The future of capitalism (in Classic disputes in sociology)

THE FUTURE OF CAPITALISM Bob Jessop Preprint of article in Classic Disputes in Sociology, edited by R.J. Anderson, J.A. Hughes, W.W. Sharrock, 36-67 (London: Allen and Unwin, 1986) I. Introduction Theories and forecasts about the future of capitalism have proved among the most important and most contentious topics in the history of sociology. Disputes over this question can be regarded as 'classic' in three different ways. Firstly, the future of capitalism provided a topic which was discussed directly or indirectly by many of the founding fathers of sociology. The genesis of sociology itself is closely connected with the rise of industrial capitalism and reflections on its origins, nature, dynamic, effects, and future were central issues for most sociologists. Secondly, the future of capitalism has been continually re-appraised during the development of sociology. For capitalism has survived and expanded, changed in some respects and remained the same in others, experienced both boom and slump, been overturned in some parts of the globe and prospered elsewhere. Thus earlier theories have been tested as the future became the present and new ideas and forecasts have continually been proposed to reaffirm or correct past arguments. In this sense the future of capitalism has provoked disputes both in the classics and about their continued relevance. It is also the focus of a classic dispute in a third sense. For the scientific status and/or political relevance of sociology have always been controversial and the present theme has obvious political implications as well as scientific pretensions. This is particularly clear in the recurrent claim that the growth of sociology represents a bourgeois reaction to Marxist and/or socialist interpretations of the origins, nature, and future of capitalism. More generally different sociological approaches towards capitalism and capitalist societies involve different expectations about the survival of capitalism. This holds both for theories which are merely concerned to predict what type of social organisation will 1 emerge next in (or after) capitalism and for those which aim to conserve, reform, or overthrow it. In this sense the classical views have also involved important political and ideological disputes. In short we can approach the future of capitalism as a classic dispute in three different senses. It occurs in the classic texts of sociology, it has shaped its subsequent development, and it illustrates the fundamental political issues raised by sociological enquiry. We begin by briefly defining capitalism, then consider some problems involved in forecasting its future, discuss the key points at issue in the classic sociological approaches to this question, note how these points have been taken up in more recent work, and, finally, conclude with some general comments on the future of capitalism. 1. What is Capitalism? Not all the theories discussed here are explicitly concerned with the capitalist economy or capitalist societies. But their inclusion is justified in so far as they focus on key aspects of capitalism as understood by Marx and/or Weber, its two most important theorists. In these terms capitalism can be defined as an economic system in which goods and services are produced for sale (and with the intention of making a profit) in a large number of separate firms using privately owned capital goods and wage labour (cf. Bowles and Edwards, 1985, p 394). In turn a capitalist society is one whose economic system is predominantly organised along capitalist lines. This does not mean that the economy determines all other features of a capitalist society nor that political and cultural institutions have no effects of their own. It does mean that the class relations in such societies are largely shaped by the relation between capital and wagelabour and that many economic problems confronting the political and ideological systems will be shaped by their insertion into a capitalist economic system. Thus Durkheim can be included because he examined the capitalist division of labour and its implications for other spheres of society. Likewise theorists of post-industrialism can be included because they discuss the impact of the shift from a capitalist economy 2 specialized in goods production to one which produces mainly services. But theorists who are chiefly concerned with, say, urbanization, mass politics, or family patterns can be safely excluded. 2. Forecasting the Future In discussing the future of capitalism one is not (or should not be) engaged in detailed, long-range prediction of specific events. Instead one's task is to forecast how major trends will develop on the basis of existing tendencies, regularities, and recurrences which seem sufficiently marked to justify such projections. Sometimes this involves nothing more than the simple extrapolation of short-term statistical trends. But such trends can be misleading when taken out of context so that the constraints imposed by the overall structure and dynamic of the capitalist system are ignored. Two other approaches which often occur in the classic texts and in more recent work are those of extrapolating from the institutional logic of particular systems (rather than from specific statistical series) and/or from past cycles of development which can be observed over a long period of time. Thus some theorists have tried to identify the inherent dynamic of particular institutional systems (such as technology, the division of labour, mechanisms of economic exploitation, rationalization, or bureaucratization) and their implications for other systems and the overall organisation of societies. Others have tried to identify long-term patterns or cycles of capitalist development and the events which typically trigger them off (such as changes in how production is organised, new military technologies, waves of entrepreneurial innovation, or wars). Even in these cases, however, forecasts become less specific as their time-horizon stretches further into the future. The problems involved in these different approaches will become clearer as we proceed. II. Early Sociology and the Future of Capitalism Sociology first emerged as a distinct discipline within the social sciences after the French Revolution and it was eventually consolidated as such during the last quarter of 3 the nineteenth century.1 What made sociology distinctive was its evolutionary view of social development and its argument that a decisively new type of social order had recently emerged. Early sociologists such as Comte, Saint-Simon, and Spencer drew a contrast, each in their different ways, between (a) the new, peaceful order based on modern industrial production, trade, and science and (b) earlier, war-like societies based on economic coercion, military conflict, and religious ideologies. From this they drew fairly optimistic conclusions about the peaceful development of industrial (or capitalist) society and emphasized that political life should also be reorganized so that it no longer reflected the old parasitic and feudal-military state systems. They differed on how this should be achieved - through a new industrial-scientific priesthood, socialist cooperation and technical administration, or through a liberal, nightwatchman state with minimal functions. But they were all convinced that this was feasible and that the evils of industrial society could be eliminated. This early optimism about the peaceful future of industrial capitalism was shattered, however, by the growth of imperialism, the development of military rivalries, and the intensifying conflicts between capital and organised labour. In turn this encouraged two different trends in sociology. Some sociologists turned to an analysis of politics. In different ways they emphasized the inevitability of rule by elites, of political and ideological manipulation of the masses, of racial and ethnic antagonisms, of conflicts between national interests, and so forth. Among these theorists we should mention the continuing influence of such theorists of elites as Pareto, Mosca, and Michels. But here we focus on the second trend. This involved an increasing concern with the political economy of industrial capitalism and its implications for the developing social order of modern societies. In this way the dispute with Marxism became a decisive element in the growth of classical sociology. Before turning to the founding