life in heaven. This is because, according to Calvinist doctrine, God valued hard-work and a ‘pure-life’ non-materialistic life.

According to Weber this led to a situation in which Calvinist communities encouraged work for the glory of God, and discouraged laziness and frivolity. Needless to say there was quite a motivation to stick to these ethical codes, given that hell was the punishment if you didn’t.

Over the decades, this ‘work-ethic’ encouraged individuals and whole communities to set up businesses, and re-invest any money they earned to grow these businesses (because it was a sin to spend the money you’d made on enjoying yourself), which laid the foundations for modern capitalism.

Weber argued that over the following centuries, the norm of working hard and investing in your business became entrenched in European societies, but the old religious ideas withered away. Nonetheless, if we take the longer term view, it was still the Protestant work ethic which was (unintentionally) responsible for the emergence of Capitalism

Evaluations 

On the plus side, Weber’s theory of social change recognizes that we need to take account of individual motivations for action in order to understand massive social structural changes

On the negative side, critics have pointed out that the emergence of Capitalism doesn’t actually correlated that well with Protestantism: there are plenty of historical examples of Capitalist systems having emerged in non-Protestant countries – such as Italian Mercantilism a couple of centuries early.

Find out More

This post is a very brief summary of Max Weber’s theory of religion and social change. For a much more detailed account, including more specific historical details of Calvinism, please see this post (forthcoming!) 

 

*Weber recongized that features of the Capitalist system were present in other parts of Europe previous to the 17th century, but Holland and England were the first societies to really adopt capitalist values at the level of society as a whole, rather than it just existing in relatively isolated pockets.

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Is Capitalism on the Wane?

John Mcdonnell, Labour’s Shadow Chancellor today announced Labour’s plans to renationalise the railways and many other public utilities at no cost to the public.

Does this mean that Jeremy Corbyn’s rejection of contemporary capitalism is now the new mainstream, and/ or does this represent the end of Capitalism as we know it?

It does seem that Capitalism has become something of a dirty word ever since the financial crash of 2008, and in a recent poll, most British people regard capitalism as ‘greedy, selfish, and corrupt’; and many are more sympathetic towards socialism, and favor the renationalisation of the railways and utilities.

 

However, the ideological scare-mongers are out, claiming that re-nationalisation will be far from free, and it will be interesting to see how much genuine public appetite there is for bringing back services into public ownership!

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The Industrial-Capitalist Model of Development

In order to understand what Modernisation Theory is, it’s useful to have an understanding of what the ‘Industrial Capitalist’ model of development is. The United Kingdom and America, the two leading super powers in the world up throughout the last two centuries, both followed an industrial-capitalist model of development,

There are obviously two bits to ‘industrial capitalism’:

INDUSTRIAL + CAPITALISM 

The first requires more explanation….

Capitalism and Development 

Capitalism is an economic system based on the private ownership of the means of production (land, raw materials, technology, factories and offices) and where production is carried out for a profit.

Under capitalism, any individual with sufficient capital (defined as resources which are available to be invested rather than saved for emergencies or simply consumed) is free to set up a business and produce a good or a service which can then be sold for a profit in the market.

In theory, Capitalism is the most efficient way of ensuring that people get the goods and services they want at the cheapest price. The reason for this is that if a Capitalist sees someone else making a profit (selling blue widgets for example), they will see an opportunity, and start producing blue widgets themselves, wanting to profit themselves.

This creates competition between the two producers, which should have three effects – competition should drive prices down, because consumers want the cheapest product, and/ or it should also push quality up, because consumers want the best quality for the cheapest price; it should also encourage innovation, as each capitalist receives a lower profit for blue widgets, they might try making fancier or different colored widgets, thus generating new demand.

In reality, what happens is all of the above – capitalist production creates new markets in varying qualities of widgets (different for different people with differing income levels) and innovation – as more producers come in seeking profit through production.

Crucial to the capitalist mode of production is labour power – capitalists buy labour power through paying wages (on the ‘job market’) – in Marxist theory, this is an exploitative relationship as the capitalist extracts surplus value from the workers by paying them less than the value of the goods they produce, but pro-Capitalists argue that it’s a win-win situation, as under free-market Capitalism, anyone is free to sell their labour elsewhere, or set up their own business themselves.

Communism – the ‘opposite of Capitalism’ 

The opposite of pure, free-market capitalism is Communism – where there is no private property and the state owns and controls the means of production. Under state-communism in Russia during most of the 20th century, the state decided what people and society needed and dictated to factories what was to be produced in five year phases. Thus there was no role for the profit motive or entrepreneurial innovation.

Goods were effectively rationed, and distributed according to need rather than by being sold on the market place.

It follows that in ‘pure communist systems’ people had much less economic freedom than under Capitalism.

NB – the above is a very rough account!

The role of the state in ‘free-market’ capitalist systems

In most European societies today, the state (governments) regulate the ‘free-market’ – so the ‘free’ in the ‘free-market’ is a very relative concept.

For example, there are lots of laws about health and safety, and environmental protection and worker rights (the minimum wage) which restrict the freedoms of capitalists; and there is also taxation which allows the state to provide some services for free to everyone (along Communist lines) – in the UK for example we have free state provided health and education, and security (the police) – so there is a very limited ‘free-market’ in these areas.

Industrialization and Development 

Industrialization refers to the process of moving from an agricultural to a factory based economy, which in turn involved harnessing the power of coal, oil and gas to power machines in factories to produce goods rapidly and efficiently.

The best example of the industrial mode of production is Henry Ford’s Ford motor plant, in which he organised the production of cars along a conveyor belt system – where workers would stand in one ‘post’ and progressively add bits onto a car which came past them.

Industrialization went hand in hand with Capitalism, as organizing workers to work in a mechanized factory was the cheapest way to produce massive amounts of goods for sale and thus to maximize profits for individual capitalists.

Fast forward to the present day and many areas of production have been ‘industrialized’ – pretty much all forms of transport, clothing, computers, and even agriculture (thought tractors etc).

So what is the Industrial-Capitalist mode of development?

It basically refers to the past 200 years of economic development in Europe and America, which has since spread to many other parts of the world. The UK went through this phase in the 19th century, the USA in the 20th.

The industrial-capitalist mode of development consists of an economic system which allows (relatively) high amounts of freedom to capitalists to invest and make a profit – it was the Capitalist class (e.g. Henry Ford) who effectively industrialized the production of most goods for example.

This had the knock on effect of creating lots of jobs and secondary business, and eventually a surplus which the government could tax in order to provide a range of welfare benefits to populations for free.

It is this mode of development which Modernisation theory suggests developing countries should adopt in order to develop, thus following in the footsteps of the UK and the USA.

Disclaimer – I wrote this off the top of my head in 20 minutes! 

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What is Capitalism?

 

capitalismYou really need to understand what Capitalism is in order to understand Marx. Wikipedia (1) is actually a useful starting point here, defining Capitalism as

“an economic system in which the means of production are privately owned; decisions over what is produced and what is bought and what prices should be are determined mainly by private individuals the free market, rather than through a planned economy; and profit is distributed to owners who invest in businesses.”

 

There are three (+1) main components of Capitalism (2)

  1. Private ownership of the means of production – rather than collective or state ownership.
  2. Goods are produced for sale in the free market – rather than for personal use of for barter.
  3. The reason producers produce goods is because they wish to make a profit – the profit motive is central.
  4. To the above I would add a fourth component- which is wage labour – The majority of people in a Capitalist system make their money through wage labour – by selling their labour power to their employers.

Four arguments for Capitalism

  • It is the best economic system for bringing about economic growth, or a sustained increase in the total value of goods and services that are produced,
  • It is the best system for ensuring that what is produced matches up to the needs and wants of the people – because producers only make a profit if they supply what people demand.
  • Thirdly it is argued that production should be efficient because Capitalists are in competition with each other – and the more efficient one’s business is, the lower the cost of production, the lower the price and higher profit.
  • Defenders of Capitalism argue that the genius of Capitalism is that it transforms individual self interest into collective good – selfish capitalists want to make a profit, but they have to produce what people want in order to make a profit!

