The Social Theory of Contemporary Capitalism
The sociology of capitalism developed by Max Weber and its critique developed by Marxists are unable to account for the transformed structure and practices of contemporary capitalism. The social theory of Chinese capitalism requires new fundamental concepts; the new democratic practices developed in India, South Africa or Brazil cannot be understood in terms of Western liberal democratic theory. Below, Partha Chatterjee discusses the necessity of seeing capitalism itself as lacking a single universal character.
It was roughly a hundred years ago that Max Weber spelt out the intellectual framework within which the sociology of modernity as a global process was studied through the twentieth century. He identified, first, the sociological foundations of the actual historical process as well as the normative culture of capitalism as the expansive productive aspect of modern society. Second, he identified the practices of rationalisation through bureaucratic procedures of decision-making within both state and private organisations as the characteristically modern conception of legitimate and non-arbitrary authority consistent with individual freedom. Third, he identified the secularisation of education, art and public life as the manifestation of a general process of what he famously called the ‘disenchantment of the world’ that was characteristic of modernity itself. It would not be an exaggeration to say that the global spread of the discipline of sociology occurred in the twentieth century largely in response to, if not always in accordance with, the framework proposed by Weber.
In developing his framework, Weber was, of course, building on the foundations laid earlier by Smith and Ferguson in Scotland in the late eighteenth century, by Kant and Hegel in Germany at the turn of the century, and, needless to say, by Karl Marx sitting in the British Museum in London in the middle of the nineteenth century. In particular, Weber was building on the idea of the abstract subject, endowed with a rational will and sovereign in its choices, morally responsible for its actions, acting upon the world as the rational agent of history and thus actualising certain universal tendencies that were both historically compelling and normatively legitimate. Social theory in the twentieth century may be said to have been mainly concerned with the universal modernisation of social institutions and the freedom and welfare of individuals.
Looking back, it is clear that Max Weber was writing – in the early twentieth century – in the high period of Western dominance over the world. The two decades leading up to World War I saw an explosion of imperialist annexations of colonial territory and intensified rivalries among the European great powers – Britain, France, Germany, Austria and Russia – joined now by the United States and Japan competing in the Pacific. The settlement following the end of World War I led to the dissolution of the three continental empires in Europe – the Habsburg, the Czarist and the Ottoman – but the overseas empires of the British, the French, the Dutch and the Portuguese remained intact. The principle of self-determination of nations was recognised in Europe, but the colonial territories of Asia and Africa came under a new global regime of supervised development towards modernity, exemplified by the mandates system of the League of Nations. The erstwhile provinces of the Ottoman Empire in West Asia and the former colonial possessions of Germany in Africa and the Pacific were put into three graded classes depending on the degree of social and institutional development and placed under the tutelage of one or the other advanced state – some of them European powers, others themselves white settler colonies such as South Africa, Australia and New Zealand. The intellectual assumptions that now more or less universally dominated colonial discourse were the ones that would be formalised after World War II as the sociology of development.
In a larger work that has just been published, entitled The Black Hole of Empire, I have argued at length that the conceptual apparatus that has been used until today to think comparatively about social development in countries all over the world was laid out in the early nineteenth century in the utilitarian thinking of Jeremy Bentham.1 He developed the tools by which governments everywhere came to be compared according to some common measures. He also insisted that given a stock of empirical knowledge about the social, economic and moral practices of any country, the best possible laws for that country could be formulated by a neutral expert. By the late nineteenth century, long after utilitarian philosophy ceased to have much influence, Bentham’s universal comparative project was coded in two senses of the norm. In the empirical sense, the norm was the statistical mean or average. In the normative sense, the norm was the universally desirable standard represented by the most advanced societies. The two senses of the norm encompassed a universal pedagogical project. The empirical deviation of a country on any social measure from the desirable norm called for a set of policies designed to change the institutions of that country so as to bring it closer to the norm. If necessary, the universally desirable norm might have to be suspended for that country until such time that its social practices were sufficiently developed for the advanced institutions to be put in place there. The classic example of this is John Stuart Mill’s elaborate defence of representative government as universally the best possible government, with the proviso that dependencies such as Ireland and India were still not ready for it. I have argued that the basic conceptual apparatus developed in the administration of modern empires in the nineteenth century have continued to this day to connect the normative with the empirical through a structure of deviations and exceptions in what has come to be called the sociology of development in the age of empire without colonies.
