Critical Encounters

Capitalism, Democracy, Ideas

Wolfgang Streeck

• Publisher: Verso
• Year: 2020
• Print ISBN: 9781788738743
• eBook ISBN: 9781788738750
• Topic: Economics
• Subtopic: Political Economy
• Index: Economics

From the acclaimed author of How Will Capitalism End? comes an omnibus of long-form critical essays engaging with leading economists and thinkers. Critical Encounters draws on Wolfgang Streeck's inimitable writing for the London Review of Books and New Left Review, among other publications. It opens with treatments of two contrasting historical eras - factory capitalism and financialization - and three of the world's major economies: the United States, France and Germany. Delving into the world of ideas, Streeck discusses the work of Quinn Slobodian, Mark Blyth, J?rgen Habermas and Perry Anderson. Finally, he zooms out to compare his home discipline of sociology to natural history, giving a remarkable and non-deterministic reading of Charles Darwin. In the preface, Streeck reflects on the art (or craft) of book reviewing and the continuing merits of the book form. Critical Encounters also includes a series of 'Letters from Europe', penned as the coronavirus descended upon the Continent.

PART I

Capitalism

CHAPTER 1

… the More They Stay the Same

February 2019

IT WAS IN THE early 1960s, I think, that our class at a small-town gymnasium made a trip to southwestern Germany, herded by several of our teachers. We visited Heidelberg and Schwetzingen and similar places, without really seeing them; seventeen-year-old boys have other things to consider. However, we also went to Rüsselsheim, near Frankfurt, for a tour of the Opel car factory. Never in my wildest dreams had I imagined a place like this: the deafening noise, the dirt, the heat, and in the middle of it all, living people stoically performing predefined minute operations on the cars-in-the-making that were slowly but relentlessly moving by their workstations. The high point of the visit was the foundry, located in the basement – which, as I now learn from Joshua Freeman’s marvelous book, was the way car factories were then designed.* Here, where the heat seemed unbearable and there was almost no light, half-naked human beings carried, in small buckets of obviously back-breaking weight, the molten metal, red-hot, from the furnace to the casting stations. To me, trained in the classics rather than the real world, it seemed as if I had entered the workshop of Hephaistos, Homer’s crippled Olympian blacksmith. Looking back, I think it was on that day that I began to become something like a radical and decided to study sociology, which I then believed could enable me and others to help improve the lives of those having to slave away in the basements of the factories of this world.

Later, as a young social scientist, the car industry remained an obsession for me. I included car manufacturing in my empirical work whenever I could, and made a point of visiting the factories to renew my ‘feel’ for them and replenish my supply of mental images of what I tried, often in vain, to convince my colleagues were the Gothic cathedrals of the twentieth century. What I found amazing, among other things, was how these places were changing, and how fast, compared to what I had seen back in the 1960s: less and less noise, dirt and dust; much better air; no welding by hand and no overhead assembly anymore; hermetically sealed automatic paint shops; the heavy lifting all done by machines and later by robotics. In final assembly it was now the workers who were lifted up, sitting on movable platforms along with the doors or seats or whatever else they were installing. My last visit to the VW plant at Wolfsburg, more than three decades ago, ended as usual in final assembly, where no sound was to be heard apart from soft music and the first firing of the engines at the end of the line as the new cars were taken away to the storage area. The workers were mostly women, dressed in jeans and t-shirts. With a big smile and the male chauvinism that will always be part of the culture of car making, my guide, from the all-powerful works council, let me know that what I was seeing was ‘Wolfsburg’s marriage market’: ‘The lads drop by here when they have a break to see what’s on offer’.

Of course, much of this change was due to technological progress, and also to labour market constraints like the need to feminize the workforce and the labour process. But politics and industrial relations were at least as important. In the 1970s, after the strike wave of 1968 and 1969, governments, managements and trade unions in European manufacturing countries began to take seriously demands for what in Germany came to be called Humanisierung der Arbeit – the ‘humanization’ of industrial work. Under Brandt and Schmidt, this became a national research and development campaign, run out of a special department in the Ministry of Research and Technology, which lavishly funded academic and industrial projects in engineering, management and industrial sociology. Ending Taylorism was the object, and there were results, especially where workers and their representatives had rights, not just to information and consultation, but also to co-decision-making on work organization, technology, working time, training and the like.

