Posts Tagged ‘Max Weber’

New publication: ‘The Power of Ideas’ collects ‘theoretical foundations’ posts

Wednesday, December 22nd, 2010


It’s finally arrived! The most anticipated (by me at least) Policy Progress publication of 2010, The Power of Ideas: Decline and renewal in the theoretical foundations of progressive thinking, is now online.

From my foreword:

This report collects together all of my writings on the ‘Theoretical Foundations’ topic, one of the main themes for the Policy Progress website in 2010. This topic goes right to the heart of what Policy Progress has been trying to do as a policy ‘think-site’ devoted to developing and supporting progressive initiatives and ideas. Over the course of this year, I’ve tried to grapple with the history and prospects of progressive thinking and renewal. And, perhaps miraculously, I feel that the 35 or so posts that formed the basis for this report really do add up to something that hangs together.

As I said yesterday, I won’t be able to write for Policy Progress anymore next year, so I’m pleased to have managed to complete this giant compilation as a record of (much of) the year’s work.

You can download a copy here.

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We value what we measure

Tuesday, December 14th, 2010

This is the third and final part of a series of posts about contemporary progressive thinkers who challenge the ‘conventional wisdom’ about economic growth. Part one looked at Richard Wilkinson and Kate Pickett’s The Spirit Level and part two looked at Tim Jackson’s Prosperity without Growth.

Wilkinson, Pickett and Jackson suggest that economic growth should no longer be — even cannot be — central to the progressive project. But what about those within the economics profession itself?

Joseph Stiglitz is a U.S. Nobel prize-winner, former chief economist of the World Bank, and author of Globalisation and Its Discontents and Freefall: America, Free Markets, and the Sinking of the World Economy. Amartya Sen, born in India, is also a Nobel prize-winner, and the author of Development as Freedom and The Idea of Justice. Both are highly-regarded progressive economists.

In 2008 and 2009, together with Jean Paul Fitoussi (a distinguished French economist), they headed a Commission on the Measurement of Economic Performance and Social Progress set up by President Nicolas Sarkozy of France, who felt that existing measures like Gross Domestic Product (GDP) didn’t tell a full and proper picture of the economy or society.

The Stiglitz-Sen-Fitoussi Commission produced a lengthy, thoughtful and thorough report. They argued that GDP was indeed a partial and often misleading measure, and proposed reform across three dimensions. First, classical GDP statistics needed to be refined to better take account of things like income distribution and the actual value of public services. Secondly, there was a need to complement GDP with measures of ‘quality of life’, including both purely subjective aspects such as happiness, and more objective factors drawn from Sen’s ‘capability framework’. Thirdly, we need to measure and track the sustainability of our economy, defined quite precisely as whether “at least the current level of well-being can be maintained for future generations” — for this the Commission argued that an approach based on changes in resource stocks (which Tim Jackson would recognise) would be needed.

Across all three dimensions, the Commission’s arguments are well-developed and compelling, although they were clear that their report was very much a starting point for what would be a complex exercise of statistical reform.

And, while predominantly an expert technical process, their work is likely to have important policy consequences and implications for progressive thinking. This is because the way we account for things helps determine the way we see the world. What we measure, we value; and, too often, if it isn’t measured, it slips out of view. This was a central theme of New Zealand politician and academic Marilyn Waring’s feminist critique of economic statistics, Counting for Nothing, back in 1988, and this work is very much in that vein.

In a ‘Reflections’ paper accompanying the main report, Stiglitz, Sen and Fitoussi are more explicit about this aspect of their project:

It is our belief that an open discussion of the issues – and problems – involved in measuring economic performance and social progress provides an important context within which societies can engage in critical debates about societal values. (p. 27)

Otherwise, the “risk is that as countries strive to increase measured GDP, they take actions which now, or in the future, may actually lower societal well-being” (p. 10). This can be seen with the environment:

Countries that enjoy high living standards today by depleting their inheritance of natural resources – without investing the proceeds – are “robbing” future generations. It is possible that doing this does not even increase their welfare, as people usually care about the well-being of their children, but they may unintentionally act this way, at least partially because they are not informed, absent the right metric. (p. 10)

And even with the recent Global Financial Crisis:

Many concluded, for instance, that financial deregulation was good, because it led to rapid expansion of the financial industry and an increase in measured GDP. We now know that that growth was not sustainable; that much of the profits earned in 2004-2007 might more appropriately be looked at as winnings in gambling by some, which were more than offset by the losses in 2008, and the following years, by others. (p. 11)

What, therefore, are the likely implications of measuring things in a broader and more accurate way? How would this approach, if implemented, be likely to inform the further development and renewal of progressive ‘theoretical foundations’?

