Radical Political Economy

Explorations in Alternative Economic Analysis

Victor Lippit

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317461388
• Edition: 1
• Topic: Commerce
• Subtopic: Commerce Général

Radical political economy is built upon the formal analysis of neoclassical economics and the tradition of Marxian/radical analysis. The essays presented in this book offer a representative sampling of the issues and methodologies involved in the study of radical political economy.

I

Labor

1

What Do Bosses Do?

The Origins and Functions of Hierarchy in Capitalist Production

Stephen A. Marglin

I. Introduction: Does Technology Shape Social and Economic Organization or Does Social and Economic Organization Shape Technology?

Is it possible for work to contribute positively to individual development in a complex industrial society, or is alienating work the price that must be paid for material prosperity? Discussions of the possibilities for meaningful revolution generally come down, sooner or later, to this question. If hierarchical authority is essential to high productivity, then self-expression in work must at best be a luxury reserved for the very few, regardless of social and economic organization. And even the satisfactions of society’s elite must be perverted by their dependence, with rare exception, on the denial of self-expression to others. But is work organization determined by technology or by society? Is hierarchical authority really necessary to high levels of production or is material prosperity compatible with nonhierarchical organization of production?

Defenders of the capitalist faith are quite sure that hierarchy is inescapable. Indeed their ultimate line of defense is that the plurality of capitalist hierarchies is preferable to a single socialist hierarchy. To seal the argument the apologist may call on as unlikely a source of support as Friedrich Engels. Perhaps it was a momentary aberration, but at one point in his career at least Engels saw authority as technologically rather than socially determined:

If man, by dint of his knowledge and inventive genius, has subdued the forces of nature, the latter avenge themselves upon him by subjecting him, in so far as he employs them, to a veritable despotism, independent of all social organization. Wanting to abolish authority in large-scale industry is tantamount to wanting to abolish industry itself, to destroy the power loom in order to return to the spinning wheel.¹

Going back to the spinning wheel is obviously absurd, and if the producer must typically take orders, it is difficult to see how work could in the main be anything but alienating.

Were the social sciences experimental, the methodology for deciding whether or not hierarchical work organization is inseparable from high material productivity would be obvious. One would design technologies appropriate to an egalitarian work organization, and test the designs in actual operation. Experience would tell whether or not egalitarian work organization is Utopian. But social science is not experimental. None of us has the requisite knowledge of steel-making or cloth-making to design a new technology, much less to design one so radically different from the present norm as a serious attempt to change work organization would dictate. Besides in a society whose basic institutions—from schools to factories—are geared to hierarchy, the attempt to change one small component is probably doomed to failure. For all its shortcomings, neoclassical economics is undoubtedly right in emphasising general equilibrium over partial equilibrium.

Instead of seeking alternative designs, we must take a more round-about tack. In this paper it is asked why, in the course of capitalist development, the actual producer lost control of production. What circumstances gave rise to the boss-worker pyramid that characterizes capitalist production? And what social function does the capitalist hierarchy serve? If it turns out that the origin and function of capitalist hierarchy has relatively little to do with efficiency, then it becomes at least an open question whether or not hierarchical production is essential to a high material standard of living. And workers—manual, technical, and intellectual—may take the possibility of egalitarian work organization sufficiently seriously to examine their environment with a view to changing the economic, social, and political institutions that relegate all but a fortunate few to an existence in which work is the means to life, not part of life itself.

It is the contention of this paper that neither of the two decisive steps in depriving the workers of control of product and process—(1) the development of the minute division of labor that characterized the putting-out system and (2) the development of the centralized organization that characterizes the factory system—took place primarily for reasons of technical superiority. Rather than providing more output for the same inputs, these innovations in work organization were introduced so that the capitalist got himself a larger share of the pie at the expense of the worker, and it is only the subsequent growth in the size of the pie that has obscured the class interest which was at the root of these innovations. The social function of hierarchical work organization is not technical efficiency, but accumulation. By mediating between producer and consumer, the capitalist organization sets aside much more for expanding and improving plant and equipment than individuals would if they could control the pace of capital accumulation. These ideas, which are developed in the body of this paper, can be conveniently divided into four specific propositions.

I. The capitalist division of labor, typified by Adam Smith’s famous example of pin manufacture, was the result of a search not for a technologically superior organization of work, but for an organization which guaranteed to the entrepreneur an essential role in the production process, as integrator of the separate efforts of his workers into a marketable product.

