The Future of U.S. Capitalism: Social Problems in 21st cent.

It was my particular pleasure to give the following mini-lecture to the students of Diane Schaefer at the University of Indiana this past week. Diane is a grad student at UI and had organized a visit for me which included dinner with her and three other grad students at UI.

I had not been at UI before and was most pleased to visit. UI is the home of three people who have forever altered the way we think about life and the world. James Watson, who with Francis Crick developed our understanding about DNA, was on the faculty there. Ed Sutherland forever changed criminology; before Sutherland, street crime was the only focus. Since Sutherland, criminology has expanded to include white collar crime, corporate crime and political crime...crimes of the middle and upper class which were excluded most conveniently from both law, policing and research. Then too, Kinsey did his basic work there which has forever changed our hitherto religously informed ideas about sex and sexuality.

So it was a pleasure to stroll around campus with Diane and, later, Hal Pepinsky. Pepinsky, by the way, along with Richard Quinney, is working to convert criminology from its mindless peace-keeping orient- ation to the much more affirmative/progressive/humanist peace-making.

So 'twas a great honor for me to lecture on the same campus as these most remarkable scholars....and petty revenge for the beating UI gave UMichigan a few weeks ago in football.

Efforts to predict the future of any human activity is risky business indeed...since most human processes are non-linear; often taking qualitative leaps, twists, reverses and skips. Economics is often called the dismal science...non-the-less there is enough order and continuity in human affairs to make some rough guesses about what may happen. In the new sciences of chaos/complexity, there are two new attributes of prediction which I have included in the analysis below: first one sets four to eight outcome states rather than trying to favor one and only one as does modernist scientific sensibility.

Secondly, one looks at non-linear interactions between key variables rather than directional causality. The framing concept for so doing is the ALGORITHM. An algorithm is simply a set of directions which, loosely, push a system to one region of time/space rather than another. In sociology, several key factors will interact and push the USA toward any one of several futures which I will try to anticipate below.

  1. The Sociological Imagination. In the lecture, I tried to make the point that the way the USA fits itself into the globalizing political economy will shape/pre-shape the degree to which each student in the class today will work, worship, play, learn and earn. Global structures now shape personal destinies.

    But destiny is not pre-determined as it is in both the totalizing theory of modernist science and the monopolizing pre-theory of pre-scientific times. Indeed, with wit and wisdom, with good theory and good politics, human beings working together using human judgment can feed back into the political economy to make it do its proper job...serve human ends rather than corporate purpose.

  2. I began by making the case that capitalism was/is a very, very dynamic system in several respects:

    1. The center of capitalism moves and moves at an ever-increasing pace. Capitalism begins as commodity capitalism in the 13th c. as crusading armies from northern Europe converged on Venice to depart for Palestine. Great wealth accumulated for the merchants of Venice. Both feudalism, slavery and tribal communalism were thus forever doomed.

      Commodity capitalism moved to Brussels in the 15th c. Comodity capitalism moved to London in the 17th c. Commodity capitalism transformed cottage industry into factory industry when steam power was linked to production of goods at Huddersfield, England in the 18th c.

      Industrial capitalism moved to New England and the USA in the 19th century...and expanded to form the now dominant sector of capitalism: finance capitalism.

      Commercial/Industrial/finance capitalism shifted its center to Japan in the 20th century. In 1985, ten out of ten of the biggest banks were based in the USA; in 1996, 10 of 10 biggest banks are in Japan.

  3. The Advantages of Capitalism. I always begin lecture series on the positivities of capitalism; most marxists/political economists do not...and thus alienate students from the lecture. So do be sure to make the following points when you lecture/write on economic sociology:

    1. Capitalism is the most productive economic system heretofore developed.
    2. Capitalism is the most innovative system so far developed.
    3. Capitalism is the most flexible system yet created by humans.
    4. Capitalism requires an ever-improving knowledge system.
    5. Capitalism tends to destroy ancient forms of privilege, power and social status...not excluding race, gender, religion and ethnic preferences.
    6. Capitalism requires social peace; the movement of jobs, capital, profit, goods, and employees in a globalized economy means the end of predatory warfare in its military modality...many would argue and I not deny that that peace is the false peace of economic hegemony non-the-less it is a sea-change from previous use of force to capture markets, access raw materials and exploit labor in 3rd world colonies....future wars will begin as ethnic cleansing and end as economic suicide.

