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Democracy Against Capitalism: Base, Superstructure and More Definitions

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The goal of Ellen Meiksins Wood in Democracy Against Capitalism is to resuscitate the Marxian method of historical materialism. This seems to be a perennial problem for Marxist thought; it was one of the central issues facing the Frankfurt School as we saw in The Dialectical Imagination by Martin Jay. See, e.g. pp. 41 et seq. Part of Wood’s method is argue her definition of some of the critical terms used by Marxists especially in Chapters 2-5. Wood compares her view to those she considers less valid, a typical approach in technical works. My interest is whether any of this can help us understand the rise of neoliberalism.

Chapter 2 discusses a common metaphor, base and superstructure. This from Wikipedia gives a good idea of the problem Wood wants to address:

In Marxist theory, human society consists of two parts: the base (or substructure) and superstructure. The base comprises the forces and relations of production (e.g. employer–employee work conditions, the technical division of labour, and property relations) into which people enter to produce the necessities and amenities of life. The base determines society’s other relationships and ideas to comprise its superstructure, including its culture, institutions, political power structures, roles, rituals, and state. While the relation of the two parts is not strictly causal, as the superstructure often affects the base, the influence of the base is predominant. In Orthodox Marxism, the base determines the superstructure in a one-way relationship. Marx and Engels warned against such economic determinism.

This definition contains more terms requiring a definition. What are the relations of production? This is from the Marxists International Archive Encyclopedia:

The objective material relations that exist in any society independently of human consciousness, formed between all people in the process of social production, exchange, and distribution of material wealth.

Examples of objective material relations are listed in Wikipedia: “employer–employee work conditions, the technical division of labour, and property relations”. The forces of production are the unity of the means of production and labor.

Wood gives a her own list of the relations of production: exploitation, domination and appropriation. Kindle Loc. 1175.

And since we’re doing definitions, here’s a description of the term Capitalist Mode of Production from Wikipedia:

The capitalist mode of production is characterized by private ownership of the means of production, extraction of surplus value by the owning class for the purpose of capital accumulation, wage-based labour and—at least as far as commodities are concerned—being market-based.

The Wikipedia discussion of base and superstructure suggests that the general idea is that the economic base exerts control over the superstructure, and that occasionally changes in the superstructure cause changes in the base. Wood thinks that the two are more closely related. Capital has a lot of control over the superstructure, and can force changes in the base. At the same time, changes in the economic base can force changes in the superstructure.

All of this seems quite obvious. Changes in the machines and processes used in production can require adjustments to laws and rules both to allow the use and to protect workers. It’s also true of other superstructure elements, such as law. In the US, for example, the laws have gradually changed to allow non-compete clauses in contracts between employers and the lowest level of employees. Restaurant chains can require delivery employees, cooks, and window clerks to sign non-compete agreements. That obviously is part of the work conditions between employer and employee, which is identified as part of the base while the change in law is part of the superstructure.

The primary use of this distinction for Wood seems to be that we can use the ideas to isolate parts of society for study and analysis, but that we have to remember always that different parts of a society affect each other.

I draw the following conclusions from this chapter, which I’ve now read three times so you don’t have to.

1. Reading this book is tedious, in part because one or more of the terms I’ve defined and a few other terms we all sort of know (social formation, class struggle, etc.) appear on every Kindle page, which for me is probably 100 words. But in this kind of work, careful definitions matter. When we look back at the past, we see a vast number of specific events. Historical materialism tries to make sense of these events in terms of forces that amount to more than the individual decisions of all our ancestors, logic and laws that can be derived from study. Wood describes historical materialism as follows:

A materialist understanding of the world, then, is an understanding of the social activity and the social relations through which human beings interact with nature in producing the conditions of life; and it is a historical understanding which acknowledges that the products of social activity, the forms of social interaction produced by human beings, themselves become material forces, no less than are natural givens. (Kindle Loc. 491.)

To do this, Marxists use the terms I’ve defined here, although often with other definitions. Each definition has the potential to produce a different interpretation of history. Consequently, these tedious definitions and the tedious prose they help create are necessary.

2. The description of the relation of production as exploitation, domination and appropriation is striking. I wonder if there are any large societies in which these relations do not control production?