Freeman, whose history centres on the UK, the US, the USSR and China, largely sidesteps the European continent, which is regrettable given the enduring success of manufacturing in countries like Germany and Sweden. Certainly workforce participation and anti-Taylorism had their drawbacks, as did worker co-management. In Sweden, work reform culminated in avant-garde production methods at Volvo and Saab that were not only expensive but were disliked by the workers they were supposed to benefit – like ‘group work’ on ‘production islands’, where complete cars were individually put together almost from scratch and workers were encouraged to sign ‘their’ product with their names. For a while, Saabs and Volvos were the favourite cars of European intellectuals because they were made, it was believed, by ‘happy workers’ – until both firms returned to more conventional work organization (which, however, did not in the end protect them from being taken over by GM and Ford, respectively). In Germany, meanwhile, cooperation between management and the works council at Volkswagen gradually deteriorated into collusion and co-optation. The scandals included multimillion euro payments to the head of the works council and his girlfriend, authorized by the company’s personnel director, Peter Hartz. (In 2002, while at VW, Hartz was appointed by Gerhard Schröder to chair a commission on the labour market, which eventually led to the ‘Hartz-IV’ reforms, which cut benefits for the long-term unemployed.) Still, on the shop floor this mattered less than in the press, and whatever else it was that management, union and works council did together, the workers who no longer had to work overhead surely appreciated that.

Freeman’s book tells a long and elaborate story that begins in England in the late eighteenth century, then moves to the United States, and from textiles to steel and from there to automobiles, and on to the worldwide victory of Taylorism and Fordism in the first half of the twentieth century. That victory extended even into the Soviet Union under Stalin, and peaked in the mass production of the Second World War. This, in turn, was followed by the Cold War and the hopes that accompanied it for peaceful global convergence driven by the inherent constraints and opportunities of modern industrialism, until history moved on with the rise of China and its peculiar pathway of industrial modernity. Throughout his account, Freeman manages to convey the deep ambivalence associated with modernization as industrialization: expulsion from the land, proletarianization, exploitation, repression, cruel discipline on the one hand and emancipation from traditional ways of life on the other, coming with money wages, new solidarities, trade unions fighting for higher wages and better conditions, and with the possibility of industrial citizenship and social rights gained by supporting and participating in popular politics of social reform.

Among the things that make Freeman’s book special is that he pays attention, not just to the internal organization of factories, but also to their relationship with, and indeed their effect on, their surrounding societies. That factories require particular patterns of settlement – large new cities or extensive company housing – does not always figure prominently in accounts of industrialization. Planning for the sudden arrival of large numbers of people in a previously sparsely populated geographical space attracted urbanists with progressive visions of a new society and a new industrial man or woman requiring, and thriving from, access to collective infrastructures, entertainment, education and culture: a modern lifestyle in sharp contrast to the villages where the first generation of industrial workers, mostly young, were recruited. Architects could design factory buildings not just to meet utilitarian requirements but to make aesthetic statements about the value of what was produced inside them. Factory architecture, we learn from Freeman, especially as it developed in the United States, soon became an international style that eventually spread even to the Soviet Union, where factories were designed to represent and celebrate the same industrial modernity that was taking shape under Western capitalism.

Freeman’s account of ‘the making of the modern world’ opens our eyes to the enormous extent of international cross-fertilization, especially in the 1930s and 1940s, not just between the United States and the USSR, when large-scale manufacturing was developing into a world of its own, with Henry Ford as a global icon of universal progress. One of his admirers was, of course, Adolf Hitler. Immediately upon taking power Hitler had tried hard but in vain to make German auto manufacturers abandon their traditional style of small-scale craft production and produce a simple car ‘for the people’, a Volkswagen. In the end it had to be Ford himself who helped him set up the first Fordist German car plant (apart from the two much smaller Ford and General Motors plants in Cologne and Rüsselsheim), at a place later named Wolfsburg, with second-hand machinery from Dearborn, Michigan. To show his gratitude, in 1938 Hitler awarded Ford the highest decoration of the Nazi regime for foreigners, the Great Cross of the German Order of the Eagle (Großkreuz des Deutschen Adlerordens).

