Part 13

Anthony Giddens wrote, "One of the main debates in social theory has been between those who regard capitalism as the `maker' of the modern world, and those who accord this perhaps dubious honor to industralism." * Giddens' own view is that there are not two but four "institutional clusters" which together share the dubious honor of being the main "makers" of modernity.

They are:

1. Capitalism.

2. Industrialism.

3. Heightened surveillance of individuals' behavior. (Giddens has Michel
Foucault's geneaologies of modern institutions in mind.)

4. Centrally controlled means of violence possessed by nation-states.

Giddens' four point diagnosis of modernity's causes suggests, to me at any rate, a four point program for a cure, bearing always in mind that the objective of the cure is to make modernity work better, not to undo it:

1. Reform capitalism in the direction of social democracy.

2. Reform industrialism in the direction of sustainable appropriate
technology.

3. Resist what Foucault calls "normalizing," e.g. encouraging
self-actualization, which is perhaps the same as what Jungians call "individuation" (not to be confused with individualism).

4. Work to bring the military machines of nation-states under the rule of
law, encouraging, e.g. deep democracy, nonviolence, collective security, respect for human rights.

If Giddens' account of the processes that created modernity is true, and if the premise that better etiologies lead to better prescriptions is true, then the above four-point program is more than a list of four kinds of desiderata. It is a list of levers with leverage. It goes to the sources, to the roots. It identifies key desirable changes that will unlock the doors to many other desirable changes.

However, in my opinion, Giddens' account of the generative institutions that brought modernity into being can be improved. The facts about the dynamics of modernity can be framed with better concepts.

From a better account of why the modern world is as it is, there will follow, in my opinion, improvements in: (1) The four-point cure program, outlined above, which I have derived from Giddens' account of modernity's causes; and (2) The programs and policies Giddens himself has recommended, as adviser to Britain's Prime Minister Tony Blair; and as today's leading advocate of a "third way" approach to renewing social democracy.

*Anthony Giddens, The Nation-State and Violence. Berkeley: University of California Press, 1987. p. 2.
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Part 14

Speaking in the terminology of Anthony Giddens, a key question concerning the search for solutions to the intractable structural problems that plague modernity is the question how to get out of a homeostatic loop. A homeostatic loop, as its name suggests, is a structural trap which nullifies change.

It keeps modern institutions as they are, which is, of course, not always a bad thing; but which is a bad thing when the purpose is to modify modern institutions in order to facilitate the solution of problems that cancel human lives.

Among the intractable structural problems whose solutions are often frustrated by homeostatic loops are poverty; economic insecurity; environmental degradation; and, partly but not entirely as a consequence of these first three, political violence.

Giddens writes, "Homeostatic system reproduction in human society can be regarded as involving the operation of causal loops, in which a range of unintended consequences of action feed back to reconstitute the initiating circumstances." *

Giddens defines two ways in which modern institutions reproduce themselves, generation after generation, of which the first is the homeostatic loop and the second reflexive self-regulation. The second is defined as, "Causal loops which have a feedback effect in system reproduction, where that feedback is substantially influenced by knowledge which agents have of the mechanisms of system reproduction and employ to control it." * *

Reflexive self-regulation can be called the "good" reproduction of institutions. It is guided by the processes of deliberation, moral judgment, debate, discussion, and social consensus-seeking that Aristotle did so much to establish as characteristic of human action, and which Giddens has done so much to affirm in the face of tendencies in the social sciences to explain human events as driven by machinations of objective structures. Homeostatic loops can be called "bad" social reproduction of institutions, even when it is acknowledged that institutions which reproduce themselves without the blessing of human opinion may sometimes by lucky chance turn out to be good. Homeostatic loops cement dysfunctional institutions in place. They frustrate good intentions. They seem, but only seem, to make the cases of the objectivists and the structuralists Giddens take such pains to criticize.

The most important homeostatic loop, in my opinion, is what I have been calling the profit imperative. Some Marxists call it the need to keep intact a regime of accumulation, so that surplus value can continue to multiply itself. Claus Offe, quoted extensively by Giddens, calls is the structural problem of capitalist societies. It is close to what Giddens himself calls structural constraint.

