Stumbling and Mumbling

Author: chris dillow   |   Latest post: Wed, 12 Sep 2018, 02:30 PM


Power without conspiracies

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On Twitter this morning Sam Freedman asked "whether it's possible to see politics as entirely about power structures without eventually thinking conspiratorially?" I think it is. There are (at least) three elements here.

The first is that capitalism is an emergent process: nobody designed it from scratch. It emerged as the unintended outcome of millions of decisions, and it is not simply individual behaviour writ large. As Marx said, "men make their own history but they do not make it just as they wish."

One aspect of his concept of alienation is that all of us - even capitalists - become subject to impersonal forces beyond individual control. For example, he thought that poor working conditions were due not to "evil" capitalists but to the fact that competition forced even benign capitalists to hold wages down*:

Free competition brings out the inherent laws of capitalist production, in the shape of external coercive laws having power over every individual capitalist. (Capital Vol I Ch 10, part 5)

A similar process might explain the rising pay of the 1%. If each individual board of directors wants to attract a top-quality CEO, they'll feel the need to drive up pay. The upshot will be an arms race in which shareholders collectively pay more than they need to whilst being unable to coordinate to cut CEO pay.

The relative lack of coops might also be due to emergent processes. Credit constraints and problems of collective action - it's difficult to get dozens of people to agree to anything - might stymie their spread. Capitalistic modes of production thus dominate without them being more efficient but without any conspiracy.

A second process is ideology. People don't support the existing order merely because they've been indoctrinated by the Tory press. There are spontaneous processes whereby this happens.

One, demonstrated by Kris-Stella Trump, is a form of anchoring effect; our idea of what's fair is shaped by the actual distribution of income. For example, if someone were to say that the appropriate share of income going to the top 1% should be 7% we'd regard them as very left-wing: the share today is almost 14%. In the mid-80s, however, such a view would have been merely a defence of the existing distribution.

A second process is system justification (pdf). This can arise from wishful thinking: people want to believe the world is fair and the wish is father to the belief.

A third is adaptive preferences. As Amartya Sen has said:

Deprived people tend to come to terms with their deprivation because of the sheer necessity of survival, and they may, as a result, lack the courage to demand any radical change, and may even adjust their desires and expectations to what they unambitiously see as feasible. (Development as Freedom, p63)

Just as lonely men become accustomed to bachelorhood, and even like it, so the poor and powerless do to their circumstances. There's no conspiracy here, just the powerful tendency of humans to adapt.

Thirdly, there's the relationship between capitalism and the state. Imagine a benign government which wanted high wages and employment. It might adopt pro-capitalist policies to achieve these simply because capitalists have power over investment and hiring decisions. The desire to maintain business confidence and stop firms relocating overseas might cause it to maintain low taxes on profits and top incomes, ensure a quiescent labour force, and have little regulation. It might even - in a world in which real interest rates are high - justify fiscal austerity to hold down borrowing costs. Depending upon conjunctural features of capitalism such policies might or might not be justified: they were more so in the 90s than they are now. Whether they are or not justified, however, is a matter of judgment. We don't need to invoke conspiracies.

None of this is anything like a complete description of the mechanisms at work. I hope, though, that they are sufficient to show that we can think of capitalism in terms of power relations without invoking conspiracy theories.

* Marx might well have been too pessimistic here. Competition can bid up wages too - if firms want to pay above the going rate to reduce staff turnover or induce more effort. And some firms might have more discretion over wages than Marx thought.

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