|Series:||Anthem Studies in Development and Globalization Series|
|Edition description:||First Edition, 1|
|Product dimensions:||5.30(w) x 8.00(h) x 1.00(d)|
About the Author
Erik Ringmar is a Professor at the National Chiao Tung Unviersity, Hsinchu, Taiwan. He is the author of 'Interest, Identity & Action' (CUP 1996), as well as many academic articles in the fields of history, international politics and sociology.
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How We Learned to Live with the Market and Remained Almost Human
By Erik Ringmar
Wimbledon Publishing CompanyCopyright © 2005 Erik Ringmar
All rights reserved.
The Inevitability and Inhumanity of Capitalism
During the last ten years or so there has been a lot of talk about the coming of a 'new economy'. Different authors define this amorphous entity in slightly different ways; some focus on new technologies, others on new styles of corporate management and ways of working; or perhaps it is rather a product of a scaling-back of the state or perhaps a consequence of an ever more globalized world. Although the items on this list, or on some longer list like it, may appear quite disparate, what they have in common is an emphasis on the logic of the marketplace, on the interplay between supply and demand. What is new about the new economy, in short, is an emphasis on market forces. Economic markets, we are today constantly told, must be given freer reign – we must 'get prices right' and stop pampering and mollycoddling the inefficient, the unproductive and the merely lazy. Only in this way will we survive in the new and vastly more competitive world in which we live; only in this way can we achieve economic growth and lasting happiness.
We are in this way invited to participate in a gigantic social experiment. According to the engineers who have drawn up the plans, our societies are to be reorganized ever more closely in the image of a market. Efficiency, rationality and productivity are to characterize ever more of what we do, and what cannot be justified in such terms should disappear, or at least receive less of our time and attention. This is the future, after all – we do what everyone else is doing, and if we fail to conform, we are doomed. And even though the benefits of the experiment may be slow in coming, and it sometimes seems as though we are becoming poorer both in material and in social terms, we are assured that the day eventually will arrive when all the sacrifices of the present will be justified. Just as once Communism, capitalism will bear its greatest fruits in the future. Meanwhile we should take pride in the fact that we have history on our side and that we live according to its fundamental principles. The new economy is thus above all an idea – it is an idea that requires boundless idealism and commitment. Fiat capitalism et pereat mundus.
We have of course been here before. The proponents of the new economy sometimes talk as though they are the ones responsible for inventing economic markets and as if no one previously has understood their benefits. But markets have been around for thousands of years. In China there were thriving markets in both consumer goods and factors of production even before the establishment of the first imperial dynasty in the third century BCE, and in Europe markets have existed continuously since money was reintroduced sometime in the eleventh century. And as far as a committed defence of market forces is concerned, our contemporary social engineers are merely the bleak shadows of the real revolutionaries of the eighteenth and nineteenth centuries: economists like Adam Smith, David Ricardo and Nassau Senior. It was on their recommendations that market forces were unleashed from the fetters of mercantilism and traditional privilege. Markets, after all, are not natural beasts but created ones; the free markets of the nineteenth century were products above all of actions undertaken by the state.
This historical context holds a lesson for us. The nineteenth-century combination of industrial production and laissez faire policies led to unprecedented levels of economic growth but also to unprecedented levels of human misery. The problem, to put it briefly, was that subsistence farmers were deprived of their land and forced to sell their labour in markets that were completely glutted. Once the value of a human life is determined by market forces and once that value sinks sufficiently low, a situation is created which is highly unstable. As a victim of the market you need to do something in order to save your dignity and improve your conditions. Some people protested and put political pressure on governments to institute pro-labour legislation and social reforms. Others decided that markets had to be abolished, and others again turned to fascism. In fact, most of the politics of the twentieth century was taken up with attempts to deal with the direct and indirect consequences of nineteenth-century industrialism and laissez faire. Hence the social strife, the revolutions and many of the conflicts and wars.
And now we are thus invited to do it all over again. We should liberate markets, we are told, and see what happens. Of course the situation is not the same as one hundred years ago – we are richer now, better educated and prepared – yet the parallels are there and the prospects are troubling. Once again the economy is likely to grow rapidly in the aggregate while the market becomes the arbiter of our lives. There will be new victims, and while we are likely to be better off economically, we are also likely to be more humiliated and debased. Capitalism, in short, is inevitable, but it is also inhuman. It is inevitable since there is no other system that produces comparable levels of prosperity, but it is inhuman for what it does to human beings and to the societies in which we live.
