Alternative social systems and individual wellbeing

Communism …
or Capitalism?

A joke from Poland in the 1970s: “In capitalism it is a question of man’s exploitation by man. In communism it is the reverse.”

A modern social system is an environment where millions of people find opportunities, develop their talents, express their beliefs, and earn their livings within the context of a set of economic and political institutions. Specific institutions of property, power, ideology, education, and healthcare create an environment within which citizens of all circumstances pursue their life interests. Individuals exercise their freedoms through the institutions within which they live, and those institutions also determine the quality and depth of social resources available to the individual that determine the degree to which he or she is able to develop talents and skills and gain access to opportunities. Institutions create constraints on freedom of choice that range from the nearly invisible to the intensely coercive. Institutions create inequalities of opportunity and outcome for different groups of citizens; rural people may have more limited access to higher education, immigrant and minority communities may experience discrimination in health and employment; and so on. Further, social systems differ in the balance they achieve between “soft” constraints (market, education, regional differences) and “hard” constraints (police, regulations governing behavior, extra-legal uses of violence).

To describe a set of institutions and a population of individual actors as a system has a number of implications, some of which are unjustified. The idea of “system” suggests a kind of functional interconnection across its components, with needs in one subsystem eliciting adjustments in the activities of other subsystems to satisfy those needs. This mental model is misleading, however. Better is the ontology of “assemblage” discussed frequently here (linklinklink). This is the idea that a complex social thing is the unintended and largely undesigned accumulation of multiple independent components. One set of processes leads to the development of the logistics infrastructure of a society; another set of processes leads to the development of the institutions of government; and yet other path-dependent and contingent processes contribute to the system of labor education, management, and discipline that exists in a society. These various institutional ensembles are overlaid with each other; sometimes there are painful inconsistencies among them that are resolved by entrepreneurs or officials; and the result is a heterogeneous and largely unplanned agglomeration of social arrangements and practices that add up to “the social system”. 

A central premise of some classics of social theory, including Marx, is that the institutions through which social interactions take place form large and relatively stable configurations that fall into fairly distinct groups — feudalism, capitalism, communism, socialism, social democracy, authoritarianism. And different configurations of institutions do better or worse in terms of the degree to which they allow their members to satisfy their needs and live satisfying lives. The ontology associated with the theory of assemblage, however, is anti-essentialist in a very important sense: it denies that there are “essentially similar configurations” of institutions that play crucial roles in history, or that there is a tendency towards convergence around “typical” ensembles of institutions. In particular, it suggests that we reject the idea that there are only a few historically possible configurations of institutions — capitalism, socialism, authoritarianism, democracy — and rather analyze each social order as a fairly unique configuration — assemblage — of specific institutional arrangements.

This perspective casts doubt on the value of singling out “capitalism,” “liberal democracy,” “religious autocracy,” “apartheid society,” “military dictatorship,” or “one-party dictatorship” as schemes for understanding distinctive and sociologically important patterns of un-freedom. Rather than considering these different “ideal types” of social-political systems as structures with distinctive dynamics, perhaps it would be more satisfactory to consider the problem from the point of view of the citizens of various societies and the degree to which existing social, political, and economic institutions serve their development as full and free human beings.

Amartya Sen’s framework for understanding human wellbeing in Development as Freedom is valuable in this context (link). Sen understands wellbeing in terms of the individual’s ability to realize his or her capabilities fully and to live within an environment enabling as much freedom of action as freely as possible. Sen’s framework gives a powerful basis for paying close attention to inequalities within society; a society in which one-third of the population have exceptional freedom and opportunities for development, one-third have indifferent attainments in these crucial dimensions, and one-third have extremely limited freedoms and opportunities is plainly a less just and desirable society than one in which everyone has the same freedoms and a relatively high level of opportunities for development — even if the average attainment for the population is the same in the two scenarios.

This prism permits us to attempt to understand the structural characteristics of society — political, cultural, religious, economic, or civic — in terms of the effects that those institutional arrangements have on the freedoms and capacity for development of the population. This is the underlying rationale for the Human Development Index, but the HDI is primarily focused on development rather than freedom.

We might try to evaluate the workings of a given ensemble of social and political institutions by devising an index of human wellbeing and freedom that can be applied to each society. Examples of indexes along these lines include the Human Development Index, the Opportunity Index, and the Cato Institute Freedom Index. Every index is selective. It is interesting and important to observe, for example, that political freedom plays no role in the Human Development Index, while the Cato Institute index pays no attention to the prerequisites of freedom: access to education, access to health care, freedom from racial or ethnic discrimination.

So each of these indices is limited as a scheme for evaluating the overall success a particular institutional configuration has in creating a free and enabling environment for its citizens. But suppose we had a composite index that reflected both freedom (broadly construed) and wellbeing? Such an index might look something like this:

  • Rule of law 
  • Security and safety 
  • Movement 
  • Religion 
  • Association, assembly, and civil society 
  • Expression and information
  • Identity and relationships 
  • access to quality education
  • access to quality healthcare
  • freedom from racial, ethnic, and gender discrimination in employment, education, housing, and other social goods
  • equality of opportunity

(It is interesting to observe that these characteristics align fairly well with the contents of the Universal Declaration of Human Rights.)

Using an index like this, we could then ask important comparative questions: How do ordinary citizens fare under the institutions of contemporary Finland, Spain, China, Russia, Nigeria, Brazil, Romania, France, and the United States? An assessment along these lines would put us in a position to give a normative evaluation of the various social systems mentioned above: what social, political, and economic arrangements do the best job of securing each of these freedoms and opportunities for all citizens? Under what kinds of institutions — economic, political, social, and cultural — are citizens most free and most enabled to fully develop their capacities as human beings?

It seems evident that the answer to this question is not very esoteric or difficult. Freedom requires the rule of law, respect for equal rights, and democratic institutions. Real freedom requires access to the social resources that permit an individual to fully develop his or her talents. A decent life requires a secure and adequate material standard of living. These obvious truths point towards a social system that embodies the protections of a constitutional liberal democracy; extensive public support for the social resources necessary for full human development (education, healthcare, nutrition, housing); and an extensive social welfare net that ensures that all members of society can thrive. There is a name for this set of institutions; it is called social democracy. (Here are several earlier posts that reach a similar conclusion from different starting points; linklink.)