Capitalism is a dynamic system – it is always transforming the world around it

Capitalism is an incredibly dynamic system – because it induces Capitalists to complete, they are ever looking for new opportunities to invest and make the best rate of profit –There is a natural tendency for this system to change societies and expand globally. Capitalism is restless and Marx was very aware of this fact –

Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones … All that is solid melts into air”(4)

Of course, all of the above advantages are contested – Marxist writers generally arguing that there are contradictions within the Capitalist system that make it fundamentally flawed – one such writer is Alex Callinicos…

Alex Callincos (3) – Two contraditions within the Capitalist system

According to Callinicos, the above factors mean there are two fundamental forms of conflict, inherent to the Capitalist system –

  • Firstly, because the Capitalist class exploits labour –the interests of the Capitalist class are in conflict with the interests of the working class.
  • Secondly, each individual member of the Capitalist class is in conflict with other members of that class – Capitalists compete with each other to attain an ever greater amount of profit and an ever greater share of wealth.

Capitalism tends to concentrate wealth in the hands of the few and lead to greater exploitation of the many

enjoy_capitalism_2_Each individual cpitalist, faced with competition from other Capitalists, seeks to maximise profits relative to his competitors. One way in which this can be done is through technological innovation, thus lowering the costs of production below the average costs of production in the sector, which will increase the rate of profit. This will attract further investment (capital).

The problem with this is that it is only a short term solution because eventually other Capitalists will innovate in the same way and the competitive advantage will be nullified, and we return to a level playing field.

Of course some capitalists are unable to afford these technological innovations and go bankrupt, causing unemployment which reduces the bargaining power of those in work, which allows the remaining Capitalists to reduce the wages of their workers, thus increasing the rate of exploitation. At the same time, surviving capitalists buy up the means of production of those firms that have bankrupted at below market value thus leading to a concentration of ownership and a concentration of power in the hands of fewer and fewer people.

From the Marxist point of view therefore, the logic of Capitalism that wealth gradually becomes concentrated in the hands of fewer and fewer people, and the masses get ever more exploited and impoverished.

Sources

(1)  http://en.wikipedia.org/wiki/Capitalism – my version is modified slightly

(2)  Ingham, Geoffrey (2008) Capitalism, Polity – see this for a fuller account of definitions and history of Capitalism

(3)  Callinicos, Alex (2003) An Anti-Capitalist Manifesto, Polity

(4)  First appears in ‘The Communist Manifesto’, 1848. – http://www.marxists.org/archive/marx/works/1848/communist-manifesto/

http://www.learnoutloud.com/Podcast-Directory/Philosophy/Political-Philosophy/The-Communist-Manifesto/22023 – free podcast of the Communist Manifesto

http:/manybooks.net/titles/marxengelsetext93manif12.html – download free ebook – I have a copy permanently on my ipod! – Ironic I’m sure.

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The Capitalist Mode of Production

Understanding the Capitalist Mode of Production is crucial to an understanding of both Modernisation Theory and Dependency Theory – I thought the passage below did a nice job of summarizing what the ‘capitalist mode of production’ is.

A a special treat for my American readers, I have used the correct, British spelling of ‘labour’.

‘Today we think of Capitalism as the normal way of organising economic activity and tend to take it for granted, but it is a very different mode of production to previous feudal economies and hunter gatherer livelihoods…

Capitalism is based on private ownership of enterprises such as factories, plantations, mines, offices or shops and the operation of these assets for profit. Other elements of the means of production such as labour, land, technology and capital are also privately owned and can be bought and sold.

Labour is the most important input for production. Under capitalism, labour, the work of men and women, has become a special type of commodity which is sold in the marketplace. Capitalists use their money to buy labour and combine this commodity with other inputs, such as land, raw materials etc. to produce new goods and services. In profitable businesses, the economic value of these new goods and services are greater than the other inputs required to produce them.

Workers’ labour generates a surplus value greater than the workers’ wages. When the capitalist sells the finished commodities on the market they extract surplus value from the labour of the workers by paying them less than the value of the work they have completed. Capitalists are able to profit from the labour of others because they control the means of production.

The capitalist mode of production was different to earlier feudalism because of the role for waged labour and the importance of capital and markets for acquiring wealth. The important transition which lead to the expansion of capitalism around the globe through colonialism was the concentration of capitalist power through the fusion of state authority and capital.”

Source – Brooks, Andrew (2017) The End of Development 

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What is Alienation?

Working definition: the separation or estrangement of human beings from some essential aspect of their nature or from society, often resulting in feelings of powerlessness or helplessness.

Today, the concept of alienation has become part of ordinary language, much used in the media. We may be told, for example, that who groups are becoming alienated from society, or that young people are alienated from mainstream values. With such usage of the concept we get the impression of the feeling of separation of one group from society, but the concept has traditionally been used in sociology, mainly by Karl Marx, to express a much more profound sense of estrangement than most contemporary usage (IMO).

Origins of the concept

Sociological usage of the term stems from Marx’s concept of alienation which he used to develop the effects of capitalism on the experience work in particular and society more generally.

Marx developed his theory of alienation from Feuerbach’s philosophical critique of Christianity – Feuerbach argued that the concept of an all powerful God as a spiritual being to whom people must submit in order to reach salvation was a human construction, the projection of human power relations onto spiritual being. Christianity effectively disguised the fact that it was really human power relations which kept the social order going, rather than some higher spiritual reality, thus alienating from the ‘truth’ of power was really maintained.

Marx applied the concept of alienation to work in industrial capitalist societies, arguing that emancipation for workers lay in their wrestling control away from the small, dominating ruling class.

Later, Marxist inspired industrial sociologists used the concept to explore working relations under particular management systems in factories.

Marx’s historical materialist approach began with the way people organise their affairs together to produce goods and survive. For Marx, to be alienated is to be in an objective condition which as real consequences, and to change it we need to actually change the way society is organised rather than changing our perception of it.

Work in the past may well have been more physically demanding, but Marx argued that it was also less alienating because workers (craftsmen for example) had more control over their working conditions, work was more skilled and it was more satisfying, because workers could ‘see themselves in their work’.

However, in 19th century industrial factories, workers effectively had no control over what they were doing, their work was unskilled and they were effectively a ‘cog in a machine’, which generated high levels of alienation – or feelings of powerlessness, helplessness, and of not being in control.

It doesn’t take too much of a leap to apply this analysis to late-modern working conditions – in fast food outlets such as McDonald’s or call centers, for example.

Marx’s theory suggests capitalist production creates alienation in four main areas:

  1. Workers are alienated from their own labour power – they have to work as and when required and to perform the tasks set by their employers.
  2. They are alienated from the products of their labour – which are successfully claimed by capitalists to be sold as products on the marketplace for profit, while workers only receive a fraction of this profit as wages
  3. Workers are alienated from each other – they are encouraged to compete with each other for jobs.
  4. They are alienated from their own species being – according to Marx, satisfying work is an essential part of being human, and capitalism makes work a misery, so work under capitalism thus alienates man from himself. It is no longer a joy, it is simply a means to earn wages to survive.

Marx’s well known (but much misunderstood) solution to the ills of alienation was communism – a way of organizing society in which workers would have much more control over their working conditions, and thus would experience much less alienation.

Critical points 

Marx’s concept of alienation was very abstract and linked to his general theory of society, with its revolutionary conclusions, and as such, not especially easy to apply to social research.

However, in the 20th century some sociologists stripped the concept from its theoretical origins in order to make the concept more useful for empirical research.

One example is Robert Blauner’s ‘Alienation and Freedom (1964) in which he compared the alienating effects of working conditions in four industries – focusing on the experience of the four key aspects of alienation: powerlessness, meaninglessness, isolation and self-estrangement.

