The C word

We don’t need anyone these days to tell us that we’re in a mess. Nor to explain why. The libraries are groaning with books on globalization…… deregulation…..privatization…. debt….neo-liberalism…. greed……inequality…. corruption….. pollution…… austerity……… migration.

I’ve just finished a book by Jerry Mander - The Capitalism Papers – Fatal Flaws of an Obsolete System (2012) (the link gives the entire text) which is as good a moral critique of the system which few dare to name as you’re likely to read – “Jerry!”, one of his friends, says – “I hope you’re not going to use the “C” word”!!

I wondered about this reluctance to talk about capitalism – and duly googled the word, unearthing quite a few treasures I have so far missed, two of them produced in 1999 and clearly major works. The New Spirit of Capitalism is a French contribution by L Boltanski and E Chiapello whose main focus is -

management literature, and the ways in which it shifted between the 1960s and the 1990s in tone, content, and the general set of assumptions about capitalism and the role of management. Boltanski and Chiappello, as their title suggests, draw directly on Weber’s classic analysis of “The Protestant Ethic and the Spirit of Capitalism”. Put simply, Weber’s account maintains that the emergence of a full-scale capitalist economy depended in part on a change in the habits of commercially-successful merchants, master craftsmen and entrepreneurial farmers, whose forebears might have spent their profits on luxurious lifestyles and, if sufficient, on the land, titles and symbolic goods necessary to gain admittance to the aristocracy.

The pursuit of such worldly glories might always have diverted resources away from investment in further productive capital if the ideology of Puritanism had not motivated the proto-capitalist actively to avoid them in favour of dedication to the singular vocation of his ‘calling’.

Boltanski and Chiapello derive from this account the axiom that capitalism requires from its key agents a degree of dedication, hard work and self-sacrifice which does not come naturally or easily. As such, capitalism must always be animated by a ‘spirit’, an ideology which inspires and motivates not the entire population, but the key sections who must be committed quite explicitly to the project of capital accumulation if it is to carry on successfully.
 Boltanski and Chiapello identify three such ‘spirits’, the first being Weber’s; the second being the bureaucratic ‘spirit’ of the era of high Fordist industrialism (the ideology of the ‘company man’), and the third being the ‘new spirit’ of the highly flexible, network-intensive knowledge economy

The Cultural Studies journal gives a well-referenced review of the book which was only translated into English in 2006 and was in 2013 paid the tribute of a book-length analysis - New Spirits of capitalism? Crises, justifications and dynamics (2013) by Paul du Gay, Glenn Morgan. The language of both books is, however, a bit off-putting and presumably explains their lack of impact on the general public. Another review of the original 1999 book is here.....

1999 also apparently saw the first appearance of what looks to be a blockbuster of a book - The cancer stages of capitalism by John Mc Murtry reviewed here whose author gave us, more recently, both a second edition and a summary of his argument. Again, however, I have a reservation about the writing style - I really do believe that poor writing reflect poor thinking.......

But my failure to register his book makes one wonder about the motives behind the high profile of writers such as Naomi Klein…..is it just her beauty that impacts I have to wonder………

Richard Sennett is a better known writer – although hardly a rabble-rouser…..I was disappointed by his book about cooperation but his The Culture of the new capitalism (2006) looks much more interesting and seems to link up with The New Spirit of Capitalism – see this review

The Great Recession is a Marxist treatment of profits and this particular post from the blog behind it gives the sort of longitudinal treatment of the subject which is so often missing from discussions

Those preferring more journalistic approaches could do a lot worse than read this Spiegel article about the world view of the new billionaires.

I’m reminded of a wave of books in the 1970s which were early harbingers of this sense of crisis - James Robertson’s The Sane Alternative (1978) and Ronald Higgins’ “The Seventh Enemy” (1978) were typical examples. The second described the 7 main threats to human survival as the population explosion, food shortage, scarcity of natural resources, pollution, nuclear energy, uncontrolled technology - and ……human nature. The author’s experience of government and international institutions convinces him that the most dangerous was the moral blindness of people and the inertia of political institutions.

