Covers environment, transportation, urban and regional planning, economic and social issues with a focus on Finland and Portugal.

Monday, February 11, 2008

The current capitalist system

1. Concept of social class [5]

The capitalist system is based on two institutions, whose integrity is crucial for its survival:

The private property - the social power of private property is exercised impersonally by market forces on the capital market, and personally in administrative privileges in companies.
The labour market - under-pinned by the power of the ruling class aiming to create unemployment and thus subverting the opposition to his “kingdom” through deflation, loss of confidence among investors, economic cycles of consecutive growth/slowdown.

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Currently, there is strong argumentation against the importance of the concept of social class, considering that the mode of consumption is much more significant than the means of income or that there is a different form of social identification, largely cultural and religious, which can lead to identity conflicts, much observed in industrialized societies.

However there still exist quite important arguments in favour of the concept of social class, considering that it may contribute to the development of the individual's identity. It still exists a so called upper-class, isolate itself from other classes and almost impossible to penetrate; emerges a new "super-class", an "elite" of professionals and managers, who receive high salaries and and share ownership; the working class continues to have class conscience, continuing to believe in possible conflicts of interest.

Another prospect believes that any conception of class based on models of power is very limited, since the quality of life cannot be expressed in purely economic terms or property, but in terms of individual freedom, health and social respect .

Therefore, the concept of "class" is very complex, resulting from a combination of several factors: class; "status"; party / social activism; way of social, cultural and religious identification; access to information and media power. In addition to this, the social compositions are variable from country to country, with no rigid boundaries within each of these compositions.

So I think the future, particularly in the industrially advanced countries, may be of societies composed of multiple layers, each one with its own system of values. I believe that the concept of class based on labour, may disappear in societies that have achieved a large degree of industrialization, due to technological developments verified in the production process.

But the colossal disaster is reflected in the millions of shattered lives excluded from the system, the most vulnerable, the exploited of the exploited, living situations of extreme poverty, victims of human traffic, drugs addiction, epidemics, abandonment and social marginality, military conflicts, racial discrimination, etc. Unless creating conditions for freeing the human beings subject to these life conditions, no society will be truly free or have social peace.

Even so, the concept of class in its economic aspect – the position of a person in a market determines its position in the class - remains an important analysis tool to find a solution to the increasing inequality of income between the world population as a result of the neoliberal policies. It should be used alongside a vision covering cultural and ethical values, adverse to the logic of capital accumulation and exacerbated consumerism as factors of social promotion, in an deconstruction attempt of the existing social-economic model.

Therefore, today and from an economic point of view, a generic model representative of a developed Western society, could be a five class model: a dominant social class or “upper class”, consisting mainly by the major owners of the means of production; a middle class divided into 2 parts - upper middle class and lower middle class; a working class; a lower class, characterised by repeated cycles of unemployment and the fall below the poverty line from time to time, when employment opportunities are scarce. A large share is composed by the lower middle class and the working class - more than 60% of the workforce – both with undefined borders.

Intellectuals and technical cadres are a social group transversal all classes. In general it has been accentuated the exploitation to which they are subject, with a clear deterioration of their economic and labour situation, increasingly excluded from top business decisions.

2. The limitations of reformism [7]

A share corresponding to the income of property has exponentially increased. The famous “trickle down” economic theory claims that the foreign and local investment, combined with large tax benefits to companies, naturally causes a redistribution of wealth from the economically dominant class to the other classes i. e., higher standards of living for the poor will develop gradually and not at the overt expense of the more affluent. [8]

Such policies are leading to a growing social polarization and to a growing instability and insecurity between the so called middle class - the rich becoming richer, the poor becoming poorer.

The current capitalist system, in full phase of the neoliberal globalization, is transforming the work into mere commodity. It is dehumanizing the work, whether manual or intellectual.

However, the normal mechanisms and game rules of the two markets initially described - the capital market and the labour market - could generate a political resource allocation, which could lead to "the corporate management yields up more and more of its prerogatives to the mobilized collective will of the workforce". Here an opportunity might arise for the big challenge - "the labour “de-commodification” , and the enmeshment of the investment function in a net of direct and indirect social controls". This could be the key to a progressive and cumulative transition to social justice and job security.

Maybe what we lack to do is to plan the change. To achieve the objectives of basic social justice and job security, it will be necessary to design these changes and implement them. The difference between revolution and reform lies in their capacity to mobilize the working class.

According to the reformist limitations thesis, a movement of workers which organizes around a reformist program can never represent a challenge to capitalism. However, opposite view arguments that unless the dominant political element of a reformist labor movement can be diverted from its program and its internal cohesion thereby destroyed, the challenge will be inevitable.

Furthermore, the way a party keep its political “faith” (going beyond mere welfarism) can save it from disintegration and marginalization, sustaining the unity of the movement. If the party moves away from the reformist path (as currently happens in most cases) the movement will replace it as representative political front or as the privileged interlocutor of the organised working class.

The compatibility between reformism and capitalism will thus be measured by the relationship between the policies of labour organisations and the vital institutions of capital.

This post is the second part of the full article "Koistinen"


[5] Wikipedia article: Social class
[6] Rhizome News: Historical Resource Roundup: Radical Software,
[7] Winton Higgins and Nixon Apple, Journal Theory and Society, How limited is reformism?
[8] David Truskof, Trickle down economics perpetuates war