New Capitalism?

Kevin Doogan

• Publisher: Polity
• Year: 2013
• ISBN:
  9780745657691
• Edition: 1
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

In this stimulating and highly original work, Kevin Doogan looks at contemporary social transformation through the lens of the labour market. Major themes of the day — globalization, technological change and the new economy, the pension and demographic timebombs, flexibility and traditional employment — are all subject to critical scrutiny.

We are often told that a new global economy has emerged which has transformed our lives. It is argued that the pace of technological change, the mobility of multinational capital and the privatization of the welfare state have combined to create a more precarious world. Companies are outsourcing, jobs are migrating to China and India, and a job for life is said to be a thing of the past. The so-called 'new capitalism' is said to be the result of these profound changes.

Kevin Doogan takes issue with these widely-accepted ideas and subjects the transformation of work to detailed examination through a comprehensive analysis of developments in Europe and North America. He argues that precariousness is not a natural consequence of this fast-changing world; rather, current insecurities are manufactured, emanating from neoliberal policy and the greater exposure of the economy to market forces.

New Capitalism? The Transformation of Work is sure to stimulate academic debate. Kevin Doogan's account will appeal not just to scholars, but also to upper-level students across the social sciences, including the sociology of work, industrial relations, globalization, economics, social policy and business studies.

1

From Post-Industrial Society to New Capitalism: The Evolution of a Narrative of Social Change

At the start of the film Annie Hall Woody Allen tells the joke about two women in a restaurant who complain about their meal.

One woman says to her friend, ‘The food in here is absolutely poisonous.’

‘Yes,’ says her dinner companion, ‘and they give you such small helpings.’

The joke turns on the conjoining of two incompatible observations. Each perspective is reasonable in its own right but not in relation to the other. This apparently perverse logic presents an ironic complaint about quality and quantity which could be retold today and applied to the different perspectives that relate to the nature of the contemporary transformation of work. Thus while one person might lament the fact that ‘there are no jobs for life anymore’, another might well agree and add ‘yes, and they want you to work until you are 70.’

Seemingly paradoxical observations abound. In America, Jeremy Rifkind, President of the Foundation for Economic Trends in Washington DC, writes about ‘The End of Work’ (Rifkind 1995), while Juliet Schor writes about ‘The Overworked American: The Unexpected Decline of Leisure in America’ (Schor 1992). The term ‘downsizing’ has captured the public mood in Europe and North America in the views of a variety of different commentators, from Michael Moore to Pat Buchannan. However, if the trends towards mergers and acquisitions in the private sector, and indeed in employment growth in many parts of the public sector, are to be discerned, many organizations would appear to be getting larger. In writing about the flexible labour market in the United States, commentators such as Will Hutton (2002) make much of the fact that ‘Manpower’, the temporary employment agency, is the largest private sector employer in the United States, conveying a huge expansion of temporary or contingent employment in recent times. Yet temporary employment accounts for less than 5% of the American workforce and is fairly modest compared to most countries in North America and Europe. More widely, across most of the advanced economies there is a pervasive sense that work has become more precarious and jobs more insecure. A study conducted by the OECD (1997) showed significant anxiety about the fear of job losses and redundancies among all advanced industrial economies. Yet, consistent with the paradoxes alluded to above, the statistical evidence points to stable job tenures for the most part and increasing long-term employment.

Indeed with certain issues there is not only a gap between public perceptions and empirical or material reality, they almost appear to have a wholly independent existence. In looking at job insecurity and demographic change public sensibilities and empirical realities seem to be moving in opposite directions. In relation to the former, Francis Green makes the point well that the concept of job insecurity attained broad public currency when economic conditions improved in the 1990s. In the early 1980s, when mass unemployment returned to levels not experienced since the great depression of the 1930s, there was no expressed concern with job insecurity as it is understood today. Mass unemployment, redundancies and poverty dominated public concerns, but not job insecurity or precarious employment as such. In short it became a topic of international concern in the following decade when labour market circumstances in many countries became more benign (Green 2005).

