Ben Fine on the Material Culture of Financialisation

A FESSUD Working paper by Ben Fine.

From the abstract:

The purpose of this paper is threefold. First is to comment upon the nature of financialisation. Second is to frame how this leads financialisation to be understood whether consciously or otherwise. And, third, is to draw out implications for surveying households as their experiences and understandings of, and reactions to, financialisation without specifically designing a questionnaire itself for this purpose. As should already be apparent, underpinning this contribution is the presumption that financialisation is a characteristic of contemporary capitalism (and that the term is also an appropriate category for representing this characteristic). The material culture of financialisation is addressed by drawing upon the 10 Cs approach that was developed for the study of consumption, highlighting how it is Constructed, Construed, Commodified, Conforming, Contextual, Contradictory, Closed, Contested, Collective, and Chaotic.

Read rest here.

Institutions, what institutions?

There are many explanations for why some nations are rich while others are poor. The dominant view, in mainstream (neoclassical) economic circles is that institutions are the central cause of the divide between developed (center) and underdeveloped (periphery). I discussed before (here and here) the role of institutions vis-à-vis geography and culture. I have also noted how the New Institutionalist argument concentrates on the institutions (fundamentally property rights) that act on the supply side of the economy. That is growth arises because property rights provide incentives for productive investment. I also noted (here) that the historical evidence for patents, copyright and other forms of property protection for explaining growth is limited at best. Note that mainstream authors and heterodox authors, at least the majority, tend to agree that institutions rather than geography or culture are central for development.

Also, the table above suggests that cultural and geographical explanations tend to put an emphasis on the supply side, but that is not necessarily the case, and it would be difficult to speculate about what Jared Diamond, for example, thinks about the relative role of supply and demand. Also, it’s worth noticing that while in his early work economic historian David Landes favored a demand-led view (which I tentatively put in the institutional box) he clearly moved to a cultural supply-side interpretation in his later work.

So if you believe most heterodox economists institutions are relevant, but not primarily those associated to the supply side; the ones linked to the demand side, in Keynesian fashion are more important than the mainstream admits. Poor countries that arrive late to the process of capitalist development cannot expand demand without limits since the imports of intermediary and capital goods cause recurrent balance of payments crises. The institutions that allow for the expansion of demand, including those that allow for higher wages to expand consumption and to avoid the external constraints, are and have been central to growth and development. The role of the State in creating and promoting the expansion of domestic markets, in the funding of research and development, and in reducing the barriers to balance of payments constraints, both by guarantying access to external markets (sometimes militarily, like in the Opium Wars) and reducing foreign access to domestic ones was crucial in the process of capitalist development.

In this view, for example, what China did not have that England did, was not lack of secure property rights and the rule of law, but a rising bourgeoisie (capitalists) that had to compete to provide for a growing domestic market that had acquired a new taste (and hence explained expanding demand) for a set of new goods, like cotton goods from India, or china (porcelain) from… well China, as emphasized by economic historian Maxine Berg among others (for the role of consumption in the Industrial Revolution go here). Or simply put, China did not have a capitalist mode of production (for the concept of mode of production and capitalism go here). Again, I argued that Robert Allen’s view according to which high wages and cheap energy forced British producers to innovate to save labor, leading to technological innovation and growth, and the absence of those conditions in China led to stagnation is limited since it presupposes that firms adopt more productive technologies even without growing demand.

The same is true of Latin American economies, which several authors like Engerman Sokoloff suggest fell behind as a result of absence of secure property rights. Latin American economies entered the world economy to produce silver (mining-economy/Amerindian population), sugar (plantation-economy/African-American population) and other commodities, for external markets. They were exploitation colonies, less reliant on the development of domestic markets, typical of settlement colonies in the Northeast United States or of the central countries in Western Europe.

The economies that depend on the production of commodities for world markets and import everything else are more vulnerable to the fluctuations of the price of commodities. Booms in commodity prices lead to growth, albeit very concentrated in the hands of the owners of capital, but they leave very little in terms of infrastructure for future growth. Further, since the economy must import everything to satisfy domestic demand, the economy is dependent on external sources of production, and when the export of commodities does not allow for enough imports, then either demand must be curtailed or the economy must become indebted to be able to continue to consume. A thriving domestic market is central for economic development, and the ability to diversify production to provide for the market is the key to catching up.

