Monthly Archives: April 2013

Adventures in Anachronistic Sociology: Dahrendorf ‘Class and Class Conflict in Industrial Society’

Dahrendorf

Following up on a line of research that resulted in a paper recently accepted for publication, I’ve been digging into the sociological literature on class and stratification. Today I read relevant sections from Dahrendorf’s Class and Class Conflict in Industrial Society, which is widely cited in the literature and seems to have been a major influence on debates. His ‘conflict theory’ of class is interesting: he attempts to set out a theory of class in terms of ‘authority relations’ rather than economic relationships between actors. This schema has some oddities, not least Dahrendorf’s categorisation of postal workers as members of the ruling class. Michael Mann picks up on this quirk in The Sources of Social Power vol. 2, but Mann’s conceptualisation of the middle classes owes a lot to Dahrendorf. The middle classes in mature industrial society are, Dahrendorf argues, ‘born decomposed’ – they occupy various positions at different gradations within the administrative hierarchies that characterised contemporary industrial society. The working class(es) have also experienced decomposition, as industrialism has produced not a single mass of proletarians but several gradations in terms of skill and training. The skilled working class blends into the white-collar salariat. So far, so persuasive as an general account of changes within industrial society up until 1959. The distinction between ownership and control is pretty important, distinctions along similar lines were later made by other class theorists such as Goldthorpe and Wright. Dahrendorf also provides a pretty sharp discussion of other theories of class put forward by scholars such as Djilas and Burnham.

But Dahrendorf takes his argument further, in a direction that seems absurd today, arguing that industrial society is no longer capitalist. This is because of the separation of ownership and control between capitalist shareholders and managers. Marx accurately described the conditions of his own age, in which capitalist owners managed their factories in person, directly facing propertyless, non-organised workers at the coal-face of production. Dahrendorf argues that this all changed with the rise of the joint-stock company. The intensity of class conflict in the late C19th and the early C20th was merely the result of an overlapping set of conflicts over authority relations, which have now been diffused more generally through society and the economy. Not only has the struggle between capital and labour been overshadowed by other complex and cross-cutting conflicts, but capitalists no longer seem to exercise a great deal of agency within society on Dahrendorf’s account. What I found extraordinary about Dahrendorf’s account, however, was the bizarre claim (from a 2013 vantage point) that

Never has the imputation of a profit motive been further from the real motives of men than it is for modern bureaucratic managers

If that claim was true in 1959, it certainly isn’t one that anyone would make in 2013. It seems fairly obvious that the interests of managers of capitalist enterprises are closely aligned with shareholders, indeed the right argues that managers ought first and foremost act to maximise shareholder value as agents of shareholder principals. The left, meanwhile, argues that managers and capitalists have effectively become a single profit-driven class. Dahrendorf’s claim looks like it originates on another planet rather than from half a century ago. What does this imply? That Western societies were, for a brief interlude in the post-war era, post-capitalist ‘industrial societies’ but reverted to capitalism between then and now (presumably sometime after 1979)? Or perhaps that, despite his sharp conceptual analysis of the new middle classes, Dahrendorf was mistaken and Western societies were always capitalist and that economic relations – rather than generalised authority relations – have always underpinned their social structures? Or that, as Mann might argue, certain sources of social power oscillate in terms of their relative importance, with economic power now reshaping Western societies because of global economic integration?

Still, there’s a strong anti-authoritarian spirit that runs through the book, emphasising the role of conflict in a pluralistic society and rejecting the demand for enforced consensus made by its enemies.

DeLong on the ‘Lesser Depression’

Good article by DeLong on the scale of the damage caused by the Global Financial Crisis and the subsequent recession:

In the Great Depression that struck the U.S. in 1929, the subsequent twelve years before American mobilization for World War II erased the last shadows of the Great Depression, production averaged roughly 15% below the pre-Great Depression trend, for a total depression waste output shortfall of 180% of a year’s production. Today, even if U.S. production returns to its stable-inflation potential by 2017–a huge if–we will as of 2017 have incurred a depression waste output shortfall of 60% of a year’s production.

The losses from what I have been calling the Lesser Depression will not be over in 2017. As best as I can foresee, there is no moral-equivalent-of-war on the horizon to pull us into a mighty boom to erase the shadow cast by the downturn, and when I take present and values and capitalize the lower trend growth of the American economy as a result of the shadow into the future, I cannot reckon the present value of the additional cost at less than a further 100% of a year’s output today, for a total cost of 160% of a year’s production. The damage is thus equal to that of the Great Depression, counting a 1% of production shortfall as equally painful whenever it happens.

The U.S. economy today, however, has two and a half times as many people as the U.S. economy of 1929. And the U.S. economy today is five–or perhaps more–times as rich as the economy of 1929. In terms of the sheer real value of goods and services lost due to the depression waste output shortfall, the fact that the U.S. economy today is some 12.5 times the size of the economy of 1929 means that the absolute size of this downturn looks to be some fourteen times the size of the Great Depression.

DeLong also makes a concise, empirically supported argument that the US remains a long way from its debt capacity. As he also argues here, there seems to be enormous, unmet demand for safe assets in the form of treasury bonds. But rather than prevent painful deleveraging by issuing debt to meet this demand, policy elites seem set on inducing further liquidation through austerity. If bleeding the patient fails, fetch more leeches. The mistakes of the Great Depression are blindly repeated as if Keynes had never put pen to paper. 

The obvious difference between the Great Depression and now, noted by DeLong, is that no geopolitical crisis looms to provide a deus ex machina for the economic travails of the US or Europe and the opportunity to reconstruct the world’s economic architecture.