Familiar examples are that minimum wages lead to unemployment, which leads to wages falling back to the levels where they were before the minimum wage tried to raise them; organizing strong labor unions pushes factories to close or move, which leads to weak labor unions; funding old age benefits and health care leads to higher taxes, which leads to capital flight, which leads to falling tax revenues, which leads to underfunded pension plans and inadequate health care, leaving the old and the sick at the mercy of market forces as they were initially before the reform effort began. Attracting investment to a developing country by means of a tax-free Export Processing Zone leads other competing countries also to establish EPZ's, which causes the capital that flowed in to flow out again ("the race to the bottom").

When the question how to get out of a homeostatic loop has been asked, the inquiry in search of a good answer to the question has implicitly already started. One has already begun to ask how modern institutions might simultaneously be made to work efficiently and transformed so that the range of viable future options will be broadened. Paraphrasing Freud, one might say instead of "Where Id is, let Ego be!" "Where homeostatic loops are, let reflexive self-regulation be!"

*Anthony Giddens, The Constitution of Society. Berkeley: University of California Press, 1984. p. 27. ** Id, p. 376.

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Part 15

Anthony Giddens, now the Director of the London School of Economics, is the leading advocate of what he himself calls third way social democracy. In his writings on this topic the power of market forces to shape the global economy tends to be accepted as inevitable. Social democrats are advised to emphasize education and other social investments which may be cost-effective according to measures that markets validate. Although doing one's best to maintain some sort of social safety-net in spite of international competitive pressure to lower taxes and wages is taken to be part of the agenda of any left-of-center government, fundamentally transforming the forces that shape the global economy is not part of the agenda. Social democrats are advised that to be elected they must speak a language understood by the new majorities, the suburbanites and the educated wired workers. They must offer solutions, like putting more police on the streets, to problems the voters rank as first priority problems, like crime.

This last advice is no doubt sound. Nobody ever got elected by talking about issues voters are not interested in. But as to the rest of the "third way" and "New Democrat" and "New Labour" platform, I vote for putting structural transformation back on the agenda. Apart from what today's voters may and may not understand, there is no way to deliver what they need, including higher wages and a better social safety net, without challenging the market forces that shape the global economy. Some of Giddens' own theoretical writings imply that this necessity is also a possibility.

Giddens' theory of structuration implies that the forces that shape the global economy could be fundamentally transformed. His anti-structuralism does not take the form of replacing "social structure" with a different central concept for social science, such as Pierre Bourdieu's "habitus" or Michel Foucault's "power." It takes the form of rethinking "structure." For Giddens "structure," or, rather, "structuration," is a process, not a substance. It is dual. First, social structures frame the contexts of human action; but always also, second, social structures are products of human action. Therefore: the power of market forces to shape the global economy is not inevitable. Market structures cannot, in principle, limit the possibilities of human action in the ways that mainstream politicians and economists think they do.

Giddens' concept of the double hermeneutic also implies that fundamentally transforming the forces that shape the global economy is possible. The double hermeneutic concept points out that the objects social scientists seek to interpret and understand, for example nation-states, for example debt, for example money, are themselves already socially constructed realities. They depend for their existence on human institutions (On "institutional facts" as John Searle says in his writings on socially constructed reality.) Consequently, each and every element of the global market economy could be transformed.

In general, Giddens' decades-long critique of mechanistic thinking in the social sciences leads to the conclusion that as human beings we construct our social institutions. Interpretive sociology, as Giddens has painstakingly developed it at great length, always insists on elements of human choice and reflective self-regulation in the construction and understanding of institutions. In the language I prefer, human institutions are made of ethical norms, and can be ethically reconstructed.

One is tempted to conclude that Giddens' political practice contradicts his social theory. I shall offer another conclusion. When certain other elements of Giddens' theory (i.e. other than the duality of structure, double hermeneutics, and interpretive sociology) are considered, it can be argued that Giddens misunderstands the origin and nature of modernity in ways that obscure its possibilities for transformation. From this viewpoint, his theory is consistent with his practice, and both are mistaken.