fathers of classical (as opposed to early) sociology, therefore, we should briefly review the arguments advanced by Marx and Engels. III. Marx and Engels on The Future of Capitalism 4 The close ties between the analysis of capitalist societies and political attitudes emerge in a different way in the work of Marx and Engels. Like the early sociologists they lived during the crucial transitional period when competitive capitalism based on industrial production was establishing itself in Europe and North America and its influence was spreading throughout the world. Marx and Engels provided their most general and accessible statement about capitalism and its future in the The Communist Manifesto (1848). They described capitalism as a revolutionary mode of production which was fundamentally changing the course of civilization. It introduced market relations and the cash nexus into all spheres of society and throughout the world. It thereby overturned the traditional social bonds among society's members. By continually modernizing the forces of production and promoting the division of labour, capitalism prepared the material conditions necessary for social cooperation and planning in economic life. But, despite the ever-increasing social character of production (often termed the socialization of the forces of production), the capitalist economy operated in an anarchic, uncoordinated manner determined by the private interests of individual capitalists concerned only with their own profits. The search for private profit imposed fetters on the further development of production. Wealth accumulated in the hands of capitalists whereas its direct producers were impoverished. This was reflected in the co-existence of unsold goods and unmet needs and it produced ever-worsening economic crises. Such was the dynamic of capitalism, however, that it tended to be self-destructive. In particular capitalism was creating its own gravediggers through the continued expansion of the so-called proletariat. This comprised workers whose only economic property was their labour-power and whose only alternative to starvation was to sell this to one or another capitalist. As capitalism destroyed pre-capitalist modes of production at home and abroad, other classes were eliminated and the proletariat expanded. It was also concentrated in ever-larger numbers as factories grew and the division of 5 labour became more complex. As individual workers, then groups of workers in a factory or trade, and, eventually, all workers in a nation-state (or even the world economy) mobilized to resist capitalist exploitation, they would grow more conscious of their shared class position and their common interest in the overthrow of capitalism. Their economic struggles would also encounter the resistance of the state as well as individual capitalists and groups of employers. In this way the working classes would develop a revolutionary consciousness and move from trade unionism to party political organisation. With economic conditions worsening and the proletariat gaining in strength (helped in part, according to Marx and Engels, by the communist party), the revolution would eventually break out. When the working class had conquered political power, it would take over the means of production and subject the economy to social control. Marx presented a more developed account of the capitalist mode of production in the three volumes of Capital (1867-87). This was less concerned to forecast how capitalism would be overthrown (although he still believed this would occur) than to consider how it had developed, how it functioned, and how it expanded. Here we only consider Marx's analysis of the course of its expansion and not his views on how capitalism originated. Capital describes several fundamental laws which were typical of capitalism and would shape its future development everywhere. Thus, although he conceded that most of his evidence came from England, he also insisted that other countries would undergo the same experiences of capitalism. Some of these laws shape the recurrent rhythms of the capitalist system and others determine how it changes over longer periods of time. Here we concentrate on Marx's views on the long-term changes in capitalism before its contradictions became so acute that it either collapsed or was overthrown through revolutionary class struggle. The most important general law was the so-called 'law of value'. This describes how capitalists allocate resources to different fields of production according to their expectations of profit. Although this law is mediated through market forces, it ultimately 6 depends on the sphere of production. For only here can the surplus-value which finances profits be produced. Marx also described certain developmental tendencies of capitalist economies. These include: the growing concentration of capital, i.e., the accumulation of capitalist assets by single firms through the reinvestment of past profits; the increased importance of productivity gains ('relative surplus-value') as opposed to longer working hours and greater effort ('absolute surplus-value') in the creation of surplus; the increasing urgency of overcoming the obstacles to capitalist expansion involved in the tendency of the rate of profit to fall' - a tendency which emerges in so far as all enterprises seek a competitive edge by substituting labour-saving machinery for wage-labour even though the latter is, according to Marx, the sole source of profit on the total capital advanced to buy production goods, materials, and labour-power; the growth of the reserve army of labour (the unemployed) as productivity gains outstrip wages; the growing centralization of capital, i.e., the management of assets owned by different individuals or firms by one enterprise (e.g., through joint-stock companies or banks); the growing separation of legal ownership and effective control of the means of production through the development of joint-stock companies and related forms of business organisation; the growing importance of credit in the functioning of the capitalist system; and so forth. It should be noted that Marx did not treat these developmental tendencies as 'iron laws' which operated with unbending necessity. Instead he always considered how they were mediated through capitalist competition and the struggle between capital and labour. In addition Capital also modified Marx's earlier predictions about the growing polarization of class relations. For Marx indicated (somewhat imprecisely) that, as capitalism developed it would require a growing middle class of clerks, engineers, managers, accountants, and so forth. The implications of this developmental tendency for his analysis of how the working class would overthrow capitalism was not brought out. Such complexities make it unclear exactly how Marx foresaw the final crisis, if any, of the capitalist economy. Sometimes he implied that it would occur through the collapse of profits owing to the tendency of the rate of profit to fall, sometimes that it would be 7 through lack of demand (underconsumption) due to the growing impoverishment of the proletariat, sometimes to the disproportions between different branches of the capitalist economy, and, sometimes, that the class struggle - and not some automatic mechanism - would bring about the overthrow of capitalism. But he did insist that capitalism had a strictly limited future and would eventually be superseded by a new form of economic and political organisation. This would involve collective ownership and control of the economy and the abolition of the political division of labour between people and delegates, delegates and bureaucrats. In most respects Engels shared Marx's views on the future of capitalism as an economic system and, indeed, it was Engels who edited the last two volumes of Capital. But one point which Engels emphasized is that there would also be a tendency towards increased state intervention in the capitalist economy. He argued that the fundamental contradiction between the socialization of the forces of production and the anarchy of the market would become more acute. In turn this would encourage efforts to eliminate the anarchy of production. Initially this would involve joint-stock companies and other ways of coordinating different capitals; and then, as even monopolistic forms of capitalism encountered difficulties, there would be a move towards state production, planning, and intervention. In this way