Social Relations and Social Exclusion

Rethinking Political Economy

Peter Somerville

• Publisher: Taylor & Francis
• Year: 2012
• Print ISBN: 9780415240406
• eBook ISBN: 9781134551491
• Edition: 1
• Topic: Social Sciences
• Subtopic: Cultural & Social Anthropology
• Index: Social Sciences

Examining the rational individual, this book develops a new approach to the theory of social relations. It explores how far we make sense of society on the assumption that people act as independent and free individuals, exercising rational choice. Re-examining the family, community, workplace and state, the author offers a thorough and original critique of the social policies of 'New Labour'.

1 Introduction

A Theory of Social Relations

In social science as in natural science there is no shortage of people who make fundamental assumptions about what human beings are ‘really’ like. This in itself is not a problem so long as the assumptions are falsifiable and not beyond the influence of all possible arguments. The real mistake is to elevate what should be only working hypotheses into exclusive claims about the essential nature of humanity; that is, claims to some kind of unique and ultimate truth about the human condition. This book argues that what we can know is basically the ‘text’ and ‘context’ of humanity and the interaction between them; that is, the autobiographical narratives of individual human beings communicated through third parties, the social relations in which they are embedded, and the observable dynamical processes in which these individuals act upon and are acted upon by specific contexts.

The concern of this book is primarily with social theory. There is a sense in which human interaction and organisation represent a specific level of evolution where individual organisms adopt patterns of behaviour which ‘best fit’ the environments in which they operate. Some sociologists have used the term ‘strategies’ to describe such patterns (Pahl 1984; Crow 1989; Edwards and Ribbens 1991; McCrone 1994), although the limitations of the concept have been pointed out by others (Wallace 1993). The basic point is that what could be called an evolutionary approach serves to focus attention on three key features: the individual human being (known through their autobiographical texts), their natural/social environment (conceptualised as their ‘context’), and the courses of action by individual human beings which determine their comparative advantage or disadvantage in different environments (processes of text–context interaction).

Some of the assumptions of this evolutionary approach are shared by what is known as the ‘public choice’ or ‘social choice’ or ‘rational choice’ perspective (Olson 1965; Buchanan 1965) and by the related theory of ‘human capital’ (Becker 1981). It is this perspective which will inform much of the argument in this book. According to this perspective, derived from neoclassical economics, each individual acts or tends to act to maximise his or her utility, and this is primarily what determines their orientation to their environment. Co-operation among human beings is then achieved mainly through the social construction of group advantage, and understanding how such construction occurs lies at the root of explaining social relations generally.

In common with all perspectives deriving from the ‘Enlightenment’, including marxism and feminism, rational choice theory makes one key assumption about the nature of human beings, namely that they are capable of self-determination; that is, critical reflection through developing their own autobiographical narrative (Drover and Kerans 1993: 6) which enables them to make up their own minds about the values they wish to maximise. Sen (1987) argues that human beings have ‘basic capabilities’ which they should be able to develop and exercise as a condition for ‘participation autonomy’ (Doyal and Gough 1991). This assumption is not fundamental in the sense of being assumed to be true a priori for all human beings: it is of course recognised that some human beings will not be capable in this sense (a failure or absence of ‘text’). The status of the assumption is rather more transcendental, in that it is required in order for rational choice theory to have substantive applicability. It is still only a working hypothesis, but it is one that lies at the root of the theory itself.

Rational choice theory holds that in general individuals are responsible for their own self-determination. Any form of external compulsion tends to undermine that sense of personal responsibility and is therefore to be minimised. In some circumstances, however, it is necessary to have rules or regulations which are binding on individuals in order for the basic capabilities of those individuals to be developed. In such cases, acceptance of the rule or regulation should be achieved by means of reasoning and negotiating among the individuals concerned. Essentially, rational choice takes place within a system of constraints by means of a negotiated balance between the desires of the individual and those with whom that individual relates (their ‘community’). If negotiation fails, there are only three possible outcomes: the rule or regulation is removed (effective ‘voice’); the individual chooses to obey the rule (‘loyalty’); or the individual leaves the group (‘exit’) (Hirschmann 1970). Where an individual is unable to exercise the exit option, and where the rule remains in place, that individual can be said to be constrained to act against their will, for example through the application of effective sanctions if they fail to comply with the rule. This represents a failure of ‘context’, in that external conditions effectively deny the exercise of rational choice to the individual.