Demography will be considered in greater detail in Chapter 4, but for the present discussion of public perceptions it is worth noting the widespread belief that demographic pressures are said to be reaching some kind of tipping point. Across the advanced industrial world a ‘demographic crisis’ has been discovered due to increased longevity and falling birth rates. A story of ‘ageing populations’ has become so commonplace as to be unremarkable, but it has almost come out of the blue. Until recently discussions of the demographic crisis were concerned with unsustainable population growth and yet, within a few short years, the crisis has almost moved into reverse with population ageing and declining birth rates. This is a significant turnaround in perception, yet, in the absence of war, famine, disease and migration, populations are not subject to sudden change in structure. Birth and death rates are observed over decades and demographers have not radically changed their population projections well into the 21st century. The question therefore arises with both demographic ageing and job insecurity as to how and why these ideas have come into prominence, seemingly independent of population and employment trends.

The initial impetus for the present work arose from a desire to explain the prevalence of perceptions of job insecurity alongside the statistical evidence of continuing job stability. However, as later discussion shows, the gap between evidence and perception extends beyond the question of job tenure into other areas such as capital mobility, technological innovation, welfare retrenchment and demographic change. At times it appears as if the scale of the transformations that underpins the new capitalism is inversely proportional to the evidence to support such accounts. It is therefore necessary, in the first instance, to recognize that the case for societal change relies on transformative factors whose presence and impact are the subject of debate. However, the present discussion also acknowledges that the absence of supporting evidence does not seem to diminish a general sensibility that ‘we live in a fast changing world’ or that today’s jobs are no longer associated with the sense of security and advancement that they previously conferred.

Accordingly there are basically three ways of addressing the gap between perception and reality. One position is to say that statistical measurement provides the only purchase on the real world and, if public opinions lack empirical evidence, they are simply false. In the face of paradoxical or groundless perceptions it is perhaps tempting for the more enlightened amongst us to retreat into the cloistered world of the academy, take comfort in the companionship of superior intellects and find solace in statistical evidence and rigorous scientific inquiry. This would be an easy, if perhaps arrogant response, except for the fact that these days the academic community seems less than impressed with statistical evidence as empirical inquiry has lost some of the kudos it once enjoyed. Moreover, academics not only share many of these perceptions with the public, universities often provide the expert commentators who articulate these ideas and help establish them as common sense.

In contrast, a second response is to assume that those accounts of societal transformation, based on technological advancement, global market forces and institutional restructuring, speak to a change in contemporary experience that is so profound that contemporary measurements cannot divine their existence nor calculate their impact. Any gap between evidence and societal transformation is thus understood as a limitation of the statistical methods employed and the obsolescence of data sets that they generate. This is essentially the line of explanation offered by Diana Coyle in her account of new capitalism. To her credit, Coyle is one of the few commentators who acknowledges the lack of evidence for the ground breaking claims she offers, and she is also prepared to consider the merits of the sceptics’ critique. Her most detailed account of new capitalism acknowledges ‘the measurement problem’ and accepts that productivity growth is hard to connect with the implementation of new technologies (Coyle 2001). She acknowledges, ‘that an important weapon in the armor of the New Capitalism advocates is therefore the likelihood that radical new technologies are implemented slowly, so that their effects can take many decades to emerge’. In this way the gap between evidence and the ‘reality’ of change is either irrelevant or statistically unavoidable. Whilst many reject ‘crude empiricism’ and recognize the challenges of classification, measurement and interpretation in statistical analysis, acceptance of the statistical mismatch that Coyle suggests is, to a large extent, an act of faith.

A third attempt to square the circle is offered by those who suggest that statistical evidence represents material reality, but public perceptions are also real in that they have real consequences. In relation to the globalization debate for instance, Colin Hay and Ben Rosamond (2002) have noted that sceptical counterclaims, supported by hard facts, have not dented the support for the globalization orthodoxy. Accordingly they suggest the existence of a material reality and a ‘discursive reality’, rooted in a mode of representation of social change and a public acceptance of its credibility. The present discussion takes this as a way of progressing, but also suggests that it is important to attempt to explain the emergence of the space between material and discursive realities. In some ways what is really new about new capitalism is this distance between rhetoric and reality which has no equivalence in previous decades. Therefore an important challenge for any analysis of new capitalism is to identify the well springs of a mode of representation that constitutes a discursive reality at variance with empirical or material reality. This may seem off-putting to many readers, raising the prospect of impenetrable textual deconstruction, but the reader should be assured that this author has no such inclination. However new capitalism is not just based on a description of actual developments, but increasingly on normative accounts of current trends and future possibilities, depicting a world, not as it is, but as some would wish it to be. Therefore the task is not confined to the analysis of change, but to understanding the ideology that underpins an increasingly powerful mode of representation of societal transformation.

