The
Neo-Marxist Contribution to Economic Sociology
Gaurang R. Sahay
Neo-Marxism swept like a
breath of fresh air into the rather stale economic sociology in the
middle of twentieth century. After a few years later it was clear
that Marxism had more or less regained the position that it had once
had in the beginning of economic sociology, and it is today
rightfully considered as one of its richest intellectual traditions.
The taboo against citing the older generation of Marxists has been
lifted, and a series of new, interesting works have been produced. A
sign that the times have indeed changed is that when Arthur
Stinchcombe published in 1983 the first book in field of neo-Marxism
to have the title ‘Economic Sociology’, he stated that his
primary purpose was to ‘complete and unify the neo-Marxist
tradition’. Another sign that Marxism is taken seriously again can
be found in a survey of economic sociologists that Harry Makler,
Arnaud Sales, and Neil Smelser carried out in 1979. The authors found
that ‘practically all or 90 percent of our respondents indicated
that Marxist or neo-Marxist approaches are most often used in the
study of economy and society’. Even if one grants that the survey
was somewhat impressionistic in nature, it is clear that Marxism is
back on the agenda of economic sociology. Some of the major themes in
Marxist economic sociology include the ownership and control of the
means of production, and the effect of this ownership and control on
the workplace, on the economic system, and on society in general via
the economic system.
Marxism
and the Critique of the ‘Economy and Society’ Perspective
In the economic sociology that
developed just after World War II in Europe as well as in the US,
Marxism played an extremely minor role. Economic sociologists,
especially the Americans, were either hostile to Marx or they felt
that he had very little to contribute to the field of economic
sociology. This becomes quite clear if one looks at the more
programmatic attempts from that time: Parsons and Smelser’s Economy
and Society,
Wilbert E. Moore’s pamphlet on Economic
and Society and
Smelser’s article in the International Encyclopaedia of the Social
Sciences with the same title, and Smelser’s The
Sociology of Economic Life.
In Parsons-Smelser’s Economy
and Society, which
is a work of more than 300 pages, there are three minor references to
Marx. The ideas expressed here are not without interest. There is the
observation, for example, that Marx’s idea of a capitalist system
was a predecessor to the concept of ‘the economy as a social
system’. It is also noted that Marx, as opposed to Marshall, failed
to see that ‘organization’ can be regarded as a distinct force of
production. This impression is confirmed when one looks at the
annotated bibliography at the end of Economy
and Society. Out of
the nearly one hundred references to important works in ‘economics’
and ‘sociology’, there is only one reference to a work by Marx.
This is to Capital,
which has been described as ‘the classic text of socialistic
economic theory’.
In Moore’s pamphlet Economy
and Society, one
can find a few scattered references to Marx. The gist of most of them
is that Marx was wrong. In Moore’s vision, Marx was an economic
determinist, and his type of analysis is simply ‘not very helpful’.
In the list of ‘selected readings’ that Moore had compiled for
the benefit of the student, there are references to Kuznets, Weber,
Caplow, and so on — but none to Marx.
In Smelser’s famous textbook
The Sociology of
Economic Life and
in his article on ‘economy and society’ in the International
Encyclopaedia of the Social Sciences, there are a few rather
nondescript references to Marx. The textbook describes Marx as an
interesting thinker whose ideas are mainly of historical interest for
the economic sociologist. This impression is confirmed when one reads
the text on ‘economy and society’ in the International
Encyclopaedia. According to the appended bibliography, economic
sociologists can profit from studying the works of people such as
James S. Duesenberry, George Katona and David M. Landes but Marx is
not mentioned.
When Marxists started to
criticize mainstream sociology, in the late 1960s and early 1970s,
one of their major charges was that sociology ignored political
economy. In A Brief
Guide to Bourgeois Culture
Robin Blackburn typically noted sociology’s ‘rejection of most
political economy’ and claimed that sociology ‘assumes on
principle a harmonious economic system’. Terms like ‘exploitation’,
Blackburn added, are taboo in bourgeois economics as well as in
sociology.
