Thursday, September 17, 2009

The “New Capitalism” and The “Dialectics of Failure”.

In recent years there has been a spate of news reports on the ‘new economy’, the shifts in corporate structure and the resultant transformations in the nature of employment. Richard Sennett, in a series of works on the culture of “new capitalism”, has attempted to map the connection between large-scale trends in corporate structure and the employee’s experience of work and self. The operational logic of this new capitalism isn’t new; for Sennett (1997, p. 161) the novelty lies in the innovative organizational structure of business, which seemingly flouts Marx’s thesis that the concentration of production goes hand-in-hand with the concentration of capital. In the world of new capitalism, once stable corporate bureaucracies have become increasingly “flexible” and “highly mobile” enterprises, ultimately less secure in their position (Sennett, 1997, p. 161). In turn, Sennett argues, work has become subject to recurrent metamorphoses, engendering more uncertainty and instability in the workforce. An image in stark contrast to Weber’s (2008, p. 245) “iron cage”, were individuals born into the “technical and economic conditions of machine production” found their lives determined by the “mechanism” of capital accumulation. This almost Sisyphean fate had some positive aspects; it provided a measure of certainty for the worker. Their relatively secure position ensured a sense of usefulness and purpose. Sennett’s ultimate concern in his analysis of the new capitalism is the extent to which this picture has changed, the extent to which the modern worker is subject to uncertainties, haunted by uselessness and unable to gain a sense of purpose and coherent selfhood from work.

The backdrop to Sennett’s analysis is the shift from the fordist model of industrial production, to the post-fordists employment structures that developed after the collapse of the post-war boom. The French political economist, Alain Lipietz (1997, pp. 2-3), has argued that Fordism can be construed in essentially three different related ways: 1) as an “industrial paradigm, 2) as a “regime of accumulation”, and lastly 3) as a “mode of regulation”. In terms of industrial paradigm, Fordism combined the scientific management of Fredrick Taylor and the technological advancements of mechanization. The application of scientific management involved a demarcation between the organization of production and the process of production itself. Routines were formalized and carried out according to preset outlines. The gains in productivity which resulted from the fordist principles of organization formed the basis for a new regime of accumulation. Increased profit provided the basis for more financial investment, and the increased wages ensured higher levels of aggregate demand. British Historian, Eric Hobsbawm (2006, pp. 263-4), identified the spread of these fordist principles, both to divergent industries and to foreign counties as a crucial pillar underpinning the post-war “golden age”. Finally, Lipietz posited (1997, p3), Fordism constituted a “mode of regulation”, were the capital-labour relation was subject to a process of “contractualization” and there developed a system of rules that moderated employer and employee interests.

The mode of regulation indicative of Fordism placed heavy controls on redundancy and wage rates, locking Capital into a series of obligations towards labour. For Zygmunt Bauman (2000, pp. 144-5), the underlying ideal of Fordism was the melding together of labour and capital by the “mutuality of their dependency”. Henry Ford, from whose name the term Fordism is derived, famously introduced the five dollar day. This constituted a raise of twice the amount previously on offer at the Ford Motor Company. In Ford’s own explanation, he merely wished his employees the ability to purchase the cars they produced. However, many commentators have rejected this justification as tongue-in-cheek and point to the high level of labour mobility and the need to retain staff. The increased retention of staff and the reduction of labour mobility, allowed Ford to benefit from a relative stable workforce and minimize the cost associated with training new workers on a regular basis.

Given the fordist propensity to lock labour into long-term arrangements, the prospect of life-long employment was not only a possibility, but a probability often confirmed by experience. Bauman (2000, 146) characterized the frame of mind, typical under Fordism, as a “long-term mentality”. Whereby, the “time horizons” in question seemed expansive, often out-striping the lives of individuals. For the employee, life-long employment with the single company was not unheard of, and for the employer they often felt as if they were contributing to a family legacy beyond themselves. Fordism, in its tripartite manifestation, provided the institutional framework to sustain a somewhat “coherent self” based upon the Victorian notion of a life’s work, or purpose (Sennett, 1997, p. 172). Sennett (1997, p. 173) noted that, under new capitalism, the institutional structure that supported the long-term mentality and coherency of self image representative of both the Victorian mindset and fordist paradigm are no longer in place. For both Sennett (1997, p.162) and Bauman (2000, p.147), the shift from Fordism to new flexible organizational structures has caused an alteration in the relation between work and self.

The ‘crisis of fordism’, which had precipitated the cultural dynamics which Sennett attempts to elucidate, was predicated upon a series of economic fault lines that had developed over the course of the long-post-war boom (Lipietz, 1997, pp. 3-4). Throughout the course of the 1960s and 1970s, high-income economies had witnessed a decline in the rates of profit. This trend was associated with a decline in the levels of productivity and the overall cost of labour. The mainstream explanation for the crisis of the Fordism was that the social compact between labour and capital had over-empowered labour and therefore undermined the rate of economic growth (Lipietz, pp. 3-4). In order to surpass the limitations of Fordism, polices of “liberal flexibility” were introduced that slackened employment regulation and undermined social security: allowing for the general destabilization of work (Lipietz, 1997, pp. 3-4).

