Sociology, Capitalism, Critique

Hartmut Rosa, Stephan Lessenich, Klaus Dörre, Jan-Peter Herrmann, Loren Balhorn, Jan-Peter Herrmann, Loren Balhorn

• Publisher: Verso
• Year: 2015
• Print ISBN:
  9781781689325
• eBook ISBN:
  9781781689349
• Topic: Economics
• Subtopic: Political Philosophy
• Index: Economics

For years, the critique of capitalism was lost from public discourse; the very word "capitalism" sounded like a throwback to another era. Nothing could be further from the truth today. In this new intellectual atmosphere, Sociology, Capitalism, Critique is a contribution to the renewal of critical sociology, founded on an empirically grounded diagnosis of society's ills. The authors, Germany's leading critical sociologists-Klaus D?rre, Stephan Lessenich, and Hartmut Rosa-share a conviction that ours is a pivotal period of renewal, in which the collective endeavour of academics can amount to an act of intellectual resistance, working to prevent any regressive development that might return us to neoliberal domination.

The authors discuss key issues, such as questions of accumulation and expropriation; discipline and freedom; and the powerful new concepts of activation and acceleration. Their politically committed sociology, which takes the side of the losers in the current crisis, places society's future well-being at the centre of their research.

Their collective approach to this project is a conscious effort to avoid co-optation in the institutional practices of the academy. These three differing but complementary perspectives serve as an insightful introduction to the contemporary themes of radical sociology in capitalism's post-crisis phase.

Section I

POSITIONS

CHAPTER 1

The New Landnahme: Dynamics and
Limits of Financial Market Capitalism¹

KLAUS DÖRRE

I work as a temporary worker in a large company, meaning I am not part of the core workforce. There is no new hiring anyway … just temping, everywhere. Unfortunately, this kind of capitalism has now been given free rein. Ever since temporary labour laws were loosened up by the government in 2004, the company only hires people on fixed-term contracts. From secretaries to administrators, that’s all that’s booming. The hiring is done on the basis of the so-called ‘BZA collective labour agreements’,² in which wages are much lower than those of a regular employee. Through these contracts, the employer’s obligation to pay an equal wage to temps is circumvented. Compared to my colleagues I only earn two-thirds of their wage, I have five fewer vacation days, no bonuses, only half of the overtime pay, no extra money for meals, no retirement plan, no company pension, no raises, no parking spot, and I’m not allowed to participate in company events – despite the fact that I am in some respects better qualified for the job. I would rather not speak about the psychological stress, which is terrible – because you always feel like a second-class citizen and are continually made to feel that way. Where will this development lead to next? How am I going to find a way out of it? What advice would you give me? I am completely out of ideas at this point.

This passage from an e-mail written by a temporary worker carries a typical complaint commonly heard throughout the world of work. What it reveals is not physical suffering or neglect in an absolute sense; the experiences depicted are, rather, of an existential nature. At first glance, this person seems to have done everything right. Employed in a modern leading sector, the IT industry, he engaged in extended vocational training only to find that, even with an Abitur (the German leaving certificate, equivalent to British A-levels) there is no path back into the core workforce. All that is left is painful discrimination and helplessness.

How can, or rather, how must a sociologist react to these sorts of grievances? Certainly there is no shortage of scientific instrumentarium capable of transcending the expression of cheap, frivolous sympathy. One could inform the inquiring temporary worker that he has become the victim of a risky decision – frustrating on a personal level, but nevertheless the self-chosen fate of many in an individualised modernity. If trained in hermeneutics, one could make the case that he is absolving himself of personal responsibility via the scapegoat of capitalism, instead of seriously pursuing a university degree so as to avail himself of the statistically proven opportunities offered by higher education. Observers schooled in systems theory may confront the author of the e-mail with the fact that his complaint will result in, at most, a slight rustling in the system, the structures of which he will invariably remain embedded within. But one could also attempt something surprising: take the temporary worker seriously and chart a path from the hints that he has laid out in his e-mail. Is there really a connection between the precarious living conditions of one individual and a particular variety of capitalism? How can this capitalism be criticised and changed? What kinds of alternatives exist?