Finally, since the economy was based on the mono-production of commodities (and the size of the domestic markets is relatively limited) there were little if any incentives for technological innovation and higher productivity. Note also, that once a country falls behind, and almost all countries were essentially at the same level of income per capita around 1800 (or at least differences were considerably smaller than now), it is very hard to catch up, since the distance to the technological frontier is increasingly steep. It is not the same to copy a textile mill that uses a steam engine than to emulate the development of the Silicon Valley. In this sense, the institutions associated to the colonization period are central, rather than property rights, to explain underdevelopment in Latin America. Capitalism and its institutions both caused growth in the center, and stagnation in the periphery.*

* I discussed here how the industrialization of Britain meant the deindustrialization of India and China.

Herbert Marcuse on Paul Baran’s Critique of Modern Society and of the Social Sciences

Paul Baran and Herbert Marcuse's (author of One Dimensional Man) friendship went back to their days together at the Institute for Social Research (the foundational school of critical theory in the social sciences, which led to the future establishment of The New School For Social Research in NYC, and became the intellectual impetus for spawning the 'New Left' in the US - for more on this, see here) in Frankfurt in pre-Hitler Germany. Their close connection is revealed in a series of letters they wrote to each other in the 1950s and early ’60s (posted this month on the Monthly Review website).

From John Bellamy Foster:

The following talk, delivered only days after the publication of Monopoly Capital: An Essay on the American Economic and Social Order by Baran and Paul M. Sweezy, Marcuse reveals his admiration for Baran’s article on “The Commitment of the Intellectual.”Marcuse also provides his understanding of the critical importance of Baran’s notion of economic surplus, as introduced in The Political Economy of Growth and its significance for the critique of monopoly capital. This throws light on Marcuse’s own use of the concept of monopoly capitalism, which is frequently mentioned in his work (see for example his Counter-Revolution and Revolt).

Marcuse criticizes Baran for rejecting—in “Marxism and Psychoanalysis”—the use of psychological terms and for distancing himself from Freudian psychoanalysis and its left interpretations. Marcuse was clearly disappointed (as he indicated in a letter to Baran on September 22, 1959, where he commented on the galleys to Baran’s article) that Baran had not embraced the kind of argument he himself had put forward in Eros and Civilization. Nevertheless, it is worth adding that Baran—as Marcuse no doubt understood and as their own correspondence reveals—was far from simply rejecting psychological issues out of hand. Baran’s essay on psychoanalysis was aimed at the critique of what he called “psychologism” and “social psychologism”—and not psychology and social psychology. He insisted in this respect that what was needed was a more revolutionary social psychology—that took into account as its initial datum the structure of capitalist society as a whole. He sought to push this view forward near the end of his life through the critique of the cultural apparatus, overlapping in this way with the concerns of such thinkers as Marcuse, Fromm, Williams, and Mills. (See the special July-August 2013 issue of Monthly Review on “The Cultural Apparatus of Monopoly Capital”). To the end Baran remained an uncompromising critic of the narrow economic rationalism of monopoly-capitalist society and the damaging effect that it exerted on the material existence, culture, and consciousness of humanity.

Read rest here.

The Quality of Monopoly Capitalist Society: Culture and Communications

From the editors of Monthly Review:

Below is a hitherto unpublished chapter of Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966). The text as published here has been edited and includes notes by John Bellamy Foster. The style conforms to that of their book. Part of the original draft chapter, dealing with mental health, was still incomplete at the time of Baran’s death in 1964, and consequently has not be included in this published version. 

Paul Baran & Paul M. Sweezy

The culture of a society includes the education of its young, its literature, its theater, music, the arts—in short whatever contributes to the “training and refinement of mind, tastes, and manners…the intellectual side of civilization.” To inquire further into the culture of monopoly capitalism, we have here selected for attention two areas which offer a larger body of specialized research and which we judge to be decisive for the quality of culture as a whole: book publishing and broadcasting. These are both now big businesses, and they therefore demonstrate the striking extent to which culture has become a commodity, its production subject to the same forces, interests, and motives as govern the production of all other commodities. 

The development of big business in the cultural field has of course been possible only because of the enormous increase in the productivity of labor under advanced capitalism. In earlier times culture was the monopoly of a tiny minority, while the vast majority had to work most of their waking hours to keep body and soul together. 