And where are the social democracies in the world today? They are largely the Nordic countries: Finland, Denmark, Norway, Sweden, and Iceland. Significantly, these five countries consistently rank in the top ten countries in the World Happiness Report (link), a rigorous and well-funded attempt to measure citizen satisfaction with the same care as we measure GDP or national health statistics. The editors of the 2020 report describe the particular success of Nordic societies in supporting citizen satisfaction in these terms:

From 2013 until today, every time the World Happiness Report (WHR) has published its annual ranking of countries, the five Nordic countries – Finland, Denmark, Norway, Sweden, and Iceland – have all been in the top ten, with Nordic countries occupying the top three spots in 2017, 2018, and 2019. Clearly, when it comes to the level of average life evaluations, the Nordic states are doing something right, but Nordic exceptionalism isn’t confined to citizen’s happiness. No matter whether we look at the state of democracy and political rights, lack of corruption, trust between citizens, felt safety, social cohesion, gender equality, equal distribution of incomes, Human Development Index, or many other global comparisons, one tends to find the Nordic countries in the global top spots.

And here is their considered judgment about the circumstances that have led to this high level of satisfaction in the Nordic countries:

We find that the most prominent explanations include factors related to the quality of institutions, such as reliable and extensive welfare benefits, low corruption, and well-functioning democracy and state institutions. Furthermore, Nordic citizens experience a high sense of autonomy and freedom, as well as high levels of social trust towards each other, which play an important role in determining life satisfaction. (131)

The key factors mentioned here are worth calling out for the light they shed on the current dysfunctions of politics in the United States: effective institutions, extensive welfare benefits, low corruption, well-functioning democracy, a limited range of economic inequalities, a strong sense of autonomy and freedom, and high levels of social trust and social cohesion. It is evident that American society is being tested in each of these areas by the current administration, and none more so than the areas of trust and social cohesion. The current administration actively strives to undermine both trust and social cohesion, and goes out of its way to undermine confidence in government. These are very disturbing signs about what the future may bring. Severe inequalities of income, wealth, and social resources (including especially healthcare) have become painfully evident through the effects of the Covid-19 epidemic. And the weakness of the social safety net in the United States has left millions of adults and children in dire circumstances of unemployment and hunger. The United States today is not a happy place for many of its citizens.

The ontology of power

There have been quite a few posts on the concept of power over the years in this blog (link). This continues to be an intriguing subject for me. Fundamentally the question of the moment is this: how does “power” fit into a social ontology of the kinds of things that exist in the social world? Does “power” exist, or is it a term that encompasses a range of other social things and relations? At one point I characterized power as an “influence” concept (link), analogous to “is humorous,” “is rude,” or “is charismatic”. In each case the concept is defined in terms of a capacity possessed by the agent to influence certain kinds of behaviors by others around him or her.  Along these lines we might define power as a feature of an individual as follows:

Caesar is powerful =df Caesar has access to social levers of coercion that permit him to coerce certain kinds of behavior by others.

Those levers might include —

  • command of military or paramilitary forces
  • relations with conformant legislators positioned to enact legislation and regulation
  • relations with conformant private citizens positioned to coerce their dependents to behave this way or that

On this approach, “power” is a dispositional concept attaching to individuals and invoking access to certain kinds of instruments of coercion.

What is “coercion”? This is a topic that Robert Nozick picked up early in his career (“Coercion” in Philosophy, Science, and Method: Essays in Honor of Ernest Nagel). We might define coercion very simply in terms of an actor’s ability to influence the terms of choice that confront another actor. The Godfather put it best: “I’ll make you an offer you can’t refuse.” Here is a possible definition:

x coerces y =df x creates a choice situation for y in which the costs of choosing other available options are unacceptably high, leaving only On+1 to be chosen.

(Here is an article on coercion in SEP; link.)

We can then broaden this concept to groups in society by postulating that certain groups have greater access to the levers of coercion than others. So we might say that “capitalists have more power than workers” because capitalists have access to the lever of unemployment, whereas workers have access only to the power to withhold their labor at substantial personal and familial cost. And we might say that organized crime lords have more power than shopkeepers because the criminals have greater ability to use and threaten violence against the shopkeeper than the reciprocal.

We can also broaden the concept by grouping the levers of coercion into different families: economic coercion, physical coercion, community coercion (shunning within a religious community, for example), … This allows us to identify the sources of power within a given society. Individuals and groups who are favorably positioned with respect to these different categories of instruments of coercion are more powerful than others.

What this account leaves out is the range of “soft” power associated with framing and ideology. This is a different avenue of social influence. It is possible to impel individuals or groups towards certain kinds of actions by shaping their beliefs and cognitive-affective frameworks. Using the media to shift the terms of debate over a policy — taxing the rich at higher rates or providing universal health insurance — is a way of exerting power without coercion. 

A few features of “power” emerge from these observations. First, power is a relational concept. An individual possesses power over other individuals (relation 1) and does so in virtue of the relations he bears to other persons and institutions (relation 2). Second, power is the activity side of structure: structures and sets of social relations constitute the environment within which individuals are empowered to exercise power over others. The structures perdure, and individuals act within their elements to exert their will over others. And third, power is distributed over many individuals and groups within society at a time. But it is fluid and subject to fluctuations as structures and individuals change. Dick Cheney was powerful at one point in time but not at other points. And what changed was not Cheney but the levers of power and social networks to which he had access.

This seems to imply that power is not itself a “thing” within a reasonable social ontology. It is rather a relational characteristic that exists at various social locations depending on the connections those locations have to the levers of influence over individuals and groups. 

(We might speculate that there is an art to exercising power that means that not everyone is equally adept at the activity. Being well situated with respect to the levers of influence is a necessary condition but not a sufficient condition for being powerful.)

This account lines up well with some aspects of Steven Lukes’ analysis of power in his classic book, Power: A Radical View (link). It also aligns well with Michael Mann’s definition of social power in The Sources of Social Power: Volume 1, A History of Power from the Beginning to AD 1760 and elsewhere: “My earlier work identified four primary ‘sources of social power’ in human societies: ideological, economic, military, and political” (Fascists, 5).

Power within organizations

Sociologists have been thinking about organizations in a careful, empirical way for decades. Here is a volume edited by Mayer Zald that results from a 1969 conference at Vanderbilt on the topic of “Power in Organizations” (Power in Organizations).  The cross-section of sociologists represented here provides a good snapshot of the ways that organizations were conceptualized in the late 1960s.  There are contributions by quite a few interesting sociologists, including Peter Blau, Richard Peterson, Charles Perrow, and Mayer Zald.

