Thursday, August 18, 2016

"Fractured Republic" Reflections Part One: Corporatization and the New Mass Economy

This is part one of a three-part review of Yuval Levin's The Fractured Republic. See also the introduction and parts two and three of this review.

The basic pattern of 20th century American society Yuval Levin describes throughout The Fractured Republic consists in the nation drawing together through the middle of the century, before pulling apart over the last few decades. Levin convincingly shows that this pattern makes sense of developments in virtually every institution of mass social power. See, for instance, the following triplet of graphs:

Yet surprisingly, a brief discussion of unionization notwithstanding, he spends little time considering this model alongside broader developments in the American economy. One gets the impression from Levin’s chapter on the economy that the age of the large, centralized firm is over, and that economic life today is centered around small, diffuse private companies.

Yet Gallup research shows that small business start-ups have been in steep decline over the past forty years, while the share of private sector workers employed in small businesses relative to large businesses continues to fall. And though I don’t have empirical evidence on hand that this is the case, I would conjecture that a great many mom-and-pop stores and restaurants continue to be replaced by ever-expanding industrial chains.

Consider also the rise of national social media networks and technological platforms, which Levin praises as building “inherently narrow and personalized networks” that “build up subcultures rather than a mass culture.” Is that true? Today, a few powerful institutions—Facebook, Google, Twitter, Amazon, etc.—command extraordinary centralizing power. These organizations, largely run by  recent post-pubescents, have control over more of our personal information than any totalitarian secret police ever had over their citizenry. That does not strike me as a platform for decentralization. Moreover, it seems wrong to think that these tech forums promote subcultural differentiation. To the contrary, in giving terrifying force to an amorphous “public opinion,” these institutions may well cement and strengthen the insidious, homogenizing tendencies of mass (progressive) culture.

But setting my tech-ludditry aside and returning to more traditional economic institutions, Tocqueville (following Adam Smith) saw in the modern capitalist division of labor the same dialectical pattern that drives democratic polities from individualistic premises to despotic conclusions. In particular, the logic of economic individualism destroys the rich mediating bonds and institutions that formerly humanized social relations. Industrialization further divides society into two distinct classes, united only through on an abstract collection of faceless, market forces.

Through the division of labor, Tocqueville explains, as the “workman is perfected” in productivity, so too is “the man degraded.” Economic specialization constructs a new class of industrial elites who, shorn of any aristocratic duty to their workers, grow far harsher than the most brutal of feudal masters. Just as with subjects under soft despotism, the workman grows “dependent on masters in general, but not on any master in particular.” Connected only through contractual agreement to exchange labor for wages, the master-worker dynamic is rendered entirely economic: “the former makes no promise to protect, the latter no promise to defend, and neither habit nor duty creates a permanent bond between them.”

Particularly damning, Tocqueville insists, is the farcical equality now said to define the master-servant relationship. In the marketplace, each party is bound only in virtue of its consent, and in the formal eyes of the law, the two are equals. Yet this “imaginary equality” hardens the hatred between master and servant. For in the “privacy of his soul, the master still deems himself superior,” but no longer an aristocratic guardian, he abandons those traditional “protective and benevolent sentiments that grow out of a long period of uncontested power.” The servant too, though as a matter of contract the equal of his master, recognizes himself as the social inferior, and comes to hate his obligations that stem from a “degrading utilitarian reality.”

Ever the hedgehog, Tocqueville provides a discussion of market dynamics tightly consistent with an animating pattern of thought that resonates throughout his work: hyper-individualism and democratic equality lead to the erection of new consolidated powers, embodied both in a distant bureaucratized state and a distant bureaucratized manufacturing aristocracy. Soft despotism and economic consolidation enervate the people, rendering them dependent on a cadre of amorphous, distant elites. As Tocqueville caustically concludes in a passage as prescient as any in the Norman’s oeuvre, “today’s manufacturing aristocracy, having impoverished and brutalized the men it uses, abandons them in times of crisis and turns them over to public assistance to be fed.”

Has Tocqueville’s prediction come to pass in contemporary American economic life? I’m not entirely sure. But I suspect these descriptions of farcical equality in the face of entrenched inequality and mass dependence on a class of removed corporate executives captures to a large extent the anxiety of Walmart employees and the like. Economic life remains a realm where the dissolution and fracture Levin describes are not clearly apparent. As the logic of corporatization infects an ever broader sphere of social life, economic consolidation, not fragmentation, may well remain the central challenge to be overcome.

Levin of course does not have nothing to say about the risks of economic corporatization. Indeed, his analysis of economic individualism begins from the same point as Tocqueville’s—it is the Smithian division of labor that both perfects the worker and (possibly) degrades the man. Yet here again Levin offers the same prescription that will be critiqued at greater length in my next post: “we must use specialization to fight the negative effects of specialization.”

Levin warns in principle of “gigantism in the economy” which can itself consolidate “power over workers and consumers” and eliminate society’s indispensable mediating institutions. Yet while acknowledging the possibility of the problem, Levin does not take seriously its applicability to American economic life today. I wonder why. Haven’t chain stores that regulate  employees’ lives with rigorously regimented scripts passed far into the realm of consolidated economic gigantism? Shouldn’t conservatives be open to policy prescriptions that substantially restrain the growth of these efficiency-maximizing corporations? What of employee ownership or stock options, reforms that could create an analogue to mediating institutions within the firm? These seem like the sorts of exciting possibilities conservatives should explore.

Levin’s diagnosis of corporate America’s transformation of workers into consumers is also deeply resonant with the Tocquevillian worries described above. He insists that conservatives need economic policies that will “address Americans as workers” once again, rejecting the enervating passivity of consumerism for the energetic activity of dignified work. The worry that Americans have lost their sense of themselves as workers speaks to a dizzying dislocation in economic life. Men who primarily see themselves as workers embody that traditional American ethic of free labor. Consumers, on the other hand, are passive billiard balls, rebounding about an economic system of prices and incentives.

Given that he grasps the Tocquevillian diagnosis, it is disappointing that Levin doesn’t explore new possibilities of what work could look like. Instead of considering the aforementioned potential of greater worker-participation and ownership as is traditionally demanded by a distributist vision of conservative economic reform, Levin returns to expanded choice as the solution.

He explains that the way to transform consumers back into workers is by developing “portable, individualized benefits and rights that are not attached to workplaces in ways that assume long-term employment relationships.” But this seems to me exactly backwards. The problem is not that workers are too bound to employers, it is that workplace relationships have grown into cold, staid bonds of mere legal contract, rather than warm, humane bonds of intimate authority. The prescription is not to further promote the individual’s atomization but to revitalize communal life within the workplace.

To conclude, this post has raised some objections to Levin’s discussion (or rather lack of discussion) about the consolidated nature of contemporary American economic life. I have argued that the chief economic obstacle is not an excess of diffusion but a glut of corporate centralization. And I have suggested that Levin’s philosophical solution does not adequately address the distinctive social difficulties posed by bureaucratized economic gigantism. Instead of emphasizing choice, Levin would do well to consider new imaginative possibilities to promote greater individual identification with and investment in the workplace.

I pick up this line of reasoning—my critique of Levin’s democratic solution to a democratic problem—in my next blog post.

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