A particularly well executed
critique along the lines of Blackburn can be found in Alvin W.
Gouldner’s The
Coming Crisis of Western Sociology
(1970). In a section entitled ‘The Extrusion of the Economic from
the Social’ he argues that sociology has become a ‘residual
discipline’, studying only ‘what was left over by other
disciplines’. Gouldner makes an interesting observation that since
sociologists were unable to analyse economic facts, they simply
rationalized them away. This, Gouldner says, is especially clear when
it comes to analyses of the social order:
This means that Academic
Sociology traditionally assumes that social order may be analysed and
understood without making the concerns of economics focal and
problematic. It implies that the problem of social order may be
solved, practically and intellectually, without clarifying and
focusing on the problem of scarcity, with which economics is so
centrally concerned. Although aspects of sociological analysis make
tacit assumptions about scarcity, sociology is an intellectual
discipline that takes economics and economic assumptions as givens,
and that wishes or expects to solve the problem of social order under
any set of economic assumptions or conditions. Sociology focuses upon
the noneconomic sources of social order. Academic Sociology
polemically denies that economic change is a sufficient or necessary
condition for maintaining or increasing social order.
Gouldner also felt that when
the structural-functionalists did look at economic phenomena, their
analyses were strangely inept and marred by a tendency to treat
economic phenomena as if they were subcategories of sociological
concepts. Gouldner illustrates this idea by a careful examination of
the way property has been analysed in mainstream sociology.
Gouldner’s critique of Parsons and Smelser’s thesis on property
can be found in a section entitled ‘Towards a Sociology of
Property’ where the author also advances his own version of how
property should be analysed from a sociological perspective. Gouldner
says that Parsons and Smelser view property in a very naive way, and
he points out that they basically do not see any difference between
property and other forms of social relationships. Property, Gouldner
concludes, is a social relationship of a very special type; it can
bypass the roles and values that make up Parsons’ social system.
A ‘social system’ is
therefore a residual organization of social relationships, in that it
may deal with only those things that are ‘left over' after property
rights have been established ... Property constitutes the ‘givens’
or the limiting conditions for the construction and development of
social systems in the Parsonian sense Property is thus the
infrastructure of social systems. (261, p. 309)
The Renewal in Marxist
Economic Sociology
A more noteworthy Marxist
critique of sociological understanding of advanced industrial society
is found in Maurice Zeitlin’s Corporate
Ownership and Control: The Large Corporation and the Capitalist
Class. The book
contains a sharp critique of the previously widespread idea that the
separation of ownership and control had fundamentally changed the
nature of large corporations and, with them, of capitalism.
Zeitlin starts by pointing out
that there exists an ‘astonishing consensus’ among social
scientists, including sociologists, that a separation has taken place
between ownership and control of the large corporation and that this
has led to the demise of the capitalist class. It is the managers and
not the old capitalist families who rule the big companies today, and
they do it in a novel manner. The managers do not maximize profits
but rather their own power. Ideas of this type, Zeitlin says, can be
found in a variety of well-known sociological works such as
Dahrendorf’s Class
and Class Conflicts in Industrial Society,
Bell’s The Breakup
of Family Capitalism,
and Parsons- Smelser’s Economy
and Society.