Blauner developed ways of measuring these different types of alienation incorporating the subjective perceptions of the workers themselves, arguing that routine factory workers suffered the highest levels of alienation. However, he found that when production lines became automated, workers felt less alienated as they had more control over their working conditions.

Blauner’s work ran counter to existing theory that technological innovation and deskilling would lead to ever greater levels of alienation. It also suggested alienation could be reduced without destroying capitalism.

Continuing Relevance

While the collapse of Communism suggests that Marx’s general theory of alienation is no longer relevant, many firms today seem to have taken on board some aspects of the theory – for example, it is well establish that increasing worker representation and participation reduces worker ‘alienation’, as outlined in the Taylor Review of Modern Working Practices. Another example of how firms combat alienation is the various media and tech companies which design work spaces to be ‘homely and comfortable’.

Other sociologists have attempted to apply the concept of alienation to criminology (Smith and Bohm, 2008) and even the study of health and illness (Yuill 2005).

Source

Giddens and Sutton (2017) Essential Concepts in Sociology

 

 

 

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Summary of Zygmunt Bauman’s ‘The Individualised Society’ (part 1/3)

Chapter One  – The Rise and Fall of Labour

This chapter explains that the decline of the labour movement is due the extraterritorial power of Capital.

The industrial revolution led to labour being uprooted from its age old link to nature and then becoming tied to capital in commodity form, thus it could be bought and exchanged. In the era of heavy modernity, where profit derived from Fordist/ Taylorist big scale heavy production, capital and labour were dependent on each other for their well-being and reproduction because they were rooted in place,  hence the historic power of unions and the welfare state. It was in everyone’s interests to keep labour in good condition.

All of the above gave rise to a long-term (and collective?) mentality– as illustrated in collective bargaining through unions and also through the fact that pretty much all nineteenth century thinkers thought that there would be an end point to constant change, even if the means and ends to reach that end point differed.

All that has changed now – we have moved from a long term mentality to a short term one. The features of work today are as follows:

  • Short term contracts – partners no longer intend to stay long in each others company.
  • Flexibility – work is like a high achieving sport (following Geert van der Laan) – the people in it work very hard, but fewer of us actually compete.
  • Working life is saturated with uncertainty – the nature of work is that anyone can be sacked at short notice with no warning signs, and the logic of promotions are less apparent.

Such uncertainties are a powerful indivdualising force – when work is like a campsite (not a home) there is little incentive to take an interest in the organisation, and thus solidarity is lost. We find ourselves in a time of weak ties (Grannoveter) or fleeting associations (Sennet).

This disengagement between capital and labour is not one-sided – Capital has set itself loose from from its dependency on labour, its reproduction and growth have become by and large independent of the duration of any particular local engagement with labour. Extraterritorial capital is not yet completely free of local ties – it still has to deal with governments but, paradoxically, the only way for governments to attract Capital is to convince it that it is free to move away – and to give it what it requires.

Speed of Movement (following Crozier) now seems to be the main stratifier in the hierarchy of domination – ideas are now more profitable than production, and ideas are had only once, not reproduced a thousand times, and when it comes to making ideas profitable the objects of competition are consumers not producers, and this is now Capital’s primary relation – thus the ‘holding power’ of the local labour force is weakened.

Thus (following Robert Reich) we now have four categories of economic activity –

  1. Symbol manipulators – For example those involved in the knowledge economy and marketers.
  2. Those who work to reproduce labour – Mainly teachers.
  3. Those who work in personal services – A whole range of things from Estate Agents to Hairdressers.
  4. Routine labourers – low skilled people who make things – these are the lowest paid and have the least secure obs because they expendable and they know it!

Following Peyrefitte, Bauman now characterises Modernity as an attempt to build confidence and trust – in oneself, in others and in institutions – Modernity did this and work was its primary vehicle – there was trust in the general frame – now this is gone – when de-layering and downsizing is the norm, people no longer invest in it – they would rather trust (e.g.) the fleeting stock market than the collective bargaining power of unions.

Pierre Bourdieu links the decline of politics and collective action to people’s inability to get a hold on the present (because without a hold on the present, we cannot get a grip on the future). This is especially true of today’s mass labourers who are tied to the local while capital is extraterritorial –  means they are apriori in an inferior position – when they cannot control capital, why would they engage with politics?

It is the passage from heavy to light modernity that provides the context for the decline of the labour movement. Other explanations are insufficient.

Summary/ commentary/ questions

In the postmodern era Capital has (and requires) more freedom of movement than in the modern era. The primary reason for this is the growth of consumer markets – rapidly changing tastes mean people buying and throwing away at a faster pace, and to keep up with this Capital needs to be able to shift itself around faster – free to drop old ideas and production practices as they become unfashionable or unprofitable.

As a result workers mass-labourers are powerless – they are rooted to place, as are national governments – both can only compete in a race to the bottom to try and make things as attractive as possible to globally mobile capital.

For such workers, their efforts are in vein – they are expendable and they know it, hence they are less likely to join unions and less likely to get involved in politics – neither of these make any sense when they don’t have a grip on the present – when they do not have any purchase on security of livelihood.

Speed of movement seems to be the main differentiating factor in the post-modern society.

NB – There are some workers who do OK out of these arrangements, mainly the ‘symbol manipulators’ but these have to be extremely adaptable to survive in the era of globally mobile capital!

Q: This could be an untestable theory? How does one measure the ‘mobility of Capital’ and its effects on employment?

Chapter Two – Local Orders, Global Chaos

Order is a situation where you can predict the probability of something happening. Some things are probable, some unlikely. Order suggests a degree of predictability, and it is order which gives rise to the confidence that you can engage in an action knowing what the outcome is likely to be – order boils down to the manipulating the probabilities of events.

The opposite of order is chaos – or a situation where there is always a 50-50 chance of any two events happening.

The manipulating of events and the production of order out of chaos is what culture does on a daily basis.  We speak of a cultural crisis if the order of culture is breached too often.

Culture also differentiates. This is because order is created by categorising, setting boundaries – Difference is the result of this order building activity

However, in every culture there are those who transgress boundaries, who do not fit, those who are ambivalent, and such ambivalences are unlikely to disappear because in reality no attempt to classify the complexities of the world are ever going to be able to accommodate the actual complexity of the world, and hence the more culture or order there is, the more ambivalence.

Culture may well be an attempt to distance chaos by creating order but the result is ambivalence (a self-defeating process!).

Because of their unsavoury yet intimate connections with the state of uncertainty,  the impurity of classifications, the haziness of borderline and the porousness of borders are constant sources of fear and aggression, and these are inseparable from order-making and order-guarding exertions (33)

Order is also important in the global power struggle – Imposing order onto others is one way of gaining power. The more routine and predictable one’s life is, the more order, the less power. Order is something the powerless suffer and which the powerful impose, whereas they themselves (the elite) are relatively free to move as they please.

The above logic is at work in globalisation – Globalisation is a world disorder – It is presented to us as chaotic (a genesis discourse) rather than predictable (a Joshua Discourse) and order is an index of powerlessness. The new global power structure is operated by the opposition between mobility and sedentariness, contingency and routine, rarity and density of constraints. Globalisation may be termed ‘the revenge of the nomads’.

Escape and volatility rather than ominous presence (like bureaucracy and the panopticon) are now the means of power. Normative regulation (which was costly) is no longer necessary in the age of flexibility – what keeps the precariat in check today is their vulnerability – They race to the bottom in an attempt to attract ultra mobile capital, aided in this by state policies of precariatisation. It is irrational for them to mobilise collectively because if they do capital will just take flight.

In terms of knowledge, space matters much less than it did in the past, and according to Paul Virillio, it doesn’t matter at all. In the age of instantaneous global communications, local knowledges which are based on face to face interactions and gatherings have much less authority. We get our information through cyberspace, and thus actual space matters less. However, for those doomed to be local, this is felt as powerlessness.

