By Martin Parker, The Social Artist, Vol. 5, No. 3, Autumn 2017
The three principles of capitalism taken together – i.e., the search for profitable investment in a competitive market through hiring waged labour – have certain implications for the conduct of economic activities and point to particular dynamics of capital accumulation.
Efficiency
Since profits cannot (always) be obtained by simply charging more money for things, they depend on producing more efficiently: on producing more (things, value) for less (inputs), or maximising the output to input ratio. Capitalist firms will try to squeeze as much surplus value out of labour and other resources as possible, through (for example) work intensification or cost reduction. As Weber noted, this makes some forms of means/ends calculation and rational accounting systems essential to capitalist enterprise and the pursuit of profit.
Management knowledge and practice has developed around this question of rationalisation, and includes many efficiency increasing technologies and innovations designed to reduce the cost of labour and increase its productivity. Among the most notable of these rationalising technologies was Taylor’s ‘scientific management’ and the subsequent development of the assembly line by Henry Ford. Through careful observation and measurement, a particular task can be divided into various components, timed, formalised and standardised. As a result, jobs can be designed so as to require less skill and to maximise productivity.
In contemporary capitalism, this process of rationalisation, or means/ends calculation, is not confined to the assembly line and the production of things but has been extended to knowledge or immaterial work. The figure of the call centre worker is emblematic here of how the delivery or ‘knowledge’ work can be divided up, measured and controlled. And a similar process of quantification and control has occurred with professional labour. Doctors, teachers, probation officers find their labour increasingly subject to performance measures, standardization and audit.
The deregulation and flexibilisation of labour markets has also provided more cost effective ways of hiring, firing and deploying labour according to needs. Another strategy for reducing labour cost is delocalisation. Over the last couple of decades at least, many Western organisations have delocalised production to developing countries offering cheaper labour; China has become the ‘workshop of the world’ and India the ‘office of the world’ on the grounds of their cheap labour and low levels of taxation and regulation. For example, much of the labour used in the publishing industry to format, proofread, print, market or distribute books and journals is increasingly outsourced to low-cost economies.
Market Expansion and Growth
Another obvious way to increase profit is to sell more things. Finding new markets has been central to capitalist expansion. As local or national markets get saturated, capitalist firms have to expand further afield. So, for example, nineteenth-century cotton mill owners in Manchester sold their fabric to India, US farmers sell corn to Mexico, Nestlé sells its infant formula in developing countries and so on.
But selling more things is not just about finding new markets for a particular product, first because the market might eventually become saturated, and second because a profitable market will attract competitors which in turn will make the rate of profit fall. It also requires constantly inventing or finding more things to sell. This may be through making improvements in existing products (producing safer, faster or greener cars, healthier burgers…), inventing new products (televisions, phones, antidepressants, e-book readers…), or selling things that previously were not for sale but were common property (e.g., drinking water, health, education, genes…). In its search for more and more things that can be exchanged on the market for profit, capitalism has managed to transform goods that were outside market relations into commodities that can be sold for a profit, a point we will explore later.
The relentless innovation of capitalist firms in designing and selling new products goes hand in hand with relentless consumption. It has become a truism to claim that we live in an increasingly commodified world, that more and more of our lives is mediated by the market. An increasing proportion of the goods and services we rely on for survival or pleasure (e.g., food, water, child care, sports and leisure, and so on) are acquired on the market for a price, rather than through self-provisioning or a mutual network of exchange with friends or family.
In order to pay our way through all this consumption, we are increasingly reliant on waged labour, and debt. If mass consumption is essential to capital accumulation, so is the provision of credit to sustain consumption. Indeed, there is a whole credit industry which since the 1980s has been able to develop with fewer and fewer regulatory restrictions to provide consumer credit for everything from cars to education, toys, houses or holidays, including to poorer and poorer sections of society as we saw recently with subprime mortgages. The provision of credit is not only essential to underwrite consumption, it also provides another avenue for profitable capital investment as capital invests in capital itself.