This general destabilization of work, is the organizational condition that informs Sennett’s (1997, p. 162) thesis that new capitalism is “impoverishing the value of work” by reducing it to short-term engagements that are incapable of forming the basis of a “durable personal purpose”, or a stable sense of self. News reportage on trends in employment often highlight the increased and mounting rates of casual, part-time and self employment relative to full-time employment within the new economy (Kanter, 2009; Bazelon, 2009). These reported figures buttress Sennett’s (1997, p. 166) observations about the increasingly ephemeral nature of work and the attempts of corporate managers to promote a sense of contingency in the workforce. Sennett (1997, p. 166) quoted the comments of an AT&T executive who stated that: “’jobs’ are being replaced by ‘projects’ and ‘fields of work’” with the ultimate aim of promoting a sense of impermanence.

In ‘No Logo’, journalist Naomi Kleim (2001, p. 242) argued that managerial notions of “flexibility” translate into “no promises”. No promises in the era of flexible accumulation have introduced new uncertainties and anxieties in the middle classes, that Sennett (1997, p. 161) asserted were more characteristic of the working classes in a bygone era. Given the continued metamorphoses of corporate structure, driven in part by ever-emerging technological advancements, that often lead to the de-skilling of workers and the ability of companies to do “more with less”, today’s middle classes are haunted by “the specter of uselessness” which for Sennett (1997, pp. 166-167) culminates in the underlying implication of a “dispensable self”. Dislocation from the engine of economic growth, coupled with reference to personal autonomy and individual “informational competence” within the “skill-based economy” forces workers into a double-blind, which denies them control of economic conditions, whilst promoting a sense of personal responsibility (Sennett, 1997, p. 167).

In a recent New York Times article, Sudhir Venkatesh relayed some tentative findings of his current ethnographical work in a series of Manhattan and Brooklyn coffee shops on freelance professionals, who he said exhibited a great sense of guilt and personal failure over their current economic plight (Bazelon, 2009). The self-reports of these freelance professionals have been made within the context of a major economic recession, but this only accentuates trends already observed by Sennett, and moreover highlights his concept of the double blind. Venkatesh’s interviewees have placed the onus of responsibility upon themselves, initiating a sense of guilt and personal failing, despite the overwhelming economic climate (Bazelon, 2009). Kanter (2009) describe how the management of IBM actively cultivate this sense of personal responsibility, insisting that in the current global environment employees continually need to keep themselves relevant to their employers by updating their skill set. In 2007, Sam Palmisano, the current CEO of IBM, talked of a new company program that would credit staff members with educational benefits. The “learning accounts” would reward individual employees for their contributions to the company, but Palmisano insisted that this was not a hand-out; rather, the need for the employee to remain usefull was their own resonsibility (Kanter, 2009).

It is clear that corporations like IBM do not provide the institutional framework required to support long-term mentalities and the sense common under fordist organizational principles of a life-long vocation. Not only does this induce a sense of insecurity and the fear of uselessness, but the lack of institutional cover coupled with the notion of personal responsibility culminate in what Sennett (1997, p. 174) calls a “dialectics of failure”, that place a tremendous burden upon individuals and undermines there sense of self. IBM’s position on personal responsibility and the need for employees to maintain and improve their skill base further exemplify Sennett’s (1997, p. 167) notion of the “spectre of uselessness” and the prospect that economic redundancy is an imminent possibility. This short-term mentality, the casualisation of employment and the reduction of jobs into projects, undermine any sense of loyalty and induce a general sense of uncertainty. In an earlier period, the mode of regulation indicative of Fordism did not alleviate industrial conflict and often facilitated it; however, labour and capital were locked into long-term contractual relations that instituted a relatively stable mutual dependency. The ‘crisis of Fordism’ and the movement toward ‘liberal flexibility’ might be said to have moved capitalism not to a ‘new’ formulation, but out of a momentary metastable social settlement.

Written by Mathew Toll.

Bauman, Zygmunt. (2000), Liquid Modernity, Cambridge: Polity.

Bazelon, Emily. (2009), “The self-Employed Depression”, New York Times, June 2nd, [,%20Flexibility,%20Self&st=nyt&scp=].

Hobsbawm, Eric. (2006), The Age of Extremes: The Short Twentieth Century 1914-1991, London; Abacus.

Kanter, Rosabeth Moss. (2009), “IBM and Procter & Gamble's 21st Century Workplaces”, Bloomberg, September 8th, [].

Kleim, Naomi, (2001), No Logo, Netley: Flamingo.

Lipietz, Alian. (1997). "The post-Fordist world: labour relations, international hierarchy and global ecology.", Review of International Political Economy, Vol. 4, No. 1, pp. 1-41.

Sennett, Richard. (1997), “The New Capitalism”, Social Research, Vol 64, No 2, pp. 161-180.

Weber, Max. (2008), “The Protestant Ethic and The Sprit of Capitalism”, Classical Sociological Theory, Edited Craig Calhoun, Joseph Gerteis, James Moody, Steven Pfaff, Indermohan Virk. Carlton: Blackwell Publishing, pp. 229-246.

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