There is a problem with this
type of analysis, Zeitlin says, and that is its lack of solid
empirical backing. Zeitlin points out that the figures in Berle and
Means’ classic work The
Modern Corporation and Private Property
show at most that only one out of five large corporations was
controlled by the managers. Later works in the same genre are no more
convincing. There is also the crucial fact, according to Zeitlin,
that no-one has shown why the policies of managers should differ in
any significant way from those of the owners; the fact that the
owners do not personally lead their corporations does not mean that
they have given up the power to make the key decisions. Zeitlin
concludes that ‘news of the demise of the capitalist classes ... is
... somewhat premature’. What is needed to settle the issues
involved, he says, is new and more sophisticated research:
The methods and procedures,
and the basic concepts and units of analysis, in such research will
have to be quite different than those which have been commonly
employed in the past. Most important, such research must focus at the
outset on the complex relationships in which the single corporation
is itself involved: the particular pattern of holdings and their
evolution within the corporation; and the relationships between it
and other corporations; the forms of personal union or interlocking
between the officers and directors and principal shareholding
families; the connections with banks both as ‘financial
institutions’ and the agents of specified propertied interests,
including those who control the banks themselves; the network of
intercorporate and principal common shareholdings. In a word, it will
be necessary to explore in detail the institutional and class
structure in which the individual large corporations are situated.
Zeitlin’s call for new
concepts and methods in the study of the capitalist class has been
heeded by quite a few researchers. Three of the more recent and
interesting among them are Michael Useem who has done work on ‘the
inner circle’ of the capitalist class, and Beth Mintz and Michael
Schwartz who have launched the theory of ‘financial hegemony’.
Mintz and Schwartz’ theory of financlal hegemony is most fully
elaborated in The
Power Structure of American Business
(1985), and the basic idea is that it is the financial institutions —
mainly banks but also insurance companies — which control the
capital flow and thereby set structural constraints for all other
corporations. ‘The biography of American capitalism can, in a
sense, be written as a chronicle of the flow of capital into certain
sectors and away from others’.
The theory of financial
hegemony differs from traditional ‘bank control theory’,
according to which banks control the industrial corporations in a
direct manner by appointing their leadership, acquiring controlling
stock, establishing capital dependency, and so on. Mintz and Schwartz
do not deny that show-downs occur between banks and corporations;
they do, and it is usually the banks that win. The emphasis in their
analysis is, however, on ‘hegemony’ as a form of rather loose and
indirect control by the banks over the environment in which the
corporations operate. As a rule, industrial corporations cannot make
major decisions without approval from the financial community. The
banks themselves usually present a united front since they are
connected to one another through interbank borrowings and through
loan consortia.
The Power Structure of
American Business
uses empirical evidence of various types. The book uses a list of
bank interventions in major US corporations during a five-year period
has been compiled with the help of the business press. The authors
also use the huge and increasingly sophisticated literature on
interlocking directorates to support their theory of ‘financial
hegemony’. Mintz and Schwartz show that commercial banks send out
and receive interlocks more often than other types of corporations.
The authors interpret this as meaning that interlocks are needed by
the banks both to determine the direction of capital flows and to get
information about what is going on in the economy.
While Mintz and Schwartz have
followed up on Zeitlin’s suggestion that one should look into the
link between the corporations and the banks, Useem has focused on the
idea that there exists an ‘inner group’ in capitalist society
which is responsible for ‘the cohesiveness of the capitalist class
and its capacity for common action and unified policies’. In The
Inner Circle Useem
presents evidence that businessmen are not necessarily disorganized
and differentiated by heterogeneous interests, as Berg and Zald have
suggested, some of them do constitute a class conscious elite (for
the considerably broader claim that there exists a socially cohesive
upper class in the US.) Useem’s main thesis is that businessmen who
are simultaneously represented on several boards of directors will
develop a sense of the general interest of the business class and not
only perceive what is good for their own firms. He also postulates
that these businessmen will be more active in government, in
non-profit organizations and in trade organizations than are
businessmen in general. These hypotheses are confirmed through
interviews with a large number of US and British businessmen and
through an analysis of interlocks. Useem concludes: ‘the members of
the inner circle constitute a distinct, semi-autonomous network, one
that transcends company, regional, sectoral, and other politically
divisive fault lines within the corporate community’.
Of special interest is Useem’s
finding that businessmen from large corporations basically sit on
many boards in order to get information about what is going on in the
economy and to find out what other large corporations are up to (‘the
business scan’). The ‘inner circle’ has consequently, according
to Useem, not come into being through some conspiratorial design but
as an unintended consequence of ‘the unpredictability of
circumstances facing all large corporations in industrial
democracies’. The author’s speculations that the rise of an
‘inner circle’ of businessmen heralds a new stage of capitalism —
‘institutional capitalism’.