the state would become the 'ideal collective capitalist' and thereby prepare the ground for the management of all the productive forces by society itself (1878). IV. Marxist Theories after Marx As both Marx and Engels recognized, capitalism is a dynamic system which changes constantly. Indeed important changes have occurred both in the most general features of capitalism and in the relations among different national economies. Not all these changes were anticipated by Marx and some of them he could not possibly have foreseen. Later Marxists have attempted to integrate these changes into Marxist political economy and to provide fresh forecasts about capitalist development and the prospects 8 for revolution. Three classical revisions are examined here and some neo-Marxist accounts later. Marxist theory suffered a certain sclerosis after Marx's death in 1883. This can be seen most clearly in the rigid orthodoxy which came to dominate the Second International. In part the latter's views are interesting in themselves but they are also important on other grounds. For they provided both the context in which disputes over the future of capitalism developed in Marxist thought and the foil against which those classical sociologists interested in a debate with Marxism developed their own ideas on industrial capitalism. The most noticeable features of orthodox Marxism were its rigid economic determinism, its emphasis on the class struggle, and its faith in the revolutionary nature - given time of the proletariat. Its economic determinism was often expressed in the view that the iron laws of capitalist development would sooner or later produce an economic catastrophe so devastating that it would spark the latent revolutionary consciousness of the workers and other oppressed classes and thus provoke the final overthrow of the capitalist system. This 'catastrophist' view was coupled with two further articles of faith. The revolution would break out in the most advanced capitalist societies - where the contradictions of capitalism and the socialization of the forces of production had most prepared for the transition to socialism. And it was the class struggle (more specifically, the struggles of the working class) which would bring about the revolution. Classes were the privileged agents of historical transformation. Within the mainstream Marxist movement these articles of faith were challenged above all by Eduard Bernstein, a prominent German social democrat. In his book on Evolutionary Socialism (1899) Bernstein argued that capitalism was not developing as Marxist orthodoxy suggested. Indeed actual economic trends appeared to contradict its economic catastrophism. Thus Bernstein noted that standards of living were rising, that shares were more widely distributed through the development of joint-stock companies, that there was no polarization of classes, that the peasantry had not been eliminated, 9 that small and medium capital survived, that the middle class was expanding (especially with the growth of what we now call the white-collar groups), that the economic crisistendencies of capitalism seemed to be moderating, and that it seemed possible to plan capitalism to avoid crisis. We should note here that, although some of these developments were anticipated by Marx himself in Capital, orthodox Marxism had been less concerned to follow these arguments. For Bernstein all of this implied that, contrary to the orthodox Marxists, capitalism would not collapse. Instead it could be gradually adapted and transformed into socialism with the support of the middle classes and peasantry as well as the working class. Class alliances and democratic politics were the key to such a peaceful and gradual transition. In this way Bernstein prepared the theoretical and intellectual ground for social democratic reformism and seemed to reassert the early sociologists' belief in the peaceful, productive future of industrial society. Somewhat different but equally influential views were developed by Rudolf Hilferding, a leading Austro-Marxist theorist and a prominent politician. In various studies during the first forty years of the present century, Hilferding described and tried to explain the principal changes in modern capitalism. He noted the growing dominance of large firms and the emergence of cartels and trusts, all of which try to restrict competition; the major expansion of the credit system in mediating the development of capitalism; closer links between banks and industry, amounting to their fusion in a form of finance capitalism; and growing state intervention in the economy. In particular he emphasized two main trends: imperialism and organisation. Imperialism involved the competition for international economic and political domination among different finance capital groups and was pursued with the support of strong nation states. Equally important was the growing trend towards the organisation of capitalist production and markets through economic planning conducted by banks and the state. Indeed Hilferding claimed that a new stage, organised capitalism, had been reached. Like Engels, who anticipated such arguments in discussing the state's role as an ideal collective capitalist, Hilferding believed that the growing concentration of economic power in the hands of a few monopolies and the state would make it easier to seize power and to engage in democratic socialist planning. 10 Lenin substantially modified orthodox Marxism by focusing on the implications of monopoly capitalism and the imperialist rivalries among different national economies. Although he was influenced by Hilferding and Bukharin (another Marxist theorist of imperialism), Lenin drew quite different political lessons. He described imperialism as the highest, last stage of capitalism. It was moribund, decaying, monopoly capitalism. He identified five fundamental traits of imperialism: (a) the rise of monopolies, (b) the fusion of banking and industrial capital to form a financial capitalist oligarchy, (c) the export of capital in an attempt to counteract the tendency of the rate of profit to fall on the home market, (d) the development of international cartels and trusts, and (e) the territorial division of the world among the great capitalist powers (Lenin, 1916). He stressed that the rise of imperialism fundamentally changed the prospects and dynamic of revolution. As monopolies struggle for extra profits and markets at home and abroad, political repression and wars became the order of the day. Although imperialist profits enabled the monopolies to buy off key sectors of the working class (the labour aristocracy), other workers are still oppressed, the intermediate classes and even non-monopoly capital were subject to monopoly domination, and capitalist powers contended with each other for control of markets. All this meant that the state became increasingly repressive and militaristic. This ruled out a peaceful, democratic road to socialism. The rise of imperialism also hanged the likely site of the first revolutionary rupture in capitalism. It was no longer the most advanced capitalist societies which were most likely to experience revolution but those undergoing the most severe social disruptions. Lenin himself believed that Russia was especially vulnerable in this sense and that the Russian proletariat (with support from the peasantry) would instigate a revolution which would then spread abroad. Even this short review has shown, firstly, that classical Marxists were seriously concerned with the changing character of capitalism and its political implications and, secondly, that they engaged in disputes about it. These concerns were maintained 11 throughout the vicissitudes of capitalism and the changing fortunes of the working class movement. The changing character of imperialism and state intervention has rendered many of the original arguments redundant but the themes advanced by Bernstein and Hilferding are still significant for contemporary Marxism. But we must now consider how classical sociology treated the future of capitalism. V. Classical Sociology and the Future of Capitalism The development of classical sociology was closely related to the consolidation of industrial capitalism and its impact on contemporary social institutions and relations. Here we consider Durkheim's work and then concentrate on Max Weber. This means neglecting such important German theorists as Toennies, Simmel, and Sombart as well as leading American classical sociologists but this can be justified by Weber's absolutely central role in sociological thinking about capitalism. 