The question is thus not how capitalism can be replaced with something else – there is nothing else that can replace it – the question is rather how its negative consequences can be avoided. In fact, ever since markets were first introduced at the very beginning of recorded history, people have tried to come up with various ways of coping. Although capitalism is very good at breaking down social structures, human beings are very good at rebuilding them. This book is about this interplay of destruction and recreation. The aim is to briefly go over the history of capitalism and to look at some of the ways in which people have sought to deal with its destabilizing effects. What we want to know is what capitalism does to individuals and societies, but also what individuals and societies do in order to protect themselves. This book is a work in historical sociology, but it is written with a certain sense of urgency. Before the new economy comes down on us in full force we need to know more both about capitalism and about how to survive it with our humanity intact.
The Power of Markets
Capitalism has always had a way of shaking things up. Capitalism has undermined traditions, eroded the power of well-established authorities and made, in Karl Marx's famous phrase, 'all that is solid melt into air'. Normatively speaking, many of these changes have been for the good. The expansion of markets has brought about economic development, leading to prosperity for some and a far better standard of living for the many. Economic development in turn has made it possible for people to leave their hand-to-mouth existence and lead proper human lives. As a result there is more time for rest and recuperation, for social interaction, for cultural and intellectual pursuits. Although the evidence here is far more contested, there also seems to be a connection between economic development and a number of other long-cherished goals including peace, social justice and democracy. If nothing else peace, social justice and democracy are far more difficult to maintain when people are poor and the economy stagnant.
And yet capitalism has also had a number of consequences which normatively speaking have been quite disastrous. The expansion of markets has forced people to specialize on ever more well-defined tasks, and as labour has been more finely divided, so has the fabric of social life. Over the course of the last 200 years capitalism has continuously broken up social relationships and destroyed communities and established ways of life. Facing new economic imperatives former farmers and farmhands have suddenly found themselves factory workers in cities where they have had few connections with other people. In the course of the nineteenth century, the Europeans were uprooted in this fashion, and today farmers throughout Southeast Asia are going through much the same process.
In addition the expansion of capitalism has meant that more and more of our lives has become subject to market forces. Things have become commodified, as it were. To 'commodify' something is to turn it into an object that can be sold in a market at a price. As a result of this process we have come to adopt an increasingly rationalistic attitude to our relationships with others and to ourselves. At the same time other non-economic ways of understanding the world have become more difficult to uphold. Values have been replaced by prices, and prices as always are determined through the interplay of supply and demand. In this way, even though the expansion of markets makes sure that resources are becoming increasingly efficiently allocated, we become increasingly impoverished.
Capitalism, finally, seems to make our lives more and more alike. When subject to the same market forces, societies, products, and even human beings start to resemble each other. In part this is a consequence of the spread of the new market rationality. When we all apply the same standards to our actions and our thoughts, we increasingly come to think and act in similar ways. But convergence is also a consequence of ever sharper competition. Everything else being equal, the bigger the market, the larger and fewer the companies that supply it, and before long a few enormous companies will be selling ever more standardized goods to ever more people. If nothing else, such homogeneity is terribly boring. But homogeneity is also a threat since our very notion of an identity presupposes the ability to draw distinctions and to create boundaries. There must be something about us that is uniquely ours if there is to be a point to our lives. In a fully extended market society, it is less and less clear what that could be.
Both pictures are consequently correct. Capitalism is simultaneously both inevitable and inhuman. It is inevitable since there is no better way to bring about economic prosperity together with all the cherished social goods which prosperity produces. It is inhuman since capitalism undermines our communities, our values and our ability to determine who we are. As inevitable, capitalism has to be encouraged; as inhuman, it has to be controlled. The all-important question is how we can simultaneously respond to both of these conflicting imperatives.
Political discussions over the last 250 years have more than anything concerned precisely this issue, and the various views on the matter make up the familiar left-right scale according to which political positions are conventionally classified. The traditional right-wing of the anciens régimes was anti-capitalist and defended time-honoured values and hierarchies, whereas the left-wing was pro-capitalist and revolutionary. Once the left seized power in the course of the nineteenth century, however, the positions switched. The new right-wing praised the virtues of capitalism and sought to make sure that nothing would restrict its reach. The new left-wing emphasized the negative consequences and looked for ways in which capitalism could be controlled.
Important as these debates have been, it would be a mistake to think that the conflict between competing imperatives can be settled entirely through political actions. There is certainly a role for politics here but it is more limited than we commonly imagine. The conflict between competing imperatives is too tangible, too pressing, too everyday, and none of us can afford to wait around for the political debate to run its course. What we do is instead to rely on a kind of infra-politics, a low-level, barely visible politics which we all engage in, whether we know it or not, whenever we take steps to protect ourselves against the negative impact of capitalist markets. As it turns out, there is an entire repertoire of social arrangements we routinely draw on to assure such protection. There is nothing left-wing about these instinctive actions and they are not undertaken in order to make a political point. In fact, even the most vocal of market fundamentalists end up protecting themselves in much the same manner. They too are human beings, after all, and they too have to defend their humanity against the encroachments of the market.