The elite used to accumulate things, now they discard them and have to be comfortable dwelling in chaos. Bill Gates is the archetype – constantly striving to produce new things in act of creative destruction. Chaos is thus no longer a burden in the culture of the elite, who experience it as play, but this is a curse for those lower down the order, who would wish to slow down the changes that are imposed on them as a result of the elites’ creative destruction.

Those who can afford it live in time, those who cannot live in space. For the former space does not matter, while for the later they struggle hard to make it matter.

Summary/ Comment/ Questions

Culture is an attempt to create order out of chaos – and in doing so it sets rules/ norms/ boundaries. However, this is a self-defeating process, because the result of order building is ambivalence – the more a culture becomes obsessed with order building, the more differentiation occurs, and the more scope for the established boundaries being transgressed.

Order is important in the global power struggle – the ability to impose order on others is a mark of power, to subject them to a routine, to limit them, while the ability to avoid having order imposed on you, to be free, is also a mark of power. Having order imposed is something the weak have done to them.

However, the elite no longer have to be present to impose order – they manage to do this by being free-floating – it is volatility which keeps people individualised and thus powerless and doomed to be local. (Limited to only certain types of freedom, but not the freedom to construct a more stable society).

Furthermore, local knowledges facilitated by face to face communications are undermined by global communications networks. This further undermines the ability of the precariate to act collectively.

Those who can afford it live in time, those who do not live in space.

Question – Doesn’t this somewhat overlook Glocalism – especially Permacultural elements of the green movement – albeit extremely fringe?

Chapter Three – Freedom and Security: The Unfinished Story of a Tempestuous Union

Starts with Freud – In order to be happy man must fulfil his desires (individual freedom) but he exchanges these in ‘civilisation’ for security, so that he can be free from the suffering of his own body, other men, and nature. Security is gained when the impulses are tamed and replaced with order in the form of culture which imposes compulsive (habitual) action on individuals. However this compulsive action restricts our freedom, and human life is a situation in which the urge for freedom constantly battles against the damn put up by culture.

In other words, there is a trade-off between the need for freedom and the need for security – we need both, but to get one we have to sacrifice the other, and the sacrifice of either results in suffering. It follows that happiness can only ever be a fleeting thing as we flit between too much freedom or too much security, and finding the best-trade off is an ongoing process.

Between the Devil and The Deep Blue Sea.

Alain Ehrenberg suggests that rather than unhappiness stemming from man’s inability to live up to cultural ideals, it is rather then absence of any clear ideals which results in a not knowing how to act, this is the source of mental depression – and not knowing how to act rationally in particular. This is the malady of our post-modern times.

Impotence and inadequacy are the diseases of our late modern, post modern times. It is not the fear of non-conformity but the fear of not being able to conform, not transgression but boundlessness which are our problems. (Unlike in modern times, big brother is gone and there are numerous Joneses who couldn’t care less about our quests for our ‘true selves’).

This is freedom, but the cost is insecurity, unsafety and uncertainty (Unsicherheit) – We have the freedom to act but we cannot know whether our actions will have the desired result, yet we do know that we will bare the costs for bad decisions.

Individually we stand, individually I fall.

Following Norbert Elias’ book title ‘The society of individuals’ – society consists of two forces locked in a battle of freedom and domination – society shaping the individuality of its members, and the individuals forming society out of their actions while pursuing strategies plausible and feasible within the socially woven web of their dependencies.

However, it is important to note that the process of individualisation is different today from modern times.

In modern times class divisions arose out of different access to the resources required to self-assert – The working classes lacked the means to do so and turned to collectivism to assert themselves, while the middle classes were able to be more individualistic – yet they generally responded to being disembedded through attempts to re-embed.

However, individualisation today is a fate and not a choice. In the land of individual freedom of choice the option to escape individualisation and not participate are not on the agenda. We are told that if we fail it is our fault, and we must find biographical solutions to problems which are socially created.

There is a difference between the self-asserting and self-sustaining individual and the individualised individual.

Can there be politics in the individualised society?

The Self-Assertive ability of men falls short of what genuine self-assertion would require – the choices we are free to make are generally trivial.

There are two consequences of individualisation for politics – Individuals by decree do not seek to solve their problems collectively, they just look to others for advice about how to cope with their problems (e.g. chat shows), and they tend to to view committing to acting with others as too limiting on their own freedom. Individuals by decree do not see engaging in public life as a duty, they tend to see it as an investment and only do so when they can get something back, and as a result the only thing individuals by decree tend to ask of society is minimal – to protect their bodies from danger and to protect their property rights.

Hence why networks are the new norm in the postmodern society – which consist of shallow connections (weak ties) as they are easy to access and easy to leave. As a result, in the individualised society the individual is not really a citizen because they have invested so little of themselves in that society.

Togetherness, individual style

The gap between the right of self assertion and the ability to influence the social settings which render such self-assertion feasible or unrealistic seems to be the biggest contradiction of second modernity, and we would do well to tackle this collectively.

Short termism and selfishness are rational responses to a precarious world – We have all been hit by global economic forces over which we (or seemingly no one else) has control, or we know someone who has (downsizing etc.) and so the rational response to this is to look to oneself, not invest in collectivism. No one seems to be discussing the fact that this uncertain world is human made, and that what we are dealing with is the ‘the political economy of uncertainty’.

The root of the problem is the flight of power from politics – capital is extraterritorial and politics remains rooted to space – and the political solutions to the problems mobile capital creates is yet more freedom for capital – because there is no global institution that is capable of doing the job of regulating it. No one seems to have any solutions!

When individals accept their impotence en masse (following Cornelius Castoriadis) – society becomes heteronomous – pushed rather than guided, plankton like, drifting, it is like people on a ship who have abandoned any attempt at steering the vessel, and so at the end of the modern advernture with a self-governing, autonomous human world, we enter the era of mass confromity

Making the individualised society safe for democracy

Democracy is an anarchic force – one best recognises democracy when it is complaining about not being democratic enough. Democracy is a constant battle to find the right balance between freedom and security. For most of modernity the fight has been for more freedom, now we need to focus more on security. However, the biggest danger of all is that we call off the fight to get the balance right by opting out of the social process (and engage with society only as indivduals).

What is to be done? We need global instituitons to limit the flow of capital, at the state level – basic income. However, a bigger question is who is to do it?

Summary, Comment and Questions

I think Bauman is trying to say too much in this section – It’s much easier to understand some of what he says by cutting out about a third of it and reording it….

Capital is freefloating and the average person’s job is more precarious, and there are no global or national institutions capabable of controlling International Capital (power, says Bauman, has departed from politics). Because of this, people see no point people getting involved in politics, and thus we no longer seek collective solutions to social problems and we only ask society to do the bare minimum for us.

In short, structural changes in the nature of Capitalism have altered the way we perceive politics – we now see it as pointless and thus we are no longer contributing to the construction of our society.

Instead, we seek biographical (personal) solutions to these systemic problems – . Rather than getting involved in long-haul politics, we limit our range of vision, our range of options to choosing how to better surviving or cope in this precarious world – we spend our time re-training, or improving our C.V.  (marketing) to make us more employable or promotable, for example. (Bauman says that selfishness and shortermism are a rational response to a precarious world). We are spured on by our efforts because we know that if we fail in our efforts we will be held responsible for the the consequences of our inability to keep ourselves employable.

The key thing here is that this limited range of choices we are choosing between is forced on us – we haven’t actively decided to not engage with society as political beings, the social structure has changed in such a way that politcs is now (objectively?) pointless, and we don’t know how to fix it, thus we narrow our range of vision to focussing on that narrow range of events we think we can control, and doing so, Capital becomes freer, and so our lives become even more unstable.

This is why Bauman says…. The gap between self-assertion and the ability to affect the social settings which make that assertion realistic (which is required for ‘genuine self-assertion’ ) is the biggest contradiction of second modernity.This is because what we are currently witnessing is individualisation by fate which falls well short of genuine self-determination – In general the choices we are free to make are relatively trivial.