A lot has happened in the subsequent 47 years – new pressing issues have been identified – but who would gainsay Higgins’ identification of the “seventh” enemy? These days, there would probably be a majority in favour of stringing up a few bankers, politicians and economists – “pour encourager le autres” – were it not illegal…

Over the years, I’ve read and collected books and articles to help me identify the sort of agenda and actions which might unite a fair-minded majority.

Like many people, I’ve clicked, skimmed and saved – but rarely gone back to read thoroughly - for example this post of last September which listed books about "the crisis" which were waiting for me in a special pile few of which I have yet got round to...............

The folders in which they have collected have had various names – such as “urgent reading” or “what is to be done” – but rarely accessed.

Occasionally I remember one and blog about it.

I need to be more disciplined………………

An Etzioni resource

Last week’s sad funeral at least gave me the chance to retrieve a package which had been waiting for me since November in my neighbour’s house in my Carpathian village. By great coincidence it included a copy of Etzioni’s 2003 autobiography My Brother’s Keeper - which tracks the life of a rare character who managed to straddle successfully the worlds of academia (he is an organisational sociologist) and activism and therefore thoroughly to warrant the label of public intellectual

Etzioni’s has worked as a theorist, researcher, and political advisor, and has even developed his own political strategies. Only a few social scientists have been as active as Etzioni (born in Koeln in 1929) in all four of these fields. He follows in the footsteps of Karl Marx, Max Weber, and Emile Durkheim, all three of whom were not just theorists, but were also able – although each in his own manner – to act as polemicists and political activists…..

Instead of being demoralized by the power of the market and the state, Etzioni places faith in the citizen’s practical abilities of self-organization. Etzioni counterposes the failures of the market and the state by pointing to a third social sector, the communitarian society. Even in his first important book on social theory, “The Active Society” from 1968, Etzioni formulates the ambitious goal of “societal guidance”.

His multiple roles and activities are nicely set out in an assessment of his work by David Sciulli - Etzioni’s Critical Functionalism – communitarian origins and principles (2011) and another book (produced in 2005) The Active Society Revisited took another look at one of his classic 1968 productions which I remember being a bit too overwhelmed by to venture far into….

The Communitarian Reader (2004) is a useful collection of articles by his major associates in the venture to sketch out an alternative to neo-liberalism and collectivism which became known (in Europe at any rate) as the “third way” and which, arguably, somewhat tarnished his reputation – by virtue of the charlatans (such as Blair and Schroeder) with whom he associated

Nothing daunted, he ran a journal - The Responsive Community journal – for almost a decade; inaugurated the International Communitarian Society and broadened his application of his approach in the book The New Golden Rule

For my money, the one weakness of his analysis is that it does not properly take on board issues of power and profit. 

He is now 89 and still going strong - Last year he issued The New Normal and also an interesting paper on Politics and Culture in an age of Austerity which spends too much time for me on issues of “happiness” but which makes the following critical comment on one of the recent key books on that subject

Skidelsky and Skidelsky’s seven elements of a good life are decoupled from consumerism but not necessarily from self-centeredness. Two goods are dedicated to creature comforts, namely security and good health. In their rendering, security is of the person, not the nation; health is that of the individual, with little attention to public health. The inclusion of respect and friendship (akin to Maslow’s self-esteem and affection) in the list of goods is a major step forward, as gaining these goods is disassociated from buying things to enhance one’s status or to express friendship.

Skidelsky and Skidelsky enrich Maslow by adding three goods. First is harmony with nature, which for them is not an expression of concern for the environment but, rather, a quest for inner tranquility of the individual (Skidelsky & Skidelsy, 2012).

Next on the list is personality, which is “the ability to frame and execute a plan of life reflective of one’s tastes, temperament and conception of the good… as well [as] an element of spontaneity, individuality and spirit” (ibid., p.160). Both are self-centered.