Perrow’s contribution, “Departmental Power and Perspectives in Industrial Firms,”  is particularly interesting.  Here is how Perrow frames his research problem:

It is my impression that for all the discussion and research regarding power in organizations, the preoccupation with interpersonal power has led us to neglect one of the most obvious aspects of this subject: in complex organizations, tasks are divided up between a few major departments or subunits, and all of these subunits are not likely to be equally powerful. In industrial firms … there are fairly clear divisions between the basic units of sales, production, research and development (or engineering), and finance and accounting. Equality of these groups is hardly insured by the fact that there is at least one person, the president, who stands above all these functional groups, and by the fact that each department is stratified into roughly equal levels of authority…. The question of which group dominates in industrial firms, then, will be the subject of this paper. (59-60)

Perrow’s approach to the problem is empirical. His study depends on interviews with dozens of ranking employees in twelve manufacturing companies with at least 1000 employees, with 2633 individuals interviewed in total. 

The study focuses on three primary groups and one “residual” group that could be identified in all the firms: sales and marketing, production and manufacturing, and research and development. The residual group is “staff services”, including finance, personnel, legal, and the executive group.  The research question was to determine which group or unit had the most “power” within the firm.  The interview template asks a series of questions about how the interviewee estimates the power and discretion possessed by various groups within the firm.

Perrow notes that the concept of “power” conceals a range of complexities:

Do we mean actual or potential power, power derives from internal workings of the firm or the market place, power based upon the force of personalities or the logic of group functions, power today or power in the next quarter, and so on? (63)

There is a strong pattern to the results for the fundamental question, which unit has the most power? Perrow finds that “sales” is judged to have the most internal power in 10 out of 12 firms; production is generally second; “finance” is commonly third; and R&D is almost always last. 

Perrow’s next question is “why” — why should sales be the most powerful unit within manufacturing firms? His answer turns on facts about the market economy.  The sales operation of a company is the interface between potential consumers and the product created by the firm.

As a result of this strategic position, sales is in a position either to exploit present company capabilities or force a change in these capabilities. The consequences for the other groups are manifold, but sales — with few sunk costs (capital investment) and little interdependence with other functions that would require major changes in its own structure and operating procedures — is capable of more flexibility. (65)

Perrow finds this result surprising for one category of firm — those where design and production are “non-routine”, or where the product is not yet commoditized. These are what we would today refer to as high-tech firms.

If respondents described their tasks as fairly nonroutine — indicating frequent problems requiring analysis and uncertainty about the outcomes of their efforts — then there would be little edge for sales. (66)

So Perrow expected that R&D — the unit assigned to develop new products and solve problems — would have greater power in an environment of technological uncertainty.  But the importance of R&D within such a firm does not cash out in terms of internal power, in Perrow’s findings based on these twelve firms.  And this fact, in Perrow’s assessment, comes down to a tactical advantage possessed by sales within the firm:

Neither of these [prior] analyses sufficiently takes into account the ability of those who once gain power to manipulate the source of uncertainty, at least over a span of, say, ten or fifteen years. The maintenance people in Crozier’s study augmented their power by removing information from the files that might make their performance more predictable and less uncertain, and by keeping information secret from machine operators and other engineers. Similarly, I think that sales, or production, or R&D can use their power to maintain either a fiction of uncertainty, or to steer the organization into areas where the uncertainty will be in their hands. (67)

So Perrow highlights an important source of power within an organization: the power to shape or hoard information.

The impression we get from reading Perrow’s essay today is that Perrow’s conceptual framework moves back and forth between the business environment within which a firm exists and the tactical intelligence of actors within the firm.  The business environment gives an advantage to one group of actors — those involved in sales; and the tactical actions selected by actors within that unit to maintain their advantage accounts for the persistence of the power of that unit.

What the analysis doesn’t pay any attention to is the internal organization of the firm (beyond the functional division into the four units Perrow highlights).  The analysis doesn’t make any effort to map out the internal working relationships between functional units, or the ways in which performance of actors within units is supervised, or the ways in which communications occur internally, or the ways in which individuals are recruited into roles, or the ways in which decisions are made.  The article does distinguish between levels of managers — upper, middle, and lower — but doesn’t provide an “organizational” account of how these levels fit together.  This is partly, of course, a function of the question that Perrow posed for research: what is the perceived level of power associated with the major functional units in the decision-making of the firm? But perhaps it reflects as well the development of the field.  In his later writings Perrow is much more attentive to the “micro-organizations” and systemic interconnections that exist within large organizations such as FEMA or the NRC.

It is also interesting to highlight the time period in which this conference occurred: at the high-water mark of popular mobilization against the Vietnam War and segregation.  The contrast between organizational power and popular protest was a stark one.  And some of the organizations that are considered in the volume — universities and medical schools, for example — were at the center of this contrast.

Quiet politics

image: Conspiracy, Edward Biberman (cover illustration, Quiet Politics)

Pepper Culpepper’s Quiet Politics and Business Power: Corporate Control in Europe and Japan sheds some very interesting light on one key question in contemporary western democracies: how do corporations and business organizations so often succeed in creating a legislative and regulatory environment that largely serves their interests?  And, for that matter, why do they sometimes fail spectacularly in doing so, even while spending oceans of money in the effort to influence public policy?

The book is a careful comparative study of the development of corporate governance laws and institutions in France, Germany, the Netherlands, and Japan.  It offers special focus on the institutions governing hostile corporate takeovers (very different across the four examples), but also takes on other issues of current interest, including executive pay.  But though the cases and issues considered in the book are fairly esoteric and specialized, Culpepper’s analysis is intended to provide a broadly useful tool for understanding how corporate influence is exercised in a democracy.

Culpepper wants to know what political and situational factors explain the divergent course that corporate governance has taken in these four contemporary democracies, from more permissive to more restrictive.  Do elected officials determine the broad outlines of the governance regime?  Are differences across states the result of differences in the platforms of large political parties in these states?  Or are the outcomes driven by something else?  Culpepper thinks that it is usually something else:

In this book, I argue that the outcomes observed in these four countries result not from variations in government partisanship or from different interest coalitions, but from differences in the political preferences of managerial organizations.  In all four countries, the rules favored by the managers of large firms are those that triumphed, often against substantial political opposition. (3)

Or in other words, the outcomes are those favored by the business elites rather than elected officials or mass-based political parties.  And differences in outcomes are explained by differences in the business environment in the four countries.  This is the “business power” part of the question, and Culpepper’s fundamental empirical finding is that businesses elites generally have proven successful in creating the institutional and regulatory regimes in their polities that they prefer.  But how do they succeed?