Working through all of the great debates in sociology in the twentieth century, there has prevailed, if I might make an allusion to the world of the religious, a monotheism of the abstract subject of history – universal, rational and sovereign – accompanied by the structural counterpart of the monotheism of capital – equally universal, singular and endowed with rationality. Max Weber articulated this monotheism with much analytical skill and power. It was, it seems to me, a reflection, perhaps a necessary reflection, in social theory of Western dominance in the global order.
“The dominant version of the sociology of modernisation and development was challenged by those who used Marxist critiques of global capitalism and others who challenged the intellectual hegemony of post-Enlightenment disciplines of social knowledge.”
We know that the critique of Western dominance over the world was vigorously carried out, both as actual and frequently bloody political struggles and as an intellectual struggle, throughout the twentieth century. Politically, it was successful in bringing to an end the old colonial empires and establishing sovereign nation-states as the universal form of the modern state, represented above all in the global institution of the United Nations. The dominant version of the sociology of modernisation and development was challenged from several quarters – most notably, by those who used Marxist critiques of global capitalism and others who challenged the intellectual hegemony of post-Enlightenment disciplines of social knowledge. In the decades after World War II and decolonisation, these critiques sometimes found institutional space in the universities and academies of several countries in Asia, Africa and Latin America. Especially in the 1970s and 1980s, there even emerged some significant networks, journals and publishers that connected these otherwise disparate scholars and institutions located in different countries into identifiable groups and schools of anti-hegemonic sociological thought. The dependency school was probably the most famous of these intellectual movements, followed, among others, by feminist and environmental critiques of development, subaltern studies and what has come to be called postcolonial studies. These trends even managed to break into the Western academy, more in some disciplines and universities than in others. But it would not be wrong to say that their presence was on the whole marginal to the institutional structure of disciplinary knowledge in the social sciences.
In the meantime, something else was happening in the structure of global power. The fall of the socialist regimes in the Soviet Union and Eastern Europe seemed to mark the emergence of a unipolar world order in which Western dominance and the leadership of the United States apparently became unquestioned. This was also the beginning of what came to be called the era of globalisation. The anti-colonial critiques of the 1970s seemed to lose their bite. In the absence of viable alternative trajectories of development, the erstwhile Third World projects of self-reliance and independent growth fell flat. From the 1990s, the age of globalisation seemed also to reestablish on unchallenged foundations the monotheism of capital in the form of the abstract subject of history.
However, under the surface of globalisation, a structural change was taking place whose ramifications have only become clear since the financial crisis of 2008. The last two decades of the twentieth century saw the emergence of a new mode of flexible production and accumulation and the rapid expansion of the international financial markets. New developments in communications technology allowed for innovations in the management of production that could disperse different components of the production process away from the centralised factory to smaller production and service units often located in different parts of the world and sometimes even in the informal household sector. Alongside, there was a huge rise in the speculative investment of capital in the international markets for stocks, bonds and currencies.
The result was that the emergent economies of Asia became the sites for rapid growth of industrial manufacturing, fuelled by exports to the older capitalist economies of the West, while the latter sought to profit from global financial speculation and a disorganised and dispirited working class at home. Soon, the Asian economies became dependent for their growth on continued exports to the West, while Western economies encouraged consumers to borrow beyond their means to maintain their levels of consumption. In addition, major Western powers also incurred huge debts to finance their military expenditures in order to maintain their political dominance in different parts of the world. This was the process that has led to the recent financial and debt crisis in the United States and Europe.