1. Durkheim and the Capitalist Division of Labour Emile Durkheim was a French sociologist and moral philosopher. He was less interested than the classical German sociologists in capitalism as such but he was intensely concerned about the social pathology of contemporary industrial society. In certain respects his arguments take issue with those of Comte and Saint-Simon on the future of capitalism and, more generally, they develop key themes from the liberal republican tradition of the French revolution. This can be seen most clearly in his critical analysis of the evolution of the division of labour and the specific forms it assumed in modern capitalism. Durkheim argued that primitive societies were characterized by a mechanical division of labour. All individuals performed similar tasks and social solidarity was based on shared values. Then, for reasons which need not concern us here, a gradual move occurred towards an organic division of labour. Individuals performed different tasks and social solidarity was based on moral individualism and cultural pluralism (Durkheim, 12 1897). In defining the modern division of labour in these terms Durkheim took issue with both Comte and Saint-Simon.2 Thus he rejected both Comte's plan to impose a shared morality under the authority of an industrial-scientific priesthood (which would imply a return to mechanical solidarity) and the Saint-Simonian belief that routine cooperation based on economic interdependence could in itself secure social solidarity (since any society must also have a fundamental moral dimension). Nonetheless Durkheim did believe that the organic division of labour could provide the basis for individual freedom and social cooperation. Yet this could only occur when certain pathological features of contemporary society were eliminated. In particular Durkheim criticized three aspects of the capitalist division of labour: its forced character, its excessive character, and its anomic character. It was forced because class relations and the inheritance of private property meant that individuals were not free to find the work most suited to their skills and talents; it was excessive because workers often had insufficient work to keep them occupied in a way that produced job satisfaction; and it was anomic because it was unregulated by a coherent value system (1897). It was these unhealthy features of the modern division of labour (and not industrial society as such) which engendered class conflict. In turn class struggles should disappear once this division of labour was properly regulated. This could be achieved through economic cooperation among modern guild associations and through the overall political and moral guidance of a liberal republican state whose power could be checked as necessary through these same guilds. In this way the future of capitalist society could be assured and its full potential for individual freedom and moral order could be realized. 2. Max Weber on the Iron Cage of Capitalism Weber's work is often treated as the sociological counterpart of Marx's economic analyses and Weber himself is often regarded as the bourgeois Marx. This might 13 suggest that we have here a classic dispute over the future of capitalism and not simply a difference of opinion. But, whilst subsequent commentators have certainly tried to construct such a dispute between Marx and Weber, their attempts are in many ways misleading. As the claim that Weber debated with the ghost of Marx implies, there was no direct confrontation between them. Even less could one argue, as is sometimes suggested, that Weber deliberately stressed the leading role of ideological as opposed to economic factors in historical development. Instead he addressed quite different methodological and theoretical issues. In addition Weber was writing when the transition from competitive to monopoly capitalism was already well under way in Germany and elsewhere and imperialist rivalries were becoming sharper. Thus the capitalism confronting Weber differed from that which Marx studied. Nonetheless Weber's approach to capitalism and its future did differ markedly from that of Marx. And he did side with the liberal bourgeoisie and Germany's national interests rather than with the international working class movement. Thus, even if there was not actually an open dispute between Marx and Weber, much can be gained from comparing their analyses. Weber was concerned above all to understand the development of modern, Western civilization and its historically unique character. He focused both on its cultural values and its core institutional order. He considered that its value system was unique because it was dominated by formal rationality. This involved an emphasis on precise calculation of the relations among various means and ends in terms of abstract principles which are universally applied. This type of rationality could be found in spheres as diverse as technology, musical harmony, economic organisation, the administration of government, the secularization of religion, the development of mathematics and science, and so forth. Its growing predominance in the modern world was reflected in the latter's loss of ultimate values and mystery (disenchantment). Weber also considered that two key institutions in the organisation of Western civilization were bureaucratic administration and the capitalist enterprise. Bureaucracy involved the rational organisation of administration not only in government but in many other types of association. It was characterized above all by close adherence to 14 administrative codes and formal regulations. Likewise the modern capitalist firm engaged in rational calculation about the various opportunities for monetary profit on the market that would follow from different patterns of economic activity and directed its activities to securing the maximum profit (cf. 1968, p 85). For Weber there were two crucial characteristics of modern capitalism: firstly, the institutional conditions which permitted a rational calculation of opportunities for profit on the market (as opposed to profits from plunder, war, political corruption, organised crime, etc.) and, secondly, the role of entrepreneurs in setting economic enterprises in motion after such profit opportunities. The importance of entrepreneurship received much emphasis in Weber's famous study of The Protestant Ethic and the Spirit of Capitalism but Weber also examined the institutional conditions of capitalism in Economy and Society and General Economic History. For Weber modern capitalism was significant because it spread rational economic calculation into everyday life and was involved in satisfying ever more needs. Among other things this spread of capitalist relations involved: (a) the appropriation by private enterprise of all physical means of production; (b) the freedom of the market from irrational restrictions on trade or labour - e.g., laws on Sunday trading or trade union monopolies; (c) rational technology, permitting calculation, typically based on mechanization; (d) calculable law so that enterprises could foresee the legal consequences of their actions; (e) free labour - involving legally free but economically dependent workers who were free to sell their labour power on the market; and (f) the commercialization of economic life, i.e., the use of financial instruments to represent share rights in enterprise and property ownership (1981, pp 208-9; 1968, pp 92-3). The rise of the money economy and double-entry book-keeping were also important in permitting rational capitalist calculation both during the planning stage and when preparing profit-and-loss accounts. Indeed Weber stressed how the abstract norm of monetary profit came to dominate all aspects of the deployment of economic resources under capitalism. Thus a rational firm 15 would reject the mechanically most efficient technology if other techniques were more profitable (1968, pp 65-7). This calculation is undertaken within individual firms and is only later validated by the market (For more detailed discussion in these terms, see: Cohen, 1981, pp xxxii-xxxvi; and Collins, 1980). Weber believed that rationalization rather than class struggle defined the main developmental axis of modern societies. This was reflected in his criticisms of both capitalism and socialism. He criticized capitalism on the grounds