MIA > Archive > Kidron > Presence of Future
The competition that drives individual firms to ever-greater size also leads to centralization – an ever-increasing share of productive resources ends up in the hands of an ever-smaller group whose number might grow, but less than proportionately to its share of resources. To the rest their decisions appear capricious.
It also results in growing polarization.
In all other social systems people shared something of a common fate. Rich and poor, privileged and not, were influenced by the same events – suffered, unequally to be sure, from famine, plague, war and other scourges, or benefited, unequally but still in common, from peace, relative plenty or a balmy climate. There were degrees of commonality, but there was little distinction in the type of their experience. By contrast, polarity is embedded in market society. Its productive system is only loosely constrained by external factors, common to all. Those who own, control and administer it, and those who have a monopoly of the services key to its functioning, improve their relative position as the system grows. The centre gorges while the edges gape.
From the beginnings of market society, there have been delicate consciences who railed against the widening gulf between the new rich and the new poor. Measures were proposed and institutions set up to temper the natural proclivities of the regime: charity was encouraged and charities promoted. The beginnings of a welfare state emerged in Germany in the 1880s, in Britain in the early 1900s. Nothing helped. Disparities between the new poor and the rich widened inexorably. Today the barons of the market system, the Bill Gates or the Warren Buffett’s are clawing in many thousands of times the income of the new factory worker in Indonesia or Sri Lanka. Where the top fifth of income recipients in mid-eighteenth century England might have received some third of all incomes, and the bottom quarter some 5–6 percent, today the richest fifth of earners in the world spend some 86 percent of world income, 66 times the expenditure of the bottom fifth (1.3 percent).
Extreme polarization is ultimately subversive of the moral commons on which every society, including market society, rests. Tradition, self-respect, mutuality do battle with the custodians of stability. The costs of control rise.
Competition and the innovation that drives it and issues from it leads to ceaseless, purposeless change and agitation in every aspect of the market system.
Little has changed since Marx and Engels wrote in their Communist Manifesto in 1848:
‘Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations ... are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned.’
Change is, if anything, more turbulent and encompassing than in their day. It is dissolving conventional distinctions between competition and collaboration, between supplier and customer, associated and stand-alone operations. Even the biggest firms find they cannot predict, let alone control, it. Despite a vast outpouring of writings on the subject, there is a strong trend away from formal planning. A growing number of business people, post-modernists as it were, now question whether an overall strategy is of any use at all. Grabbing opportunities or coping with crises as they arise, proceeding by trial and error, constantly revising tactics in the light of new experience (‘logical incrementalism’) may make more sense.
Conventional distinctions are dissolving. With every day it becomes more difficult to mark the borders between one industry and another: the office equipment industry and telecoms, between telecoms and the computer industry, between consumer electronic vendors, and sellers of information, or the entertainment, media or publishing industries.
Even intangibles like identity (will big companies become confederations of small ones, will small ones flit between big ones,) or style or corporate culture are being queried. On occasion, even the fundamental purpose of a business is challenged. Is it for the founder’s family, or for outside shareholders or risk-takers, as tradition has it, or do consumers, employees or ‘the community’ also have some part in it?
The pool of major players in the world market is constantly being drained and replenished. Globalization has resulted in an enormous inflow of new narco-bourgeois, and an outflow of state capitalist managers and functionaries. New dotcom and digital bourgeoisies stream in with the computer industry and operators of scheduled passenger liners steam out to oblivion. Media moguls are in, steel barons out.
The effects of endless agitation reach far. Ordered relations, conventional attitudes, the substance of morality itself, are swept away, re-form into something different, only to be swept away again.
In market society the security that comes with size displaces most other forms of security. Judgement is reduced to counting; and counting is counted as judgement. ‘To figure’ is ‘to think’.
Anything that can be sold, is sold: gallows, leg-irons, electronic torture chambers find a place on the list of exports from Britain today. Blond, blue-eyed babies for adoption abroad are purchasable in Poland; soluble paper for spies is exported from Japan; status and convictions are available for a price everywhere. Illicit drugs is a $500 billion trade conducted in all continents, and of economic significance to many small countries and in many regions in large ones.
Proposals for expanding exports of toxic waste and polluting activities from hub countries to the system’s rim are seriously considered at the highest levels: ‘I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that’ wrote Lawrence Summers, then chief economist of the World Bank to his colleagues at the time. (He was later to become Treasury Secretary in the US). Known killers are sold as long as they are profitable: ‘I’ll tell you why I like the cigarette business’, said, billionaire US investment guru Warren Buffett, ‘It costs a penny to make, sells for a dollar, it’s addictive and there’s fantastic brand loyalty.’
There is a flourishing business in business ethics. Academics and executives convene to discuss them. Consultancies and clients sport ‘ethical’ or ‘socially responsible’ investments in their literature (presumably to set them apart from the normal kind). Business schools appoint professors to run courses in the subject. Companies trip over one another to unveil codes for it. One-third of large companies in the UK, and four-fifths of large companies in the US have published such codes.
Life is detached from economic activity. There was neither cynicism nor subversion in the Financial Times’ main headline of – ‘US markets in turmoil after sharp rise in jobs’. The paper was simply reporting that the Dow Index of share prices fell 171 points after employment figures registered the strongest improvement for 13 years.
Two hundred years ago, Thomas Jefferson railed against ‘merchants who know no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gain.’