It is suggested here that public perceptions of labour market change are part of a larger mosaic of contradiction and confusion, of seemingly opposing perspectives that serve to express and convey a broader representation of the world of work and wider society. These perspectives are rooted in narratives of societal change that imbue technological development and corporate restructuring, and institutional adaptation with a transformative capacity. These forces are expressed through labour market change in new forms of engagement between capital and labour, based on tenuous connection and transient engagement, which are said to engender insecurity and individualization. The term narrative is used here because of analytical significance of the representation of societal development and the meanings, understandings and assumptions that people have acquired of it. It is also useful to consider narratives in that they draw attention to form and content in public discussion, in media commentaries and in academic debate. To speak of narrative form and content also invites consideration of style and substance, of narrators and audiences, of the medium and the message. These narratives have emerged from the discussions of structural changes in advanced economies that preoccupied much of the earlier ‘post-industrial society’ debate initiated by Daniel Bell. Over some four decades post-industrial narratives have evolved from a concern with structural change within industries and macroeconomic outcomes, to accounts that stress technological innovation and organizational processes within firms, and latterly to suggest cultural and relational change. There is a contextual shift from considering changes within national economies to a new emphasis on global processes. The pace of change is said to increase exponentially and the unprecedented discontinuous nature of transformation is emphasized. It is argued here that the rise of a new managerial literature, signalled in the publication of a number of key business texts in the 1980s and 1990s, defined a new trajectory that came to embrace the idea of the ‘new economy’ and a ‘knowledge economy’, eventually consolidated the narratives of new capitalism. More recently there is a greater appreciation of ideational change in a ‘new spirit of capitalism’ that provides the ideological platform on which societal transformation is represented and understood.

Ideology is not a term that many people feel comfortable in using today as it invokes a variety of notions from false consciousness to state sponsored propaganda. The latter redolent of conspiracy and the former evoking intellectual hubris. However to ignore the ideological dimension in the representation of societal change is to impose severe limitations on the discussion of new capitalism and to deprive analysis of key developments since the beginning of the post-industrial debate. In the 1960s commentators sought to capture the nature of capitalism after ‘les trente glorieuses’ – the post-war boom in advanced capitalist societies. They looked at the industrial structure of economies that had reduced unemployment, produced high levels of growth, low inflation and especially in comparison with the depression of the interwar years asked ‘Has Capitalism Changed?’(Tsuru 1961). In contrast the last quarter of the twentieth century has been of a radically different experience punctuated by periods of high inflation, low growth, and the return of mass unemployment and periodic crises of profitability. There have been intense debates about the policy responses, which have featured on the role of the state, the virtues of corporate freedom and flexible labour markets, and the deleterious impact of punitive tax regimes and overly generous welfare systems. Discussants have been fully aware of ideological camps and the politics surrounding policy remedies. As will be seen later in this chapter enormous financial resources have been invested in naturalizing the workings of the market, in constructing a vision of a deregulated economy and in promoting the merits of flexibility. The debates are more concerned with change as a means than as an end, highlighting processes and possibilities rather than outcomes. Increasingly accounts of change are those people wish to happen rather than have, or necessarily will occur, and for that reason alone it seems extraordinarily self-limiting to deny the ideological construction of social transformation.

A Brief History of New Times

It is understandable that most readers of the new capitalist texts take at face value the claim that we are living in new times. If learned academics, government officials, consultants, journalists and business leaders say that society is witnessing the new dawn of technological change, a period of unprecedented social and economic transformation, then this idea will have widespread acceptance. If some are sceptical of such claims there is a tendency to portray the non-believers as lacking insight and imagination, locked in the past, unaware of current developments and unappreciative of the speed of change. When such scepticism is informed by historical comparisons the non-believers are deemed to be ‘old fashioned’.

The tendency to render the contemporary as ‘unprecedented’, however, involves analytical distortion and ideological risks. In the first instance such accounts deny the audience the vantage of historical comparison against which their assessment of social change can be made. In order to stress the significance of their perspectives on the pace and consequence of social transformation it is very tempting to say that the processes observed and the technological possibilities predicted are of greater scale and import than anything that came before. Their claims are given a newsworthiness they might not have otherwise obtained which affords some degree of protection against charges of exaggeration and reckless imbalance. Yet it is a protection that only lasts for as long as the audience is willing to accept the unprecedented nature of the changes observed. If there has been some diremption in social development, the preoccupations of contemporary discussion should offer no retrospective connection with earlier perspectives of social change. If we live in a period of ‘discontinuous change’, as Charles Handy claimed in the 1990s, it follows that current themes should be entirely novel, a set of ideas without precedent, a debate without a past. Once these connections are established the credibility of new capitalist narratives are undermined in significant ways. Thus Charles Handy might have hoped that his readership had no knowledge of Peter Drucker (1969) who had previously written about the 1960s as ‘the age of discontinuity’.