Finally, while Maslow put selfactualization at the pinnacle, Skidelsky and Skidelsky crown leisure at the top of the list of the goods. Leisure is defined as “self-directed activity” and “purposiveness without purpose” (ibid., p. 9). It is an intrinsic good wherein people can and should flourish by doing well in whatever they choose to undertake: “The sculptor engrossed in cutting marble, the teacher intent on imparting a difficult idea, the musician struggling with a score…such people have no other aim than to do what they are doing well” (ibid.)

At the peak of his European peregrinations selling the “third way” he wrote this short piece for The New Statesman – and this longer pamphlet for the Demos ThinkTank

This review of his autobiography not only gives a good sense of the trajectory of his life but sums up my own feelings that he got his wings sizzled by supping too close to the devil….

Despite this reservation, however, he is one of these rare individuals I feel who has used his endowments to create a real and original sense of the "public good"......   

Those wanting to know more about Etzioni can access archives here and interesting comments here

Thought for the Day

“Lower standards” has been a common complaint in society for decades. Indeed things have been going downhill for many European commentators for most of the past century

The 20^th century began so hopefully but the first world war – and its aftermath - destroyed these hopes and led to the ideological struggles which ended only 25 years ago.

Jose Ortega y Gasset's 1930 The Revolt of the Masses blamed in 1930 the "political domination of the masses" for the decline in standards. Ortega believed that the rise of the masses threatened democracy by undermining the ideals of civic virtue that characterized the old ruling elites.

Loss of religious authority is often regretted as having created a moral vacuum leading irresistibly to the present-day culture of instant gratification

Television; parental laxness; the language of entitlement; political correctness; and multiculturalism are variously identified as the main culprits…..

If we can agree that the balance between freedom and authority has gone too far, how do societies pull back? 

Most people assume that some sort of behavioural change is needed – along the lines perhaps of Ametai Etzioni’s Communitarianism which sets out ways in which the ethic of social responsibility can be brought back into our schools and workplaces. 

But a growing number of people see that as impossible to achieve against the power of consumerism and commodification which advertisers thrust on us every minute of the day - and are simply choosing to opt out of the materialist society. 

Of course, that in itself is a highly individual choice and fragments us socially even more……

This is part of a series of thoughts sparked off by my use of the word "amoralism" to describe contemporary Romania......

Survival in Romania

I referred briefly yesterday to the scandal which is currently gripping Romania – that of ex-Presidential candidate Elena Udrea. Anyone familiar with the writings of Tom Gallagher would have evinced not an iota of surprise at the revelations of greed and illegality. They loomed large in his most recent book on the country - Romania and the European Union – how the weak vanquished the strong which had followed his 2005 book Theft of a Nation itemising the kleptomania which has been a feature of the country’s political class for centuries….. 

Yesterday’s post used the phrase “consumerist amorality” of contemporary Romania – the last word alluding to Edward Banfield’s study in the early 1950s of a small town in southern Italy whose inhabitants displayed loyalty only to the members of their nuclear family and who had absolutely no sense of social responsibility for wider circles. The book (published in 1955) was called “The Moral Basis of a Backward Society” 

Banfield concluded that the town's plight was rooted in the distrust, envy and suspicion displayed by its inhabitants' relations with each other. Fellow citizens would refuse to help one another, except where one's own personal material gain was at stake. Many attempted to hinder their neighbours from attaining success, believing that others' good fortune would inevitably harm their own interests. "Montegrano"'s citizens viewed their village life as little more than a battleground. Consequently, there prevailed social isolation and poverty—and an inability to work together to solve common social problems, or even to pool common resources and talents to build infrastructure or common economic concerns.

"Montegrano"'s inhabitants were not unique nor inherently more impious than other people. But for quite a few reasons: historical and cultural, they did not have what he termed "social capital"—the habits, norms, attitudes and networks that motivate folk to work for the common good.

This stress on the nuclear family over the interest of the citizenry, he called the ethos of ‘amoral familism’. This he argued was probably created by the combination of certain land-tenure conditions, a high mortality rate, and the absence of other community building institutions.

Sixty years later, Ronnie Smith profiled (in “City Compass Guide Romania”) the ordinary Romanian in a similar way -

If you are fortunate enough to drive in Bucharest you will witness what is probably the clearest evidence of mass individualism in global human society. Romanian people, of all shapes, sizes, social and educational backgrounds and income brackets will do things in their cars that display a total disregard for sanity and other drivers.