Another feature of Freeman’s story, also unusual, is the space he devotes to the representation of the factory in the arts, beginning with the futurism of the interwar years. Particularly prominent were photography and cinematography, the most modern branches of artistic production, whose works were as technologically reproducible as the new mass consumer products. While photographers and film-makers did document the drudgery of mass production and the misery of exploitation, they were no less fascinated by the promise of progress embodied in the newly minted cars coming off the conveyor belt, the polished airplane engines and turbines ready to start, and the huge workshops with their avant-garde architecture, like Frank Lloyd Wright’s Johnson Wax Factory in Racine, Wisconsin, where hundreds of people could be seen to be working together in quiet discipline for American and universal improvement.

One question that reappears at each turning point of Freeman’s long story is whether the suffering in the factories of early industrialization was really necessary for, and must therefore be justified by, the progress of industrialism and, with it, of mankind. This debate begins with none less than Adam Smith, who discusses the pros and cons of the division of labour, the increase in productivity and the decline in humanity it simultaneously portends – so that at some point the progress of the former is undone by the damage done to the latter, by chopping away at human mental capacities and personal self-esteem. In the West, it was capitalists who insisted that the waste of one or two generations in the living hell of the factories of Manchester and then the world was a sacrifice that had to be made for a better life for all in the future. But where can that sacrifice end if the systemic imperative of capitalism is the endless accumulation of capital? This was not necessarily an issue under socialism: both Stalin and Trotsky considered the use of brutal force indispensable for a socialist variant of primitive accumulation, meaning unfettered reliance on Taylorism and military-style discipline to advance the formation of a socialist working class. The promise was that with the arrival of Communism, the toil would be over, as society would be liberated from work by a combination of socialized fixed capital and Soviet power. European social democrats, for their part, settled for liberation mainly in rather than from work, with less managerial discretion, shorter chains of command, job enlargement, group work, use of productivity gains to slow down the work pace, and the like. The results were observed by a new generation of industrial sociologists, in the wake of the worker uprisings of the 1960s and 1970s.

Not surprisingly, a prominent theme in Freeman’s account is the conflict between labour and capital, or management, over factory organization and factory discipline, and above all over how to share the proceeds from the superior productivity of organized cooperation in large-scale production. Factory work is teamwork, making it impossible to devise a simple formula for dividing its benefits, and opening the door for bargaining between parties with conflicting demands and interests. Here a crucial parameter is relative power, as brought to bear in, as well as affected by, national and local institutions of industrial relations. A pervasive force in factory life, power extends to and shapes the organization of production even where one would not necessarily expect it. Freeman recounts how in the post-war era giant factories began to go out of fashion in the United States, to be replaced by much smaller, geographically dispersed production sites. Changed transportation and coordination technologies helped make this possible, as did vertical disintegration and just-in-time delivery of ever more parts contracted out to a growing supply industry. But these were only facilitating circumstances; the driving force, according to Freeman, was the response of managements to the power organized labour had been allowed to build under the New Deal, most effectively where factories were large. To avoid costly concessions to their newly empowered workforces, firms shifted to greenfield sites in places where the labour supply was not yet spoiled by a tradition of unionization. Here, ‘human resource management’ could choose from 100,000 job applications for an initial workforce of 1,500, making sure that those finally hired were anti-union, had a family with children, and had to pay off a mortgage for their family home – on the plausible assumption that a mortgage makes for a robust work ethic and at a minimum militates against going on strike.

More as an aside, Freeman notes that management flight from large factories was not universal. It didn’t happen in countries and companies with effective institutions of industrial democracy, where worker representatives could veto job relocation while at the same time guaranteeing management industrial peace, and indeed collaboration, in return. Here a prime example is, again, Volkswagen’s main factory at Wolfsburg, which did not just remain big but in recent years has actually expanded its workforce, from 44,000 in 2007 to 62,000 ten years later (a little less than Freeman claims), at a time when the company was also growing rapidly through internationalization. To a large extent, this was possible because the union was able to extract from management new investment and employment guarantees for the Wolfsburg plant, in exchange for its services as an effective manager of worker discontent. Another factor was that the Land of Niedersachsen, where Wolfsburg is located, is a privileged shareholder in Volkswagen and sufficiently powerful in this capacity to ensure that enough of the company’s jobs remain where its present workers and their families live and vote. (This is a condition that the European Union has for years tried to put an end to, in the name of ‘free movement of capital’.)