The following attempt to respond to the inquiring temporary worker rests upon the thesis that, since the 1970s, the contours of a new capitalist formation have begun to emerge, (tentatively) referred to in the present article as financial market capitalism. A fundamental trait of this fragile formation is that it has made institutions designed to restrict the activity of the market the object of a new Landnahme. By now, this process has produced dramatic crises. The limits of this finance-driven Landnahme have become evident and thereby open up space for change. In order to explicate this perspective, we will (1) illuminate the socio-economic structure of capitalism; (2) introduce the concept of Landnahme; (3) enumerate the distinctive features of financial market capitalism, as well as its crises; and finally (4) take up the question of how everyday grievances can be translated into a contemporary sociological critique of capitalism (5).

1. WHAT IS CAPITALISM?

Anyone inquiring about the core socio-economic structure of capitalism is commonly directed to the concept of socialisation through markets (Marktvergesellschaftung). For the economic mainstream (referred to as neo-liberal for the sake of simplicity), ideal capitalism is identical with a market society regulated by a lean state and held together by nothing more than the ethical self-obligation of its members. Numerous diagnoses of the times in which the transition to a new capitalist formation is dealt with as the ‘economisation of the social’, ‘marketisation’, or even ‘market totalitarianism’,³ build – albeit critically – upon this model. Whether affine or counter-hegemonic, such paradigms have a common problem: they identify capitalism too strongly with the generalisation of the commodity form and competition. As will be shown, however, neither the postulate nor the critique of ‘pure’ competitive capitalism suffices for a comprehensive grasp of a new social formation. Thus, we will begin by clarifying that which capitalism is not, or at least what it is not exclusively.

The paradigm of market orthodoxy

Fundamental to the economic-liberal system of thought and its accompanying methodological individualism is the ‘demand for a strict limitation of all coercive or exclusive power’.⁴ Freedom is defined primarily as the absence of coercion and regulation. Market relations based upon the pursuit of vested interests and allowing market participants the maximum possible scope of decision-making are considered the ideal case of free interaction. Accordingly, contemporary market orthodoxy views the form of competitive capitalism currently unfolding as a precondition for political freedom. In this ideal capitalism, the pursuit of profit is the driving force of economic activity. Anything that detracts from this drive accordingly leads to distortions of competition and, as a result, to social deformations. The ideal of an entrepreneur with a sense of social responsibility represents an especially problematic distortion – at least to Milton Friedman.⁵

It must be added, however, that the paradigm of market orthodoxy is itself highly multifaceted and encompasses various schools and systems of thought.⁶ Even the paradigm’s most radical proponents purport to have learnt their lessons from the failure of laissez faire, and acknowledge that there are some limits to market coordination. State and government are regarded, not only by ordoliberals but also by followers of the Chicago School, as a ‘forum that determines the “rules of the game”’, but also as an ‘umpire to interpret and enforce the rules decided on’.⁷ Consequently, market orthodoxy is not generally opposed to social associations and organisations as such, but rather insists on the principle of freedom of contract being valid for any and all types of organisations. Its opposition is directed ‘only against the use of coercion to bring about organisation or association, and not against association as such’.⁸ Under this paradigm, the labour market is simply a market like any other; thus freedom of contract is also (indeed, especially) demanded in dealings with the organisations of the wage-earning population.

The presumption is that a market does not do away with inequalities and asymmetries of power, but rather exploits them with the utmost efficiency. Inequality itself is considered ‘highly desirable’⁹ as it increases the individual’s willingness to perform. For modern market orthodoxy, market activity is (aside from a few vital functions of the state) conducted according to the principle of the survival of the fittest. Her Royal Majesty, that is to say economic efficiency, decides, and only the strongest survive! Of course there are rules of the game that all participants must observe, but these rules are only accepted for one reason: not because they are in some way God-given or rationally founded, but simply because they have already established themselves. Accordingly, capitalism can be translated into the formula ‘market plus functioning competition plus freedom of contract equals efficiency (maximum output of goods at the lowest possible cost)’. Particularly in ordoliberalism, however, the formula is amended to include the caveat that markets require a state capable of acting, which in turn can only be strong if it limits itself to a few core functions. Thus, the ‘market’s great achievement’ is the reduction of the number of problems that ‘must be decided through political means’.¹⁰ Though state and government may initially be introduced as guardians, presiding over the market and enforcing its rules, it is ultimately the economy that determines the efficiency and market compatibility of politics.