Manoeuvres such as parking in the middle of the street, u-turning on highways without any warning and weaving between lanes in heavy traffic at 150 kilometres per hour are commonplace and point to an extreme lack of concern for the safety or even the simple existence of others.

The next time you are waiting to get on a plane at Henri Coandă airport, take a little time to observe how queuing in an orderly and effective manner is clearly regarded as an af­front to the sovereignty of the Romanian individual. Enjoy the spectacle of the pushing, shoving and general intimida­tion that follows the arrival of the airport staff to supervise boarding. Even while watching an international rugby test match you will only occasionally see the same intense level of barely controlled aggression.

Outside of their core social networks Romanians closely follow the rule stating that it is every man, woman and child for themselves. ……There is an opinion poll, published in early 2012, show­ing that around 90 percent of the Romanian population regards almost all of their compatriots as utterly untrust­worthy and incompetent. At the same time 90 percent, possibly the same 90 percent, see themselves as being abso­lutely beyond reproach. This is clearly an extreme response no matter how you view it and provides evidence of an ex­traordinary and troubling imbalance within the generality of Romania’s social relationships.

There is a well-known prayer in Romania, which roughly goes: “Dear God, if my goat is so ill that it will die, please make sure that my neighbour’s goat dies too.”

So what does this commonality suggest? The EU’s first Ambassador here was Karen Fogg who gave every consultant who came here in the early 1990s (like me) a summary of what can be seen as the follow-up to Banfield’s book – Robert Putnam’s Making Democracy Work – civic traditions in Italy (1993) which suggested that the laggardly nature of southern Italian Regions was due entirely to this “amoral familism”.  Putnam made an even greater play oF missing “social capital” – indeed spawned an incredible technocratic literature on the concept and ideas on how it could be “engineered” to deal with the new alienation of modern capitalism..

Romanian communism, of course, had almost 50 years to inculcate more cooperative attitudes and behaviour – but the forced nature of “collective farms”; the forced migration of villagers to urban areas to drive industrialisation; and the scale of Securitate spying created a society where, paradoxically, even fewer could trusted anyone.      

From 1990 the market became God; Reagan and Thatcher had glorified greed; the state was bad; and television – which had been limited by Ceaucescu to 2 hours a day - the great good……As the commercial stations and journals spread, the values of instant gratification became dominant. So we shouldn’t be surprised that the average Romanian seems to behave in such an aggressive and selfish if not amoral way………

Grancea’s article on “the concept of freedom in Romania” may be a very bad translation but does emphasise a crucial point – that the words foreign business men, consultants and academics have brought to Romania do not resonate in people’s minds the way we imagine them to…..They have in fact become simply another series of verbal weapons to use in the struggle for position..........

Almost 5 years ago I quoted this poem –

Smuggler
Watch him when he opens
His bulging words – justice
Fraternity, freedom, internationalism, peace,
peace, peace. Make it your custom
to pay no heed
to his frank look, his visa, his stamps
and signatures. Make it
your duty to spread out their contents
in a clear light
Nobody with such language
Has nothing to declare

My E-book Mapping Romania - notes on an unfinished journey tries, in various places, to deal with some of these cultural aspects - particularly section 7.2 at page 31 and all the annexes

Two funerals and a scandal

Attending funerals was one of the things which I did as a senior Regional politician in the 1970s and 1980s – as the older officials in the ranks of our professional advisers passed away. As I changed countries and roles in 1990, only the street procession of an Azeri President’s funeral registered – until my mother’s own funeral in 2005.

But this past week has seen two funerals of older friends in this part of the world. First, in Sofia on Friday that of my friend Vihra’s father – from whom I always received a warm welcome in her gallery.

And yesterday we bade farewell to Maritsa our neighbour for 15 years in the Carpathian village I call home.