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Part 16

At the end of a long essay on 19th and 20th century philosophy of science, Anthony Giddens wrote, "Human beings are reasoning agents who apply knowledge of their contexts of action reflexively in their production of action, or interaction. The `predictability' of social life does not merely `happen' but is `made to happen' as an outcome of the consciously applied skills of social actors." *

If Giddens is right, there must be some escape from some main dilemmas that modern humanity faces.

Here in California common messages on our television screens remind us of one of the dilemmas. They emanate from an entity called the Economic Recovery Council, whose principal members appear to be candidate Arnold Schwarzenegger and three of his advisors; Professor Arthur Laffer of USC; billionaire Warren Buffet; and former secretary of state George Schultz. The messages echo the arguments of the 1980s with which Ronald Reagan, Margaret Thatcher, and Helmut Kohl convinced the electorates of the United States, the United Kingdom, and Germany, respectively.

Their logic is familiar: if its government's policies make business more profitable, then more businesses will come to California. There will be more economic growth, more jobs, more prosperity for everybody, and less need for public welfare.

For better or worse, there is a core of truth in the arguments of Schwarzenegger, Laffer, Buffet, Schultz, Reagan, Thatcher, Kohl et. al. It is true that increasing profits encourages investment. What makes this core of truth a horn of a dilemma is that the standard ways to increase profits include going slow on raising wages or else lowering them, reducing environmental and safety regulations, and reducing taxes on business. Citing the laws of economics, Schwarzenegger and his braintrust are inviting California to join the race to the bottom.

But if Giddens is right, then what makes the response of the market to pro-business policies predictable is not anything that just `happens'. It is `made to happen' by conscious actors. The conscious actors could make different choices, leading to different results.

Many economists, however, argue that business people have little choice but to act in the ways that the laws of economics describe. Milton Friedman, for example, has written that any business person who does not strive to maximize profits will not stay in business for long.

But if Giddens is right --and if the consensus of many recent philosophers of science that his view represents is right-- then Friedman, and by the same token Schwarzenegger, Laffer, Buffet, Schultz, Reagan, Thatcher, Kohl et all, must in some important ways be mistaken. There must be an important sense in which the laws of economics are not laws at all. There must be some escape from the dilemma that apparently compels modern societies to choose between either encouraging business or supporting higher wages along with a stronger social safety net. There must be some escape because the predictability of economic behavior, including the rather elementary prediction that if business is offered greater profits it is more likely to invest, does not just happen. It is made to happen.

* Anthony Giddens, "Comte, Popper, and Positivism," in Politics, Sociology, and Social Theory. Stanford: Stanford University Press, 1995. p. 197.

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Part 17

Writing a chapter in a book co-edited by Anthony Giddens, Robert Kuttner argues that at this point in history it is necessary to reconstruct the mixed economies of yesterday's social democracies. He asserts that there are fundamentally only two ways to do this:

1. "Either nation-states reclaim some of the power lately commandeered by market forces, or,
2. new transnational institutions of governance must be devised." * (numbers and blank space added).

Kuttner intends his stark dichotomy as a challenge to the naivete of people like the Bill Clinton style New Democrats and the Tony Blair style New Labourites. Such people propose: "... let markets set prices; let free trade and free movement of global capital work their efficient magic. If voters don't like the social or distributive consequences, use the state to temper the extremes and give the displaced new opportunities and skills." *

To accept free trade and then propose that the state correct its extremes is naive. Kuttner writes, "Tempering the excesses of the market requires substantial public outlay and regulation. Yet if the world is one big free market, capital tends to avoid nations that impose burdens on it." *

And, "The very existence of laissez-faire unravels the safety-net. Social programmes are expensive and require either high levels of taxation or

Thus Kuttner arrives at the conclusions stated above. Only two paths to social justice are possible: (1) Nation-states reclaiming economic power; or (2) Transnational governance of the world economy.

Without denying the importance of pursuing both (1) and (2), I believe that Kuttner's proposals also have elements of naivete.

For the reasons Kuttner gives in criticizing the New Democrats, any efforts by national governments to reclaim the power to regulate capital will be at best only partially effective.

The proposal to reinvigorate social democracy through new transnatio nal institutions of governance relies on the prediction that if there were a world economic government, then capital in flight would have no place to fly to.