3. Domination seems to be the most important, perhaps because of the books I’ve been writing about. Pierre Bourdieu made it a central element of his life’s work. I didn’t get to finish Foucault’s Security Territory and Population (maybe I will someday), but one of the main ideas of that book and other works by Foucault is governmentality, and the systems that have arisen to produce it. Domination is a central focus of oligarchy, because it enables the oligarchs to achieve their common purposes:

1. Protecting and preserving wealth
2. Insuring the unrestricted use of wealth
3. Acquiring more wealth.

I doubt that Marxism is the best way to study domination in a contemporary complex society like the US or France. I don’t see on the google any evidence that Wood engaged with the works of Bourdieu or Foucault. But I am sure that our normal social discourse depends on pretending that we are not dominated.

4. The three relations have deep roots in our individual psyches. It’s easy to see that domination/submission drives behavior in the animal kingdom as pictured in the term Alpha Male. Exploitation and appropriation are frequently found with domination. Perhaps recognition of those fundamental psychological issues drove the scholars of the Frankfurt School to attempt to incorporate Freudian psychology into their revamped Marxism.

5. Ideology is one part of the superstructure, I plan to take that up using this article by Wood.

The Slow Death of Neoliberalism: Part 4C Conclusion

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Part 1.
Part 2.
Part 3.
Part 3A. This post at Naked Capitalism expands on Part 3, and adds a discussion of Simcha Barkai’s paper and methodology; I discuss other aspects in Part 4A.
Part 4A.
Part 4B.

It’s fairly easy to criticize neoliberalism from the inside, just based on its incoherence and its failure to deliver good outcomes to most of us. The Barkai Paper discussed in parts 3A and 3A, and the Paradise Papers and the Panama Papers make it obvious that the benefits of neoliberalism flow to the wealthy at the expense of the rest of us, whose wages are largely stagnant and have been for decades, and whose share of overall wealth has fallen.

Neoliberalism can also be criticized from the outside as a form of capitalism, and that seems to me to be more revealing. The constricted logic of capitalism leads directly to domination by the few in business and society generally. The logic that pushes towards dominance is the result of the nature of reason as it has evolved since the Enlightenment. I’ve discussed similar descriptions of the drive to domination in Polanyi, Arendt and to a lesser extent Veblen; click name above to visit my author page. My recent discussions of these points based on my first readings in Critical Theory can be found here, here, and here.

The members of the Frankfurt School were trained in classical German thought, including Hegel, Kant, and Marx. Initially they accepted Marx’ theory of an inherent contradiction in capitalism: that the rich would accumulate all the money and impoverish the workers, who would rise up and lead the revolution. That didn’t happen. Instead, the drive to domination was restrained by legislation. The majority’s insistence on restraints was so strong that the Supreme Court, that playground of the elites, was forced to allow the legislation to stand. But the scholars of the Frankfurt School knew that the drive to domination didn’t disappear. Today it’s just as strong as it was in the late 19th Century.

The natural logic of capitalism is gigantism. Marx said that in unrestrained capital, smaller businesses will be swallowed up by larger businesses, and he was right, as we see today. Organizations with massive capital wield enormous power, and can easily take over control of a society. We see the beginnings of all this today. There is a long tradition in the US of distrust of large piles of money and the people who control them, a sentiment that drove the progressive movement of the late 19th Century. That doesn’t disappear accidentally. It requires an external force to change it. I wouldn’t say it has disappeared today, but far too many of us have lost that natural distrust.

Somehow many people think billionaires as just like the rest of us. They aren’t, and the vulgar braggart in the White House is a perfect exemplar. But far too many of us are willing to accept rule by the rich. One of the central influences that led to this sorry situation is the Law and Economics movement, with its single-minded focus on economic efficiency. Economic efficiency: who could object that? Of course we should be efficient.

Once courts decided that the most important part of justice is insuring economic efficiency, they began to eat away at the laws and theories that enabled the majority to control the rich and powerful. Ideals like the importance of fairness, or social equality, or recognizing and correcting power imbalances through legislation, withered and vanished. Gradually we lost the ability to govern by majority rule. Our Supreme Court feels no compunction in overruling the will of the majority on health care, on voting rights, even on actual elections.