According to Marxist theory,
the fact that a minority is in control over the means of production
leads to a society which is divided into antagonistic classes. There
is thus a direct and clear link in Marxism between ownership and the
constitution of the major groups in society, which is absent in
stratification theory concerning advanced industrial society.
Neo-Marxists thus attacked mainstream stratification studies in the
1970s for ignoring the role of ‘class’ or social divisions based
on control over property.
By the early 1980s a series of
attempts by neo-Marxists to map out the class structure of various
countries had also been made. The analysis which has attracted the
most attention, is probably that of Erik Olin Wright. There are two
general strengths to Wright’s work: his theoretical classification
of certain middle class groups (‘contradictory locations within
class relations’) and his vigorous attempt to operationalize
Marxist categories. It should also be mentioned that Wright has been
directing a huge empirical project since 1978 involving comparisons
of the class structure in at least eight countries.
From the viewpoint of economic
sociology it is clear that class analysis represents an advance over
the kind of stratification studies which were popular in the 1950s.
The reason for this is that it pays more attention to fundamental
economic facts. In this context it should also be mentioned that Erik
Olin Wright’s most recent studies seem to be heading in a direction
directly relevant to economic sociology. Inspired by the work of John
Roemer (497), Wright has decided to reconceptualize his class
analysis in terms of ‘exploitation’. This latter concept, which
replaces ‘domination’ in Wright’s conceptual scheme, is
directly connected to the notion of ‘material interests":
...the exploitation-centered
concept is more systematically materialist than domination concepts.
Classes are derived from the patterns of effective ownership over
aspects of the forces of production. The different kinds of
exploitation that define different kinds of classes are all linked to
the qualitative properties of these different aspects of forces of
production.
It is to be hoped that Wright,
as part of his new research on classes, will examine different forms
of property to see how they have evolved historically, and then
determine the effect they may have on the social structure. These
kinds of questions are definitely central to economic sociology and
have not been extensively studied.
The neo-Marxists’ idea that
control over the means of production is of decisive importance for
what is happening in the economy brought them into a head-on clash
with the mainstream version of industrial sociology. The result was a
series of interesting Marxist analyses of what is sometimes referred
to today as the ‘sociology of the labour process’.
According to the early
industrial sociologists, what goes on in the workplace depends mainly
on the interaction within and between local groups. From a Marxist
viewpoint, this is an excessively narrow perspective and a sign that
‘bourgeois social science including sociology’ are unable to deal
with the objective dimension of the labour process. Harry Braverman
has thus argued that most industrial sociologists feel that ‘their
task is not the study of objective conditions of work but only of the
subjective phenomena to which these give rise: the degrees of
“satisfaction” and “dissatisfaction”. Michael Burawoy says
basically the same thing when he points out that industrial sociology
looked at what happens inside the factory but then ‘stopped at the
factory gate’. Burawoy is more appreciative than Braverman,
however, of industrial sociology; it is thus possible, he says, to
integrate sociology’s ‘partial truths within a Marxist
framework’.
In the concrete studies that
have been produced in industrial sociology by the neo-Marxists, the
idea that control over the means of production shapes work inside
factories and offices is worked out in different ways. The general
thesis of Harry Braverman’s Labor
and Monopoly Capital
(1974) is that the capitalists are increasingly eliminating the
element of thought in work and thereby degrading it. Human work,
which Marx had characterized as a mixture of action and
conceptualization, is ‘deskilled’ and reduced to the level of
animal activity. Under capitalism thinking is monopolized by
management, and Braverman writes: ‘The verb to manage, from manus,
the Latin for hand, originally meant to train a horse in his paces,
to cause him to do exercises of the maflége... Like a rider who uses
reins, bridle, spurs, carrot, whip, and training from birth to impose
his will, the capitalist strives, through management, to control’.