that the spread of formal rationality subordinates the original ends of rational action to its means. Capitalist economic activity becomes obsessed with making money rather than goods; and making money rather than satisfying human needs becomes the criterion of economic success. Thus the initial purposive rationality of capitalism is destroyed by the growth of instrumental reason. But Weber also criticized socialism. He suggested that technological rationalization and bureaucratic domination were essentially irreversible and implied that calls for their abolition were either retrogressive or utopian. They were retrogressive because other modes of economic and political organisation could not sustain the material prosperity which had been secured through capitalism. They were utopian because the nationalization of capitalist enterprises would actually reinforce bureaucratic domination. Implementing the socialist programme would merely substitute public for private bureaucracy in economic management - thereby fusing the state and the economy into a single bureaucratic despotism. Lacking the Marxist's faith in the self-destruction of capitalism or the revolutionary potential of the working class, Weber looked elsewhere for the solution to the pathology of modern capitalist societies. In particular he stressed the role of national power politics in providing both ultimate meaning and the means to temper purely technical domination. Everyone could strive, to be sure, for some measure of individual autonomy and responsibility in the face of increasing economic interdependence and political dependency. But the basic solution was to be found at the level of the nationstate and internal politics. A sense of purpose could be established by pursuing the interests of the national community and by advancing the economic and social welfare 16 of all classes at home. In turn this would require vigorous political direction from charismatic leaders able to define and defend national interests and to mobilize popular support under a system of plebiscitary, parliamentary democracy.3 Locating Weber's arguments in this way reveals their significance for the development of classical sociology. For Weber was not only interested in the political economy of capitalism in the age of imperialism but also discussed the limits of democratic participation and emphasized the importance of elites through his account of political charisma and the entrepreneurial spirit. An account of his views which ignores their political as well as theoretical implications would be as deeply misleading as an account of Marxist political economy which ignored Marx's political alignment with the working class movement. This does not mean, as noted above, that Weber developed his approach in direct opposition to Marxism. But it does help us to compare the ideas of Marx and Weber on the future of capitalism. VI. Some Interwar Developments The formation of classical sociology between the 1870s and the First World War shaped theoretical developments for some fifty years. Certainly few theoretical initiatives occurred during the interwar years either in sociology or Marxism which are still regarded as significant contributions to the classic disputes which concern us here. In part this reflects the shift of the centre of sociological gravity to the United States (where capitalism as such was not a major issue for most sociologists) and the stagnation in Marxist thought occasioned by the rise of Stalinism. Nonetheless one should mention the growing interest both in the expansion of the middle classes and in the consolidation of managerial capitalism with its apparent separation between capitalist ownership and managerial control. The emergence of a new welfare capitalism in some countries during the interwar years also received attention but this issue only became significant for sociology during the 'fifties. For our purposes the most notable developments were Schumpeter's studies of capitalism and the emergence of the Frankfurt School. Schumpeter and the critical theorists both drew on Marx as well as Weber in discussing 17 capitalism. Moreover, whilst critical theory has always been significant for debates over its future, a resurgence of interest has recently occurred in Schumpeter's work on this topic. 1. Schumpeter on Capitalism and Socialism Joseph Schumpeter, a conservative Austrian economist, affirmed Marx's analysis of the dynamism of capitalism, its cyclical character, the increasing concentration and centralization of capital, and its self-destructive tendencies. But he also affirmed Weber's emphasis on the crucial role of entrepreneurs in capitalist development. Schumpeter argued that the vitality of capitalism depended on innovations (especially in the sphere of production) and that these in turn rested on three main factors: the rise of new firms, the availability of credit, and the entrepreneurial activities of the captains of industry. Sometimes Schumpeter approached these issues as an economist but, in Capitalism, Socialism, and Democracy (1942), he offered a more sociological account. Here he identified certain tendencies towards the self-destruction of capitalism and forecast its decline in favour of socialism. Three developments were mainly responsible for this. Firstly, the rise of managerial capitalism had routinized innovation and was making entrepreneurs redundant; the decline of the individual entrepreneur weakened the commitment of the dominant economic class to private capitalism. Secondly, the spread of capitalist relations was undermining the protecting strata (e.g., the English aristocracy) and traditional institutions which provided political leadership and support for the bourgeois class in its struggle with labour. Thirdly, although the bourgeois revolution had thrived on the development of critical liberal thought and capitalism still encouraged critical reasoning, modern intellectuals had begun to call capitalism itself into question. Together these changes would losing its capacity and will to defend the capitalist system. At the same time the pressure for socialism would increase. 2. Critical Theory and the Future of Capitalism 18 The arguments of the Frankfurt school were strongly influenced by the history of the Weimar Republic and Nazism and its members were generally pessimistic about the future of capitalism. Like Schumpeter and many other contemporary theorists, they confirmed that modern capitalism has become managerial, bureaucratic, and routinized. What particularly distinguishes the Frankfurt School for our purposes, however, is its argument that modern capitalism actually destroys critical reason. Thus theorists such as Neumann, Marcuse, and Kircheimer argued that monopoly capitalism was compatible with, sustained, and, indeed, required an authoritarian, if not a fascist, form of state. They believed that modern capitalism was prone to stagnation (giant firms would use their monopoly power to inhibit innovation), to growing rigidity (because of the increasing interdependence of a concentrated, cartelized, and trustified economy), and to predatory expansion (in the search for export markets and for secure access to raw materials). In turn this implied a growing need for state intervention to secure economic and political stability in the face of shocks such as unemployment, raw material shortages, and political struggles. Other members of the Frankfurt School, such as Horkheimer, Adorno, and Pollock, agreed that an authoritarian state was inevitable but denied that it was essentially capitalist. For it undermined competition and market forces which were key elements in any orthodox definition of capitalism. Instead one could see the emergence of a so-called 'state capitalism' or else a much more general system of authoritarian, bureaucratic domination. Although these arguments seemed less relevant after the defeat of fascism, postwar developments encouraged a second line of attack. For the critical theorists had also emphasized the dominance of instrumental reason in capitalism and how it deformed modern society. There was said to be a reciprocal link between the rise of instrumental reason (or technological rationality) and the spread of commodity relations throughout capitalist societies. Thus people had become separated and atomized and were easily dominated by a bureaucratic despotism centred in private capitalist organizations and the state system. Even opposition to this system could