In some respects, it would likely be compatible with the arguments of The Spirit Level and Prosperity without Growth. We would become more aware of which types of societal and economic development were having the most positive (or negative) impact on quality of life, and whether we were on a sustainable path. The Commission’s work can’t at this stage point to whether a strict path of de-growth is necessary, as Jackson argues, but would nevertheless encourage us to see the quantum of economic activity as just one set of factors in achieving progressive goals of equitable wellbeing. Metrics on things like leisure, happiness and political voice would help to provide a broader picture.

A secondary but still important consequence might be to counter negative images of the effectiveness of public services. The modern image of the public sector languishes under the constant suspicion of inefficiency and dysfunction, a far cry from the chilling efficiency of ‘bureaucratic authority’ depicted by Weber and which (I have argued) helped underpin the Keynesian-era confidence in the state. Cautiously, without wishing to prejudge, the Stiglitiz-Sen-Fitoussi Commission suggests that if we could better measure the value and not simply the input costs of non-market public activity, we may see a more positive picture of improved value over time (often in form of better quality and more effective services in areas like health and education, rather than larger volumes).

That may be one more way in which the seemingly mundane process of statistical reform could transform the way we see things, and deconstruct some of the statistical ’story’ that neoliberalism has constructed about the primacy of growth and markets.

Links:

  • The main Stiglitz-Sen-Fitoussi Commission report.
  • The accompanying ‘Reflections and Overview’ paper from Stiglitz, Sen and Fitoussi.
  • My earlier post on Weber.

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Weber Out-Takes 3: Max and the Austrians

Friday, August 6th, 2010

This week’s column discussed Max Weber’s theory outlining the strengthens of bureaucratic administration (in both the public and private sectors) and also mentioned the much more negative tract Bureaucracy by Ludwig von Mises of the Austrian school of economics. (As mentioned previously, the Austrians were particularly sceptical of the efficacy of state action.)

But I didn’t have space to explore the links between the two men. This is from Wikipedia:

[Weber's] “action sociology”, as they called it, was a frequent topic in the “Mises Circle”, an influential group headed by Ludwig von Mises, a key figure in the Austrian School . . . [Austrian school co-founder Freidrich von] Hayek also frequently attended these discussions, and the subjective method advanced in his The Counter-Revolution of Science: Studies in the Abuse of Reason (1952) reflects these influences. Ludwig Lachmann, a later member of the Austrian School, made explicit the Austrian School’s indebtedness to the Weberian method.

Interestingly, given their methodological and sociological differences, Weber and Mises were not only acquainted, they shared an admiration for each other’s work. Mises considered Weber a “great genius” and his death a blow to Germany. Likewise, Weber comments that Mises’s Theory of Money and Credit is the monetary theory most acceptable to him[66]. Weber accepted Ludwig von Mises’s criticism of socialist economic planning and added his own argument. He believed that under socialism workers would still work in a hierarchy, but that now the hierarchy would be fused with government. Instead of dictatorship of the worker, he foresaw dictatorship of the official.

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Weber Out-Takes 2: Max and Maynard Keynes

Thursday, August 5th, 2010

Another aspect of the discussion that I wasn’t able to fit into this week’s column was Weber’s politics, and the resulting link between him and the other two influential thinkers mentioned in the column, Keynes and Beveridge, who were both liberals rather than coming from the socialist/social democrat/Labour tradition.

This is from Peter Beilharz’s entry “Max Weber” in Beilharz (ed) Social Theory: A Guide to Central Thinkers (1991) (pp. 228-9):

Was Weber, then, a socialist? The answer to this question is no, but it raises another, more interesting question about the relationship between liberalism and socialism. Weber was in some ways a cultured bourgeois like Keynes, but this did not prevent either from being a reformer. The logic of his social theory, however, was that the prospect of a qualitative break between capitalism and socialism was simply inconceivable. The day after the revolution — here he would agree with Gramsci and Durkheim — it would still be necessary to have bread in the shops and to get the children to school. In this regard Weber’s distaste may be said to be for certain socialists more than for socialism, which he viewed as an historic form of economic organisation.