In short, capitalism and its quest for accumulation rests on producing, selling and consuming ever more. It relies on and requires endless growth. The centrality of growth to capitalist economies is evident both at firm and national levels. Growth in GDP is considered as the holy grail of economic policy by most national governments and international institutions from the World Bank to the European Central Bank. Growth has become the fetish of capitalism and is supposed not only to deliver increased profit for capitalist firms, but also jobs, prosperity and better lives for all.
The growth imperative is also evident at the level of firms where the profit motive encourages expansion. The continuous need to accumulate capital means that capitalist firms have a tendency to grow larger and larger, both through internal growth and through acquisition. For example, through the sorts of mergers and acquisitions Informa has engaged in, the global market for academic publishing has become dominated by just a few key players. More generally, the history of capitalism since the nineteenth century has been the history of the increasing concentration of capital around a decreasing number of multinational corporations that have acquired enormous power not only within their particular industries but also over governments. Some corporations have become so large that their sales far exceed the GDP of some countries. Of the 100 largest economies in the world in 2000, 51 were corporations and 49 were countries (based on comparison of corporate sales and countries’ GDPs).
Producing Capitalist Subjects
Capitalism not only signals a great transformation in the mode of production, but also in individuals’ subjectivity: the way people understand themselves, and relate to each other. Capitalism requires and produces certain types of human beings: “free” autonomous agents maximising their own utility through both work and consumption, or homo economicus. Indeed, the two figures of the freely choosing consumer and the self-investing flexible worker are central motifs of contemporary capitalism.
As mentioned earlier, increased labour flexibility is an important cost-reduction strategy for contemporary organisations. Individual workers may be redeployed across different jobs or functions of an organisation, across different locations, or simply dismissed. Demand for ever-increasing flexibility in the labour market means that individual workers constantly have to restyle, retrain themselves, and invest in themselves to remain employable. These investment decisions do not take place solely in the workplace or even in education, but embrace all of social life. For example, Grey illustrates how accountants invest in their appearance or in building appropriate social networks in order to advance their career. Similarly, students may take on extra-curricular activities to build their CV. The self becomes an enterprise, a project to be managed in order to maximise returns (in terms of salary, career prospects and so on).
In short, modern capitalism constitutes subjects as free autonomous, rational, utility maximising agents in at least two ways: as consumers freely choosing on the market, and as workers personally Both contribute to the individualisation of selves living more and more isolated from each other. As Margaret Thatcher famously proclaimed, “there is no such thing as society,” only free individuals responsible for their own success and failures.
And indeed, who wouldn’t like to think of themselves as “free,” as able to do what they wanted free of interference from government, bureaucracy, trade unions, God, or the force of tradition? The market leaves us free to choose between all sorts of products and services to consume, job opportunities to apply for, or even better, free to set up our own business, to become the next Mark Zuckerberg or Richard Branson. This freedom to become what we want constitutes one of the greatest appeals of capitalism. The strength of market capitalism is not only its supposed economic superiority or “efficiency,” but also as Hayek, Friedman or Nozick have argued (albeit in different ways) its close association with individual freedom, at least a certain kind of freedom. But efficiency, growth and freedom, the hallmarks of capitalism, are all contested ideas.
Martin Parker is Professor of Culture and Organisation, School of Management, University of Leicester.
Our Comment
Quantification and control can stultify creativity, and curtail the exercise of judgement and attention to individual need – all of which diminishes both the quality of professional labour and the humanity of the professional.
In The Great Transformation, Karl Polanyi describes how the market economy has reduced man to labour, and nature to land, and exposes the deplorable consequences of that.
Here Martin Parker analyzes the further dehumanization of man, and the relentless exploitation of resources wrought by capitalist dynamics.
There is globally a mounting recognition that the present system is inadequate, and an earnest quest for one that will meet the needs of the twenty-first century.
Élan