Comment

Firstly, Interestingly, this theory does not depend on there being a false consciousness  – whether we fail to see that there are systemic contradictions which are causing this need to continually update ourselves to keep ourselves employable or whether we see it but simply cannot see any alternative is moot – the point is the important thing is whether or not we perceive the systemic contradictions, we KNOW that if we do not try we will be held responsible for our failure by society, and it is this ‘responsibilisation’ which is compelling us to keep on keeping on.

Secondly, I guess this links back to why Bauman perceives the decline of the Welfare State is so bad, because it’s very existence assumes that it is not our own fault that we sometimes might suddently find ourselves unemployed.

Chapter Four – Modernity and Clarity – The Story of a Failed Romance.

When reason tells us that the world is an uncertain place, indecision of the will is the result. Ambivalence is a mixing of the doubts of reason and this indecision of the will.

The more my freedom grows in terms of the greater the range of future possibilities, then the less grip on the present I have. The less freedom I have, the greater my grip on the present.

In considering freedom we need to consider the difference between the range of viable possibilities on offer, which possibilities I wish to achieve and my ability to achieve them. If the volume of possibilities exceeds the capacity of the will then restlessness and anxiety are the result, but if I lack the means to attain a possibility I desire then withdrawal is the result.

Freedom, Ambivalence and Scepticism seem to go together.

After a few pages outlining the historical development of sceptisism in philosophy, Bauman points out that modern sceptics were pretty much universally obsessed with order building, as exemplified in the popularity of order building – Modernity was fundamentally a legislative process.

The mission of modernity was (in Freudian terms) was to restrain the pleasure principle with the reality principle, or (in Durkheimian terms) to socialise the individual so that they would never want what they couldn’t achieve  and would want to do what was socially useful – real freedom meant to live like a slave (to one’s desires), society’s job was to get people to agree to acceptable freedoms and duties. In short, Modernity was about cutting the ‘I want’ down to the ‘I can’. Restricting people’s desires was the way Modernity dealt with the problem of ambivalence.

Or to sum up – The modern project was about society determining what freedoms were possible and then legislating and socialising so that people internalised these legitimate wants. Here we can see the origins of modernity’s totalitarian tendencies.

Two things in retrospect – this project has failed, and it has been abandoned. One reason this battle with ambivalence failed because the powers of creative destruction and the individual’s desires played second fiddle to the ‘objective’ constraints imposed on them.

Today it is desire itself which fuels social change – Needs creation seems to be the main thing which Capitalism does (following Bourdieu). The way we integrate into society is as consumers – and we can only integrate if our wants constantly exceed our current level of satisfaction. (The only exception to this is the underclass, but they are the minority – their wants are managed, limited).

(p68) The permanent disharmony between wants and the ability to achieve them is for the postmodern era functional – hence why we have a high degree of ambivalence in identity formation, social integration and systemic reproduction.

Today the market requires ambivalence and we are free to enjoy its wares, but we are unfree to avoid the consequences (downsizing etc.) because the only solutions on offer to help us deal with the downsides of the free market are market-solutions.

A second reason why modernity failed to tackle ambivalence is because modernity was always local, and it resulted in many localities with different solutions to ambivalence. Hence why we have neotribalisms and fundamentalism – these aim to heal the pain of ambivalence by cutting down choices – but the nature of these responses is that they are unpredictable.

The 300 year war against ambivalence is not over, it has just changed its form – it is no longer carried out by conscript armies but by guerrilla units which erratically erupt occasionally between the brightly lit consumer malls.

Summary, Commentary and Questions

When we have too much freedom, ambivalence is the result (ambivalence is a mixture of the doubts of reason (uncertainty over the probability of events) and the resulting indecision)

Modernity attempted to reduce ambivalence by order building – society determined what freedoms were necessary and desirable and then socialised people into thinking in this way – restricting their freedom, replacing the ‘I want’ with the ‘I can’. People’s desires came second to the social.

With consumer-capitalism, however, things are now reversed. Needs creation is the main thing Capitalism now does – profitability requires us to desire things, and once we have those things to tire of them quickly and desire new things. Fuelling Individual desire lies at the heart of modern Capitalism.

However, there is a growing gap between our growing (unfulfilled) desires and our ability to achieve them, and this creates ambivalence, which today is functional for Capitalism.

There is nothing in mainstream society that offers us an escape from this, nothing that offers us structure and certainty and a limt to our desires – at the level of social integration, we integrate as consumers, at the level of identity construction we must make choices based on consumption, and at the level of societal reproduction, this requires people to be consumers. The message is clear – you are free to consume, free to make a choices.

However, we are not free to escape from this because the only solutions to our confused state of having too much choice are market-solutions. This is why Bauman said we are compelled to make these choices, forced into making more and more choices by a system that requires us to make choices.

There are movements which offer alternatives to consumerism – Fundamentalisms and Neotribalisms – but these do not offer the possiblity for systemic reproduction because they tend to be local, and are thus only ‘guerilla movements’ between the brightly lit shopping malls which perpetuate ambivalence at the levels of the system and the lifeworld in general.

Commentary

Again I think Bauman here is extremely verbose – He’s basically saying that the system requires that we keep on buying and discarding, buying and discarding at ever faster rates and so we are sort of forced into making consumer choices. This ‘built in obsolence’ is the very basis of the system and it destabilises us, bewilders us, makes us uncertain of what we should be doing and uncertain of who we are.

I think Bauman maybe ignores elemts of the green movement and the anti-consumerist movement – these have the potential to resocialise people into constraining their desires on the basis of a global ethics of responsibility for the other, and do, in fact, specifically focus on how the local and the global intersect.

Chapter Five – Am I my brother’s keeper?

The concept of the welfare state has changed from being a safety net to a springboard. Its success is judged by the extent to which it renders itself unnecessary – by getting people back into work. The unspoken assumption behind this is that dependence is something which is to be ashamed of – ‘decent people’ simply do not entertain the idea of being on welfare.

According to Levinas, our starting point should be ethics – I am my brothers keeper, because his well-being hinges on what I do and refrain from doing. He is dependent on me. To question this dependence by asking the question ‘Am I my brother’s keeper’, asking for reasons why I should care, is to stop being a moral being, because morality hinges on (internalising?) this crucial dependent relationship.

The need of the other and taking responsibility for meeting that need is the cornerstone of ethics according to Levinas. This has been the basis of the Judaeo-Christian form for a long time, and the idea underpinned the welfare state, but this idea is now well and truly under attack.

The welfare state came into being because of a conflation of factors – simultaneously a result of ethical intentions, labour movement struggle, and the need to diffuse political tensions, but also because it was in the interest of both labour and capital. Both industry and the state benefited from having a reserve army of labour – because profit was derived from the number of people employed and state-power was derived from the size of the reserve national-army.

However, the nature of unemployment has changed today – They are not a reserve army of labour because downsizing means they are unlikely to be recalled by industry, and they have no social function – they are not needed for work and they are not useful as consumers – because the products they need are low profit and they cannot afford anything else. Hence the recasting of them as the underclass – society would be better off without them, so best to forget them! Free floating capital has no need to keep local-underclasses nourished. To illustrate this Bauman draws on Beck’s ‘The Brave New World of Work’ – only 1 in 2 Europeans have regular, full-time employment.

We hear nothing of people’s lives turned around by social security,  but we hear a lot about the minority of welfare scroungers. The underclass in popular imagination is demonised.

Why? Because the life of the average worker is fraught with uncertainty and anxiety – as is the consumer lifestyle he adopts — Ordinary life in short is miserable – Cynically the creating of an underclass whose lot looks miserable and who we can look down on – a life even worse than our own – makes us a little less miserable. However, they do get some stability – in the form of welfare cheques and it is this that the average flexible worker perceives – rather than their suffering on account of their not being able to access the many opportunities on offer. This also means the prospects for solidarity with the poor are slim. To the average person, the welfare state gets no support.