That is the result of the same kind of logic that drives capitalism, the logic of economic efficiency applied to every area of life. A somewhat simple idea that might be useful in limited settings becomes the overall mindset, the formula for decision-making that jumps from the tiny number of cases in which it might be a useful to the absurd idea that it works in every area of law.

It would be interesting to see a history of the erosion of the Securities Laws beginning under Reagan and his hit-man SEC Chair John Shad, followed by mildly limiting legislation, which the courts expanded to cut way back on the ability of the regulator to regulate, and the investor to sue. The Supreme Court bought into Posner’s principle, and then expanded it beyond recognition.

Friedrich Pollock, a member of the Frankfurt School, said that the profit motive has always been a form of the power motive. It just gets dressed up in fancy reductive logic by the likes of Posner and Bork for public consumption. Regardless of their motives, they are no different from Frank Luntz, who uses the tools of rhetoric to hide the ugly transformations sought by the rich.

All these changes start small, and require something that seems like a justification, but eventually, it’s just the whim of the elites. That’s how Trump acts, and that’s how the more effective members of his cabinet and his other appointees act. Rex Tillerson is destroying our capacity to engage in diplomacy. Scott Pruitt is destroying our ability to protect ourselves from climate change and pollution. Jeff Sessions is wrecking the Justice Department. All this was foreshadowed by the destruction of the SEC under Shad.

When government is dismantled, how does a society work? The rich take over and run things according to their fancies.

That’s the logic of capitalism. Control the capitalists or they controls you.

[Photo: Annie Spratt via Unsplash]

The Slow Death of Neoliberalism: Part 1

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This is the first of a short series on my long-term project on neoliberalism. The questions I started with were 1. How did neoliberalism become the dominant discourse; 2. Was there an alternative; and 3. How can we move to some other form of discourse.

I started with the premise that the neoliberal project has two prongs, a theory of the person in society and an an economic theory.

The person in society is as a rational actor whose only important role is to get a job producing stuff which provides money to buy stuff based solely on a rational calculation of utility. The work part doesn’t apply to people with money. They just rationally concentrate on getting more money. People with no money and no job are subject to discipline by the carceral state. It doesn’t matter why they don’t have jobs. No work, no money, no freedom.

The economic theory is based on neoclassical economics, with its roots in 19th Century morality and the idea that everything can be stated mathematically. The morality is Jeremy Bentham’s utilitarianism, with a strong dose of Calvinism evidenced by the phrase “the lash of hunger”.

My project and my premise are based on reading books which broadly fall into three categories: theory (Foucault, the Frankfurt School, Kuhn, Mirowski), history (Arendt, Veblen, Polanyi), and economics, (Mankiw’s text, Samuelson and Nordhaus’ text, Jevons, Piketty). The plan was that by placing neoliberalism in a broader context, I could get some idea of how it took hold and what were plausible alternatives.

This post discusses theoretical issues. Neoliberalism is a positivist theory.

Positivism is the view that the only authentic knowledge is scientific knowledge, and that such knowledge can only come from positive affirmation of theories through strict scientific method (techniques for investigating phenomena based on gathering observable, empirical and measurable evidence, subject to specific principles of reasoning). The doctrine was developed in the mid-19th Century by the French sociologist and philospher Auguste Comte (1798 – 1857).

The scientific method is a good way to understand physical phenomena. The key step is eliminating all aspects of the object of study that cannot be measured and accounted for. If you want to know the charge of an electron for some reason, there’s an old experiment for that. In this experiment, that includes measuring the viscosity of air, but it also includes several assumptions that may or may not be accurate; one is that the droplets of oil are spherical.

In the double slit experiment you fire photons at two slits and get interference bands. Some of the photons hit on one of those bands, and others hit others. We don’t know exactly the route that they take between the photon gun and the target, and we can’t predict which band the particle will hit. There is only statistical prediction. So, there are limits to what we can know in the positivist sense. That’s true of math too for other reasons; see Godel’s Theorems.