The general approach adopted in this book is along the lines of: what are the rational courses of action in any given context and, if it is assumed that individuals follow such courses of action, how far can this explain the consequences? This approach therefore does not assume that individuals always do act rationally or in their own interest, nor does it assume that individuals will necessarily agree on whether a given course of action is rational or not. It argues more modestly that an assumption of rational behaviour can explain a good deal that would otherwise appear puzzling about social relations and social action. The theory also has a normative dimension, in that it suggests that people ought to act rationally and that an increased commitment to rational action within a context of appropriate norms and rules is essential for human dignity and human progress.

Rational choice approaches have frequently been criticised on the grounds that people do not and indeed should not always act in a rational or self-centred or goal-oriented way (Morris 1990; for a more detailed critique, see Zey 1998). It is indeed true that some writers in this tradition appear on occasions to lack an appreciation of the fact that utility itself is socially constructed and that this necessarily conditions individual behaviour. This book, however, takes the view that utility or value is essentially context-dependent; that is, it varies according to the nature of the social institution in which it figures. This view is shared by those identified with the perspective of New Institutional Economics (North 1990). It is also consistent with the approach of those writers who talk in terms of a ‘bounded rationality’ (Simon 1982; Conlisk 1996).

The rational individual is therefore one who has a capacity for self-determination or autonomy, who adopts a strategy which selects the course of action that most effectively (that is, at least cost and risk) fulfils their desires (Laver 1997: 20). This apparently simple notion, however, is in fact extremely complex. It can be unpacked in terms of three assumptions. The first is that individuals act in such a way as to maximise value (either in a specific monetary sense or in some other context-defined sense) through the restraint of competition with other individuals by means of compulsion and selective incentives (Olson 1965). The concept of value is a difficult one, but essentially it involves the object of human desire, the means towards the enjoyment of the good life as determined on the basis of the individual’s own critical reflection. The second assumption is that individuals act so as to minimise their costs by sharing them with other individuals. Again, costs can be interpreted in either a financial sense or some other sense – social, emotional or psychological and the measurement of costs is also self-determined. The third assumption is that the milieu within which co-operation among individuals takes place is defined by access to a common resource (Ostrom 1990); that is, it is the common resource which determines the context or environment within which value is constructed (and this context can be social or institutional as well as spatial). The rational individual is therefore one who weighs value in the balance against cost and risk as part of their calculus for self-determination within a framework of their knowledge of the contextual possibilities of action. The rational course of action is the one based on the best obtainable knowledge of text and context, and on the most plausible analysis of the repertoire of likely outcomes of text–context interaction.

The importance of each of these three assumptions can be explained as follows. In the first case, the action of ‘free’ individuals results in the creation of mutual obligations within a group in return for a comparative advantage for the group as a whole. By reducing the waste involved in competing with others, every individual maximises value for herself or himself. The drawbacks, however, are that each individual has to accept a certain level of regulation in order to sustain the arrangement (for example by preventing individuals from ‘free-riding’), that inequalities of power within the group may be reinforced (because weaker individuals have less value to contribute to the pool), and that the creation of group norms and regulations inevitably means the drawing of a boundary between members and non-members of the group.

For the purposes of this book, a norm is a rule that guides how an individual is to act in a generality of cases. Here, the norm involved is a utilitarian one; that is, it says: ‘I will cooperate with the others if and only if my co-operation makes a positive contribution to the collective good.’ But why should a rational individual follow such a norm or any other norm for that matter when they can take an occasional free ride on the backs of the efforts of others? After all, if a person is acting in accordance with a norm, then he or she is not necessarily proceeding on the basis of a rational analysis of the situation. The general answer to this question is to point to processes of ‘normalisation’ which occur very early on in the lives of individuals and organisations through rituals of interaction (Goffman 1969), processes of routinisation (Giddens 1984: 15, 21, 90), habits of cooperation or trust (Coleman 1990: 177– 80; Hardin 1992: 505–7; Putnam 1993: 167), or techniques of domination (Foucault 1977, 1980; Luke 1990). Rational choice theory, however, declares that we are not hapless victims of our early socialisation, but can choose to act differently if we wish. If a rational individual decides to follow a norm, their decision will be based on a rational appraisal of the costs of non-co-operation (for example in terms of sanctions imposed by others) as against the benefits to be derived from access to a common resource. A decision to free-ride incurs costs for an individual which may not at first be open to calculation but may become clearer as time goes on, for example in terms of the damage thereby caused to that individual’s reputation or to the esteem in which they are held by others.