I will not speculate on when and how this crisis might be resolved. However, it seems that the ability of Western capitalism to offer a prolonged period of half a century of growing prosperity to all, or almost all, of its people may have now come to an end. But it is also becoming clear that the austerities and fall in living standards that have become inevitable will be very unequally distributed among the different countries in the Western world as well as within each country. Already we see the spectacle of the countries of southern Europe having to face the brunt of the austerity measures proposed to save the Eurozone from collapse. It is by no means a distant possibility that many of these countries might have to leave the Eurozone rather than bear the devastating and deeply unequal consequences of saving the ideological integrity of Europe. What will be the consequences for social harmony and political tranquillity in those countries in the face of an economic and social catastrophe unknown in the recent history of the West?
“The classical theories of Western social theory have ceased to be normative for the rest of the world.”
Not only that. There will inevitably emerge a huge asymmetry between the declining economic power of the United States and Europe and the continuing and overwhelming military superiority of the US and the NATO alliance. What will be the consequences for the intellectual hegemony of the liberal social sciences? We could certainly see renewed critiques of the capitalist social order as it has come to exist, with growing inequalities on a scale not seen in at least half a century. But we could also see other much more unsavoury developments. The economic decline of the once-privileged is fertile ground for the ugly display of naked power. There are signs already of a growing populist politics in the United States and Western Europe seeking to defend the global privileges of the core body of citizens of those countries against the assertions of lesser powers and the intrusions of alien immigrants. That form of politics could claim increasing resort to preemptive strikes, overthrow of regimes and military occupation of other countries. Thus, populist imperialism as well as xenophobia could emerge in the West on a scale similar to that in the early twentieth century.
On the other hand, the impact on the emerging economies of Asia, Africa and Latin America is also unpredictable. Like capitalist growth in earlier historical periods, the recent growth in Asian economies has been accompanied by the massive dissociation of primary producers from their means of labour. But the effects of this process cannot be politically managed today in the same way that the so-called primitive accumulation was managed in Europe in the eighteenth and nineteenth centuries. An entire range of questions have appeared in course of the recent experience of economic and political transformations in these countries whose answers are not to be found in the history of capitalism or democracy in the West. The classical theories of Western social theory have thus ceased to be normative for the rest of the world.
Indeed, one could go one step further and say that many hallowed norms of sociological theory need to be rethought today. Let me point to just a few examples. What are we to make of the sociological and cultural roots of Chinese capitalism, now threatening to bring about a tectonic shift in the very foundations of global economic power? Will revisions of or supplements to the Weberian account suffice or will it require a redefinition of capitalism itself? Or take the examples of Indian or South African democracy where many emerging practices have deviated so far from the canonical principles of liberal democracy in the West as to be unrecognisable even as a family resemblance. For instance, the idea that arbitrary power that promotes the good is often preferable to procedural rationality that perpetuates inaction has struck deep roots within legislative, executive and even judicial practices in these two democracies. Are these to be seen as aberrations or do they suggest a rethinking about the received canons of democratic practice? The recent upsurges in the Arab world have upset many stable authoritarian regimes propped up for decades by an equilibrium in great power relations. The urge for greater popular participation in government in those countries could well produce democratic structures that do not abide at all by the canonical principles of state secularism. Or take the many remarkable examples of social entitlement now recognised by government agencies in Brazil: they demand a rethinking of the very idea of the welfare state. Fundamentally, it seems to me that we are at a moment when the monotheism of capital or the abstract subject is facing intellectual disintegration. It may not be a very tidy process, but twentieth-century social theory is now in the process of being rewritten for a new century and a new world.
About the Author
Partha Chatterjee is Professor of Anthropology at Columbia University, New York, and Honorary Professor, Centre for Studies in Social Sciences, Calcutta. Among his many books are Nationalist Thought and the Colonial World (1986), The Nation and Its Fragments (1993), The Politics of the Governed (2004) and Lineages of Political Society (2011).
1. Partha Chatterjee, The Black Hole of Empire: History of a Global Practice of Power (Princeton: Princeton University Press, 2012).