Read Rest here

Culture and Symbolic Violence

Culture entails models of social reality that humans take for granted. It encompasses shared understandings of ways of seeing and feeling that comprise the social roles by which humans connect with each other to form society, which, in the Durkheimian sense, is a suis generis enity that embodies a mutual social consciousness. Culture calls attention to the ways social norms establish social identity, which inherently reflects the ways in which humans present themselves in social life, and the means by which they actively organize themselves for collective purposes; it is the capacity to socially determine what is defined as 'responsible' human activity (Meyer & Jepperson, 2000). Culture, thus, is a shared pattern of socialization combined with an implicit system of reinforcement of certain values of prescribed behavior.

In this sense, culture is related to the process by which human activity comes to be normatively held in place—institutionalization. It defines the “the way in which [...] cultural rules define the meaning [...] of [social] activity” (Meyer et. al. 1987). This sense of meaning is not found in mere objective social reality, but rather is contingent on the extent to which cognition is constructed by the social surroundings with in which individuals function (Meyer et. al. 1987) As such, it does not take humans as a priori entities, but as reified 'subjects' with internalized understandings of social action. Pierre Bourdieu (1991: 250) defines this process as a 'mode of existence'.

Culture elucidates the essence of subconscious cognitive 'scripts', which are inscribed in 'common sense' descriptions of how humans behave (Meyer et. Al: 1997). Pierre Bourdieu (1984:468) identifies these 'scripts' as 'embodied social structures'. These 'embodied social structures' are a totality in the form of a symbolic system that channels deep social structural comprehensions (Swartz 1997: 83), to such an extent that human behavior can befittingly be comprehended and understood specifically in terms of the interrelationship what constitutes actors and whose subjectively meaningful behavior, in turn, constitute society (Krasner, 2009: 95). As such, culture “organize[s] human masses, [and] form[s] the terrain on which [they] move [...]” (Gramsci, 1988: 199).

It must be noted, however, that culture is not just the formation of an identity, and thus the means by which humans are social integrated, but also can serve as an instrument of domination. In this sense, it is a source of manipulation that serves as a legitimation of unjust social relations. Accordingly, culture fundamentally rests on intrinsic processes that manufacture s ‘logic of difference’, of differential deviation' (Swartz, 1997: 96), a classification complex of inclusion and exclusion.

[...] all agents in a given social formation share a set of basic perceptual schemes, which receive the beginnings of objectification in the pairs of antagonistic adjectives commonly used to classify and qualify persons or objects in the most varied of practice. The network of oppositions between high (sublime, elevated, pure) and low (vulgar, low, modest), spiritual, and material, fine (refined, elegant) and coarse (heavy, fat, crude, brutal), light (subtle, lively, sharp, adroit) and heavy (slow, thick, blunt laborious clumsy), free and forced, broad and narrow, or, in other another dimension, between unique (rare, different, distinguished, exclusive singular, novel) and common (ordinary, banal, commonplace, trivial, routine), brilliant (intelligent) and dull (obscure, gray, mediocre) is the matrix of all commonplaces which find such ready acceptance because behind them lies the whole social order (Bourdieu 1984: 468)

Culture is a mechanism of producing homologies through which meanings are obtained via contrastive relations that constitute an objective existence of social oppositions. According to Bourdieu (1984: 468), while all agents in given social formation share a set of basic perceptual schemes, the essence of contrast predisposes humans to organize the social world according to a logic of polarity; this is what Bourdieu (1984) defines as symbolic power, which is the simultaneous act of constructing conceptual and social discrimination.

[...] if one takes seriously both the Durkheimian hypothesis of the social origins of schemes of thought, perception, apperception, and action and the fact of class divisions, one is necessarily driven to the hypothesis that a correspondence exists between social structures (strictly speaking, power structures) and mental structures (Bourdieu, 1991).

Symbolic power is, hence, a 'world-making power', whereby the essential material differentiating social contexts are ‘naturalized’. Symbolic power generates symbolic violence:

To say it more rigorously: social agents are knowing agents who, even when they are subjected to [some form of] determinism, contribute to producing the efficacy of that which determines them insofar as they structure what determines them. And it is almost always in the “fit” between determinants and the categories of perception that constitute them as such that the effect of domination arises (Bourdieu & Wacquant, 1992).

[This] presupposes on the part of those who are subjected to it a form of complicity which is neither a passive submission to an external constraint nor a free adherence to values [...] The specificity of symbolic violence resides precisely in the fact that it requires of the person who undergoes it a [certain] [manifested social] attitude [...] (Bourdieu 1982:36).