Here Culpepper’s central finding is encapsulated in the other half of his title: these corporate governance issues usually fall in the domain of what he refers to as “quiet politics.”  Noisy politics arise around the issues that generate significant and sustained interest by large numbers of voters; these issues have “high salience” to the electorate, and parties and elected officials find it in their interest to adjust their positions around voter preferences on these salient issues.  Quiet politics arise in the context of issues with “low salience” — issues to which the mass of voters are largely indifferent.  “The political salience of an issue refers to its importance to the average voter, relative to other political issues” (4).  In the context of “low salience” issues that matter to the interests of high-level business managers and elites, it is possible for these elites to deploy an arsenal of influential tools that succeed very well in bringing about the legislative and regulatory outcomes that the managerial elites prefer.  Most fundamental is an information asymmetry between managers and policy makers:

The managerial weapons of choice in quiet politics are a strong lobbying capacity and the deference of legislators and reporters toward managerial expertise.  The political competitors of managers, be they liberalizing politicians or crusading institutional investors, lack access to equivalent political armaments, so long as voters evince little sustained interest in and knowledge about an issue. (4)

Culpepper unpacks the political advantage residing with business elites and managers in terms of acknowledged expertise about the intricacies of corporate organization, an ability to frame the issues for policy makers and journalists, and ready access to rule-writing committees and task forces.  These factors give elite business managers positional advantage, from which they can exert a great deal of influence on how an issue is formulated when it comes into the forum of public policy formation.  Culpepper refers to British Cadbury Committee, tasked to develop “best practices” in corporate governance (9), as an important example of an occasion where high-level managers had a very powerful ability to write the rules that would govern their behavior.  Vice President Cheney’s energy committee during the Bush administration is another great example (link).  Informal working groups, containing a significant representation of managerial elites, have an ability to set the agenda for a regulatory regime that allows them to privilege positions they prefer and to protect their organizations from worst-case outcomes.

As in the case of direct lobbying, the power of managers in this context is the power to set the terms of the debate in an environment that is established with an explicit eye to protecting their interests. (9)

Here is one of many detailed examples that Culpepper studies in the book: the Peters Committee in the Netherlands in 1997, tasked to “establish a voluntary code of best practice in corporate governance” (100).  He notes that the Peters Committee was very similar in structure to the Cadbury Committee.  It was chaired by a former CEO, and had representation from the VEUO (Dutch Association of Securities-Issuing Companies), pension funds, and the Amsterdam Stock Exchange.  Unions were not represented.  And, Culpepper reports, the forty recommendations of the Committee were essentially ignored by the Dutch corporate actors.

Scholars of corporate finance point to the Peters Committee as a textbook example of the failures of self-regulation of business without any legal enforcement.  Yet from the viewpoint of the managerial interests that dominated the committee, its results were consistent with their highest political priority: to defend protection mechanisms [against hostile takeovers]. (101)

In other words: from the point of view of Dutch corporate elites, the committee was not a failure, but rather a demonstration of their ability to shape the agenda and secure a near-term environment that enabled their freedom of action.

So essentially Culpepper’s empirical-institutional argument is that top business managers (CEOs and their teams) have a very powerful set of tools on the basis of which they are able to influence legislation and regulation.  This tool set leads to an impressive win percentage when it comes to legislation and regulation affecting the business environment.

But he also finds that these tools are really only decisive in the context of “low salience” issues — issues that have not engaged the voting public with any intensity.  When a hitherto boring and technical issue of corporate governance suddenly jumps into high salience — for example, the conflicts of interest faced by accounting firms involved in the Enron debacle — these weapons of quiet influence essentially lose their ability to shape the outcomes.

The more the public cares about an issue, the less managerial organizations will be able to exercise disproportionate influence over the rules governing that issue. (177)

Parties, political entrepreneurs, legislative committees, and elected officials become interested in the issue; it becomes worthwhile for business journalists to learn the technical details; and the public demands solutions that may be contrary to the preferences of the business elite.  And Culpepper works through one of these examples in detail as well: the public and public policy debates that have flared up concerning executive pay (chapter 6).

In addition to its substantive political-institutional findings, the book is interesting for its methodology.  Culpepper explicitly favors the “causal mechanism” approach to social research and investigation.  He treats cases comparatively; and he attempts to “process-trace” the paths through which outcomes came about.  He depends extensively on interviews with pivotal actors in some of the cases studied.  He does a very good job of aligning his analysis against its main competitors — median voter theories and coalition politics analysis.  Finally, the book is explicitly comparativist; he want to understand in some detail the situations and factors that lead to different outcomes with respect to corporate governance, and the rules governing hostile takeovers, in the four countries he studies.  So the book does an admirable job of sketching out some of the microfoundations of corporate influence in existing democracies.  As such, it is a very useful contribution — it helps to connect the dots (link).

Inequalities and the ascendant right

The playing field seems to keep tilting further against ordinary people in this country — poor people, hourly workers, low-paid service workers, middle-class people with family incomes in the $60-80K range, uninsured people, ….  75% of American households have household incomes below $80,000; the national median was $44,389 in 2005.  Meanwhile the top one percent of Americans receive 17% of total after-tax income.  And the rationale offered by the right to justify these increasing inequalities keeps shifting over time: free enterprise ideology, trickle-down economics, divisive racial politics, and irrelevant social issues, for example.

Here is the trajectory of US income by quintile since 1965 (link); essentially no change in the bottom three quintiles over that 40-year period. Plainly the benefits of growth and productivity change in the national economy have benefited the top 40% of the population, and disproportionately have flowed to the top 5%.

Just consider what has happened to income to the “middle” class versus the top 1% in the US economy. The 40-60% segment of earners have declined from 16.5% to 14.1% of after-tax income, while the top 1% has more than doubled its share, to 17.1%.

And here’s a very graphic demonstration of the rapid increase in the percent of income flowing to the top percent of US income earners since the Reagan revolution (thanks to benmuse):

Meanwhile, the power of extreme wealth in the country seems more or less unlimited and unchallenged.  Corporations can spend as much as they want to further candidates — as “persons” with freedom of speech rights following Citizens’ United v. Federal Election Commission (link). Billionaires like the Koch brothers fund the anti-labor agendas of conservative governors. Right-wing media empires dominate the airwaves. Well-financed conservative politicians use the language of “budget crisis” as a pretext for harshly reducing programs that benefit ordinary people (like Pell grants). Lobbyists for corporations and major economic interests can influence agencies and regulations in the interest of their clients, more or less invisibly.  And billionaire lightweights like Donald Trump continue to make ridiculous statements about President Obama’s birth status.