It is therefore suggested here that a genealogy of the new times is attempted that might identify any precedents for contemporary accounts. This is not only to provide some historical context but also to capture the contemporary character of today’s version of new times and to identify the mode of representation specific to the narratives of new capitalism. The evolution of the post-industrial narrative into an account of societal transformation based on new employment relations has taken place over more than four decades. For present purposes it is possible to date the narratives of new capitalism from the late 1960s. The work of Daniel Bell, Peter Drucker and Alvin Toffler in America defined the contours of the post-industrial landscape, which continue to provide the reference points of contemporary transformation scenarios. In Europe, Alain Touraine and Andre Gorz tied the transformation of post-industrial society to questions of new and old social classes and movements. In Farewell to the Working Class (Gorz 1982) the focus was on the decline of the industrial proletariat, while Touraine (1971) considered the significance of the student movement. Thus the early American discussion seemed concerned with changing social and economic outcomes while the European debate seemed concerned with changing agency. In setting the scene for his own version of change in industrial society Daniel Bell cites the prevailing accounts of that time, with Dahrendorf (1959) writing about ‘post-capitalist society’, Lichtheim (1963) considering a new Europe as ‘post-bourgeois’, Etzioni (1968) writing about the ‘postmodern’, Boulding (1964) describing the ‘post-civilized era’, Eisenstadt (1972) the ‘post-traditional’ society, Kahn and Wiener (1967) ‘post-economic’ society, and Sjoberg and Hancock (1972) discussing ‘the new individualism’ in the ‘post-welfare state’. A very strong impression of sailing in ‘charted water’ thus emerges from the themes discussed in the 1960s by American and European social scientists.

Daniel Bell’s Post-Industrial Society

It is worth considering in some detail Daniel Bell’s account of the coming of ‘post-industrial society’ and Alvin Toffler’s Future Shock. The former was arguably the most influential account of its type, a precursor to Castells’ analysis of the informational age and the rise of network society. The latter is chosen for its resonance with the experiential accounts of contemporary work transformation offered by Ulrich Beck and Zygmunt Bauman. It is not that Bell’s account is the first of his kind, indeed he recognized that the term ‘post-industrial society’ was first coined by Arthur Penty in 1917. The power of Bell’s account of the coming of post-industrial society is based on his analysis of changes in the industrial structure of the economy and occupational composition of the American labour market. The methodological superiority of Bell’s case is also reinforced by historical comparison with pre-industrial and industrial society. He provides statistical evidence of occupational and sectoral change in America and offers international comparisons with Europe, Japan and the less developed world. Bell discusses ‘the axial structures’ of the American society in the 1960s. These include: the shift from a goods-producing economy to one based on the provision of services; occupational change with the pre-eminence of the professional and technical class; the centrality of theoretical knowledge; the planning and control of technology and decision making based on intellectual technology.

He adopts the tripartite division of the economy, devised almost 30 years earlier by Colin Clark (1957), and considers the shifting significance of the primary, secondary and tertiary sectors. Bell does not suggest that America is the template for other countries to follow, but the fact that this is the ...

Table of contents

• Cover
• HalfTitle
• Title
• Copyright
• Dedication
• Contents
• Figures and Tables
• Preface
• Acknowledgements
• Introduction
• Chapter 1: From Post-Industrial Society to New Capitalism: The Evolution of a Narrative of Social Change
• Chapter 2: Technological Change: Autonomization and Dematerialization
• Chapter 3: Globalization: Mobility, Transnationality and Employment
• Chapter 4: Theorizing the Labour Market
• Chapter 5: Globalization, Demographic Change and Social Welfare
• Chapter 6: The Flexible Labour Market and the Contingent Economy
• Chapter 7: Long-term Employment and the New Economy
• Chapter 8: Job Insecurity, Precarious Employment and Manufactured Uncertainty
• Chapter 9: Conclusion
• References
• Index