One difficulty with positivism is what constitutes a proof in non-physical sciences. Obviously we can’t separate things analogously to the way we isolate photons. And we don’t have a way to repeat experiments and we can’t be sure we understand all the relevant considerations or their magnitude at any point in time, and anyway, people change, societies change and context is controlling.

Besides positivism, neoliberalism is centered on utilitarianism. We can see this in the writings of the inventor of marginal utility, William Stanley Jevons, as I note here. We also see it in Pareto Efficiency. These ideas, and positivism generally, are very useful in rationalizing the production of goods and services.

According to the Frankfurt School the theory that positivism provides the only authentic truth is central to the Enlightenment. Ideas and theories that cannot be proved according to the requirements of positivism cannot be taken seriously. The drive to extreme positivism leads us to ignore concepts like love, social cooperation, justice, morals and all intellectual concepts because they cannot be measured and are inconsistent over time and across societies. As an example, Keynes says that “animal spirits” lead development and stock markets. How do we measure animal spirits? Positivism tells us to find a formula to replace those concepts. Eventually it leads us to focus all our energy and attention on production for profit because that is tangible.

Critical theory rejects another underlying assumption of positivism, the absolute separation of subject and object. In order to study something, it must be segregated from other things. When one person studies another, the investigator must treat the other person as an object. If the object changes, we have to assume that the changes are measurable and predictable. In the same way, when the ruler deals with the subject, the kings treat citizens as objects, and employers treat employees as objects.

To put this in our time, Facebook algorithms treat users as objects and the company sets out to draw a picture of the not-exactly-human user so as to exploit it for profit. Facebook also allows others to use its tools to exploit for profit or for other purposes.

Every society has a system for deciding what goods and services it will produce and a system for dividing up the goods and services it produces. These systems cannot be addressed easily in a positivist framework because there is no way to predict outcomes with any certainty, and because we don’t have a scientific way to assess the quality of the current system, let alone a new arrangement. For that reason, the Frankfurt School claims that positivism reinforces the status quo, and cements it for the benefit of the current group of elites.

The effect of this extreme positivism is to reduce or eliminate imagination by focusing people’s attention on the immediate present. The emphasis on work means that people have less time and energy to think about societal issues.

This all seems terribly arid. Or boring, your choice. But it describes our putrid politics. Lambert Strether analyzed the Sanders/Klobuchar vs. Graham/Cassidy debate at Naked Capitalism; I highly recommend it. Here’s Amy Klobuchar, fn omitted:

KLOBUCHAR: [Y]ou can have things available to you like treatment, right, but if it’s too expensive, is it really available to you? And if you see a Ferrari in a car lot, well, it’s available to you, but you can’t really buy it. And that is the problem if the prices skyrocket.

So it’s doing something immediately to stabilize these prices, but then in the long term making sure we can make health care more affordable. Bernie has one idea; I have some others. And we can talk about them later.

As Lambert Strether shows, Sanders can talk about both now, while Klobuchar can’t, and it’s because she can’t imagine that kind of change as a real possibility. She can’t formulate a radically different vision of society. And that’s the problem facing the whole Democratic Party and especially its last presidential candidate.

The Dialectical Imagination by Martin Jay: Conclusion On Labor Day

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This series has been wonky, even for me. The Dialectical Imagination by Martin Jay is an eye-opening description of the creation of Critical Theory, a way of approaching the social sciences that is still important today, although the forces of formulaic empiricism are gathered against it. The insights of the scholars of the Frankfurt School were remarkably prescient, and are crucial today. They give a nice description of Homo Economicus in Dialectic of Enlightenment, p. 175, long before Friedman and Hayek began their push to create the new human. They were also right about the culture industry and the effect of mass culture. Michael Moore tells a version of this story in his movie Columbine.

But for me, the most important insight is the form that reason took during the Enlightenment. This is from an interview of Michel Foucault in 1978.

… I think that the Frankfurt School set problems that are still being worked on. Among others, the effects of power that are connected to a rationality that has been historically and geographically defined in the West, starting from the sixteenth century on. The West could never have attained the economic and cultural effects that are unique to it without the exercise of that specific form of rationality. Now, how are we to separate this rationality from the mechanisms, procedures, techniques, and effects of power that determine it, which we no longer accept and which we point to as the form of oppression typical of capitalist societies, and perhaps of socialist societies too? Couldn’t it be concluded that the promise of Aufklärung (Enlightenment], of attaining freedom through the exercise of reason, has been, on the contrary, overturned within the domain of Reason itself, that it is taking more and more space away from freedom?