The political voice of the right, and the economic elite they serve, has never been louder.  And it is becoming more reckless in its attacks on the rest of society.  Immigrants come in for repressive legislation in Arizona and other states.  Racist voices that would never have been tolerated a generation ago are edging towards mainstream acceptability on the right. Self-righteous attempts to reverse health care reform are being trumpeted — threatening one of the few gains that poor and uninsured people have made in decades.  And the now-systematic attack on public sector unions is visibly aimed at silencing one of the very few powerful voices that stand in the political sphere on behalf of ordinary working people.

The big mystery is — why do the majority of Americans accept this shifting equation without protest? And how can progressive political organizations and movements do a better job of communicating the basic social realities of our economy and our democracy to a mass audience?  Social justice isn’t a “special interest” — it is a commitment to the fundamental interests and dignity of the majority of Americans.

Why peasant activism?


I have long been interested in peasant struggles as an historical phenomenon — for example, the causes and outcomes of the peasant rebellions in China in the eighteenth and nineteenth centuries (Understanding Peasant China: Case Studies in the Philosophy of Social Science).  But it is also true that peasant movements are still visible in contemporary politics in a number of countries.  For example, mobilization by peasants and landless workers in West Bengal against the state’s proposed development of a Tata factory led to the project’s relocation to Gujarat (link).  In some instances and issues, peasants and other disadvantaged people come together as a mass organization to press their interests and concerns; in other apparently similar instances they do not.  How are we to understand this variation?

People are generally careful about their active political investments, especially when their choices can lead to serious personal consequences.  Are there good reasons for poor people to form and support organizations that seek strategies for expressing their needs and interests? Should they consider supporting demonstrations, strikes, and protests? What is the likelihood that social mobilization of the poor majorities in India, Egypt, or Brazil might lead to improvement in their daily lives?

A first point is fairly obvious. As a low-income society undertakes policies and strategies for growth, there are choices to be made. These choices have differential effects on different social groups.  And poor people and peasants are often at a severe disadvantage in competing over the terms of these choices within the formal institutions of government.  China’s decision to create the Three Gorges Yangtze River dam system created many winners; but it also created many millions of low-income losers whose homes and livelihoods were destroyed in the process (link).  Largescale social and economic change is a time when the stakes are exceptionally high, and having a voice is crucial.

A second point has more to do with the “normal” workings of power in a developing state.  Poor people’s interests are almost always overlooked or undervalued by official power-holders in developing societies — a point made thirty years ago by Michael Lipton in Why Poor People Stay Poor: Urban Bias in World Development (1977). And this is often true even within parties that are ostensibly devoted to the poor, like the Congress Party in India. Corruption by leaders and powerful organizations is endemic, and landlords, business owners, and the military almost always wield disproportionate influence in the corridors of power.  So if nothing is done to disturb this “tilt” in the political system, then the outcomes will be unfavorable to poor people.

Third, it is plain that the organized efforts of under-class people can be powerful. Women’s organizations advocating for environmental protection or property rights for women can push state and national authorities towards policies they would not otherwise have chosen. (Bina Agarwal has documented these processes in India; for example, here.)  Organizations of landless agricultural workers can pressure the state into adopting reforms and programs that provide some relief for their poverty. Mass mobilization is almost the only way to assert the material interests of the people.

Debal Singha Roy considers these issues in detail with regard to rural India in Peasant Movements in Post-Colonial India: Dynamics of Mobilization and Identity. Here is how Roy puts the point:

Social movements have always been an inseparable part of social progression, and through organized protests and resistance against domination and injustice they pave the way for new thoughts and actions that rejuvenate the process of change and transformation in society.  They bring forth for public scrutiny the hard and hidden realities of social dynamics. (8)

So, according to Roy, popular movements — e.g. peasants’ movements — can lead to measurable change in favor of the dispossessed. They do so by making injustice visible to the broader society; pressing effectively for social changes that improve the condition of one’s group; giving voice to segments of society who are almost always invisible to the middle classes; and asserting one’s own agency as a fundamental aspect of being human.  These are all reasons for thinking that social activism and social movements are important.

What about the rest of us? Is activism important in a modern market democracy? Frances Fox Piven argues that these points do indeed apply in modern market democracies as well. In her recent book, Challenging Authority: How Ordinary People Change America, she lays out this case through a new analysis of American policy history.

This book argues that ordinary people exercise power in American politics mainly at those extraordinary moments when they rise up in anger and hope, defy the rules that ordinarily govern their daily lives, and, by doing so, disrupt the workings of the institutions in which they are enmeshed. (kl 23)

Piven’s basic view is that the structural inequalities of property and power in market democracies mean that electoral processes are usually tilted against the interests and concerns of poor and middling people. Electoral competitions are generally won by enough candidates reflecting the interests and world views of the powerful, that the perspectives of the poor and disadvantaged in American society rarely prevail in the statehouse or the Congress.  The exceptions occur, she believes, when poor and disadvantaged people find ways of expressing their interests through avenues that threaten to disrupt “business as usual” — boycotts, strikes, demonstrations, and other activities outside of formal politics. Rights of speech and association underlie many of these strategies, and they express a different aspect of democracy. And these in turn depend upon a combination of mobilization and a moment in time when such collective actions have the potential of creating significant disruption — when French farmers block roads to protest milk prices, for example.

So it seems that democracy almost requires a dynamic tension between formal representative politics and informal, nonviolent popular politics. What goes on in the state house needs what goes on in the streets of Madison if outcomes fair to ordinary working people are likely to occur.


Connecting the dots

There isn’t very much transparency about the deep structure of almost any complex modern society. For most people their primary impressions of the society’s functioning comes from the mass media and their own personal experiences.  We each see the limited bits to which we are fairly directly exposed through our ordinary lives — the newsroom if we happen to be a beat reporter, the university if we are professors, the play-and-learn center if we are in the business of preschool education.  We gain a pretty good idea of how those networks of institutions and organizations work. But it’s very difficult to gain a birds-eye picture of the social system as a whole.

The most basic goal of Marx’s economic programme was to demystify the workings of the political economy of capitalism.  He wanted to sweep aside the appearances that capitalism presents and to lay bare the underlying social relations of inequality and exploitation that really constituted the causal core of the system. (This is the point of his theory of the fetishism of commodities; link.) And he believed that active systems of ideology and false consciousness conspired to conceal these workings from ordinary participants. In particular, he wanted to demonstrate the process through which wealth is created within capitalism, and the relations of inequality through which its benefits are distributed.  It is a class-based analysis, and Marx proposes to the proletariat (and the rest of us) that we look for the class mechanisms of our ordinary economic experiences.

What is unsatisfying about Marx’s theory in the current context is that in the end it isn’t really very much of an empirical demonstration.  It is an abstract model of how the theorist thinks capitalism works, rather than a detailed empirical exposure based on rigorous and diverse data that demonstrates the flows that he postulates.  It offers a schema for connecting the dots of our ordinary experience, but it doesn’t actually carry out the effort.