be integrated and absorbed 19 because it accepted instrumental modes of reasoning. For example, trade unions were only concerned with improving wages and working conditions within capitalism and not with developing a real, substantive critique against capitalism and modern societies. As the capacity for critical thought (critical rationality) declines, technological rationality becomes even more entrenched. These arguments were further developed in the postwar years and extended to the question of whether opposition to capitalism is still possible. The conclusion was that it could no longer be expected in the core of capitalist society - least of all from the traditional working class. Instead it would be conducted by the marginal groups and strata (such as ethnic minorities, the poor, or Third World nations) who lose out in this system and/or by privileged groups (such as students) who can break through the onedimensional, instrumental reason which dominates modern society. These forces should act as the catalysts of revolutionary change but would also need to mobilize the working classes. Thus the Frankfurt School overturned traditional Marxist expectations about the revolutionary process (without thereby increasing their predictive power) and also developed Weber's views on the impact of rationalization in a more critical and pessimistic direction. VII. The Postwar Boom and the Future of Capitalism After the Second World War widespread worries that a serious economic crisis would develop were soon forgotten. Capitalism enjoyed a long period of rising prosperity which finally slowed in the seventies. During the postwar boom various theories suggested that a new, crisis-free form of capitalism had developed or, indeed, that a post-capitalist era had arrived. Different approaches to the future of capitalism were developed in different countries. In the United States studies of the logic of industrialism was followed by work on post-industrialism. In Britain the Keynesian welfare state and the affluent society led to theories about state-managed capitalism and/or about the growth of a working class with middle class incomes and values which were used to justify social democratic reformism. On the Continent some sociologists influenced by Marx focused 20 on new technology, the rise of a new working class, and the expansion of the middle class; and some sociologists influenced by Weber explored technocracy, bureaucratic domination, and the decline of critical reason associated with the end of ideology. Critical theorists continued to develop their ideas both in Germany and the States. And in the Soviet bloc and among orthodox Marxists in Western Europe the dominant theories revolved around the scientific and technical revolution and the growth of state monopoly capitalism and economic crisis-management. We cannot discuss all these themes here and focus instead on those which are most relevant to classic disputes over the future of capitalism. 1. The Logic of Industrialism During the postwar boom there was increasing interest in the more general dynamic of industrialism and industrial societies as opposed that of capitalism and capitalist societies as such. Capitalism was often said to have been superseded and the class struggle and class ideologies were supposed to have come to an end. Attention shifted to the basic forces of industrial technology and economic rationality and to the role of elites and mass politics. The institutional logic of industrialism was held to be more fundamental than that of capitalism (which was merely one form which industrialism could take) and some sociologists argued that capitalist and communist societies would become alike under the impact of the technological constraints involved in industrialism. Clark Kerr predicted a bilateral convergence, for example, in which increasing state intervention in the west and growing decentralization and political liberalization under communism would produce a new, 'pluralist industrialism' in both systems (cf. Kerr et al., 1960). We are not concerned here with why communist societies have not moved consistently (if at all) in the expected directions. But we should note that, while state intervention and economic planning did increase in capitalist societies (at least during the sixties and early seventies), other changes deduced from the logic of industrialism were not realized. In a recent critique John Goldthorpe identified three such expected changes 21 and considered how far they had occurred. Firstly, a more open and equal society was expected because industrialism requires an educated, mobile, and efficient labour force. Secondly, class differences and sub cultural particularisms were expected to break down because industrialism encourages the emergence of a 'middle mass' society. And, thirdly, industrialism was expected to undermine the tendency towards a polarized class conflict between capital and labour and to encourage more particularistic, decentralized forms of bargaining. Goldthorpe then notes that these predictions have been disappointed. For, while living standards have generally improved, major class-based inequalities in life-chances still exist. Indeed there is a growing tendency for the working class to be self-recruiting and for its members to belong to it for life. At the same time the rise of consumerism, the breakdown of traditional working class communities, the essentially limitless demands involved in the concept of citizenship rights, and the growth of trade unions and trade associations have generated fundamental conflicts over income levels, welfare standards, and managerial prerogatives. Thus conflicts over distributional questions have been heightened rather than reduced. This could be seen in the rise of more militant trade union bargaining at plant and industry level and in the growing interest of unions in macro-economic policy (Goldthorpe, 1984, pp 318-22). More problematic still was the changing character of the forces of production whose logic supposedly induced these convergences towards a shared pluralist industrialism, open society, and end of ideology. For, as the proponents of the institutional logic of post-industrial society noted, the very forces of production themselves were changing. This theme was first advanced by Daniel Bell in the 1960s, became popular in the 1970s, and is arguably even more relevant today. 2. The Post-Industrial Society Bell forecast that the future of capitalist society was that of a post-industrial, information society. Basing himself on the current position in the United States, he argued that a post-industrial society would emerge in the last quarter of the twentieth century. Five major changes would occur in the social structure (i.e., economy, technology, and 22 occupational system) of advanced industrial societies and would pose problems for the political and cultural systems. These changes were as follows. Firstly, in the economic sector, there would be a change from a goods-producing to a service economy in which jobs in health, education, research and government became increasingly important. Secondly, the occupational distribution would witness a decisive shift in favour of the professional and technical class - especially those in science and engineering. Thirdly, whereas industrial society is organised around the coordination of machines and men for the production of goods, it will be the mastery of theoretical knowledge for social control and purposive innovation and change which will be the central organisational principle and the key strategic resource of the post-industrial society. Fourthly, with the increased importance of theoretical knowledge, the postindustrial society may be able to assess its technological needs and then plan and control its technological growth. Finally, as regards decision-making, post-industrial societies would witness the creation of a new 'intellectual technology', i.e., the development of sophisticated models for rational decision-making in complex situations (Bell, 1973, pp 14-33). Much of the initial reaction to Bell's predictions focused on his empirical evidence to see whether he had over-stated the rise of the post-industrial service sector. Two key criticisms were that he had ignored how multinationals transfer industrial jobs abroad and how industrial companies often transfer 'in-house' services to specialized service enterprises. Both these trends led Bell to over-estimate the current shift to postindustrialism in the USA. In the longer term, however, his emphasis on the information revolution is less easy to criticize. Whether he took sufficient account of parallel changes in the organisation of industrial production or drew the right conclusions about capitalism from this post-industrial trend are different matters. In this context it is interesting to compare Bell's views with Marxist analyses of the scientific and technical revolution. 