Both were Orthodox ceremonies but provided sharp contrasts – partly because I witnessed only the church ceremony in Sofia but mainly because of the different settings. Rural funeral ceremonies are permitted the traditional “wake” and horse-drawn “carriage” when the open coffin lies on an open cart amidst the mourners who accompany the body, carrying the wreaths (in this case almost 100) from the house to the church – stopping every few minutes for prayers.

We had arrived at 17.00 the previous evening just as the night’s “wake” was starting – Maritsa had been dressed in the costume of the area and she and her grieving husband Viciu were surrounded by  friends, relatives and neighbours….It was to be a long night for him. At 07.00 he was still able to smile as we shared a coffee – but he seemed a broken man as he stepped out at midday to accompany Maritsa on the last long walk to the church….The two had shared a warm marriage for 64 years….

The evening and morning provided quite a few choice vignettes as the entire village and surrounding area turned out for one of the area’s important social occasions. Of course, the mayor was in his element with such an opportunity to network and negotiate – although, sitting next to Viciu and me in the kitchen, he totally ignored Viciu and proceeded to chat at length with a city official about the budget!      

The week so far in Romania has been a powerful one – one of six books I picked up in Bucharest’s English Bookshop was Mike Ormsby’s book of short stories (indeed sketches) - Never Mind the Balkans, here’s Romania which capture incredibly well the consumerist amorality which has penetrated so quickly into the soul of Romanians……I refer (discretely) to this in several places in my E-book on the country - Mapping Romania - notes on an unfinished journey, particularly in the section on films which mentioned a tough portrayal of contemporary Romania - Child’s Pose -  which received the top award at this year’s Berlin Film Festival but which we found a bit too close for comfort.

One cold evening in March, Barbu is tearing down the streets 50 kilometres per hour over the speed limit when he knocks down a child. The boy dies shortly after the accident. A prison sentence of between three and fifteen years awaits. High time for his mother, Cornelia, to intervene.

A trained architect and member of Romania’s upper class, who graces her bookshelves with unread Herta Müller novels and is fond of flashing her purse full of credit cards, she commences her campaign to save her lethargic, languishing son. Bribes, she hopes, will persuade the witnesses to give false statements. Even the parents of the dead child might be appeased by some cash.

Călin Peter Netzer, the film’s director, portrays a mother consumed by self-love in her struggle to save her lost son and her own, long since riven family. In quasi-documentary style, the film meticulously reconstructs the events of one night and the days that follow, providing insights into the moral malaise of Romania’s bourgeoisie and throwing into sharp relief the state of institutions such as the police and the judiciary.

 A detailed review of the film can be read here. It is a good example of the strength of familial loyalty in the country (see Annexes for more on this theme)

The media these past few weeks have been full of the scandal of one Presidential candidate in the autumn elections – Elena Udrea – whose misuse of funds was caught by various surveillance devices and friend and husband’s confessions. I’ll write more on this in a later post since this affair is a typical mixture of soap opera and the Italian Tangentopoli scandal of the early 1990s which Perry Anderson has brilliantly dissected on several occasions

I have no intention of recycling the facts which are being endlessly regurgitated by journalists here – rather I will try to put them all in the context of the way Romanian society has “developed” in the 25 years since Ceaucescu fell.   

Florin Grancea is one Romanian who has tried to do this in 2006 with his Inside the mechanisms of Romanian modernisation; and gave a shorter (but pretty opaque) piece a couple of years later on “the concept of Freedom” 

Profiling the art market

Angela Minkova has set me a challenge.  She is a quirky Bulgarian artist who deserves to be better known. The previous post carries one of her artefacts I have in my Carpathian mountain house – and today’s one of her Balchik prints (which also occupies a prominent place there).

I am not an art dealer – rather a writer, networker and art collector (of Bulgarian paintings) – but she has asked me for help in raising her profile.

She is not alone in feeling somewhat frustrated and anxious. It is, of course, the quintessential fate of artists – but particularly of those from small, poorer countries on Europe’s periphery which have only the vaguest of profiles…In Bulgaria’s case …..the Black Sea, skiing, wine and ……poisoned umbrella tips….