The claim that the element of thought in ordinary work is
increasingly transferred to the sphere of management is elevated by
Braverman to ‘the general law of the capitalist division of
labour’.
The argument in Richard
Edwards’ Contested
Terrain (1979) is
somewhat different from Braverman’s even though the basic idea is
similar, namely, that capitalist control over the means of production
determines the way in which the labour process is organized. Edward’s
main thesis is that workplaces are organized in a hierarchical way
‘because it is profitable’. The historical development of US
capitalism has produced three different types of hierarchical
control: ‘simple control’ (petty tyranny in the small workplace),
‘technical control’ (the labour process is directed by the
machine), and ‘bureaucratic control’ (control via the social
structure of the company). Edwards then connects his three forms of
control to different labour markets. ‘The working poor’ thus tend
to work in ‘the secondary market’, where ‘simple control’ is
common. ‘The traditional proletariat’ can mainly be found in ‘the
subordinate primary market’ with ‘technical control’. And ‘the
middle layers’ operate in the ‘independent primary market’,
where ‘bureaucratic control’ is predominant.
Michael Burawoy’s
Manufacturing
Consent is also
constructed around the importance of capitalist ownership of the
means of production for the way in which the labour process is
structured. Work inside the factory is thus analysed from the
perspective that it is absolutely necessary in capitalism to
‘simultaneously obscure and secure surplus value’. What
reconciles the worker to the task of producing a profit for someone
else, the author says, is that his or her work is organized as a game
(‘making out’). The goal of ‘making out’ is ostensibly to
earn incentive pay, but what really makes the worker play the game is
that it breaks the monotony and makes it easier to become absorbed in
one’s work. ‘Making out’ also existed at the stage of
‘competetive capitalism’ according to Burawoy, who on this point
of his study refers to Donald Roy’s famous research in the very
same factory thirty years earlier. At this earlier stage of
capitalism, however, coercion was more common than consent (‘the
despotic organization of work’). In today’s monopoly capitalism
the situation is the reverse (‘the hegemonic organization of
work’). In his later research Burawoy has continued to focus on the
notion that what happens at the point of production is crucial to the
maintenance of the whole capitalist system.
One of the most popular topics
among neo-Marxist writers in the 1970s was the capitalist state. The
key question-here was the way in which control over the means of
production by the capitalist class influenced the actions of the
state. The answers that the neo-Marxists gave to this question are
usually labelled ‘instrumentalist’ and ‘structuralist’. A
third possibility — that of ‘class- struggle’ — is sometimes
added. According to the instrumentalists, the state is basically used
as a tool by the capitalist class. The structuralists strongly
disagreed with this formulation, and they argued that the state has a
certain autonomy from direct control by the ruling class (‘relative
autonomy’). According to the class struggle perspective, power over
the capitalist state is determined by ongoing confrontations between
the classes in society.
Neo-Marxist writings on the
state in the 1970s made some interesting contributions to economic
sociology. Many of the works in the instrumentalist tradition thus
contain excellent analyses of the interaction between businessmen and
the state. In the ‘power structure research’ by scholars like
William Domhoff one can also find very fine and detailed studies of
the power elite. A good example is his book on the Bohemian Grove in
California, which is a social club for the upper class. Even if the
instrumentalists failed to develop a sophisticated Marxist theory of
the capitalist state, they have still contributed to that
underdeveloped part of sociology which can be called ‘the sociology
of the capitalist class’.
Other neo-Marxist studies of
the state" are also of relevance to today’s economic
sociology. This is especially the case with Fred Block’s brilliant
article ‘The Ruling Class Does Not Rule: Notes on the Marxist
Theory of the State’. The main argument here is that ‘state
managers’ are likely to try to maintain ‘business confidence’
and, inadvertently, the capitalist system as well. Another study of
interest in this context is Ulf Himmelstrand et al.’s Beyond
Welfare Capitalism,
where the authors, with the help of survey research, show how Swedish
entrepreneurs basically ignore the negative side-effects of their
businesses in the expectation that the state will handle them.