3. The Scientific and Technical Revolution 23 Various Marxist theorists have argued that the development of the productive forces typical of capitalism has leapt significantly forward due to the so-called 'scientific and technical revolution' (or STR). This refers to the increasing importance of both fundamental and applied scientific and technical research in reorganizing the labour process, creating new products, and managing the economy. In turn this has considerably advanced the social character of the productive forces and has created much closer ties between the economic and non-economic spheres of society. There is now increasing interdependence among all branches of production, between industry and education, between capitalist management and the flow of information, and between the economy and the state. These changes have not only transformed the economy but have also reorganized the class structure. The traditional industrial proletariat has declined in significance and could lose (or has already done so) its vanguard role as the leading force for socialist revolution. On some views this requires a class alliance between the old proletariat and the new technical intelligentsia under the latter's intellectual leadership. On other views it implies that there is a new working class made up of skilled, technical workers who will (or must) become the revolutionary vanguard. In all cases a revolution is still considered necessary, however, because people cannot realize the full benefits of the scientific and technical revolution under capitalism itself. This could only occur when the socialization of the productive forces which is involved in the STR is matched by social control over all aspects of the economy. Until this occurs it will be the profit motive which determines the development and application of science and technology. In turn this implies that not all of the tendencies which Bell forecast might be realized unless capitalism itself is superseded in a post-industrial society. On this Bell himself had little to say. 4. Habermas on Late Capitalism 24 Jürgen Habermas has built on the Frankfurt School tradition of mixing themes from Marx and Weber whilst also going beyond them in key respects. His significance for the classic dispute which concerns us here is found in two lines of criticism of late capitalism. The first concerns its recent development as a specific economic and social order; the second concerns the possibilities of rational public debate over the purposes of man and the goals of modern society. On the first theme, Habermas argues that state intervention has transformed competitive capitalism so that it is increasingly organised, subject to instrumental reason, and bureaucratized. Among the most significant changes which have occurred are the growth of monopoly capital; the increasing interdependence of science, technology, and industry (so that science has become a fundamental productive force and an independent source of surplus-value); increasing state intervention to stabilize the economy; and the key role of technocratic arguments in legitimizing the social order. Indeed Habermas once argued that economic crises can now be avoided and the economic conflicts between capital and labour contained. But this did not mean the end of crisis and conflict in late capitalist societies. Instead new types of crisis (involving planning problems and/or legitimation deficits) would emerge and other forms of conflict would predominate. In particular late capitalism would suffer from a decline in mass loyalty. This legitimation crisis would occur because social life has lost its mystery, all spheres of life are politicized, government is overloaded with demands it cannot meet, and the state's actions in support of capital become increasingly transparent. On the second theme, Habermas argues that the growth of bureaucracy and instrumental rationality undermines the public sphere in which ordered, rational political discussion can take place. In advanced capitalism this sphere is restricted and distorted. For it has become a sphere for interest group lobbying directed at influencing specific actions by the interventionist state and is no longer a sphere of general public discussion aimed at shaping the broad principles of the liberal state. At the same time the public and private spheres have become more closely intertwined. The state system has assumed a new 'feudal' form because large organizations and groups share power 25 with the administration and try to exclude the broader public from political life. In turn the private sphere has become increasingly politicized because the state intervenes in ever more areas of social life. All this is accompanied by changes in the sphere of public opinion and the formation of a general will. Instead of open, informed, and critical discussion, there is only publicity, public relations, and public opinion research. And, instead of public participation in decision-making, we find only a plebiscitary democracy in which alternative sets of political leaders compete for the chance to preside over the state's administrative personnel. 5. Long-Waves, Fordism, and Post-Fordism The collapse of the postwar boom forced a reappraisal of the more optimistic theories of capitalism similar to that which occurred in the movement from early to classical sociology. Among other trends there has been renewed interest in the view that capitalism experiences repeated long waves of boom and slump. It is in this context that economists and sociologists have turned to Schumpeter's work on the role of entrepreneurs in capitalist innovation. There has been a parallel movement in Marxism with fresh interest in the technological, political, and social bases of the transition from one wave to another. The latter concerns can be illustrated from recent discussions of Fordism and post-Fordism. The last long wave has often been labelled 'Fordism' after one of its foremost pioneers and spokesmen: Henry Ford. This emerged in the 'twenties with the rise of mass production techniques but was only consolidated after the Second World War with the rise of mass consumption and the interventionist welfare state. It is the general crisis of Fordism together with American's declining influence in the world economy which is reckoned to have brought the last long wave to a close. Fordism allegedly broke down for two main reasons. Its dynamiting impact became exhausted once it had been adopted in all advanced capitalist countries and this was reflected in declining profit rates and declining investment. And it also encountered growing working class resistance in the form of absenteeism, labour turnover, and strikes. In turn this 26 prompted a search for new ways to organize capitalist production to overcome the rigidities of Fordism and to counteract working class resistance. Crucial in both respects has been the growing trend towards greater flexibility in production (made possible by automation, robots, and information technology) and towards a polarization of the labour force into a technologically skilled, full-time core and a peripheral, unskilled labour force often engaged part-time or irregularly. These changes are not confined to industrial production but also occur in the service sector. There is considerable discussion about what the transition to post-Fordism implies for the reorganization of capitalist societies. Since the transition is still under way, however, forecasts have proved difficult. In part this is because the transition is not driven by some inevitable technological imperative but depends on the outcome of political conflicts. In this context most Marxist commentators and many sociologists seem to agree that one of the most important issues at stake is what post-Fordist flexibility implies for the labour force. Some predict that there will be a new class polarization between a 'functionally flexible' core of skilled workers with permanent jobs and a 'numerically flexible' periphery of unskilled