Traditionally artists have needed galleries to display their paintings – whether individually or in special exhibitions – but the internet now offers an additional, more direct, route to the buyer. There are a lot of private galleries in Sofia – but (currently) no guide to them for the visitor. The annotated list I have in my book Bulgarian Encounters – a cultural romp focuses on the small galleries selling mainly the classic painters of the early part of the last century – and identifies 17 in this category.

There are at least that number selling contemporary art – although only a few with owners who identify and actively promote quality work. My friend Vihra’s Astry Gallery is the most prominent of these – and she occasionally takes work for exhibition in European capitals.   

So the question these days for Bulgarian artists is – how should they best promote themselves?

The choices are various - through

- traditional galleries – individual paintings/ special exhibitions/ group exhibitions?

- word of mouth?

- websites – own sites or individual entries in “gateway”  or portal sites such as SaatchiArt?

- portals - marketing contemporary Bulgarian painting eg ModernBulgarianArtists

- Facebook?

The answer is simple – through all of these routes! As is argued in this well-written article which gives great tips for artists – from a site full of much better advice than I’m capable of giving

My initial thought had been to target some of Europe’s art critics – but the article shows the error in such an approach. I strongly advise you to read the article and also this one

Although I know very little about the art market, I have been lucky enough to be able to practice strategic skills and networking for ....45 years….I have a natural inclination to look at a situation and want to identify the key players who form the system or market – suppliers, consumers and intermediaries with the latter as the most complex. It is they who shape perceptions and channel (or not) the demand and supply…….

My first inclination therefore with this problem facing Bulgarian artists is to PROFILE – ie to identify (a) the relevant galleries (real or virtual) and (b) the potential buyers for the paintings of contemporary Bulgarian artists and then try to sketch the profiles of these groups.

That’s actually three distinct groups which need to be mapped and profiled –

·         Bulgarian physical galleries

·         Virtual galleries

·         The art buyer

     

The easiest to deal with is the first – I’ve already said there are very few effective “impressarios” of Bulgarian contemporary artists. Last sanctuaries of originality contained some short profiles I did a couple of years ago

This is the first in what may be a series as I brainstorm this challenge which Angela has set me.

Inclusive institutions???

I romped through Acemoglu and Robinson’s Why Nations Fail (the link allows you to read in full for yourself) and have been musing over it for the past 24 hours – so it gets full marks for its readability and provocation. It helps that its 500 plus pages consist really of short potted histories of various countries selected to illustrate its main thesis about institutions, power, privilege and challenge. In that sense it has similarities with the charming books of Robert Greene which deal with such issues as power, seduction and war.

It was Arnold Toynbee who, in the post-war period, had the temerity to try to explain the rise and fall of nations but his efforts did not seem to inspire the next generation to similar efforts. Recent reviews in the New Statesman and in The Nation have suggested that “big history” has only now returned – but it was 1987 when Paul Kennedy brought out his Rise and Fall of the Great Powers; 1997 when Jared Diamond published Guns, Germs and Steel; and 1999 when David Landes gave us The Wealth and Poverty of Nations. Like Toynbee, these books offered possible explanations for the different trajectories taken by nations.

2010 also saw Why the West Rules – for now by Ian Morris which was the subject of a long, highly detailed and caustic review – and a long and injured response by the author. Morris is a classical archaeologist and History Professor but his book is not even included in the 26 page bibliography which graces Why Nations Fail (2012) - Acemoglu, it should be noted, is an economist; Robinson a political scientist.

David Landes’ book does make it to the bibliography but the distinguished economic historian’s key work is totally ignored in the text and his name, therefore, does not figure in the book’s 18 page index….. 

There are, for me, other curious omissions and weaknesses in the 529 pages of Why Nations Fail – a book which offers from its start a distinctive lens with which to view history, namely that of “extractive institutions” and “countervailing power” and which suggests western societies owe their pre-eminence to their “inclusive institutions”.

When they define what they mean by this phrase, we get a paean to liberal or capitalist democracy – which I find a tad….well… curious given that the book was drafted in the aftermath of the 2008 global crisis; the spread since then of disgust at the behaviour of the power elites; of deepening concern about the scale of inequality within the west; and of massive alienation from political parties and voting. 