Because there is no rational economic reason for the welfare state, we should go back and make the ethical argument for it….. I am my brothers keeper, we are all dependent on each other and a society should be measured by its weakest link.

What moral duty implies is inherently ambivalent – it requires constant communication, it is not open to measurability (bureaucracy etc.) – It is always asking the question what is best for that person, what do they need, without me becoming a mere tool of that person, and how do we negotiate around things when our ideas about what is good comes into conflict with theirs.

To sum up – there is no rational reason to support the welfare state, but the ethical argument does not depend on rationality – it is its own starting point – It is better to live for other other, it is better to stand in misery rather than to be indifferent – even if this does not make a society more profitable. This should be the starting point!

I don’t think this needs any translating, for once just summarising it once makes it understandable.

Chapter Six – United in Difference

Many aspects of modern living contribute to a feeling of uncertainty – the feeling that the world in which we live, and the future is uncontrollable, and thus frightening – Thus we live today in a culture of ambient fear (following Doel and Clarke).

The things which contribute to this are as follows:

  1.  The capacity of the nation state to put things in order, to classify things and set the future has dramatically declined since the collapse of communism (this is basically the collapse of metanarratives applied to politics). Moreover the rest of the world does not look to the ‘civilisational centre’ (the developed world) for guidance any more. The main relation between the two seems to be that the rich supply weapons to facilitate numerous tribal conflicts – The New Barbarism might be an apt way to describe globalisation.
  2. Universal deregulation – the tearing up of all other freedoms other than those granted to capital – so that everything else gets subjected to the irrationality of market forces. The freedom of capital benefits from weak states – this is a new world disorder. The vast majority lose out in this process – inequality increases but it is not only the marginalised who are harmed, very few of us feel secure in our homes or our jobs – human rights do not extend to the right to a job, the right to social secuirty, or the right to dignity.
  3. The self-woven safety net of the family and the community, based on people connections and indigenous knowledges (connections for the sake of connections, with long term commitments) have been severely weakened – at this level of social integration we are increasingly dependent on technologies and the market, and so such bonds reflect the uncertainties inherent to these things. Also, we increasingly cast the other as sources of pleasure, asking what we can get from them, rather than what we can do for them.  4. Culture is soft and indeterminate – human connections are cast into successive encounters and Human identities are fragmented, a series of masks. Rather than our identity being like us building a house, it is rather that we put up a series of pre-fabricated buildings, tear one down and then put up another. The fragments of life do not necessarily relate to the other fragments… In our culture the art of forgetting is more useful than remembering.

These are some, not all of the features of postmodern life which result in uncertainty – anxiety.

Modern cities are places of perpetual strangers – Strangers are by definition messy, they do not fit in with your system of order – and thus cities are patchwork places in which no one will feel comfortable everywhere. The chief stratifier in the modern city is the extent to which you have freedom of movement – the extent to which you can avoid the areas you don’t want to go into and get to the areas where you do want to get to. In other words, city dwellers are stratified by the extent to which they can ignore the presence of strangers.

For the better off the messiness of strangers can be avoided – For those in the suburbs, strangers are an occasional pleasure when they want to interact with them, and those who provide services for them. For the poor, however, dealing with strangers cannot be avoided, and they are experienced as a threat to their sense of orderliness. They live in areas where they are not able to choose, and lack the money to escape, so they vent their frustrations in other ways – everything from racism to riots for example. Following Cohen, people feel as if they are losing their sense of home because of the stranger (but the strangers are not the real cause of course, they are just a symptom).

Bauman now proposes  that specific forms of postmodern violence stem from the privatisation, deregulation and decentralisation of identity problems – the dismantling of collective institutions through which people can come together means people no longer discuss what the root causes of their shared identitity problems might be.

We have an opportunity here – of bringing to a conclusion the disembedding work of modernity – now the individual has been set free, we can move beyond nationalism and tribalism and rethink what it means to live as humanity – and here the rights of the stranger are fundamental. This will be an involved process… the sole universal guiding principle should be the right to choose one’s identity as the sole universality of the citizen/ human – we should celebrate this,and then work on how unity might be achieved with this new diversity. However, there is also ample scope for the balkanisation of politics and tribalism as a response.

We tend to see strangers as either exotic pleasure sources or as exaggerated threats… and this in turn stems from polarisation of wealth and life chances, but also of the capacity for genuine individuality… until we sort this out the detoxification of strangers and a move forwards to genuine new global concepts of citizenship are a long way off.

Commentary

I guess it’s passages like this that demonstrate Bauman’s Late rather than Post-modern attitude to a postmodern world – there is still hope for the future!

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Bowles and Gintis: The Correspondence Principle

Marxists sociologists Bowles and Gintis (1976) argue that the main function of education in capitalist societies is the reproduction of labour power.

They see the education system as being subservient to and performing functions for the Bourgeoisie, the capitalist class who own the means of production: the Bourgeoisie require a workforce that is hardworking, accepts authority, and who won’t kick up a fuss if they are exploited, and the main function of school in capitalist societies is to indoctrinate children into these norms and values.

The education system does this through the hidden curriculum – which consists of the things pupils learn through the experience of attending school, rather than the stated education objectives in the ‘formal curriculum’.

Bowles and Gintis: the correspondence principle

The correspondence theory is the idea that the norms and values pupils learn in school correspond to the norms and values which will make it easy for future capitalist employers to exploit them at work.

Correspondence Principle

Bowles and Gintis say that ‘work casts a long shadow over school’.

There are four ways in which the norms and values of school correspond to the required norms and values of work in capitalist society:

One – It helps to produce a subservient workforce of uncritical, passive and docile workers

In a study based on 237 members of the senior year of a New York high school, Bowles and Gintis found that the grades awarded related more to personality traits rather than academic ability: low grades were related to creativity, aggressiveness and independence, while higher grades were related to perseverance, consistency and punctuality.

The education system was creating an unimaginative and unquestioning workforce through rewarding such traits.

Two – encouraging an acceptance of hierarchy and authority

Schools are hierarchical organisations – pupils have little say over what they learn, or how the school day is organised, and in day to day life, pupils are expected to obey the authority of the teachers. Later on at work, workers are expected to obey the authority of managers.

Three – motivation by External Rewards

This is where pupils are taught to be motivated by the qualifications they will receive at the end of school, rather than the ‘joy of learning’ itself, while at work, workers are motivated by the wage packet at the end of the month rather than ‘the joy of working’ itself.

This is probably the most important aspect of the correspondence principle:

In Marxist theory, if people have control over it,  work is actually enjoyable: many people engage in ‘work’ as part of their hobbies: if left to their own devices, people will naturally engage in work because it gives them a sense of satisfaction: as an example think of a car-fanatic who will happily spend hours putting together a car engine, or the whole car itself in his garage, or an allotment owner who will do the same when ‘growing their own’ – if people control the whole process of work, and can ‘see themselves’ in it, they will happily work, even for no pay.

However, work in capitalists societies becomes alienating and exploitative – Capitalists require workers to be like machines, working as part of a ‘production line’ for example, because this means production is more efficient and their profits are thus greater – so rather than individuals or small groups of individuals each setting up their own garages to make cars, or small scale farms growing food for a few dozen people, work becomes larger scale, organised into massive factories, and workers become part of the ‘machine’ of production, where the worker has no control, and work is repetitive and dull. In this industrial-capitalist system of work, workers have no intrinsic motivation to work, they need to be motivated externally, by wages.

Because this is such an unnatural and miserable situation, there needs to be a long process of convincing people this is normal – which is where school comes in – school is about learning to put up with boring lessons, and the motivation for this is at the end – through the qualifications.

Thus capitalism requires school to teach people to not be inquisitive, to just ‘learn what I tell you to learn’ and put up with boredom, to work hard now (study) in order to achieve the grades at the end of the year… there is no reward in education for those ‘doing their own thing’, because this is not what future employers require.