In the case of the second assumption, the sharing of costs involves an element of redistribution which may benefit the weaker members of the group. It also defines what individuals are entitled to enjoy by virtue of being members of the group: these could be described as membership rights. Essentially, each individual co-operates conditionally in return for improvements in their own situation. The form of co-operation is said to be governed by this principle of reciprocity. For the stronger members, the benefit could simply be the cooperation of the weaker members themselves. Again, the creation of rights which include people in membership by the same token excludes others from membership.

The norm involved in this case is that of reciprocity, which says: ‘I will co-operate if and only if a substantial number of others co-operate’ (Elster 1989: 48–9, 187, 192, as derived from Bengtsson 1998b: 12). This is more clearly rational in its avoidance of being taken for a ride, but if it were followed by everybody it is difficult to see how co-operation could ever get off the ground. In strictly rational terms, co-operation should arise only where there is ‘balanced reciprocity’; that is, where the act of one individual in benefiting another is ‘balanced’ by a reciprocal act from the other individual. Such ‘balanced reciprocity’ is based on a relationship of trust between the two individuals concerned: one individual takes a risk in co-operating, but if his or her trust in the other individual is broken or misplaced, then further co-operation may not be forthcoming. Trust is therefore the key to the normalisation of personal relationships. Trust also involves more than strictly balanced reciprocity or conditional obligation: it encompasses mutuality (Gould 1988: 292) or ‘complementary reciprocity’ (Benhabib 1988 1990), that is mutual recognition and communicative competence (Habermas 1987). Basically, the exercise of autonomy by one individual depends (among other things) upon respect and understanding from other individuals. This involves a readiness to affirm not only their essential humanity, but also their individuality, with different needs, talents, capacities and points of view (Drover and Kerans 1993: 261). The extension of this principle to larger social groups, however, where the individuals are strangers to one another, is problematic (see Chapter 4).

The third assumption essentially defines the arena or context in which a set of rights and responsibilities operates. The existence of a common resource of some kind is what provides the basis for community. In this sense, a household is perhaps the most basic kind of community, but the term could probably be applied to any form of ‘free’ association of human beings. The context is always present as the embodiment of dead labour (that is, the product of past actions of human beings), but it is also a continually moving reference point for action and interaction. The importance of this assumption is that it provides a concrete form in relation to which the highly abstract concept of value can be measured; that is, in terms of the benefit to be gained from the consumption of the common resource. Here too, however, access to the common resource is unlikely to be equal, so this can give rise to new forms of inequality of wealth and power.

Maximisation of value therefore leads to the creation of obligations while minimisation of costs creates individual rights. Jordan (1996) has rightly concluded from this that rights and obligations are not necessarily linked within the practice of any particular individual, as is claimed by neo-conservatives and some neo-labourites – that is to say, for any given individual right there does not necessarily exist a corresponding individual responsibility, although this can be artificially induced through morality or law. This is because they are linked only in the context of the group as a whole and specifically through their access to the common resource.

In this book the postulates of rational choice theory will be used in order to make sense of key institutional contexts in modern society: households, local communities, workplaces and political institutions. In each case, it will be shown how rational choice theory can throw light on how such institutions work and on how they can be changed. This is not to say, however, that rational choice theory provides anything like a full explanation of social relations. For example, as Zey (1998) points out, it lacks an adequate theory of power and of the contexts within which rational choice takes place. More generally:

The limits of [rational choice theory’s] explanations show that it is an incomplete theory of social action and that it can remain vital only by incorporating other theories at different levels of explanation. Rational choice theory itself should remain narrow . . . if it is to retain its explanatory power.

(Bohman 1992: 225, cited in Zey 1998: 111)

For this reason, other theoretical concepts will be introduced.