This tends to reinforce Sassoon’s point, quoted in the column, that “Socialist theorists contributed very little to an understanding of how to institute social reforms under capitalism, or of how to run the system”.

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Weber Out-takes 1. Max on Tammany Hall

Wednesday, August 4th, 2010

I was intrigued, reading Weber’s Politics as a Vocation (1918-9) for this week’s column, to come across an extended serious discussion about the corrupt party machines like Tammany Hall that dominated US city politics in the 19th century and into the 20th century. For reasons of space I didn’t make more than a passing mention of this in the column, but here’s what Weber wrote:

What does this spoils system, the turning over of federal offices to the following of the victorious candidate, mean for the party formations of today? It means that quite unprincipled parties oppose one another; they are purely organizations of job hunters drafting their changing platforms according to the chances of vote-grabbing, changing their colors to a degree which, despite all analogies, is not yet to be found elsewhere . . .

In America, the spoils system, supported in this fashion, has been technically possible because American culture with its youth could afford purely dilettante management. With 300,000 to 400,000 such party men who have no qualifications to their credit other than the fact of having performed good services for their party, this state of affairs of course could not exist without enormous evils. A corruption and wastefulness second to none could be tolerated only by a country with as yet unlimited economic opportunities . . .

Thus there exists a strong capitalist party machine, strictly and thoroughly organized from top to bottom, and supported by clubs of extraordinary stability. These clubs, such as Tammany Hall, are like Knight orders. They seek profits solely through political control, especially of the municipal government, which is the most important object of booty. This structure of party life was made possible by the high degree of democracy in the United States — a ‘New Country.’ This connection, in turn, is the basis for the fact that the system is gradually dying out. America can no longer be governed only by dilettantes. Scarcely fifteen years ago, when American workers were asked why they allowed themselves to be governed by politicians whom they admitted they despised, the answer was: ‘We prefer having people in office whom we can spit upon, rather than a caste of officials who spit upon us, as is the case with you.’ This was the old point of view of American ‘democracy.’ Even then, the socialists had entirely different ideas and now the situation is no longer bearable. The dilettante administration does not suffice and the Civil Service Reform establishes an ever-increasing number of positions for life with pension rights. The reform works out in such a way that university-trained officials, just as incorruptible and quite as capable as our officials, get into office. Even now about 100,000 offices have ceased being objects of booty to be turned over after elections. Rather, the offices qualify their holders for pensions, and are based upon tested qualifications. The spoils system will thus gradually recede into the background and the nature of party leadership is then likely to be transformed also–but as yet, we do not know in what way.

P.S. Matthew Yglesias’s appreciation of Politics as a Vocation from late last year is also worth reading.

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Bring on the State

Tuesday, August 3rd, 2010


This follows on from the 6th July 2010 column How Keynes gave the ‘go-ahead’ for the Welfare State.

We have seen how Keynesian economic theories had a wider impact on the theoretical foundations for post-World War II progressivism than simply a prescription for how to deal with crises of ‘underconsumption’. They helped provide progressives with the sense that the state could manage capitalism’s tendency towards crisis and achieve prosperity within a capitalist economy in a way that the private sector left to its own devices was unable to.

This was in contrast to previous social democrat thinking that held that the state could do little good in a capitalist economy and only hope to manage the transition to socialism. It makes sense then that both Keynes and William Beveridge, who wrote the blueprint for the postwar welfare state, were liberals rather than social democrats. Donald Sassoon argued that, “Socialist theorists contributed very little to an understanding of how to institute social reforms under capitalism, or of how to run the system” (pp. 140-1).