The rationality Foucault is talking about here is the same one the Frankfurt School aimed at: the systematic logic of science and technology, focused by a drive for dominance over nature and over human beings. Our society is controlled by system of mechanisms, procedures, techniques and effects of power that focus that logic and allow it to dominate us. That project is far from complete, but we can see its outlines. The political system supports only one kind of life, a life focused on work. The solution to every problem is “Get a Job”. Schools are focused on jobs training, almost from the outset. Those without jobs are scorned and openly vilified, at least if they aren’t rich.

Businesses are focused on achieving dominance. The goal is monopoly and monopsony power, or at least oligopoly and oligopsony. They lobby for laws that free them from responsibility and give them the widest possible scope to control the lives of workers, and the freedom to screw the worker as it suits managers. They pay off courts and legislators to get their way. They demand trade conditions that permit them freedom at the expense of the rest of us. Those who best succeed at dominance get all the money, and corporations fight efforts to limit their income, even by disclosure.

Dominance entails a related submission. People readily allow the growth of dominance. We tell ourselves that our work is fulfilling, and that we are making a contribution, but just ask yourself how much of your work day is filled with mindless and stupid crap that shouldn’t be done at all. Most of us work for entities which are working towards dominance, and our own work is measured by how much we contribute to achieving dominance for the employer. Those not directly involved in establishing dominance are outsourced. That has led to a two-tier economy, in which people who can directly support the drive to dominance are made actual employees and rewarded, and those who don’t are pushed out into dead-end temp, contractor, adjunct or gig jobs.

A people who once fought and died for a fair share of the productive pie now accept flat wages, grotesque inequality of wealth and income, and slowly decaying prospects for our children. We carelessly threw away the protections our parents and grandparents won for us, 40 hour work weeks, paid vacations, fair taxation, and all those communal benefits from fairly priced colleges and tech training to decent mass transportation.

We all understand the reason for these losses. We just can’t afford this stuff. We can’t pay for essentially free college and technical training. If businesses have to pay fair wages, some foreign company will under-price them and put them out of business. If we tax the filthy rich, they’ll leave for the Cayman Islands and take their jobs with them. If we don’t put in 65 hour weeks, someone else will. We don’t have money for mass transit, so we sit on the road in heavy traffic. We give up our hours to traffic, our money for schooling, and our lives for a company that will dump us when it can.

All this is guided by the formal logic of capitalism, so we understand it. That’s the rationality Foucault and the Frankfurt School are talking about.

Each of these losses makes us less free. Every surrender to the formal logic of capitalism makes us less free. Every bit of information that Amazon and Facebook and Apple and Google and all the rest glom onto makes us less free, easier to manipulate. That’s the rationality of capitalism. That’s what comes of formal logic divorced from understanding and recognition of the wide variety of possible purposes. That’s what happens when the only thing that matters is dominance. That’s what happens when we submit to economic dominance.

The promise of the Enlightenment was that we could achieve freedom through reason. Seventy years ago the creators of Critical Theory told us that was wrong. Today we are learning how right they were.

The Dialectical Imagination by Martin Jay: The Enlightenment

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Chapter 8 of The Dialectical Imagination by Martin Jay discusses Dialectic of The Enlightenment, written during WWII by Max Horkheimer and Theodore Adorno and published in 1947. I haven’t read the book, though thanks to commenter Neighbor6 I have a copy, so this discussion is all based on Jay’s description. Dialectic of The Enlightenment (my copy is titled Dialectic of Enlightenment, but I will use Jay’s) opens with this:

Enlightenment, understood in the widest sense as the advance of thought, has always aimed at liberating human beings from fear and installing them as masters. Yet the wholly enlightened earth is radiant with triumphant calamity. Enlightenment’s program was the disenchantment of the world.* It wanted to dispel myths, to overthrow fantasy with knowledge.

