The new spirit of capitalism

Chapter 1: new spirit of capitalism and a Christian response

Max Weber’s protestant ethic and the spirit of capitalism

Weber argues working more than strictly needed as demanded by capitalism required an ethnic offered by Christian beliefs. .Particularly at the start.

[It] detaches … pursuit of profit from the end of happiness, … make money an end in itself.

-- P2

Even makes people willing to defer enjoyment in favour of the hard work to make more money

The reversal of acquisition to support human need to become the need for greater acquisition is irrational argues Weber.

The motivation for this otherwise inexplicable behaviour cones in the fact that Hard work is a sign of pursuit of the ultimate destination of salvation rather than immediate happiness.

Follows from Calvinistic insecurity that to have assurance of being elect one must demonstrate the discipline and restraint that capitalism also demands

After the initial phase, capitalism itself can condition this ethic so belief becomes less important.

It’s not the ethical teaching itself but the psychological impact of that teaching on how best to be sure if obtaining salvation.

--p4 and again in tanner’s words on p5

One might think that the effect of predestination would be a ‘resigned fatalism’ but Weber argues conversely that the historical record shows anxiety that leads to striving

Tanner ’s thesis is that an alternate set of Christian beliefs ‘undermine rather than support thenew so spirit of capitalism’ p7

Highlights extreme wealth inequality, under and unemployment S alland cycles of boom and bust but most importantly the spirit of capitalism hampers recognition of such faults. P7

Challenging that spirit requires an equal opposing spirit and tanner suggests religion may provide such a force

Finance dominated capitalism

A distinctive ‘spirit’ (beliefs, values and norms)

The spirit of capitalism today is not the same as Weber’s not the utilitarian one he thought was coming p10

A description of ‘ideal types’ not real world realities.

1. Finance is a bigger proportion of the economy

   Manufacturing and retail companies routinely make more from finance than their core capability

   FX in one day frequently equals world trade in a year p11

2. Declining profit from manufacturing that began in the 70s necessitates decoupling of finance from manufacturing or service sectors to avoid the same fate

Consumer loans are less vulnerable to down turns as they don’t have the option to simply ‘cease trading’ and can also boost profitability of goods and services.

Secondary markets are even better at this decoupling

Stock prices are affected more by immediate demand for the stock than longer term profitability of the firm. Keynes’ arguement that don’t need to pick most beautiful contestant in pageant but predict who most others will pick. If everyone does this it creates a self fulfilling prophecy

Industrial capitalism cannot tolerate impoverished workforce or wider population. Financial capitalism had no such restrictions.

1. This decoupling is not reciprocated though: finance exerts a discipline on the corporation as a whole to maximise profit and return it to shareholders

What place for corporations that claim to account for all stakeholder’s interests in this argument?

Quarterly evaluation overrides longer term planning even to the detriment of the company

Any refusal to engage in the game is likely to be punished by hostile takeover often paid for by healing debt onto the target company.

Bond holders play a similar role on disciplining governments, reducing their scope and driving down costs(demanding more work from employees especially in service secured like education and healthcare)

Policies to promote economic growth are therefore understood to make a state less rather than more credit worthy; investors are therefore less likely to want to purchase that state’s bonds and will demand a higher rate of return on them. In short, especially in times of recession and high unemployment, when tax revenues fall quite short of expectations, government policy can easily be taken hostage by foreign investors and the increasingly few rich among its own citizens with the ability to make significant purchases of government bonds. P23

This is not merely laissez-faire capitalism but the active recruitment of the state to pursue the interests of international finance.

The spirit of finance dominated capitalism

Fear and coercion are not enough to motivate employees sufficiently though job insecurity may help.

There ideal is that the individual self align with the corporation as part of your ‘own efforts at self realization’ (p27)

The Protestant ethic was the spirit of industrial capitalism in its Fordist varieties, where investments sunk in expensive equipment dedicated to the production of one thing meant mass production and mass consumption. That Protestant ethic was composed of a set of values in which hard work was a moral virtue, rewarded with good pay, where the expectation was for a kind of linear, gradual advancement along a single career track often at a single company-all of which suggested the reasonableness of delayed gratification and long-term com- mitment. The slow and steady pursuit of profit by firms-firms heavily invested in equipment capable of making only one thing and which therefore required huge sales of that one thing over the life of that equipment to be profitable-was matched by the slow and steady character of pursuit of success by employees dedicated to one life task.

Although modern capitalism is ever changing and ever more rapidly so, it still relies on employees internalising a work ethic.

Precis of chapters to come

A proposal for a Protestant anti work ethic

1. Breaking the link between work and right to well being
2. Breaking the identification of self with productivity
3. Breaking the ’time collapse’ that constrains Imagining a different future

Christianity is compatible with these demands being ‘a religion of radical time discontinuity’

Christianity is characterised by a radical discontinuity’transforming the old self into the new by salvation enabled by divine agency that puts the lie to capitalism’s belief that future wealth and good fortune is merited. P32

Conformity to will of God is not the same as conforming to the subsuming demands of capitalism to align with the universal order of things.