Environmental standards could not be escaped by moving. Runaway shops would have no place to run because there would be collective bargaining everywhere. This argument overstates the degree to which the exit power of capital was the cause of the decline of social democracy. There were other causes too. The other causes will operate on a global level when, in some tomorrow better than today, new transnational institutions take capital's exit power away from it.

I agree with Charles Taylor that there are no solutions to current social problems within the framework of the standard political concepts and institutions of modernity. At this point in history, it is necessary to study again the first premises of the modern culture that is the common matrix of modern government and modern business. As Jacques Derrida has stated, the decline of the power of the nation-state makes it more necessary than ever to criticize the categories of civil society.

* The quotations are from "The Role of Government in the Global Economy" by Robert Kuttner, at page 156 of Global Capitalism, edited by Will Hutton and Anthony Giddens. New York: New Press, 2000.

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Part 18

To return to my "box" metaphor, Anthony Giddens' thinking is disappointing because it ends up trapped "inside the box." Giddens' vast historical knowledge of the origins of modernity   might have led him to conceive of modern institutions as one among an infinite number of sets of institutional structures ("structure sets" in his terminology) in which human life could be framed. Instead, it led him to become the intellectual leader of third way social democracy, which advocates accepting the "realities" of global markets as the frame governing life on planet earth.

In contrast, some thinkers who have thought "outside the box" are: Maria Mies when she suggested rethinking economics beginning with the unpaid work of mothers as the model of human labor; Hannah Arendt when she interpreted the historic social movements of the twentieth century as motivated by conscience, not by self-interest; and Elise Boulding when she proposed that hope for world peace today is found mainly in voluntary associations, NGOs and INGOs, not in businesses or in governments.

I do not think I have made an arbitrary selection in choosing three "outside the box" thinkers who are women. Seen from one side, "the box" is patriarchy. Nancy Hartsock was not wrong when she wrote that women, due to their place in society, have potentially available to them a feminist standpoint, from which it is possible to see aspects of community and of power that are not visible from the masculinist perspectives of most social science.

Nevertheless, even with the help of the women I have cited I have not yet pinpointed the conceptual shift needed to escape from domination by markets.

Third way thinkers do not even try to escape. They welcome international economic competition as a way to discipline both business and government, compelling both to become more efficient. They advocate regulating business, both nationally and internationally, to the degree they find regulation to be possible and desirable. But they caution against regulating business too much at the national level, lest it go away, thus making acquiescing to "reality" a virtue and resisting "reality" a vice. Like the author of the lead article in the current issue of the New Statesman they accuse the anti-globalization movement of wanting nationalist and localist economies that today are (they think) neither possible nor desirable.

In my next e-mail I will specify a bit more what I mean by "the box" and why I think Giddens misreads history in a way that leaves him trapped in it. Later I will say more about the relationship of "the box" to masculinism.

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Part 19

The world works according to the logic of commerce. People must eat. To eat they must have money. To have money they must have jobs. To have jobs someone must hire them. For them to be hired, there must be profit to be made by hiring them.Therefore, whatever else governments do, they must endeavor to create conditions that make business profitable.

But the world does not necessarily have to work according to the logic of commerce.Even now, as Hazel Henderson and others have pointed out, the majority of the useful tasks that get done in the world are probably performed outside the money economy.

Nor does the world have to entirely reject the logic of commerce.There are many combinations of possible ways to organize human activity so that resources get mobilized to meet needs.

(Piero Sraffa's book, The Production of Commodities by Means of Commodities, implies that any number of patterns of human culture are compatible with making an economy physically work. There is no necessary reason why homo economicus has to be involved.)

However --and here is a main problem-- humanity has become to a great extent dependent for the necessities of life on the maintenance of conditions that make business profitable.

Given that the world works according to the logic of commerce, the extent to which what ought to be done can be done is limited by what has to be done to keep the system going.

We are not free to choose to assign a lower priority to profits and a higher priority to raising wages, or to peace, or to clean air, or to pure water, or to responsibly sharing the earth with future generations and with the other forms of life that share the biosphere with us.