The result is best described as an uneasy compromise. Far from conquering all of social life, markets and societies have reached a kind of modus vivendi. Since capitalism is an unrivalled source of prosperity, it has been retained, but since it is also destructive of social life, it has been contained. There is the logic of the market, but there are also alternative logics that are non-market-based. Within the market, supply and demand reign supreme, but outside of the market, supply and demand are reined in. The combination is not without its problems, but most of the time it works reasonably well. In the end this is how all successful societies have survived capitalism; we all have our various ways of remaining human.
Our first task in this book is to provide a more detailed investigation of some of these threats. The strategy here is similar to that employed by many economists. Instead of talking about the actual world, what economists typically do is to talk about the version of the world they have created in their theoretical models. Whereas the actual world is messy and full of awkward facts, the world of the model is neatly organized in accordance with a few basic principles. Economists are regularly ridiculed for this hopelessly academic way of proceeding, and yet it is often the only way to make sense of highly complex situations. Proceeding like an economist, therefore, the question is first what the social consequences are likely to be of the development of capitalism. Only once this logic has been described is it possible to say something about what we have done to protect ourselves against it.
Division of Labour
Consider first what happens when markets grow wider in scope. Markets grow in width, we could say, when they come to include more people and larger and better integrated geographical areas. The widest possible market is one that includes absolutely everybody and in which prices and qualities are determined through the same processes. Everything else being equal, wider markets are characterized by a higher degree of division of labour. Instead of everyone making everything they need for themselves, people come to specialize on whatever they are relatively better at producing. By trading with others who similarly specialize in their comparative advantages, the division of labour will spread. Before long, work will be divided into ever smaller and better defined tasks, and in the end we will all be doing just one unique thing.
The economic benefits of this process are incontrovertible and they were the reason why the classical economists were such strong advocates of free trade. Specialization makes people vastly more efficient. By focusing on a particular task we soon become far more skilled at what we do. By leaving each task to the person who is best qualified to perform it, and by trading with each other, everyone benefits. In this way it is also far easier to introduce technological innovations. Instead of having a person perform the same tedious task all day long, we can have a machine do it. Before long the machine can carry out the work and the workers can focus on attending and servicing the machine. Hence the factory.
For individuals the division of labour has a number of obvious benefits. When labour is divided, new kinds of jobs and new opportunities present themselves. Seizing on these, people are given a chance to break with their previous lives. Those who are poor and otherwise disadvantaged are in this way able to improve their lot. A striking example are the medieval serfs who decided to run away from their feudal obligations. As customary law stipulated, after having lived in a town for a year and a day the runaways were declared free; Stadtluft, as the medieval German saying went, macht frei. Understood figuratively, city air is still liberating. It is easy to imagine the exhilarating sense of freedom experienced by nineteenth-century European farmers, or by peasants throughout East Asia today, when leaving the soil and the animals for new lives in faraway megalopolises. It is not irrational to prefer the unpredictability of city life to the all-too-predictable drudgery of the countryside.
Excerpted from Surviving Capitalism by Erik Ringmar. Copyright © 2005 Erik Ringmar. Excerpted by permission of Wimbledon Publishing Company.
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Table of Contents
Acknowledgements; Theoretical Preliminaries; 1. The Inevitability and Inhumanity of Capitalism; 2. How Society Protects Itself; In the Bosom of the Family: 3. The European Idea of the Home; 4. The Chinese Family; Among Brothers, Friends and Colleagues: 5. European Sectsm Guilds and Trade Unions; 6. Japanese Business Corporations; 7. Personal Thais; and How They Survived the Boom; The State: 8. Versions of the European State; 9. The State in China and Japan; Conclusions: 10. How We Survived Capitalism; 11. The Coming Crisis; Notes; Bibliography and Websites; Index
What People are Saying About This
'Clearly and gracefully written, it presents an interesting and fertile thesis about the nature of capitalism and how different societies have learnt to cope with it.' —John Gray, author of 'Straw Dogs' (Granta, 2002)
''Surviving Capitalism' presents a highly literate cost–benefit analysis of the history of capitalism…fresh, fascinating, relevant, and, yes, humane.' —Jeff Madrick, editor, 'Challenge Magazine'