Other researchers have done so, of course; researchers who demonstrate the widening inequalities of income and wealth that market democracies contain, the consequences of these inequalities for people at both ends of the divide, the often degrading conditions of work that the majority of the working population experience, and so forth.  So on the dimension of wealth, income, and privilege, it isn’t too difficult to gather the information we need to better understand our current economic realities based on information that is readily available; but most Americans don’t seem to bother to do so. The ease with which the right has succeeded in setting the terms of popular ideas about organized labor, racial inequalities, and immigration bears that out. Lies and slogans replace honest factual argument.

And what about the other large determinant of outcomes in modern society, the workings of political power? Here too there are founding theorists who sought to lay bare the “real” workings of power in a market democracy.  Foucault is one; Domhoff and Mills sought to do so a generation earlier.  The goals of C. Wright Mills (The Power Elitelink) and G. William Domhoff (Who Rules America? Challenges to Corporate and Class Dominancelink) were similar to Marx’s, but in the sphere of political power within a democracy.  They wanted to demonstrate how the language of pluralism and representative democracy works to conceal a system of power and influence that was anything but egalitarian. They wanted to shred the ideologies and obscurantist narratives that conceal these political realities.

But, like Marx to some extent, their writings too remained schematic. They offered a framework for thinking about political power that was radically different from that of the pluralists. But they didn’t really provide a detailed empirical exposure of the workings of this system in real time.  So here again, we’d like to have an organized way of connecting the dots within the contemporary world.  How do corporations use lobbying firms and campaign PACs to shape policy and legislation to their liking? How is it going on today? And, as is the case of the domain of economic inequalities, there are plenty of sources today shedding light on aspects of these processes.  But these political realities seem if anything, even more difficult to perceive.

The blog Naked Capitalism approximates the kind of dot-connecting that I’m describing, with specific application to the financial industry. Here a group of very expert observers are taking the trouble to track the complexities and the hidden interests involved in the financial industry, and to try to make sense of what they find in an honest way. I. F. Stone was a one-man dot-connector in the 1960s when it came to the Indochina War (Best of I. F. Stone). The opening chapter of Frances Fox Piven’s Challenging Authority: How Ordinary People Change America does a good job of sketching out the influence systems that set the planets in motion in American democracy. And Bob Herbert’s last column for the New York Times does it as well (link).  We need exactly these kinds of effort in other areas too — defense contracting, influence peddling, the pharmaceutical industry, news media, …  We need help connecting the dots of how our society works, who pulls the strings and who benefits.

Blogging, critical journalism, and crusading thinkers like I. F. Stone and Frances Fox Piven can help a lot. And, by the way, it must be done in a way that is committed to high standards of empirical fidelity; it needs to inspire the kind of trust that Stone was able to do fifty years ago. And maybe, with the makings of a more truthful shared understanding of how our society actually works, we will succeed in creating a politics that transforms it.


Lukes on power

Steven Lukes’s Power: A Radical View was a very important contribution when it appeared in 1974. Lukes emphasized several important points that became landmarks in subsequent discussions of the social reality of power: that power is a multi-dimensional social factor, that power and democracy are paradoxically related, and that there are very important non-coercive sources of power in modern society. In the second edition in 2005 he left the 1974 essay unchanged, but added a substantive introduction and two new chapters: “Power, Freedom and Reason” and “Three-Dimensional Power”.  Also new in the second edition is substantially more attention to several other writers on the social context of power, including James Scott and Michel Foucault.

Lukes offers a generic definition of power along these lines:

I have defined the concept of power by saying that A exercises power over B when A affects B in a manner contrary to B’s interests. (37)

But this definition is too generic, and Lukes attempts to provide a more satisfactory interpretation by constructing a “three-dimensional” account of power.

What are the “dimensions” of power to which Lukes refers? He begins his account with the treatment of power provided by the pluralist tradition of American democratic theory, including especially Robert Dahl in 1957 in “The Concept of Power” (link). This is the one-dimensional view: power is a behavioral attribute that applies to individuals to the extent that they are able to modify the behavior of other individuals within a decision-making process. The person with the power in a situation is the person who prevails in the decision-making process (18).

Thus I conclude that this first, one-dimensional, view of power involves a focus on behaviour in the making of decisions on issues over which there is an observable conflict of (subjective) interests, seen as expressing policy preferences, revealed by political participation. (19)

The second dimension that Lukes discusses was brought forward in rebuttal to this pluralist theory; critics pointed out that it is possible to influence decisions by shaping the agenda, not merely by weighing in on existing decision points. Lukes quotes from Peter Bachrach and Morton Baratz in their 1962 “Two Faces of Power” (link): “‘to the extent that a person or group — consciously or unconsciously — creates or reinforces barriers to the public airing of policy conflicts, that person or group has power'” (20). So shaping the agenda is an important source of power that is overlooked in the pluralist model, the one-dimensional view.

The three-dimensional theory of power turns to a different problem — the fact that people sometimes act willingly in ways that appear contrary to their most basic interests. So the third dimension is the set of ways in which the powerful transform the powerless in such a way that the latter behave as the former wish — without coercion or forcible constraint — for example, by creating a pervasive system of ideology or false consciousness. Both pluralists and their critics overlook an important point, in Lukes’s view:

The trouble seems to be that both Bachrach and Baratz and the pluralists suppose that because power, as they conceptualize it, only shows up in cases of actual conflict, it follows that actual conflict is necessary to power. But this is to ignore the crucial point that the most effective and insidious use of power is to prevent such conflict from arising in the first place. (27)

And again:

What one may have here is a latent conflict, which consists in a contradiction between the interests of those exercising power and the real interests of those they exclude. These latter may not express or even be conscious of their interests, but … the identification of those interests ultimately always rests on empirically supportable and refutable hypotheses. (28-29)

When Lukes returns to the three-dimensional theory in the final essay in the second edition, he shifts the language slightly to refer to “power as domination.” Domination can occur through explicit coercive means, but it can also occur through unconscious mechanisms.  This allows Lukes to address the theories of people like James Scott (Domination and the Arts of Resistance: Hidden Transcripts) and Michel Foucault (The History of Sexuality, Vol. 1: An Introduction).

In hindsight, it seems a little dubious to refer to these as “dimensions” of power, rather than aspects or forms of power. To call them “dimensions” somehow suggests that overall power is a vector of quantities in three or more orthogonal dimensions, each of which can vary independently. The features that Lukes identifies as “dimensions” seem more like tools in a toolkit or strategies in a repertoire: exercise control by doing X or Y or Z. So the language of dimensions seems inappropriate in this context.

