Sociological Theory and the Economy

By Sally Raskoff

In a recent post I explored how the personal is political by discussing how we can see signs of our society’s economic problems in our daily lives, even if we did not lose jobs or money in the stock market.

Since I posted that blog, Congress passed a $750 billion “bailout” of the financial industry and worldwide economies are oscillating in response. Social theorists like Marx and Wallerstein would have a lot to say about this development and link it to the end of feudalism and the emergence of capitalism. 

Let me back up here. Marx’s ideas about how society changes through a dialectic process and the importance of the economic structure have particular salience today. 

The dialectic process holds that whatever system is in existence will create its own problems or stresses; those stresses – or contradictions – escalate as time passes until the system must change or collapse and be replaced by some new system that emerges out of this process. (In other words, a thesis exists; its antithesis emerges and contradictions occur; and eventually these struggles result in a synthesis which is, in essence, a new thesis… and the process continues.)

According to Marx, the economic system shapes other societal institutions, which are set up to socialize the populace to support that economic system. The educational systems, religious institutions, family structures, and the governmental elements all work to support the productivity of the economy. Thus within a capitalist society, families, schools, and even religious organizations socialize and reward individuals to be competitive and strive for wealth.

Immanuel Wallerstein emphasizes a global reach for capitalism, which he says keeps searching for cheap resources to exploit outside its exhausted national borders. He also elaborates upon the importance of the societal response to these pressures. The nature of that response – mere tinkering or wholesale change of the system - and the timeliness of the response will affect the quality of life when experiencing pressures and shifts in structure. If a society responds slowly or with only minimal changes to the system, problems continue to accumulate and increase in magnitude.

So, to apply this model to our current times, our capitalist economic structure that has generated so much wealth for so long has an increasingly harder time finding resources to exploit for profit. Since capitalism is defined by the search for profit, exhausting such resources domestically has resulted in the global reach of capitalism, yet now those global resources are running scarce. 

The United States’ dominance has been curtailed by our overextension both economically and politically. Our economic problems are systemic, not haphazard or anomalous. Our own financial problems have reverberated through the world as all markets are connected and affected by these dynamics.

As governments have begun their “bailouts” the word “socialism” has emerged as something to fight. Yet most definitions of socialism differ greatly: since we don’t agree on the definition of the term how can anyone really “fight” it? 

Our society has typically divided its organizations into three types: governmental or public, private, and non-profit. In any society, public organizations have been charged with providing or overseeing goods and services that a society deems important for all members to have or need, private organizations with goods and services that not everyone needs or wants, and non-profit organizations with goods and services that some people may want or need. This is why public organizations (and tax money) take care of roads, parks, sewage and water systems. This is why private organizations (like businesses) emerge and perish based on how they can generate profits for their owners. This is why nonprofit organizations provide important services that are available to targeted groups, like people in need (Red Cross) or with specific interests (Boy and Girl Scouts, People for the Ethical Treatment of Animals, American Cancer Society).

In these last few years, we have confused the purpose of these types of organizations -- public services are pushed onto non-profits or even privatized and the push for profit generation exists in each type.

A sociological analysis of these dynamics would suggest that these are all connected as the hallmarks of a capitalist system searching for exploitable resources yet increasingly finding none.

Time will tell what we do in response to these pressures but it appears evident that we have much in common with people who lived at the end of feudalism as capitalism took shape. How we deal with these changes will shape our society for the coming years, decades, and generations.

Comments

[Matt K]

"A sociological analysis of these dynamics would suggest that these are all connected as the hallmarks of a capitalist system searching for exploitable resources yet increasingly finding none."

Only one that is primarily concerned with a materialist basis. Not everyone "believes" in Marx. One of his main flaws, as I see it, was an over-emphasis on sweeping historical trends, leaving out the problematic nature of predicting the future. I doubt that historical systems evolve quite so neatly as Marx made them out to.

[digital dissertation]

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