workers who will serve as a 'reserve army' of labour. Others argue that there could be a more flexible use of work and leisure time for all workers and that this could lead to a more open and equal society. Which of these outcomes occurs will also influence the nature of the state, education, welfare systems, the class structure, and so forth. Conclusions The issues raised by Marx and Weber still dominate sociological enquiry on the future of capitalism. In many ways their work was complementary rather than contradictory. Although Marx wrote extensively on contemporary social and political questions, his main theoretical interest was in capitalism as a mode of production, its laws of motion, and its implications for class struggle. Thus he sought to understand capitalist societies in terms of the anatomy of the capitalist economic system. Weber emphasized the extra-economic institutional preconditions for capitalist production (most notably in the 27 fields of law, the nation-state, and bureaucracy), the form of rational capitalist accounting, and the role of entrepreneurs. Although he developed important points about capitalist enterprises and market forces, Weber was interested in the whole field of social relations in industrial capitalist societies. Thus he placed less emphasis on the causal role of economic factors and did not accept that class struggle is the motor force of history. Through skilful re-interpretation of Marxist and Weberian concepts one could probably develop a synthesis which did not overly betray their key arguments. Nonetheless Marx and Weber clearly had different expectations about the future of capitalism and also adopted different positions in the conflict between capital and labour. These differences, together with the controversies over the role of economic institutions and class struggle in societal development, have fuelled long-running disputes in sociology. In reviewing developments since Marx and Weber wrote on capitalism and its future, we have emphasized how social and political theorists have taken up and modified themes from their work. Some theorists have been more concerned with the logic of capital accumulation (such as Bernstein, Hilferding, Lenin, and Schumpeter) and others with the impact of rationalization in all spheres of society (such as the Frankfurt School). Yet other theorists have given less emphasis to a specifically capitalist logic than to the implications of more general changes in the forces of production. Included here would be such theorists as Kerr and Bell and, to a certain extent, writers on post-Fordism. Finally there are many social and political theorists who have developed more general moral critiques of industrial societies or their specific capitalist forms. In discussing these approaches we have interpreted 'classic disputes in sociology' in a specific way. For, although the classic sociological theorists certainly devoted much time and effort to discussing the future of capitalism, the three main founding fathers of the discipline (Marx, Durkheim, and Weber) did not directly confront each other on the topic. Within the Marxist tradition, however, there have been many disputes over the future of capitalism. In addition the theoretical traditions which these founding fathers helped to develop have debated with each other ever since. This is particularly clear in 28 the recurrent attempts to confront the Marxist and Weberian traditions. Thus we are dealing with a highly mediated dispute but one which is nonetheless significant. It should also be clear that these traditions have their roots not only in different scientific perspectives on sociological enquiry but also in different political positions. This too is an illustration of the classic nature of the debate over capitalism and its future. What conclusions can be drawn from this brief review? The most obvious conclusion is that predicting the future of capitalism is fraught with methodological and theoretical difficulties. For any such attempt must confront three problems rooted in the nature of capitalism itself. Capitalism is a complex system, a dynamic system, and an open system. Thus theorists run the risk, firstly, that capitalism will be treated in a one-sided manner at the expense of more rounded, multi-dimensional accounts; secondly, that temporary features and tendencies will capture attention at the expense of longer-term aspects; and, thirdly, that the many and varied ways in which factors outside the capitalist system affect its operation will be ignored. Some of these problems should be evident from the theories reviewed above. Five further conclusions also recommend themselves. Firstly, there is no single, unambiguous, and inevitable logic which predetermines the future of capitalism or capitalist societies. No such logic exists either technologically (such as industrialism), economically (capital accumulation), or societally (rationalization). Obviously particular systems can have specific developmental logics but these are always mediated through social agents and are qualified by their interaction with other systems. Even those Marxist theories which are strongly committed to economic determinism generally allow for a contingent, subjective element which introduces indeterminacy into the future of capitalism. Likewise Weber stressed the key historical role of entrepreneurs and political leaders in shaping the future of industrial societies. Secondly, although the future of capitalism is open, it is not fully open. Two reasons can be cited for this. On the one had there is an accumulation of past technical and institutional systems which provide the initial conditions from which capitalist economies 29 and societies must respond to new challenges; and the continuing vitality of competition and market forces means that there are always pressures to adapt to developments elsewhere. How successfully different economies and societies adapt to (or resist) such pressures will depend on many factors. Thirdly, not all the developments which occur in capitalist societies are immediately attributable to the capitalist economic system. How conflicts among nation states, the proliferation of nuclear weapons, the activities of new social movements, the dynamic of racial antagonisms, regional problems, and gender cleavages, for example, will shape the development of capitalist societies is not fully determined by the logic of capitalism. This both complicates predictions about the future of capitalism and makes the future more open. Fourthly, at different times different countries have been cited as the model for future capitalist development: Britain, the USA, Germany, Sweden, and Japan. Indeed the existence of many nation-states within the capitalist world system means that there is a wide variety of social structures and economic and political strategies which have proved able to sustain capitalist expansion and/or to alleviate its worst effects. The advantages which some societies have can, however, be overturned; and other economies and societies may become more competitive. Indeed, as the problems confronting capitalist societies change, there is a tendency to look abroad for new ways of responding to the challenges. Thus the fact that capitalism has not yet created a homogeneous global village could be considered an advantage from the viewpoint of its continuing vitality and adaptability. Finally, capitalist development seems to move in long waves. There is still much debate over the reasons, timing, and rhythm behind this movement but nowadays its existence is rarely questioned. Whatever the ultimate future of capitalism, its short-term future appears to involve a transition to a post-industrial, post-Fordist society. But precisely because we are living through a transition period, it is not yet clear what the dominant form of this society will be. The USA and Japan are important models for this but there 30 will no doubt be other variants. Indeed the very flexibility permitted by information technology and automated production suggests that societal forms compatible with the next long wave of capitalism will still be large. Endnotes 1 The argument in this section is based on G. Therborn, Science, Class, and Society, London: 1976. 2 For this and other points I have drawn here on Anthony Giddens' insightful essay on Durkheim's political sociology, 1977, pp 235-72. 3 An excellent review of Weber's views on German politics is provided in Beetham, 1985. 31