II. Likewise, the origin and success of the factory lay not in technological superiority, but in the substitution of the capitalist’s for the worker’s control of the work process and the quantity of output, in the change in the workman’s choice from one of how much to work and produce, based on his relative preferences for leisure and goods, to one of whether or not to work at all, which of course is hardly much of a choice.

III. The social function of hierarchical control of production is to provide for the accumulation of capital. The individual, by and large and on the average, does not save by a conscious and deliberate choice. The pressures to spend are simply too great. Such individual (household) savings as do occur are the consequence of a lag in adjusting spending to a rise in income, for spending, like any other activity, must be learned, and learning takes time. Thus individual savings are the consequence of growth, and not an independent cause. Acquisitive societies—precapitalist, capitalist or socialist—develop institutions whereby collectivities determine the rate of accumulation. In modern capitalist society the pre-eminent collectivity for accumulation is the corporation. It is an essential social function of the corporation that its hierarchy mediate between the individual producer (and shareholder) and the market proceeds of the corporation’s product, assigning a portion of these proceeds to enlarging the means of production. In the absence of hierarchical control of production, society would either have to fashion egalitarian institutions for accumulating capital or content itself with the level of capital already accumulated.

IV. The emphasis on accumulation accounts in large part for the failure of Soviet-style socialism to “overtake and surpass” the capitalist world in developing egalitarian forms of work organization. In according first priority to the accumulation of capital, the Soviet Union repeated the history of capitalism, at least as regards the relationship of men and women to their work. Theirs has not been the failure described by Santayana of those who, not knowing history, unwittingly repeat it. The Soviets consciously and deliberately embraced the capitalist mode of production. And defenders of the Soviet path to economic development would offer no apology: after all, they would probably argue, egalitarian institutions and an egalitarian (and community oriented) man could not have been created overnight, and the Soviet Union rightly felt itself too poor to contemplate an indefinite end to accumulation. Now, alas, the Soviets have the “catch-up-wim-and-surpass-the-U.S.A.” tiger by the tail, for it would probably take as much of a revolution to transform work organization in that society as in ours.

The following sections of this paper take these propositions one by one, in the hope of filling in sufficient detail to give them credibility.

II. Divide and Conquer

Hierarchy was of course not invented by capitalists. More to the point, neither was hierarchical production. In precapitalist societies, industrial production was organized according to a rigid master-journeyman-apprentice hierarchy, which survives today in anything like its pure form only in the graduate departments of our universities. What distinguished precapitalist from capitalist hierarchy was first that the man at the top was, like the man at the bottom, a producer. The master worked along with his apprentice rather than simply telling him what to do. Second, the hierarchy was linear rather than pyramidal. The apprentice would one day become a journeyman and likely a master. Under capitalism it is a rare worker who becomes even a foreman, not to mention independent entrepreneur or corporate president. Third, and perhaps most important, the guild workman had no intermediary between himself and the market. He generally sold a product, not his labor, and therefore controlled both product and work process.

Just as hierarchy did not originate with capitalism, neither did the division of labor. The social division of labor, the specialization of occupation and function, is a characteristic of all complex societies, rather than a peculiar feature of industrialized or economically advanced ones. Nothing, after all, could be more elaborate than the caste division of labor and its accompanying hierarchy in traditional Hindu society. Nor is the technical division of labor peculiar to capitalism or modern industry. Cloth production, for example, even under the guild system was divided into separate tasks, each controlled by specialists. But, as we have said, the guild workman controlled product and process. What we have to account for is why the guild division of labor evolved into the capitalist division of labor, in which the workman’s task typically became so specialized and minute that he had no product to sell, or at least none for which there was a wide market, and had therefore to make use of the capitalist as intermediary to integrate his labor with the labor of others and transform the whole into a marketable product.

Adam Smith argues that the capitalist division of labor came about because of its technological superiority; in his view, the superiority of dividing work into ever more minutely specialized tasks was limited only by the size of the market.² To understand the limitations of this explanation requires clarity and precision on the meaning of “technological superiority,” and the related ideas of technological efficiency and inefficiency; indeed, these ideas are central to the whole story told in this paper. We shall say, in accordance with accepted usage, that a method of production is technologically superior to another if it produces more output with the same inputs. It is not enough that a new method of production yield more output per day to be technologically superior. Even if labor is the only input, a new method of production might require more hours of labor, or more intensive effort, or more unpleasant working conditions, in which case it would be providing more output for more input, not for the same amount. It will be argued here that—c...