  4. The Structure of the Global Political Economy in 1996. It is very important to a structural analysis of social problems to locate the major driving forces of human prosperity and human despair. For most of human history, micro-social processes in micro-ecosytem niches shaped infant mortality rates, longevity, quality of life suicide, murder, warfare, family dis-ordre and social collapse. Now what happens in Toyko and Hong Kong affects crime rates in Omaha and Orlando. It is very important your students begin to understand the social sources of private Mills said.

    1. There are some 1000 Transnational corporations which run the global political economy. some 300 are based in the USA.

    2. The global political economy is heavily stratified and becoming weekly, more sharply inequal in terms of wealth, power and status.

      1. There are some 160 nation-states. At the top are the Big Seven: England, France, Germany, Italy, Canada and Japan. The USA dominates the Big Seven; the rich industrial nations and the global political
      2. There are some six NIC's...newly industrialize countries which are attracting capital, jobs, factories and skilled workers from the developed countries.
      3. There are some 20 old capitalist/colonial powers which still provide their citizens with quite a good life style...mostly socialist democracies which provide decent programs in health care, education, housing, recreation and retirement for their citizens...the USA ranks at the low end of all such countries in terms of social justice...ours is a cheap- jack, mean-sprited welfare systems in which the poor are both blamed and demonized for the poverty which is more a structural feature than a functional requirement as Davis and Moore claim in their infamous essay.
      4. Ther are some 15 socialist states just hanging on. They haven't learned the great lesson of the 20th century; bureaucratic/totalitarian socialism won't work; it lacks the advantages of capitalism above.
      5. The rest of the world is said to be the 3rd world of development....more about which later.

    3. Bloc Formation: In the first 25 years of the 21st c., a most interesting structural feature of the Global Political economy will be Bloc Formation...the nation-state becomes ever-more irrelevant/powerless in the algorithms of power and wealth.

      I count some 10-12 blocs emerging, the most advanced is of course, the European Union...but the North American bloc is well along; NAFTA will be a powerful actor in 21st century. The South American Cone will likely from a bloc as will Sub-Saharan Africa...Japan will finally get her Co-prosperity Sphere which may include NZ and Oz. The Islamic countries may form two or even three economic blocs. Since the Arab states control most of the oil reserves, it will be a force to reckon. All by itself, China is a bloc; when Hong Kong joins it next year, the structure of the global economy will make undergo great change. The same is true of India; it has cheap labor, a well trained/skilled professional class, fair transport, fair communications and a new global-oriented leadership.

      So, just as nations displaced counties and townships, blocs will replace nations as a major social form in human affairs. more in another lecture.

      Israel deserves special may join the Sub-sahran Bloc and, with South Africa, make it a player on the world stage...when I visited Israel three years ago, it was gearing itself to fit into a global political economy...there are 3 places in Israel where new industries are fostered and then cut loose; I visited Kafir Vradim in n. was a lesson in how to manufacture business for the global system.

  5. Key variables in American Capitalism. The following variables are important parts of the North American Algorithm...the set of instructions which politicians, scholars, and CEO's will have to 'read out' in order to plan and to program US policy.

    1. Consumer Demand. One of the features of capitalism is that while it is a magnificent system of production, it is a lousy system of distribution...improvement in productivity tends to dis-employ workers; profit tends to separate every body from the means of distribution...capitalism is the only economic system which does so; in all other economic systems, the whole point of production was distribution...not so capitalism. to renew demand...there are several solutions.

      1. Parallel economic systems. There are a half-dozen economic systems in the USA which supplement/redeem the market system: the family is the most important parallel re-distributes huge amounts of goods and services...especially at Christmas time. (worked that in nicely, didn't I??).

        Crime is a very, very important parallel system; it provides a lot of jobs for the underclass, stimulates the legitimate economy, creates ever-more service sectors (private security is larger than public policing).