James O’Connor must be
credited with having rediscovered and further developed the ‘fiscal
sociology’ of Rudolf Goldscheid and Joseph Schumpeter. His The
Fiscal Crisis of the State draws attention to the cross pressures to
which the contemporary capitalist state is exposed; on the one hand,
there is a demand for lower taxes and, on the other, a demand for
more state services. Since O’Connor’s work was published, a few
sociological works — Marxist as well as non-Marxist — have
appeared which deal with the growing public sector and the problems
that this entails. Surveying the literature on the fiscal crisis in
1981 Fred Block concluded that ‘much research remains to be done in
developing a fiscal sociology and in providing additional evidence
for the existence of fiscal crisis as a widespread tendency in
advanced capitalism’. As neglected areas of research Block
singles out state expenditures across nations and sociological
investigations of tax resistance and of the sources of inflation.
Some studies of thèse topics have appeared since Block’s overview
was published in 1981. State expenditures in various OECD countries,
it should also be mentioned, are presently being investigated in a
research project directed by Walter Korpi and Gösta Esping-Andersen.
According to a report from this project, it is clear that those
economists who automatically view the existence of a huge public
sector as a threat to good economic performance are mistaken.
A
New Attitude to Economics?
The recent development of
Marxist thought, which is of special interest to economic sociology,
has been called ‘the new Marxism of collective action’ by Scott
Lash and John Urry. These authors mainly discuss Jon Elster’s
‘game-theoretic Marxism’ and Claus Offe and Helmut Wiesenthal’s
article ‘Two Logics of Collective Action’, but they also touch on
the works of John Roemer and Adam Przeworski. Why Scott and Lash
decided to highlight the Offe-Wiesenthal article in this context is
somewhat mysterious; it contains a fine analysis of the differences
between trade unions and employers’ organizations but it is very
different in tone from Elster-Roemer-Przeworski, who all represent a
very novel rapprochement between economics and sociology on a
theoretical as well as on a methodological level.
John Roemer’s work
emphasises the form of an analysis of exploitation through a
‘property relations approach’. By a very sophisticated use of
mathematical models, Roemer concludes that ‘it is the ownership
relations that are primary’ in explaining exploitation; what
happens in the labour process at the point of production is
‘secondary’. The notion of surplus-value is of no help in the
theory of exploitations, according to Roemer.
Roemer constructs his own
‘general theory of exploitation and class’ by combining the
property relations approach with game theory. The basic idea is that
members of a class are exploited in a mode of production if they
would be better off by withdrawing with their share of the resources.
This idea of withdrawal is a fascinating notion, which is so
artificial and ahistorical, however, that it is unlikely to be of
much value in sociology. Roemer’s focus on property relations, on
the other hand, seems very promising since it raises some very
difficult questions.
Adam Przeworski is a political
socilogist who has tried to analyse the social democratic labour
movement in terms of class compromise and hegemony. His work is
especially interesting to economic sociology because of its emphasis
on the importance of investment decisions, and Przeworski should be
credited with having made a substantial contribution to ‘the
sociology of investments’. Przeworski’s point of departure is
Kelvin Lancaster’s famous article on the dynamic inefficiency of
capitalism, in which Keynes’ analysis of investments and Marx’s
idea of two opposed classes in capitalism are combined in a game
theoretical analysis. The main idea in Lancaster, as well as in
Przeworski, is that a choice must be made by the capitalists and the
workers alike whether to consume now or in the future. Przeworski,
however, is much more specific than Lancaster, and he skilfully
analyses what consequences different investment decisions will have
under different conditions; how the threat of disinvestment works;
and so on. Unlike Roemer, Przeworski is also involved in empirical
research on the issues that he models, and this makes it easier for
sociologists to acknowledge the importance of his models.