Economic liberalism also holds an answer for the author of our e-mail. According to market orthodoxy, temporary workers’ status as outsiders is generated as a result of over-regulated labour markets. While one part of the workforce is paid above the current market rate and enjoys excessive job security due to the cartel-like power of the trade unions, the outsider groups remain excluded, denied access to well-paid and secure employment.¹¹ In order to improve these outsiders’ position on the labour market it is necessary to reduce the power of the trade unions, lower the overall wage level, weaken job security, introduce flexible forms of employment such as temporary labour, and concede to in-house agreements over sector-wide collective bargaining. The take-away is: the complaining worker can be helped, but only if the ‘market for labour’ is further deregulated so as to finally resemble the market for apples or pears¹² once again.

…and the critique

The notion that a triad consisting of maximisation of vested interest, competition, and freedom of contract leads to optimal economic performance and thus to more prosperity for all has always been a subject of sociological critique. One version of this critique laments economic liberalism’s construction of a supposed homo economicus operating within ideal, ever-transparent markets of equilibrium (Gleichgewichtsmärkte), frequented by fully informed participants, and leading to complete self-regulation. This critique, however, is only partially valid, since its underlying methodological individualism is based on the very assumption of ‘the limitations of individual knowledge’. Further, the supposed superiority of market coordination over other forms of coordination itself derives its justification from the fact ‘that no person or small group of persons can know all that is known to somebody.’¹³

Another variant of this critique takes a more fundamental approach, revealing the naïve concept of efficiency market fundamentalism that economic liberalism rests upon. Efficiency may be achieved, for example, through a minimisation of transaction or agency costs (that do not even appear in neoclassical deliberations). Transaction costs are caused by ‘frictions during the exchange of performance(s) within markets or within a company’s internal cooperation’. Such frictions emerge from ‘different knowledges and capacities, diverging interests, limited possibilities of knowledge and potentially opportunistic conduct’¹⁴ on the part of market actors. We learn from these deliberations on transaction costs that efficiency is determined not only at the level of the single enterprise, indeed not even by companies exposed to price competition, but to a large degree by institutions that regulate market-based exchange. Approaches that view institutions as resulting from relatively autonomous political and historical processes, as opposed to efficient solutions for owners of capital who wish to maximise their profits, go even further. According to these variants of critique, economic efficiency is based upon highly complex relational systems between market participants and regulatory institutions, which is why economic performance cannot be adequately analysed without identifying structural asymmetries of power and conflicts of interest.

This is where a fundamental critique of economic liberalism begins, as incomparably formulated by Karl Polanyi. Polanyi shatters the market-fundamentalist notion that labour power, land and money are commodities like any other. Labour power is flexible only to a limited degree for the very reason that it lives in a human body, subjected to biorhythms and requiring integration into family structures and social networks in order to procreate. According to Polanyi, the transformation of finite natural resources into commodities reaches its physical limits. Additionally, the use of the medium of communication called money as an object of speculation will sooner or later lead to economic instabilities. Due to this ignorance concerning the peculiarities of labour power, land and money, the notion of a pure market economy is not ‘a crass utopia’. A market capitalism regulating itself could ‘not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness’.¹⁵

Consequently, Polanyi defines the relation between freedom and capitalism in diametrical opposition to the paradigm of market orthodoxy. According to him, positive freedom can only, indeed exclusively, arise from limitations on and regulations of market forces: ‘The comfortable classes enjoy the freedom provided by leisure in security; they are naturally less anxious to extend freedom in society’. Elementary civil rights, including a ‘right to nonconformity’, should also be guaranteed, and ‘should be upheld at all costs – even that of efficiency in production, economy in consumption or rationality in administration’. This may involve limiting negative freedoms, which are enjoyed at the cost of the weaker sections of society, to the benefit of positive freedoms. Only the end of the pure market economy may signify ‘the beginning of an era of unprecedented freedom’.¹⁶

To the liberal mainstream of economics, such considerations may seem like outright heresy today. And yet ...

Table of contents

• Cover Page
• Halftitle Page
• Title Page
• Copyright Page
• Contents
• Foreword to the English Edition
• Introduction Sociology – Capitalism – Critique: Towards the Revitalisation of an Elective Affinity
• Section I: Positions
• Section II: Criticisms
• Section III: Ripostes
• Conclusion: Landnahme – Acceleration – Activation: A Preliminary Appraisal in the Process of Social Transformation
• Afterword
• Index