        The welfare state continues to re-distribute huge sums mostly upward but still enough downward to buy a thin social peace.

        The church continues to be the place of last resort for the homeless, tempest-tost, poor huddled masses discarded by market, family, state and too proud to do crime...most of the time.

        Without these parallel economic systems, 'twould be a terrible time for hunreds of millions in North America.

    2. The future of the USA capitalism depends in great part upon its military. It is the only Super-Power in the world. Many old and new capitalist countries depend upon it for the social peace both national and trans-national needed for local capitalists to survive and thrive.

      Bill Clinton is explicit about this...along with Richard Nixon, he realized more than most presidents that the future of American capitalism depends upon the US retaining its position at the top of the global order.

    3. One should watch France and the EU; France engineered the end of the link between the dollar and the gold standard in the 70's; it is trying to displace the US dollar which is now the universal currency...with the euro-bill...this is one key

    4. There are three or four fiscal tools which shape life variables in the global system. The USA controls the World Bank, the OEDC and AID and the International Monetary Fund...these together are used to force 3rd world countries to reduce debt at home and to US, German, British and Japanese banks. And bring home a lot of wealth/profits/food to the developed countries...without control of these tools, the US is forced to rely on the CIA and direct military intervention...very costly in terms of dollars and in terms of political legit- imacy...that is the lesson of Vietnam.

    5. US properity hinges upon the creation of new consumer goods. There have been 4 or 5 great depressions since 1800; new inventions have worked to renew demand and economic growth. The automobile, railroads, television, radio, cinema, computers and now the Internet continue to stimulate demand.

    6. Political legitimacy at home is crucial. As the underclass grows; as white male workers are marginalized; as the middle class continues to bear more and more of the tax the delight of the wealthy; as political corruption and bureaucratic ineptitudes continue to dis-enchant people from the nation-state, legitimacy becomes a serious problem.

      There are solutions. Social justice is the best solution but it is costly to the wealthy. Racism, religiousity, the false masculinities of sports and violence, demonization of the young, gender bashing and national chauvinism still work to shape both street politics, public policy and private relationships.

      These are, however, short-term and self-defeating solutions which may postpone civil strife but at the expense of social and economic health of the country.

      Again, social justice is the best long-term solution...not criminal justice nor incivility toward minorities. Social justice...

  6. Five futures for America. Modern science requires one predict one and only one outcome state. Postmodern science permits/requires a plurality of parallel and contrary outcomes. I predict all the following in varying unpredictable combination:

    1. The Soylent Green Solution...well protected residences and working space for the affluent and their clients; a reactive police presence for the growing underclass left to parasitize upon itself.

    2. The English Model: genteel was the case with Greece, Rome and other imperial countries before it, the USA may follow the English example; relinquish power and status to any one of the NICs and grow old with some grace.

    3. The Serbian Model...internal/incestuous warfare in which one ethnic enclave claims superiority and tries to solve its social problems on the backs of other ethnic enclaves.

    4. The Theological State...Islam and Israel are both attempting to impose an religousity and exclusivity upon those within the borders of given nation-states. In Islamic states, Islamic law provides very important solutions to poverty, housing, health care and social peace...gender inequality remains but class inequality is greatly minimized...Islam is most appealing to the poor in such is religious fundamentalism among the poor in the USA, the former Soviet Union and in Latin America.

      Liberation theologies may work to humanize/expand the shape of Universal Being but just now, things look like more religious conflict.

    5. Democratic Socialism. With the collapse of bureaucratic/repres- sive socialism, other forms of socialism now seem more likely. The Mondragon co=ops in northern Spain; Kerala State in India; the communist cities of Italy; newly re-organizing nations in Central Europe as well as the possibility of great improvement in Cuba and perchance China hold out promise for a better way to do social justice on a global scale.

I ended the lecture by telling the students that they now sit on the edge of history and have a good seat with which to watch and work for the kind of society they want...that sociology gives them the concepts with which to understand the factors which shape their lives and the models with which to re-shape them. I told them that others at the University of Indiana had greatly influenced the world and that their final field assignment was to do the same in their own life-time ...and that is your final assignment from this series of mini-lectures as well.

Go in peace, TR