Chained to the past

Present and future hostage to debt taken on on the past.

Not sure I recognise the chronic endebtedness tanner suggests. Pay day loans do exist and cripple people with debt repayments but it debt was as prevalent as she says the system would collapse.

By being less extreme the demands of capitalism are more insidious, individuals and the system limp on short of collapse but most are condemned to a hand to mouth existence.

.’ The ef- fects of this sort of forced debt-to meet basic needs under conditions of hardship are constrictive rather than expansive of future possibility, extractive of already existing value rather than productive of new value.

P35

Total commitment

Industrial capitalism induced hard work by rewarding it with secure employment on good pay with benefits.

Financial capitalism(aside from executives rewarded in stock) uses

• Fear through continuous downsizing and outsourcing p59
• Surveillance such as work throughout our keystroke trackers p60ff
• Utilitarian argument of working for external rewards (though such deferred gratification is in contrast with the consumer conditioning to ‘have it now’)
• Tightly controlled flow of work that allows for nothing less than total attention p68ff eg call centers, financial trading
• Eliminate the gap between company and individual. The self-regulated ‘company man’ can be compatible with the protestant work ethic and removes need for management supervision.

4 nothing but the present

The scarcity of time and resources enforced by profit maximizing firms makes the present task urgent for workers and therefore preoccupying and all consuming p103

5 another world

Even the anticipation that the future will be different from the present is undermined by the belief that at least it will differ in ways that the current financial instruments can anticipate, and thus protect against.

This is what tanner calls collapsing the future into the present.

This constrains imagination such that it is easier to imagine the end of the world than the end of capitalism p136 quoting Fredric Jameson

Christian hopes for the future p157

First contrasting Christianity with capitalists because a Christianity confident in a benevolent future has no need to take steps to master it, tanner then goes on to contradict this since our transformation away from sin is likely to be at least perceived negatively

The collapsing argument is incompatible with Christian hope since a) Christians expect it to be dramatically different and b) it will have enormous bearing on their fortunes. Hence deserving of special attention. P159

Christians may be ‘unusually resistant’ to the expectation of the future continuing much as the present given their expectation of radical discontinuity at the second coming and tendency to not seek to smooth out discontinuities in the past (unlike financial systems) p161

Conclusion: financial systems part of the present world to be left behind by the future one, ‘but which one?’ p166

Which world?

Opens with references to Isaiah of God forming and transforming Israel.

The finance dominated work ethic is individualising in highly moralistic fashion p168

Moralised evaluation of individual success or failure was prominent in old work ethic and doubly so in the new one. P168

Because capitalism structures relationships as winner takes all it establishes an entire social world. One that tanner status Christians ‘have reason to oppose’ as Christianity establishes very differently p170

Individual responsibility

Performance pay is the norm as an efficiency maximizing tactic p170

It is however much to easy to claim credit for others work especially at team lead and upper management level.

At the state level, debt laden, finance disciplined states move provision to the private sector leaving individuals to choose what they can afford, sometimes softening the blow with tax credits p172

This ‘individual responsibility’ works directly against the poor because they lack the means to purchase or insure and poverty increases their risk and therefore premium. Only showing the risk across the whole of society mitigates this p173

Yet too big to fail financial companies still attract social insurance as their failure puts everyone else at risk too.

P197ff for all this individual responsibility there is considerable luck involved in success, for example retiring at top of the market equates to getting a great deal on annuity and retiring rich.

Acknowledging luck doesn’t prevent us claiming credit for it p198.

A new Christian world

1. Little reason for Christianity to have any work ethic. Pre reformation what was valued was religious pursuits not economic ones.

   Reformation sought to see service of God in any work and thus effectively reversed this equation

   The problem with that is that if serving within limiting or degrading work his much more service might to given in a role more compatible with God’s universal beneficence p198ff

2. Working out one’s salvation only works in collaboration with Christ, doing it alone is to remain sinful.

   Evaluation of any such religions with is against Christ’s way - an absolute therefore not subject to the zero sum gain if relative evaluation as in performance related pay p202ff

3. P205ff Christian beliefs of worth intrinsically shared (body of Christ) - though not at cost of subjugating the individual - not conditional on any particular achievement

   Saved for a purpose (verse?) But that purpose not any kind of productive activity save to dedicate our lives to God p207

What is the non-work ethic

• Not trying to squeeze less capitalistic activities into edge time p209
• Not flaunting our lack of productivity of even destroying assets (plays into the debt driven hands of capitalism!)
• Recognition of dependency on God independent of work p210. Foucault styled ethic???
• Dependence on others is a part of - but not replacement for - this

Conclusion: a whole new (Christian) world coherent but counter to capitalism. Yet not removed from capitalism but cross cutting and disruptive