Of course, it is not just management that may find factories of that size scary; workers may as well, in particular if they have nothing to say inside them. An interesting experience I recall from the late 1970s was taking a British trade union officer to Wolfsburg for a tour of the factory. Coming from the doomed, geographically dispersed, never really integrated, effectively stand-alone small British Leyland plants of the time, torn by industrial strife and dependent on heavy public subsidies, he grew increasingly depressed as we walked through the seemingly unending factory halls – until he burst out to complain about the inhuman enormity of so many people pressed into one industrial plant. His frustration increased when a question regarding the extent to which the plant reached its production target on an average day went unanswered, since his German counterparts had no concept of production targets ever not being met. In the evening over a beer, he found relief in violating the first commandment of Fawlty Towers and telling us about the war (‘Back then when you fellows didn’t behave’): as a member of a small special unit of the British Marine Corps, he had landed in Flensburg to arrest Großadmiral Dönitz, an act of heroism for which, to his surprise, we expressed our deeply felt gratitude.

Freeman’s final chapter is on the ‘giant factories’ of Asia, in particular the Taiwanese-owned Foxconn plant, or plants, in Mainland China. Here, too, size is not a problem, made possible, not by industrial democracy, but by industrial repression. As behoves a historian, Freeman places the contemporary labour constitution of China in the context of recent Chinese history, in particular the Cultural Revolution under Mao Zedong, when management was to be subordinated to the will of the masses and factory discipline replaced with revolutionary ardour. Nothing of that is left today, except for the fact that the harsh regime in the fast-growing private sector of Chinese manufacturing may be explained, in part, as an outgrowth of the economic and political disasters of the 1960s and 1970s.

Looking at Europe in particular, there seems to be yet another, even more sinister connection between the politics of liberation in its Western version (if not from then in work) and the new ‘Asian mode of production’. As satisfied consumers of the electronic toys, colourful running shoes and cheap t-shirts that come to us courtesy of modern Asian industrialism, we tend to forget about how they are produced in Shenzhen, Chengdu, Zhengzhou, in Saigon in Vietnam, and in Taiwan, Indonesia, Cambodia and Myanmar – in factories not owned but directed by firms like Apple, Disney, Adidas and Walmart. Manchester still exists, but on the global periphery, too far away for school excursions. It is to there that we have externalized the misery of long hours and low wages, enabling us as consumers to reap their benefits without bearing the costs as producers, and disregarding for the moment those that, in an ironic version of liberation from work, lost their jobs in the process.

Much of what Freeman writes in this impressively well-written chapter may already have been familiar from occasional reports in the media. But seeing it presented together in one piece makes for a truly upsetting experience. Plants with between 300,000 and 400,000 workers; a factory with a workforce of 350,000 producing iPhones and nothing else; a regime of residence permits for migrant workers designed to prevent them from organizing; the dormitories with their strict, nineteenth-century-American style of quasi-military discipline. No cities of the future here: only barbed wire, uniformed security guards and surveillance cameras. And the suicides of which some of us may have read: when, for example, in 2010, thirteen young workers jumped to their death from the roof of a Foxconn factory producing iPhones and iPads. Freeman reports how Apple politely pointed its finger at Foxconn, and how Foxconn responded with preventive measures to spare its biggest customer further embarrassment, installing mesh wire on the roofs and balconies of its factory buildings and putting up 3 million square metres of netting above the ground all around them to catch and thereby save anyone desperate enough to find a way, still, to try to kill themselves.

One interesting question that Freeman discusses is why those Asian factories are so big, making it necessary for their rulers to expend so much effort on controlling the workers. According to Freeman, this is not due to economies of scale; production processes are not complex enough to justify organizations of that size. More likely it is the nature of the outsourcing relationship dominated by customers like Nike and Hewlett-Packard and the way these companies work their markets, where ‘flexibility’ is everything. When Apple made its long-awaited iPhone 6 available to its eager devotees, it had to be able to sell 13 million units in its first three days on the market. Since ‘freshness’, according to Apple’s Tim Cook, is a modern gadget’s most important property, final changes in design must be possible until a few weeks before sales begin. Just-in-time production of this sort needs huge factories with huge workforces kept, as it were, in storage, in company-owned dormitories nearby, to be called out any time and ordered on short notice to work, if required, twelve-hour shifts or longer for several consecutive weeks. Nowhere is the secret of how we can pay for what we are made t...

Table of contents

• Cover Page
• Halftitle Page
• Title Page
• Copyright Page
• Contents
• List of Books under Review
• Preface
• Part I: Capitalism
• Part II: Democracy
• Part III: Ideas
• Appendix: Letters from Europe