I would therefore have expected a suggestion that the west is now in danger of going the same way as others – and for the same reason…..

But no - the book ends on a note of almost laughable complacency. “Failure” is what has happened to Africa and most of Asia (apart from Japan and South Korea) and will, according to the 10 page analysis they give China in the concluding chapter, also be the fate of that country’s current effort….  

It is in this concluding chapter at the very least that I would have expected to see a recognition that Contemporary Europe and North America are showing the very same exclusion and "extractive" power which they have identified as the fatal weakness of the powerful - but this passes our authors by!! If ever there was a case of "institutional exclusion" of citizens, it is what we have been experiencing in the past decade. But these don't figure on the author's radar screen.   Not a single reference to the extensive “end of oil” literature – or to the recent important Rebalancing Society of Canadian management theorist Henry Mintzberg. There is a passing reference to the different use of patents in Europe a hundred years ago - but no mention of the variety of the variety of other ways in which resources are sucked from citizens and passed to the ruling elites eg military expenditure; pharmaceuticals; intellectual ownership; marketing; privatisation; commodification etc

Astonishingly it is only on the second last page that the authors mention the role of the media as a change agent!! And this in a book which purports to be about power. 

Karl Popper’s The Open Society and its Enemies (1945) is, of course, a work of political philosophy - not history – but should be a key reference in any work which purports to offer “countervailing power” as a driver of history. 

Paul Hirst was another political scientist who developed in the 70s and 80s the notion of “associative democracy” (people power) which was taken up by thinkers such as Will Hutton and morphed, in the 1990s, into the vision of a “stakeholder society” which I wrote about in a 2011 post

With Mintzberg, these are the authors we should be paying attention to.

Inclusive and Extractive Societies

By coincidence I find myself reading three related pieces at one and the same time

Why Nations Fail (2012) which gripped me from the opening pages of the Preface – as the review in the link says – 

For anyone remotely interested in these issues Why Nations Fail is a must-read. Acemoglu and Robinson are intellectual heavyweights of the first rank, the one a professor of economics at MIT, the other a professor of political science at Harvard.

Mostly, such people write only for other academics. In this book, they have done you the courtesy of writing a book that while at the intellectual cutting edge is not just readable but engrossing.
This alone would be reason to take notice: a vital topic, top scholars, and a well-written book.

You will find an excellent review here which identifies one of the book’s potential weaknesses -  

Explaining the entire history of humankind by dividing the world into “extractive” and “inclusive” institutions is a daunting task. At one level the notion that “extractive” institutions fail and “inclusive” ones succeed can be a tautology - if we mean that “extractive” institutions are ones that successfully block growth and “inclusive” ones are those that do not. 

This not what Acemoglu and Robinson have in mind. But lacking an axiomatic definition of what is “inclusive” and what is “extractive” that is independent from actual outcomes, the classification of historical institutions as belonging to one or the other group can end up being based on ex-post evaluations of the outcomes themselves, thereby making the argument circular and subject to a selection bias.
As a consequence, while many examples fit their theory well, others are more difficult and the discussion of those examples in the book is sometimes strained.

Empirically, when trying to classify a particular set of institutions either as “inclusive” or “extractive”, one has to face the problem of quantifying what a “small” group of individuals, in one case, and “many, in the other, mean. In what sense were the institutional arrangements of the Roman Empire “inclusive” relative, for example, to those of the Communist USSR? Or in what sense did the Spanish Kingdom turn from “inclusive” to “extractive” between the XV and the XVII century?

I should at this point confess that I have reached only page 78 (there are another 400 to go) – but one of the delights of the internet is that it allows you to find and read the most important critical reviews, thus giving you the key questions right from the beginning with which to query the authors….and the review I have quoted from and linked to is, quite simply, the best review I have ever read!!!!!

And it warns me that an issue to which the book devotes little attention is the “role of competition between nations”….

Clearly the book will keep me occupied for the week – but the other two (thankfully shorter) pieces which swam into view (as it were) pose the important question which I suspect the book doesn’t deal with about how to explain the huge discrepancies in life chances WITHIN nations.