[As such, social] [l]egitimation of the social world is not [...] the product of a deliberate and purposive action of propaganda [..]; it results, rather, from the fact that agents apply to the objective structures of the social world structures of perception and appreciation which are issued out of these very structures and which tend to picture the world as evident (Bourdieu 1982: 36).

In this sense, symbolic violence involves misrecognition, which is the mechanism by which symbolic power forces humans to objectify their social world and accept as is, with all its apparent disparities (Bourdieu & Wacquant: 1992). Culture incorporates socially understood dispositions that formulate structures of perception by which humans accept “postulates [and] axioms [that] go without saying and require no inculcating” (Bourdieu & Wacquant 1992). It is akin to the Marxian idea of 'false conscientiousness', introduced by Mannheim (1959 [1936]: 340), in which “[...] knowledge is distorted [...] when [...] it attempts to conceal [reality] by thinking of [it] in categories that are inappropriate [...].” Thus, “persons falsify to themselves the elementary facts of human existence by deifying, romanticizing, or idealizing them, conjuring up [delusionary] interpretations of [social] experience (Mannheim 1959 [1936]: 340).

This is similar to the Gramscian idea of ideological or 'expansive hegemony', by which a “multiplicity of dispersed wills, with heterogeneous aims, are welded together with a single aim, on the basis of an equal and common conception of the [social] world” (quoted in Jones 2006: 53). Symbolic violence is thus suppression of alternative world-views through the establishment of parameters that define what is socially deemed as reasonable, sane, practical, good, and ‘true’. Fundamentally, it promotes an unquestioning canonical 'idea system' (Wallerstein, 2000: 272).

To provide an illustration, it is useful to relate symbolic violence to ideal-type human being as that of the instrumentally rational single-minded seeker of maximum utility. According to this ideological conviction, the surrounding within which social action takes place is conceived as an endless array of opportunity costs. Individuals are not seen as to perceive themselves as parts of larger interconnected and interdependent social wholes, but instead as fable bees that are up against incontrovertible forces of the impersonal social institution of the capitalist market, which is characteristically governed by the modus operandi of selfishness. Social positions with respect to income and prestige is a matter of natural law; if individuals have appropriate moral virtues and exercise responsibility, jurisprudence, self-control, and unremitting hard work, it is socialy believed they can easily become capitalist entrepreneurs if the so-called Protestant ethic is taken seriously. In relating 'individuals' to ‘nation-states’, Wallerstein (2000: 283) writes:

All states can develop, all states shall develop [...] if some states have developed earlier and faster than others, it is because they […] been more individualistic […] or in some way more 'modern'. If other states have developed more slowly, it is because there is something in their [innate characteristics] which prevents them or has thus far prevented them from becoming as [progressed] as other states.

Symbolic violence fosters obeisance to competitive strife as a form of natural social harmony. Culture, as such, is an apocryphal sense of 'moral discipline' that convinces humans that they are nothing but atoms with no authentic ties that extend deeper and beyond moments of economic exchange. It serves as deceptive palliative in which social location has no affectation on social outcomes.

[The strong are deemed] more [instrumentally] rational, more disciplined, more hard-working, more self-controlled, more independent, while the [weak] are more [...] self-indulgent, more lazy, [...] more dependent (Wallerstein, 2000: 277).

The question is how is symbolic power that is translated into symbolic violence altogether socially produced? Bourdieu answers the question by developing the concept of symbolic labor, which he defines as those 'intellectual specialists, e.g. writers, teachers, professors, philosophers, etc. who advance the theoretical formulations, apparatuses, and ideations that in turn prescribe the cognitive distinctions that mask social inequalities” (Swartz, 1997: 93). They are the authorized agents, or generalized 'others', (Meyer & Jepperson, 2000) who coordinate the institutionalization of shared understandings and beliefs that ultimately transform unequal social relations into socially 'legitimate' social relations.

To what extent can 'world society theory' as developed by John W. Meyer et. al (1997) be construed as a form symbolic violence? According to the theory the social world is a society that embodies a global collective social consciousness, and, thus, a worldwide cultural cosmology of shared understandings of rational social action. Subconscious cognitive 'scripts' are international in nature, and represent institutionalizations that define the meaning and identity of actors in the international arena... They specify 'the way things' ought to work' in the international context and frames the global 'mode of existence'.