But here is a more basic concern that is visible with the advantage of hindsight: there is very little in Lukes’s treatment that sheds light on the social mechanisms of power. What are the social features that enable one individual or group to wield influence in any of these ways? Through what sorts of institutional and individual facts are individuals enabled to exercise power over others? Lukes doesn’t address this question; and yet it seems to be the heart of the matter. We would like to have a way of analyzing social relations that allows us to discern how it is that some groups gain the material and social resources necessary to prevail. Marxism offers one such theory — power derives from class position; but this answer doesn’t really satisfy in the contemporary social world. (Lukes devotes a few paragraphs to the debate between Nicos Poulantzas and Ralph Miliband on the right way of understanding the exercise of power within a capitalist society; 54-58.) But generally, it seems fair to say that Lukes comes closer to offering a semantic analysis of the use of the term “power” rather than offering a sociological analysis of the causal and structural reality of power.

Business interests and democracy

The central ideal of democracy is the notion that citizens can express their political and policy preferences through political institutions, and that the policies selected will reflect those preferences. We also expect that elected officials will act ethically in support of the best interests of the public. This is their public trust.

The anti-democratic possibility is that popular debates and expressions of preference are only a sham, and that secretive, powerful actors are able to secure their will in most circumstances. And in contemporary circumstances, that sounds a lot like corporations and business lobbying organizations. (Here is an earlier post on a report about corrupt behavior at the Department of the Interior.)

The January Supreme Court decision affirming the status of corporations as persons, and therefore entitled to unfettered rights of free speech, is the most extreme expression of the power of business, corporations, and money. As distinguished law professor Ronald Dworkin argues in the New York Review of Books (link), this decision dramatically increases the ability of corporations to influence elections and decisions in their favor — vastly disproportionately to citizens’ organizations. And, as Dworkin points out, corporations don’t need to exercise this right frequently in order to have enormous impact on candidates and issues. The mere threat of a well-financed media campaign against key representatives will suffice to sway their behavior.

There are too many examples of pernicious influence of business interests on public policy. Take a useful policy that many states and cities have tested, pretrial release programs. It appears that the public interest has been defeated by … the bail bondsmen. NPR ran a story on the pretrial release program in Broward, Florida (link). The program was successful, with a high appearance rate for court appearances and annual savings of $20 million for the county. But this program cost the bail bondsmen business. They hired a lobbyist, and in the dead of night the county commission scaled back the program. Here is how the “industry” describes the issue (link).  It is a pretty shocking story:

According to campaign records, Book [the lobbyist] … and the rest of Broward’s bondsmen spread almost $23,000 across the council in the year before the bill was passed. Fifteen bondsmen cut checks worth more than $5,000 to commissioner and now-county Mayor Ken Keechl just five days before the vote.

Keechl and several other commissioners declined NPR’s repeated requests for an interview. At the meeting last January, they said they were concerned that Broward’s pretrial program cost more than other counties’ programs, and they vigorously denied that campaign contributions played any role.

Book had his work cut out for him. Broward’s own county attorney wrote a memo warning commissioners that cutting back pretrial could be unconstitutional. But Book worked behind the scenes.

He met with commissioners, and according to county records, he had unusual access. That’s because at the same time he was hired by the bondsmen to lobby commissioners, he was also hired by the commissioners to be their lobbyist. (transcript from NPR report)

The story makes the sequence pretty clear: Through the use of campaign contributions and influence of votes by commissioners, the bondsmen groups have prevailed to abandon the policy which was unmistakably in the public interest.  The commission acted in deference to the narrow financial interests of a business group; campaign contributions by that group played a decisive role; and an overburdened county government was denied a tool that was good public policy from every point of view.  And similar efforts are taking place in many cities.  So where is the public’s interest? 
Or take the largest issues we face today in national politics — cap-and-trade policy, healthcare reform, and the nation’s food system. The influence of large financial interests in each of these areas is perfectly visible. Energy companies, coal companies, insurance companies and trade associations, and large food companies and restaurant chains pretty much run the show. Regulations are written in deference to their interests, legislation conforms to their needs and demands, and elected officials calculate their actions to the winds of campaign contributions. And the Supreme Court reverses a century of precedent and accords the rights of freedom of expression to corporations and unions that are enjoyed by individual citizens. So the influence of financially powerful corporations and industry groups will become even greater.

It would be deeply interesting if we had a sort “influence compass” that would allow us to measure the net deviation created by the private interests of companies and industries for a number of policy areas. How far from the due north of the public’s interest are we when it comes to —

  • Environmental protection
  • Banking regulation
  • Insurance regulation
  • Energy policy
  • Cost-effective military procurement
  • Urban land use policy 
  • Airline safety
  • Licensing of public resources such as gas and coal leases

Of course the metaphor of “north” doesn’t really work here, since there is no purely objective definition of the public good in any of these areas. That is the purpose of open democratic debate about policy issues — what are the facts, what do we want to achieve, and what are the most effective ways of achieving our ends? But when private interests can influence decision makers to adopt X because it is good for the profits of industry Y — in spite of the clear public interest in doing Z — then we have anti-democratic distortion of the process.

Where are the democratic checks on this exercise of power? A first line of defense is the set of regulations most governments and agencies have concerning conflict of interest and lobbying. These institutions obviously don’t work; no one who pays attention would seriously think that agencies and governments are uninfluenced by gifts, contributions, promises of future benefits, and the blandishments of lobbyists. And these influences range from slight deviations to gross corruption.  Moreover, influence doesn’t need to be corrupt in order to be anti-democratic.  If an energy company gets a privileged opportunity to make the case for “clean coal” behind closed doors, this may represent a legitimate set of partial arguments.  The problem is that experts representing the public are not given the same opportunity.

A related strategy is publicity: requiring that decision-making agencies make their deliberations and decision-making processes transparent and visible to the public. Let the public know who is influencing the debate, and perhaps this will deter decision-makers from favoring an important set of private interests. Then-Vice-President Cheney’s refusal to make public the list of companies involved in consultations to the National Energy Policy Development Group (link) is an instructive example; it is very natural to suspect that the recommendations put forward by the NEPDG reflected the specific business concerns of an unknown set of energy companies and lobbyists (link). So greater publicity of process can be a tool in enhancing the fit between policy and the public’s interests. (Here are earlier posts on the capacity of publicity to serve as a check on bad organizational behavior (post, post).)