Four – the fragmentation of subjects at school

Learning at school is fragmented into different subjects, split up into maths, English, history, sciences, with lessons lasting only 45 minutes to an hour. Knowledge is thus fragmented into different academic subjects, rather than being holistic’.

This corresponds to the fragmentation of the workforce in later life – workers specialise in particular tasks in the office or the factory, without having an appreciation of the whole.

This fragmentation makes workers easier to control because they are divided, which makes it more difficult for them to unite and challenge their exploitative conditions.

Evaluations of Bowles and Gintis’ Correspondence Principle

More detailed evaluations to follow, but for now….

Ken Robinson’s TED talk about schools killing creativity (look it up!) seems to offer broad support for the idea that school doesn’t reward creative thinking.

However, on balance, much of this theory seems out of date – relevant maybe to the 1970s, when there were more factory jobs, but not so relevant to today’s more child-centred and entrepreneurial society.

 

 

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What is Economic Globalisation?

Economic Globalisation involves the global expansion of international capitalism, free markets and the increase in international trade, a process which has accelerated since the 1950s. Nearly every country on earth now imports and exports more from and to other countries than it did immediately after World War Two, and even ex-communist countries are now part of the global capitalist economy. Britain for example imports around 60% of its food, with only 40% of the food supply being grown in Britain, and if you take a look around any class room, or any living room, and you will probably find that the majority of products were imported from somewhere else.

Some of the key features of economic globalisation include:

The emergence of global Commodity chains – manufacturing is increasingly globalised as there are more worldwide networks extending from the raw material to the final consumer. The least profitable aspects of production – actually making physical products, tend to be done in poorer, peripheral countries, whereas the more profitable aspects, related to branding and marketing, tend to be done in the richer, developed, core countries.

The role of Transnational Corporations (TNCs) is particularly important – these are companies that produce goods in more than one country, and they are oriented to global markets and global products, many are household names such as McDonald’s, Coca Cola and Nike. The biggest TNCs have annual revenues which are greater than the economic output of middle-income countries. Apple, for example, generates more income than Finland does every year, and many oil companies such as Shell and Exxon-Mobile generate revenue several times that of the poorer countries they extract from.

TNC logos

The global economy is Post Industrial – as a result it is increasingly ‘weightless’ (Quah 1999) – products are much more likely to be information based/ electronic, such as computer software, films and music or information services rather than actual tangible, physical goods such as food, clothing or cars.

The electronic economy underpins globalisation – Banks, corporations, fund managers and individuals are able to shift huge funds across boarders instantaneously at the click of a mouse. Transfers of vast amounts of capital can trigger economic crises.

global electronic economy

 

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The New Rulers of the World – A Summary

The New Rulers of the World (2001) by John Pilger provides a good example of a Dependency Theory analysis of the consequences of neoliberal globalisation, focusing on Indonesia as a case study.

The fact that this is a dependency view of development is quite clear from John Pilger’s own summary of the documentary:

“There’s no difference between the quite ruthless intervention of international capital into foreign markets these days than there was in the old days, when they were backed up by gunboats…. The world is divided between the rich, who get richer, and the poor, who get poorer, and the rich get richer on the backs of the poor. That division hasn’t changed for about 500 years” (the link above will take you to this quote)

Below I provide a brief summary of the documentary. The documentary is 15 years old now, but it provides a very useful introduction to the following concepts within global development.

  • It provides an unambiguous example of a Dependency Theory analysis of underdevelopment in one country – Indonesia
  • It’s an especially useful analysis of neo-colonialism – how economic institutions now work to extract wealth from a poor country.
  • It introduces you to the role of the World Bank and the International Monetary Fund in an accessible way.

NB this documentary is now over 15 years old, so you might like to think about the extent to which it still applies to Indonesia 15 years on, and the extent to which you can generalise this analysis to other countries today. 

(NB – the headings below are my own, not from the documentary)

John Pilger – The New Rulers of the World – intro section 

In recent months, millions of people around the world have been protesting against a new economic order called globalisation.

Never before has the human race enjoyed such enormous capacity to create wealth and reduce poverty, but never before has inequality been so great.

A small group of individuals controls more wealth than the billion people in Africa, and just a handful of corporations dominate a quarter of the world’s economic activity – for example General Motors is now bigger than Denmark.

The famous brands of almost everything are now made in poor countries, with wages so low it borders on slave labour.

Tiger Woods is paid more money to promote Nike than the entire workforce in Indonesia are paid to make Nike products.

Is this the new global village we’re told is our future, or is this an old project, that used to be run by the divine right kings, but is now run by the divine right of corporations and the government s which back them?

This film is about the New Rulers of the World – and especially their impact on one country – Indonesia.

Indonesia –history/ background

indonesia-underdevelopment

Indonesia is where the old imperialism meets the new. This is a country which should not be poor as it is rich in natural resources such as oil and gold, copper,  timber and the skills of its people.

It was first colonised by the Dutch in the 16th century, and plundered by the west for hundreds of years, a debt which is yet to paid back.

Pramoedayo Ananta Toer (ex political prisoner)

“For hundreds of years Indonesia and many other countries were sucked dry by the European countries, who became strong, and the masters of finance and commerce, and now they are dictated to by the World Bank and the IMF – Indonesia has been turned into a country of beggars because its elite is spineless.

George Monbiot (well-known environmentalist)

“We’re told that globalisation is going to bring us all together and help combat poverty but what we’ve actually seen is the opposite – the poor are becoming poorer, and the wealthy are becoming staggeringly wealthy”.

Rich and poor in Indonesia

world-bank-indonesia

The World Bank famously called Indonesia a ‘model pupil’, a success story of economic growth.

To illustrate this success the video now cuts to a lavish wedding between two merchant families – these are the elite who have reaped the benefits of globalisation –the freedom to earn money and let that money make more money.

However, Indonesia is also a very unequal country and only a relatively few people have benefited from this economic growth: 70 million people live in extreme poverty – and they’ve calculated that it would take one of the waiters working at the wedding 400 years to pay for such a wedding.

The lavish wedding is contrasted to an Indonesian labour camp less than 5 miles way where young people make the cheap consumer goods we consume in the west.

This is the backyard of global capitalism, the side we don’t see, the human price we pay for the cheap goods we buy. The average worker here gets £0.72 a day, the minimum wage in Indonesia, just over half a living wage (according to the government).

Dormitories are made from breeze blocks, they flood when it rains, and open sewers spread diseases which kill children.

The labour camp is set in an economic processing zone, which is basically a vast area of sweat shops.

Investigating Poor Working Conditions in Indonesia

GAP sweatshop.jpg

The documentary crew posed as fashion buyers to gain access and secretly filmed in one factory, and also conducted dozens of interviews with workers in these factories.

Working conditions are claustrophobic, frenzied, the workers fatigued, and working under strip-lighting in temperatures of up to 40 degrees (the management however have air conditioned offices.

They also have horrendous working hours – which can be upped when deadlines for orders are due. The workers are typically young women and one worker is on camera saying that she once worked a 24 hour shift with no breaks.  She says she is too scared to refuse or even question the working hours.

These factories are owned by Taiwanese and Korean contractors who take orders from companies such as GAP (whose products were made in the above factory where the workers are paid extremely low wages).

GAP has codes of conduct which are supposed to apply to working conditions globally, and GAP representatives do visit the factories, but the workers interviewed say they are warned by management to not tell them about forced overtime.

Dita Sari – Trade union leader

Points out that codes of conduct are meaningless in a country like Indonesia because there is high unemployment and terrible poverty, so the people are desperate enough to put up with dismal working conditions, and the government is unwilling to enforce the codes because they want Indonesia to be as attractive as possible to international companies (which means keeping labour cheap).

If you pay £8.00 for a pair of boxer shorts, then an Indonesian worker will receive approximately £0.04 pence of that.

In the previous year, the profits of gap were just short of £2 billion, and the CEO ‘earned’ £5 million, figures typical of many multinational companies.

For the sake of the documentary, they had to keep the factories anonymous, because the workers would have Victimisation from contractors and violence from anti-unionists.