The nation state is the internationally collectively understood fundamental unit of rational social action. Hence, they are isomorphic in terms of structure and organization due to generalized implicit inculcation of what is regarded as necessary for legitimate recognition in world affairs. This is routinely represented by common taken-for-granted assumptions with respect to nation-state law-based control systems, professionalization, citizenship, and the means to accomplish goals in regards to processes like economic development. These assumptions are derived from exogenous world cultural rules of what defines purposiveness in world society, and they are spread and diffused via global symbolic labor involved in international associations like the United Nations, World Bank, IMF, UNESCO, etc.

Symbolic labor involved in the diffusion of worldwide cultural rules lead to what Meyer et. al (1997) note as ‘expansive structuration’, whereby nation-states ceremonially advertise some meaningful identity in the international political economy. The inherent problem is that many nation-states suffer from a variety of inequalities with respect to the resources needed for such ‘expansive structuration’. The diffusion of world-wide cultural models of social action engenders contradiction.

World culture reflects ideals that are more often than not beyond what is practicable for most countries. This is leads to what is known as 'decoupling'. For example, economically weaker nation-states are likely to import specific principles of internationally recognized forms of economic advancement, yet on-the ground realities make such formal presentation a matter of 'organized hypocrisy'.
It is at this point that one can invoke the concept symbolic violence to 'world society theory'. The seemingly universal ethos of ‘economic progress’ ignores socially-specific factors particular within geographical and historical contexts that set nation-states on adverse path-dependencies. Symbolic violence would be evidenced by the international community, including leaders of the deprived country, interpreting the condition as a reflection of ‘economic backwardness’. The end result would be the proliferation of judgments in the international community that deem country as culturally incapable of recognizing what is appropriate to escape their deprivation. The international community would respond with an assessment of the nation state's condition and provide assistance to correct its underdevelopment (Myer et. al, 1997), however, in actuality, it would be motivated by ideologies that are meant to stain global inequalities (Wallerstein, 2000: 278), rather than rectify them.

By way of conclusion, culture is a catch-22. On the one hand, it tries to make sense of the social work, yet on the other hand, it acts as a protective shrubbery of society with inherent actualities of social injustice. Symbolic violence which culture precipitates essentializes social reality by denying it edification. This leads to, in the final instance, confusion, distortion, and intellectual ambiguity.

Bibliography:

Bourdieu, Pierre (1982), Ce que parler vent dire. L'economie des echanges linguistiques. Paris: Artheme Fayard

Bourdieu, Pierre (1984), Distinction. A Social Critique of the Judgment of Taste. Cambridge, MA: Harvard University Press

Bourdieu, Pierre (1987), “On what makes a social class? On the theoretical and practical existence of groups,” Berkeley Journal of Sociology (32): 1-18

Bourdieu, Pierre (1991), Language and Symbolic Power. Cambridge, MA: Harvard University Press

Bourdieu, Pierre (1991), “Genesis and Structure of the Religious Field”. Comparative Social Research (13): 1-43

Bourdieu, Pierre & Loic Wacquant (2004) “Symbolic Violence,” in Nancy Scheper-Hughes and Philipp Bourgois (eds.) Violence in War and Peace. Malden, MA: Blackwell Publishing

Gramsci, Antonio (1988), Selected Writings 1916-1935. New York: Shocken Books

Jones, Steve (2006), Antonio Gramsci. New York: Routledge.

Krasner, Steven D. (2009), Power, the Sate, and Sovereignty. New York: Routledge

Mannheim, Karl. (1959 [1936]) Ideology and Utopia New York: Harcourt Brace.

Meyer, John W, John Boli, & George M. Thomas (1987), “Ontology and Rationalization in the Western Cultural Account” in George M. Thomas, John W. Meyer, Francisco O. Ramirez, and John Boli (eds.) Constituting State, Society, and The Individual. London: Sage

Meyer, John W., John Boli, & Francisco Ramirez (1997), “World Society and the Nation-State”. American Journal of Sociology (103): 144-81

Meyer, John W. & Ronald L. Jepperson (2000), “The 'Actors' of Modern Society: The Cultural Construction of Social Agency. Sociological Theory (18): 100-120

Sallach, David L (1974), “Class Domination and Ideological Hegemony”. The Sociological Quarterly (15): 38-50

Swartz, David (1997), Culture & Power: The Sociology of Pierre Bourdieu. Chicago: The University of Chicago Press.

Wallerstein, Immanuel. (2000), The Essential Wallerstein. New York: The New Press.