A significant percentage of citizens living in “north Britain” (ditto most EU countries and the USA) spend their lives in quasi “third-world” conditions. I myself spent 20 years helping Scotland’s largest public agency develop a strategy to ameliorate this…..and the second piece is (yet another) pamphlet about the deep-rooted poverty within Scotland …..It’s called No More Excuses and has some good lines -

Essentially, the consumption model that dominates our economy exploits workers in poor countries, undermines businesses which are local and based in the community, offers minimum wage part-time and casual employment for the sake of cheap goods and excess profits…..

A society where esteem and self-worth are derived from acquisition, material consumption, and perceived status, rather than from relationships, mutuality or the pursuit of equality, is problematic……. 

But despite the structural causes, it is possible to overcome poverty. It requires that we pull the right levers, focus on the necessary structural change, cherish what is really important and deploy our wealth (money and beyond) for justice and equality rather than compassion. We know this is possible: as already discussed poverty is at much lower levels in the Nordic countries which are at similar stages of development and yet are more competitive, suggesting that equity and economic performance are complements and not substitutes. Ending poverty in Scotland is about allocating our resources in a more effective and sustainable way.

But it is a post from one of the best websites – Real Economics – which rams home the key point that “the current conflict is not between nations but between classes” …..   

German banks managed to capture a large portion of the growing surplus created by German workers and, instead of seeing it invested domestically, lent it abroad (to a broad array of Spanish, Greek and other borrowers)—which was the flip side of Germany’s positive current account balance (since German capitalists, benefiting from lower unit labor costs, could easily outcompete potential exporters in the European south, while German demand for European goods dropped as wages fell).

It is not countries that lend or borrow; different classes within countries create the conditions for and engage in large-scale capital flows between countries. But didn’t Spain (and Greece) have a choice? After all it seems that Spain could have refused to accept the cheap credit, and so would not have suffered from speculative market excesses, poor investment, and the collapse in the savings rate. This might be true, of course, if there were such a decision-maker as “Spain”. There wasn’t. As long as a country has a large number of individuals, households, and business entities, it does not require uniform irresponsibility, or even majority irresponsibility, for the economy to misuse unlimited credit at excessively low interest rates. Every country under those conditions has done the same. . . And this is a point that’s often missed in the popular debate.

Over and over we hear — often, ironically, from those most committed to the idea of a Europe that transcends national boundaries — that Spain (or Greece) must bear responsibility for its actions and must repay what it owes to Germany.

But there is no “Spain” and there is no “Germany” in this story. At the turn of the century Berlin, with the agreement of businesses and labor unions, put into place agreements to restrain wage growth relative to GDP growth. By holding back consumption, those policies forced up German savings rate. Because Germany was unable to invest these savings domestically, and in fact even lowered its investment rate, German banks exported the excess of savings over investment abroad to countries like Spain. . . 

Above all this is not a story about nations. Before the crisis German workers were forced to pay to inflate the Spanish (and Greek) bubble by accepting very low wage growth, even as the European economy boomed. After the crisis Spanish workers were forced to absorb the cost of deflating the bubble in the form of soaring unemployment. But the story doesn’t end there. Before the crisis, German and Spanish lenders eagerly sought out Spanish borrowers and offered them unlimited amounts of extremely cheap loans — somewhere in the fine print I suppose the lenders suggested that it would be better if these loans were used to fund only highly productive investments. But many of them didn’t, and because they didn’t, German and Spanish banks — mainly the German banks who originally exported excess German savings — must take very large losses as these foolish investments, funded by foolish loans, fail to generate the necessary returns.

 It is no great secret that banking systems resolve losses with the cooperation of their governments by passing them on to middle class savers, either directly, in the form of failed deposits or higher taxes, or indirectly, in the form of financial repression.
 Both German and Spanish banks must be recapitalized in order that they can eventually recognize the inevitable losses, and this means either many years of artificially boosted profits on the back of middle class savers, or the direct transfer of losses onto the government balance sheets, with German and Spanish household taxpayers covering the debt repayments.