Another line of defense is the independent press and media. Our newspapers and magazines have historically had the resources and mission to track down the influence of private interests on the formulation of legislation, regulation, and policy. Bill Moyers is a great example (link); for example, his recent story on the role of campaign contributions in the election of judges (link). But the resources are disappearing and the cheerleaders at Fox News are gaining influence by the month. So relying on the investigative powers of an independent media looks like an increasingly long-odds bet.

So we have our work cut out for us to validate the main premise of democracy: that the interests of the public will be served faithfully by government without significant distortion by private business interests.

(Here is a recent post on C. Wright Mills’ analysis of power elites and the influence accorded to corporations in the United States.)

Why the corporation?

image: Diego Rivera mural of Rouge Plant, Detroit Institute of the Arts

Recently I posted about C. Wright Mills and his analysis of power elites in America (post). A major theme in Mills’s book is the new power associated with the American corporation following World War II. Charles Perrow’s Organizing America: Wealth, Power, and the Origins of Corporate Capitalism (2002) offers an historical account of how this system of power came into being. Perrow is a historical sociologist, and he focuses his analysis on the structural features of the organizations he considers; the historical and social factors that favored the emergence of these kinds of organizations; and the role that they now play within the complex social and political system of modern America.

The topic is particularly relevant today, when the Supreme Court is considering whether “corporations have a right to free speech”, and therefore a right to further deepen their influence on political directions and policies through their funding of political messages.

Perrow gives close empirical attention to the evolution of the institutions through which the American economy functioned from the mid-nineteenth century into the twentieth century. Textiles and railroads play key roles in this early history. Perrow tells the story of how the American economy came to feature the large corporation as its central business organization — an outcome that was far from inevitable. He argues that the large corporation is a historically contingent creation; other forms of enterprise activity could have emerged. And he teases out of this account a pretty compelling set of conclusions that are very supportive of Mills’s basic line of thought concerning the disproportionate power that is wielded by corporations and their officers. Here’s his summary statement:

Our economic organizations — business and industry — concentrate wealth and power; socialize employees and customers alike to meet their needs; and pass off to the rest of society the cost of their pollution, crowding, accidents, and encouragement of destructive life styles. In the vaunted “free market” economy of the United States, regulation of business and industry to prevent or mitigate this market failure is relatively ineffective, as compared to that enacted by other industrialized countries. (1-2)

Perrow notes that organizations do not have to be large to be effective and efficient; along with Charles Sabel and Jonathan Zeitlin (World of Possibilities: Flexibility and Mass Production in Western Industrialization) and Philip Scranton (Endless Novelty), he argues that “networks of small firms can drive innovation and distribute wealth and power more equitably” (2). So large, hierarchical organizations are not mandated by the technical demands of modern economic life. In fact, innovation, flexibility, and community responsiveness are more likely to be associated with networks of small organizations rather than solitary large organizations, and these types of organizations were abundant in our economic history. “Many conditions were in place to grow a society of well-regulated and moderate-sized firms focused upon regional economic development; at various points in the century many citizens argued for this” (19). But that is not what we got; instead, the large organization and the corporation became the central unit of economic activity.

So why did large organizations and corporations come to have the central and dominating role that they have had in economic and social life since the early twentieth century in the United States? Perrow’s answer to this represents a synthesis of the best thinking to date on the role that corporations play. He refers to his approach as a “society of organizations” approach, involving these key elements:

  • History is path-dependent, accidental, only partially developmental
  • structure and environment rather than entrepreneurship explain success / failure
  • technologies are chosen to fit preferred structure / ideology
  • culture shapes and is shaped by organization; the latter is emphasized
  • labor process is shaped in part by workers’ resistance and can occasionally be a key factor, but acquiescence in dependency, and tradeoffs in benefits, are more often the common lot of employees
  • bureaucracy (formalization, standardization, centralization, hierarchy) is the best unobtrusive control device that elites ever had (19)

The point about labor process is an important one. Perrow notes that the central challenge of how to discipline and regularize a labor force in textiles or other mass-production industries itself led to the early development of bureaucratic and hierarchical rules within emerging organizations. For example, “uniform work rules for all mills in Philadelphia including Manayunk were established at meetings of the owners in the early 1830s” (55). (Michael Burawoy explores this role of the corporation throughout his work; Manufacturing Consent: Changes in the Labor Process Under Monopoly Capitalism.)

Perrow also gives quite a bit of attention to the legal and policy environment in the United States as a key variable in the specific pathway that American business took. The enactment of legislation permitting incorporation was an important step, in that it provided significant rights and powers to corporations (36 ff.). And Perrow notices that the development of railroads and their business organizations in the United States took a very different course than counterparts in Europe because of significant differences in political values and culture in the United States (a point that leads Perrow to intersect with Frank Dobbin’s analysis in Forging Industrial Policy: The United States, Britain, and France in the Railway Age, discussed here.)

What is the upshot? Perrow argues that in the United States the national political economy was led to create a system that gave enormous and very lightly regulated power to large organizations and corporations; that, once established, these organizations were very capable of defending their rights and freedom of action; and that the corporations exercise power at every level in American society. Corporations and large organizations wield micro-power over the tens of millions of Americans who work within them, meso-power over the environmental status of communities and regions and the consumption patterns of individuals, and macro-power over the direction that legislation and policy takes. And this degree of power is now deeply entrenched:

Belatedly, the Progressive movement of the early twentieth century sought to redress the power imbalances and the costly externalities for workers and communities. But the organizational infrastructure of the nation was not to be seriously disturbed or even ideologically challenged, up to the present. A society with small- and modest-sized firms, regional rather than national markets, and with civic welfare provisions that are a right of citizenship rather than a benefit of employment–a society with wealth and power distributed widely–is now out of the question. Large bureaucratic organizations, public and private, will be our fate for the foreseeable future. It might have been otherwise. (228)

And finally, Perrow argues that this system was not economically or technologically inevitable. Networks of smaller firms and organizations could satisfy the needs for efficient production and innovation that a robust and dynamic economy presents. And a substantially less centralized political economy would be favorable to democracy and modern quality of life.

(Perrow’s most recent book is also very timely and worth reading (The Next Catastrophe: Reducing Our Vulnerabilities to Natural, Industrial, and Terrorist Disasters). Here Perrow returns to the subject of catastrophe and its prevention. He outlines the very significant possibilities of catastrophic failure that are inherent in our current industrial and economic organization, and offers some ideas about how we might reduce these vulnerabilities. There is a connection between the two books; the wide scope of the corporation as the basic unit of economic organization directly implies the concentration of dangerous industrial processes that a more decentralized network of smaller producers would have avoided. Try a sample chapter on the Kindle.)

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