It is also worth remembering that at that time even many mainstream economists (who generally opposed state intervention) were less than sanguine about capitalism’s ability to deliver self-sustaining prosperity. Looking back from 1964, the Scottish economist Alec Cairncross explained,

Long after Adam Smith, the literature of economics is strewn with prophecies of a stationary state in which growth would finally cease under the influence of some limiting factor such as population growth, the law of diminishing returns, a fuel shortage or a chronic tendency to over-save . . . The main shift of public opinion did not take place until the war and the post war years. (quoted in Sassoon, p. 245)

On top of that came the impact of the experience of a Great Depression and a World War, and thus:

The spirit of the time was on the side of social reformism . . . This reflected the amazing unpopularity of capitalism everywhere in Europe immediately after the war. These years constituted the nadir of capitalist ideology. Everyone was in favour of state intervention and structural reforms; no one wanted to return to the bad old days of the 1930s. Thus, the Italian Christian democrat leader Alcide De Gaspari, in a speech on 23 July 1944, claimed that Karl Marx and Jesus Christ, ‘a Jew like Marx’, shared the same message of equality and universal brotherhood, ‘the true image of redemption.’ (p. 140)

In all respects, then, the time was ripe for the state to play an active role in advancing the causes assigned to it by progressives.

But this is not to say that prior to that time, the efficacy of the state as an actor had been in doubt; it was more that these new ideas widened the provence of its activities.

Indeed, it is important to understand that, in contrast to our own time when the inherent inefficiencies of the state have been theorised in exquisite detail by neoclassical economists and others, the modern state was already regarded (even before the Depression and War) as fairly formidable.

The theorist who had done the most to explain why it should be so regarded was Max Weber. Indeed, his description of the features of the ideal-type bureaucracy, set out in his Economy and society : an outline of interpretive sociology (1922) is still taught in public administration courses today. Weber himself was not an advocate of bureaucratic administration (as is sometimes believed) but was rather seeking to analyse changes in society. He envisaged an historical process where the type of authority in society evolved from:

  • charismatic authority (based on the personal charm or strength of an individual personality); to
  • traditional authority (the source of authority for monarchies); to
  • rational-legal authority, based on “a belief in the legality of pattens of normative rules, and the right of those elevated to authority under such rules to issue commands”.

Rational-legal authority is associated with a bureaucratic system of administration, the features of which included: fixed salaries, hierarchy, being bound by rules, and appointment on merit. This is in contrast with much of the way the system operated in the pre-modern state (or in the 19th century US under ‘clubs’ like Tammany Hall).

Moreover, these systems are to be found in both the public and private sector. Weber wrote:

In public and lawful government these three elements constitute ‘bureaucratic authority.’ In private economic domination, they constitute bureaucratic ‘management.’ Bureaucracy, thus understood, is fully developed in political and ecclesiastical communities only in the modern state, and, in the private economy, only in the most advanced institutions of capitalism.

That shared ‘modern’ identity for the public service on the one hand and the new managerial stata on the other is important. This was also the era of Taylorism, or ’scientific management’, in industry. The private sector too was trying to organise activity in a planned and mechanised way. Bureaucratic forms of organisation were not seen as a weakness of the state but a strength.

Even a 1944 tract Bureaucracy by Ludwig von Mises of the Austrian school of economics (whose analysis of the market’s superior dynamism was later to prove important to the critique of the state) had little to say about the inefficiency of bureacracy and focused more on how it undermined individual liberties

That made perfect sense. In the 19th and first half of the 20th century the state was something to be fearful of, not to deride as insufficiently energetic.

It was only after years of living with bureaucracies (public and private) in daily life, that the idea of the state as banal, mundane and lethargic — which we in New Zealand identify with the sitcom Gliding On — took root in the public imagination. That idea has of course now become central to the conservative critique.

For this reason, the kind of theoretical counter-arguments today’s progressives seek to mount about the efficacy of the state do not have direct parallels in the era of Keynes and Beveridge that we can draw upon, and a confident theory of “state effectiveness” is probably still to be fully developed.

To the extent that progressives of the 1930s and 1940s did have an implicit understanding that the state would be a capable actor, however, the “Weberian civil service” (though intended as a descriptive rather than normative model) is likely to have furnished a template in their heads. It may be that, despite all the changes in society and in our thinking about organisations since then, some of the essential elements of that template are still useful for that purpose today.

Links

Further Reading

  • Peter Beilharz, “Max Weber” in Beilharz (ed) Social Theory: A Guide to Central Thinkers (1991).
  • Michael Hill (ed), The Public Policy Process. Fourth edition (2005), Chapter 10 (on Weber and bureaucracy).
  • Donald Sassoon, One Hundred Years of Socialism. The West European Left in the Twentieth Century (1997), Chapter 6 and Chapter 10.

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