The last word must rest with Hollywood. Madonna, the American singer-actress who achieved notoriety in the early 1990s: ‘money makes people beautiful’; Paul Schrader, writer-director, including the screenplay of Taxi Driver: ‘I love to get huge salaries, not because I need the money, or want to own a lot of shit. But I love to make money because that’s power ... And the more money you make, the more power you have.’
A-moralism of this sort is not the transient immorality which affected many of the market system’s pioneers – the privateers, the slavers, the robber barons, the opium merchants – and which drives the thousand-and-one varieties of villain now infesting Eastern Europe and the former Soviet Union, with their pyramid selling, their snake-oil investments in privatization funds, their straight thieving of collective property, or their gangster raids on anything removable.
It is not an aberration. It stems from the market system’s necessary reliance on quantitative values. It is the only recourse for a system of autonomous but mutually dependent economic actors. In all previous societies the moral system enveloped convenience, provided a stiff if not altogether rigid frame for behaviour and attitudes. In the market system the relationship is inverted – morality is itself the convenience, a changing and changeable landscape in a vast a-moral sea of relativism. To be sure there is an ‘economics of trust’ which relates trust to transaction costs, and shows how the latter can be reduced by enhancing the former. But that in itself illustrates the point.
Whether society, any society, can survive such inversion remains to be seen.
The spontaneous, unplanned proliferation of economic activity in market society through constant variation, destruction and survival, surpasses anyone’s capacity to imagine, let alone design, the total picture. The self-regulated market – the hidden hand – becomes a paradigm for most other spheres of activity. Broad, shared purposes disentangle into narrower strands, each distinct, each frustrating or constraining the others. Others’ aims become forces to be contended with, avoided, deflected, neutralized, obstructed, annexed. People other than the few sharing your own aims become objects for manipulation, seen in the light of your particular purposes. As the whole fragments into parts, each part becomes, as nearly as it can, the whole, in an inversion of relationships unique to market society.
People do not have functions; they are their functions. ‘What do you want to be when you grow up?’ is the standard question to a five-year-old, not ‘what do you want to do?’ In the early days, in England, the new recruits to the mills became known as ‘hands’. Today, after 200 years of growing complexity and sophistication, a group president of Toyota can still suggest without a hint of irony or self-consciousness, ‘maybe it is a good idea to have two types of employee [as white-collar staff], a stock type and a flow type’ (the first of which would qualify for lifetime employment, the second staying with the group for a short while and providing it with cost flexibility and access to new technologies).
Relations between user and producer are stood on their head: instead of being the purpose for the activity of the producer, the user becomes a constraint on that activity, an annoying necessity, to be persuaded, formulated, compartmentalized and homogenized as far as possible. Use itself becomes secondary, to be adapted if need be, even invented. Economic activity becomes its own purpose. Economic summits are called to create jobs, not the other way around.
At the extreme, even the producer loses out to the marketeer. As one Hollywood screenwriter put it, ‘we live in fear of the resentment our agents must harbour towards us for taking 90 percent of the money they earn.’
The person who owns business commands the person who owns only his or her own skill, vitality and creativity. The world of things subordinates the world of life.
And what things! Whatever can be defined, detached and segmented is turned into a commodity; every continuous relationship that can be congealed into possessable, tradeable particles turns up for sale. Labour, that is the ability to work, or skill, the ability to work in a predictable way, are commodities, traded like any other, detached in concept from the person who possesses them. Income streams are ‘securitized’, and sold to and by banks. Prospective legacies are auctioned well in advance of the testator’s demise. ‘The marketing of cities as brands is coming to the fore,’ declare the consultants responsible for Birmingham’s new logo; as is the branding of whole countries: ‘Cool Britannia’.
The things that hold us in thrall are ever-less material, ever-more ethereal: before 1960 the industries at the centre of world competition were in natural resources (oil, aluminium); in the 1960s, they were the labour-intensive industries (textiles, shoes, simple assembly industries); the 1970s saw capital-intensive industries invade the heart of global competition (cars, machinery, chemicals); in the 1980s technology bore the brunt of it (consumer electronics, telecoms); and in the 1990s it became the information industries (financial services, media, ‘systems’ businesses).
Compulsions are internalized as intention. While every participant in the market system believes that he or she is acting in their own interest, as in a sense they are, what they are doing is actually determined by the competition which makes necessary, desirable and wished for a certain pattern of behaviour. We do not choose our problems, or our products. They choose us. We are pushed, forced by a system which has no transcendent purpose or goal. People don’t drive the system; the (competitive) relationship between them does. The space between them is more real than the people themselves.
The most far-reaching unintended effect of the market system is its denial of responsibility to both individuals and their organizations.
Customary, self-evident balances between resources – land in particular – and labour, between agricultural work and other work, between productive and parasitic consumption, are disrupted. Customary linkages between food supply and health, health and population, population and work, work and place, linkages that are stronger the smaller the societies they bind, are loosened, if not decoupled. The skills needed to maintain these balances lose their value and are themselves ultimately lost.
The link between personal activity and personal fate, on which the whole edifice of personal responsibility and personal autonomy rests, is damaged. So intricate is the interlacing within the market system, that no one, not even the most advantageously placed, informed and educated can hope to gauge fully the effect of his or her actions. For those in its outer regions the aspiration to do so, even if it existed, would be ludicrous. For a society whose core ethic is ostensibly one of personal responsibility for one’s actions, this is an ironic outcome.
Little of this was foreseen when market society stumbled into existence two-and-a-half centuries ago. Some of it will be taken up in the ensuing chapters.
This edited extract is from the section titled Unintended Consequences of Chapter 1 Market Society.
Last updated on 13 November 2019