Barry Coats – World Development Movement

We should aim to be better informed as consumers – when we buy something, we need to ask the company where it was produced and to give assurances that the workers are treated fairly.

The secret history of globalisation in Indonesia

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President Suharto – The most corrupt leader in modern history, according to Transparency International, having embezzled an estimated $15-35 billion during his rule

In the 1960s General Suharto seized power in Indonesia secretly backed the United States and Britain.

Suharto removed from power the founder of modern Indonesia, Sukarno – a nationalist who believed in economic independence for the country. He had kept the Transnational Corporations and their agents, the World Bank, and the IMF, out of the country, but with Suharto coming to power they were called back in to ‘save’ Indonesia.

This regime change was one of the bloodiest mass murders in post WW2 history, with more than a million people estimated to have died in the process. Suharto took brutal steps to consolidate his power by rounding up thousands and thousands of civil servants, school teachers and basically anyone with communist leanings and murdering them.

He did this with the support of the CIA, who provided a list of 5000 people they wanted dead, and the British ambassador at the time suggested a little shooting was necessary to ease the transition, while British war ships played a supporting role in protecting Indonesian troops.

Within a year of Suharto’s coming to power the economy of Indonesia was effectively redesigned, giving the west access to vast natural resources, markets and cheap labour, what Nixon called ‘the greatest prize in Asia.

The American press reported these events not as a crime against humanity, but in terms of ‘The West’s best news for years’.

In 1967 – a conference in Switzerland planned the corporate take-over of Indonesia, with most of the world’s large international companies represented, such as ICI, General Motors and American Express. For western business this was the start of the gold rush which later became known as globalisation, and barely anyone mentioned the million dead Indonesians.

Professor Jeffrey Winters

Has never heard of a situation like this where global capital holds a meeting with the state and hammered out their interests. The conference lasted for three days – and the companies present hammered out policies which would be acceptable to them on a sector by sector basis. They basically designed the legal infrastructure for investment in the country.

It basically becomes clear from a series of interviews, despite their evasiveness, that the international business community new they were dealing with a nepotistic mass murderer.

Globalisation – the British arms connection

Globalisation began in the 1980s when Margaret Thatcher dismantled manufacturing and poured billions of pounds into building up the arms industry. Suharto was an important customer for the UK arms industry at that time, and sales to Indonesia were supported by ‘export credits’, in other words, a large part of Suharto’s arms bill was paid for by the British tax payer.

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The Queen – entertaining the mass murderer and dictator general Suharto

So important was Suharto to British arms exporters, that he was welcomed to London by the Queen.

The World Bank and the IMF – The New Rulers of the World

Who are the new rulers of the world? Their empire today is greater than the British Empire ever was. Basically they are the World Bank, and the International Monetary Fund, two bodies which are the agents of the richest countries on earth, especially America.

Initially set up to help rebuild European economies after WW2, they later they began offering loans to poor countries, but only if they privatised their economies and allowed western companies free access to their raw materials and markets.

Barry Coates

Debt has been used by an instrument by the World Bank and IMF to get their policies implemented. The poorest countries are in a cycle of poverty, and current debt-reduction (not forgiveness) is not sufficient to allow them.

Susan George

The difference between Tanzania and Goldman Sachs

Tanzania – is a country with a GDP of $2.2 billion shared among 25 million, Goldman Sachs is an investment bank with profits $2.2 billion dollars shared among 162 partners.

The World Bank says its aim is to help poor people, calling this gobal development. It’s an ingenious system, a sort of socialism for the rich and capitalism for the poor – the rich get richer on running up debt, cheap labour and paying as little tax as possible, while the poor get poorer as their jobs and public services are cut to pay just the interest on the debt owed to the World Bank.

Here in Indonesia, the hand-outs to the rich have been extra-ordinary, internal documents from the World Bank confirm that up to a third of the banks loans went into – around $8 billion.

The 1998 Financial Crash, the End of Suharto and Indonesian Debt Repayment

Globalisation means that capital (big money) can be moved anywhere at any time, without warning.

In 1998 short-term capital was suddenly pulled out of Asia, collapsing the miracle economy overnight. This actually benefitted Nike in Indonesia, because they ended up labour costs were cut to 25% of what they had been previously.

With the economy collapsed, and Indonesia on the verge of revolution, Suharto was forced to step down, having already stolen an estimated $15 billion.

During his reign of more than 30 years, Suharto had handed out public utilities to his family and cronies, driving from Jakarta airport, you actually paid a toll to Suharto’s daughter.

Interview

The bank presents itself as an economic development agency, focusing on poverty reduction, but in fact, the bank operated during the entire cold war as an institution which distributed money to mainly authoritarian regimes in the third world that supported the West in the Cold War.

The Indonesian elite instigated many development projects with World Bank loans during Suharto’s 30 year reign, and many of them were seen as opportunities to skim money for themselves. In total, $10 billion remained unaccounted for out of $30 in loans. Of course the debt remained, and still had to be paid back to the World Bank.

According to the auditor general of the World Bank, if the citizens of Indonesia made a legal challenge against the World Bank over the remaining debt (given that they never received the money), the World Bank would be bankrupt, because this has gone on the world over.

Interview with Chief Economist of the World Bank – Nicholas Stone

In response to the question of how the World Bank didn’t realise that $10 billion of aid money to Indonesia had gone missing, his response was firstly to deny any knowledge of the $10 billion figure, then (on having been shown the World Bank’s own report) to say that figure was made up. He finally argued that progress had been made during Suharto’s regime if we look at literacy and infant mortality figures, even if the numbers in poverty had doubled from 30 million to 60 million.

When asked why there was such a silence over the atrocities of Suharto, he simply said the World Bank got it wrong, and they will get it wrong in the future too.

Dita Sari

Globalisation creates debts, creates misery, creates crisis, and creates privatisation, which pushes up the prices people have to pay for basic goods. In effect the money stolen by the Suharto regime is being paid back by the people who never benefited from that money.

Debt and the International Monetary Fund (IMF)

Every day nearly $100 million is transferred in debt repayments from the poorest countries to the richest, it is a debt that can never be paid back, given that half the world’s population live on less than $2 a day.

Interview with Stanley Fischer, from the International Monetary Fund

John Pliger asks whether debt cancellation should be a priority if we are to alleviate poverty, given that some countries spend half their GDP on debt repayments.

Fischer argues that we should not necessarily cancel their debt – we should rather look at the policies on education and health, and look at what sort of economies they run – do they integrate into the world economy, or do they run corrupt economies.

Fischer basically argues that countries need to repay their debts because they need to keep more resources flowing into their countries, and if they don’t repay them, they’ll never be leant to again. He sees debt as a ‘normal’ part of expanding enterprise and increasing economic growth.

NB – The subtext to the interview is that Western financial institutions depend on the debt repayments being kept up too.

Dita Sari

(In order to keep up debt-repayments) the government, as recommended by the IMF. has cut subsidies on electricity, water and education, which means that the workers have to pay more their children through school.

Now people now eat two meals rather than three meals a day.

Protests at the World Trade Organisation

Two years ago, protestors from all over the world converged on Seattle at a meeting of the World Trade Organisation….

Evaluation – How Valid are the Findings of this Documentary Today?

The documentary makes the following claims, all of which are worth investigating to see if they are still true today….

  1. The rich are getting richer and the poor are getting poorer
  2. 200 Corporations control 25% of world economic activity
  3. The World Bank and the IMF dictate economic policy to poor countries
  4. These economic policies are shaped by the 200 (or so) largest global corporations and work in their interests, not in the interests of the majority of people in poor countries.
  5. There is a small elite in poor countries which benefit from these economic policies and enforce them, against the interests of the majority.

I’ll provide a summary of the rest at a later date… In the meantime, you might like to actually watch the rest of it! 

Related Sources

The New Rulers of the World – video on John Pliger’s website

The New Rulers of the World – the book!