We are not free to choose any good thing that threatens to create an unfavorable climate for investment.

I know from experience that this message --that humanity is now constrained by markets, and on the whole dominated by markets-- is one that people do not want to hear, and one that people resist believing, but it is true.

Although the world does not necessarily have to work according to the logic of commerce, it does. What is economically necessary is militarily enforced --I deduced this lesson from my observations living in Chile before, during, and after the Pinochet coup of September 11, 1973.    Tilting social policy to be sure that no child goes to bed hungry, or to protect an endangered species, or to win human rights for labor organizers in third world countries, is not just a moral choice. It is a challenge to the logic of the system. Shutting the world down is not an option. A design specification for a conceptual shift to cure modernity is that it must show how to keep the world system running and to transform it at the same time.

Let me now begin to indicate one of the reasons why (assuming that my claims are true)   Anthony Giddens' way of going about accounting for the origins of modernity tends to make it hard to see that they are true.(continued on second e mail)

19.2

On the first page of the second volume of his three volume A Contemporary Critique of Historical Materialism, Giddens describes his project as, "...an attempt to explore the contours of a post-Marxist analysis of contemporary society and politics.   Marx's writings are of signal importance for understanding one of the most pervasive influences moulding the modern world. This influence is of course capitalism, regarded as a mode of economic enterprise that has a dynamic tendency to expansion far greater than any prior type of productive order."

Giddens generally aims to show that Marx's critique of capitalism is inadequate. Hence two main themes of his work are capitalism and Marx. But this focus on capitalism, and on what Marx has to say about it, tends to make Giddens and many others lose focus when it comes to seeing the working of modernity's central institution, the market. Marx made a mistake when he declared that only a superficial understanding could be achieved by studying exchanges in markets (what he called "circulation"). He argued that in order to achieve a deep understanding it was necessary to "force the secret of profit-making" by descending to the level of the relations of production.

"Capitalism" as understood by Marx, Giddens, and many others is not defined only by the logic of exchange. It is not defined by what Marx calls an M - C - M cycle, where the purpose of going to market is to use money to make more money. It is also defined as a particular kind of class-divided society.  It is one where human relations are dominated not just by exchange relations in general, but by a particular kind of exchange relation driven by the accumulation of surplus value by capitalists, organized by what Giddens calls the "structure set" of modern production relationships, which makes the modern kind of class-divided society one disciplined primarily by people's fears of losing their jobs.

Such considerations lead many to focus on who is winning and who is losing; what is possible and what is impossible; and within the limits of the possible what is to be recommended as worth pursuing; within a class-divided society assumed to be governed by the logic of commerce. The logic of commerce fades from view, since it is the backdrop of capitalism, not capitalism itself. It is the *fond* not the *forme.*

The point, however, is to build a global society not governed by exchange, but governed by an ethics of solidarity. In Aristotle's terms, the point is to make deliberate moral choices aiming toward the good. In Adam Smith's terms, the point is to make the processes of exchange function to serve the ends of use.

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:: Part 20

I want to persuade people to conceive of ethical principles as powerful forces that shape history. In particular, I want people to see ethics as healing medicine that can make a constructive contribution to the immediate future by alleviating the sickness of modernity. To vary the metaphor, I want people to think of ethics as the cultural matrix of justice, and, therefore, of peace.

In order to clear the ground, prepare the way, open the door to the reader's mind, I think I need to take at least five initial steps:

1. To persuade people to be suspicious of what is known as the hermeneutics of suspicion, i.e. to explain why I do not believe in unbelief.

2. To discuss the pros and cons of secularism as a characteristic ideological tendency of modernity.

3. To distance myself from Hans Kung and others who say things which may at first sound similar to what I am saying, but which I view as limited and dysfunctional views of the role of ethics in history, and of the role of ethics in causal explanation in the social sciences.

4. To discuss the historical evolution and range of meanings of the term "ethics," its connotations and denotations.

5. To discuss some relationships between ethical principles and legal principles.

I think it will be helpful to try to take these steps in connection with my announced plan to comment on Michel Foucault's views on the origins of modernity, but I would not surprise myself if I strayed from my plan in the course of implementing it.