Rational choice theory is not able to explain how power in society came to be unequally distributed. As Zey (1998: 57) says: ‘The explanation of cause is at the heart of a social theory of power and cannot be reduced to the economic exchanges of rational choice theory’. We therefore need separate theory, not derived from rational choice theory, for this purpose. In this book, I use a form of marxist-feminist theory based on a concept of exploitation. Exploitation can be defined as a social relation in which the value produced by the labour of one individual is appropriated, at least partly, by another (Delphy and Leonard 1992). Exploitation in this sense occurs in a variety of social contexts, but the two main ones to be considered in this book are the family and the labour market. An important distinction exists between exploitation in which the labour is forced and that where it is free. Forced labour is characteristic of social systems based on slavery or totalitarian state rule. Free labour, however, is typical of capitalism which is the globally dominant economic system today, and it is also typical of the household economy with its own system of labour relations. Under both capitalism and the household economy, exploited individuals labour on behalf of others in return for remuneration which is less than the value of the product of their labour. In capitalism, a propertyless individual hires out his or her labour power in return for a wage or a salary, and in domestic production a sexually subordinated individual commonly (though not always) performs labour for other household members and receives some payment in kind such as provision of shelter and material goods (Apps 1981). In both cases, the value of the payment received is always less than the value produced by the labour in question.

The importance of the concept of exploitation for the purposes of this book is that it helps to explain not only enduring patterns of inequality among individuals but also how these patterns appear to be freely chosen by the individuals concerned. This serves to counteract the common liberal assumption among rational choice theorists concerning the sovereignty of the individual; that is, that each individual has supreme power to determine his or her own fate. In reality, individuals exist within social contexts which are structured by patterns of exploitation. These contexts do not merely constrain people but shape the very freedom of their individual choice. It is not merely the rationality of human beings which is ‘bounded’, but their whole physical and emotional being.

Exploitation needs to be distinguished from oppression. Under forced labour, the two are intertwined in a single system of domination. Where labour is free, however, the relation between exploitation and oppression is less direct and more complex. Under capitalism, the working class is typically subordinated to a ‘dominant political coalition’ (Mollenkopf 1989), so that workers are both exploited and oppressed, but there is no necessary relationship between the two. In the domestic system also, the exploited woman is typically oppressed by the man, but not necessarily so, and the nature of the oppression is subtle and difficult to establish. All this suggests that the social bases of power inequality need to be rethought.

Another general consideration is the distinction between closed or exclusive groups and open or inclusive groups. Whether a group becomes exclusive with restricted membership, or inclusive with unrestricted membership, broadly depends upon whether the costs (or risks) of recruiting new members outweigh the benefits. This consideration leads to a theory of social policy according to which social exclusion and inequality among groups can in principle be tackled through sanctions and incentives to ensure that the benefits of recruiting new members exceed the costs (or risks), or that the costs (or risks) of not recruiting new members exceed the benefits. This argument suggests that an explanation of social exclusion is derivative from a more general dynamic theory of social relations based on the marginal utility of particular (new) members to a dominant group.

A final general consideration is that given the assumptions outlined above, the mechanism by which groups operate and develop can be identified as one of ‘structural selection’. This idea is analogous to that of natural selection. Essentially, co-operation within a group occurs in order to gain advantage for members of that group in comparison with other groups. Cooperation among individuals is therefore indissolubly associated with competition among groups. Since capitalism is based on this principle, that of individuals co-operating ‘freely’ within competitive markets, this helps to explain why it has been such a successful system for its participants. The group which succeeds is the one that best ‘fits’ with its social environment and this involves the production of what are known as ‘virtuous circles’ (Putnam 1993). This should not be taken to imply, however, that the history of capitalism is one of unilinear and even development. This is because of the unlimited differences and diversity among human beings and the contingencies and uncertainties associated with their interactions, both as individuals and as members of different groups.

An important, and indeed vital, question to consider is how diverse individuals with radically different autobiographical narratives come to recognise the advantages of their participation in groups, to accept their rights and responsibilities, to trust their fellow group members, and to commit themselves to those groups on a long-term basis. This essentially anthropological and psychological question has not as yet been satisfactorily answered. Goffman (1969) suggested that human communication is embedded in ritual exchanges of value between people who recognise each other as members of the same group and that children learn these basic reciprocities unconsciously. Without value exchange within groups, therefore, involving restraint of competition, human communicat...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of tables
• Preface
• Acknowledgements
• 1. Introduction: a theory of social relations
• 2. Households and families
• 3. Communities and community development
• 4. Contractual relations and social divisions
• 5. State–citizen relations and social justice
• 6. Policy implications: the case of housing
• 7. Conclusion
• Bibliography
• Index