The footnote references Max Weber’s quote, which I found here:

The fate of our times is characterized by rationalization and intellectualization and, above all, by the disenchantment of the world. Precisely the ultimate and most sublime values have retreated from public life either into the transcendental realm of mystic life or into the brotherliness of direct and personal human relations. It is not accidental that our greatest art is intimate and not monumental.

I think that’s how most of us would characterize the Enlightenment, as closing the door on superstition and opening the door to scientific inquiry. The obvious dark side of this apparently good thing is that nature becomes an object for study and manipulation; and human beings who are part of nature become objects for study and manipulation as well. The point of scientific inquiry moved quickly from an effort to understand to an effort to dominate. Science was primarily directed at supporting the production of goods and services and war machines. Adorno wrote that if Marx had his way, the whole world would become a “giant workshop” P. 259. Philosophy also became an element of the support system for a society based on industrial production. Kant’s effort to generate a morality from first principles failed, but for decades, it provided a basis for the morality that supported the capitalist system. Then the full potential of the power to dominate became clear as Hitler and Stalin achieved total domination and pushed the world into a nightmarish war.

A second problem, beyond domination, is the reductionism of science. As Horkheimer put it, “the formula supplants the image;”. P. 270. All that does not serve the capitalist system, about humans, animals, resources, the atmosphere and the planet itself, all of that is meaningless and is ignored. That includes all those spiritual and communal feelings that hold people together in groups of all sizes. It also includes our fellow feelings with other creatures, our feelings of oneness with the natural world, our gratitude for the bounty of the world, our respect for the beauty and power of the world, all useless and meaningless.

Jay begins Chapter 8 with a quote from Max Horkheirmer

If by enlightenment and intellectual progress we mean the freeing of man from superstitious belief in evil forces, in demons and fairies, in blind fate—in short, the emancipation from fear—then denunciation of what is currently called reason is the greatest service reason can render. P. 253.

Given the results of the 20th Century, Horkheimer can easily be excused for taking this pessimistic view. In any event, the idea of domination of nature became the focal point of the work of the Frankfurt School after WWII as the scholars worked to understand its ramifications. In a way, that work replaced the goal of unifying theory and practice, a central goal at the beginning of the Institute for Social Research, as it became obvious that this was not feasible. It was the last break with Marxism.

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Jay doesn’t explain why the Frankfurt School’s effort to combine theory and praxis failed, and why the scholars of the Institute concluded that philosophy and what they called speculative thought cannot provide a way towards social revolution and the betterment of society, so I’ll take a shot. One of the things I see in Jay’s book is that the scholars of the Frankfurt School believed deeply in the openness of the future. Jay writes:

In fact, the Enlightenment, for all its claims to have surpassed mythopoeic confusion by the introduction of rational analysis, had itself fallen a victim to a new myth. This was one of the major themes of the Dialectic [of The Enlightenment]. At the root of the Enlightenment’s program of domination, Horkheimer and Adorno charged, was a secularized version of the religious belief that God controlled the world. As a result, the human subject confronted the natural object as an inferior, external other. At least primitive animism, for all its lack of self-consciousness, had expressed an awareness of the interpenetration of the two spheres. This was totally lost in Enlightenment thought, where the world was seen as composed of lifeless, fungible atoms: “Animism had spiritualized objects; industrialism objectified spirits.” P. 260.

The scholars of the Institute completely rejected the idea that the world is closed; they saw it as infinitely open, and driven by human action. The world is not a collection of mindless fungible lifeless atoms, operating under simple laws or under the control of God. Instead, its future is open, radically open, open in ways we can’t imagine. Any social theory that could predict the future would have at its root the assertion that the social world, the world we humans create, operates under a set of definitive and permanent rules, like a clock or a computer. If there is no God, if there are no computer program, then how is it possible to create a theory that would lead to a praxis that would lead to a better society?

On the other hand, once we imagine ourselves, us humans, as part of a boundless and terrible and beautiful universe, we open up a vast panorama for action. The goals of that action are set by humans, hopefully through a decent political process, hopefully guided by our best thinking and our best judgment. That process continues even as Republican thugs carry on their war on the entire world. And it’s worth noting that nature, far from being dominated by humans, is quite able to overwhelm us.