STWR - Share The World's Resources

To create successful major social movements requires popular pressure, but also requires cooption of existing structures, even those lined up against movement in the first place.  The most efficient way to do so is often to use capitalism, argues James Waters.

When talking to social reformers or reading their writings, it is striking how doubtful they sometimes are about the effectiveness of their own actions.  They question whether their latest protest march, letter writing campaign, or direct action will have any real impact on the cause they espouse.  Frequently, they are not on the periphery of the cause, but the ones whose lives are dominated by it: the voluntary worker who works long hours in difficult circumstances, the academic devoted to Marxist ideals, or the nun living in a developing country.

Their scepticism is often justified.  For the human rights defender, the global outbreak of torture in the last six years has offered much work but little encouragement, as apparently twenty years of effort will be swept away following the next atrocity in a major city.  A sober reflection on the outcome of the successful campaign to reduce debt in developing countries may conclude that a principal cause of the reduction was the non-sustainability of the debt.  A developing country with debt equalling 300 percent of gross domestic product will never pay it off barring the discovery of transformative petroleum deposits, no matter how fiscally stringent the government is.  For at least some countries, the moral dimension of debt relief may be considered a pretty decoration on the gruel of financial necessity.

For the sceptic, it is not the record on debt relief but the record on international aid which demonstrate the true lack of goodwill by the world community.  In fact, the record on aid transfers may surprise them.  It is one of the areas where a considered and detailed analysis of the facts, often undertaken by solidly conservative or establishment economists, can produce results which surprise.  Not that the sceptic is too pessimistic, but rather that they are not pessimistic enough.  Aid is quite breathtakingly low.  A recent study [1] calculated that the United States values the well-being of the poorest people in the world at 1/2000th the well-being of U.S. residents, subject to a few caveats. 

If we allow for understandable American scepticism about corruption in the developing countries and adjust for the effect at a high but realistic level, the value goes up to around 1/100th.  An earlier study  [2] studied aid from 1970 to 1994 by the major market-economy donors.  It found that aid was generally given for the strategic and political interests of the donor.  A developing country which voted with a particular developed country at the United Nations usually benefited from increased aid from the wealthy country.  Comparatively limited consideration was given to the process of democratisation in the recipient.  France gave almost no consideration to it.

If the objectively assessed success of the social movement to increase global financial assistance has been limited, consider the scorecard of another movement with less economic power behind it.  Animal welfare and rights campaigns have been by turn local, national, loud, quiet, elitist, populist, armed, pacifist, expensive, and cheap.  At least some of these have had triumphs, but looking at the wider view, the welfare implications of increased animal consumption in the United States, China, and India dwarf them.  The campaigns have done little to address the broad sweep of what should be their most pressing welfare concerns.

The campaign against globalisation is not conspicuously successful unless constant guerrilla warfare is its aim.  The campaign ideas are varied and amorphous, so the assessment does not apply to all aspects of its agenda.  It may apply to one characteristic one, however, the push to maintain domestic production of goods in lieu of overseas manufacture.  The campaign has to chase footloose companies between countries and watch from outside Chinese borders as the incipient superpower welcomes foreign investment and becomes the world manufacturing base under government tutelage.  Of equal concern for the social reformer is that most people, most of the time, are probably indifferent to their cause.  Unless the reformer is a true fanatic, they must surely find it difficult to maintain the appropriate counter-revolutionary zeal 24/7.  Social movements which press for behaviour changes can highlight issues and provide analysis.  They are a necessary part of reform, and in certain restricted settings they may be able to obtain their ends, such as in a democracy where a sizable part of the population supports their aims.  They exert the constant pressure which can start in motion the process of change.  And on their own, they are not enough.

The Chinese borders are impermeable for some activists, but not for their ideas.  In recent months the behaviour of Google, Microsoft, and other computer companies in the country has been criticised by non-governmental organisations.  They claim that the providers have been collaborating with the Beijing government to prevent posting or access to information on the internet which the authorities deem unsuitable.  Words such as “freedom” reportedly cannot be included in many Chinese blogs.  The web and human nature being what it is, internet users have found ways of overcoming the restrictions.  If the government really wanted to close down the internet they could do so by a severe curtailment of information and technological access, but the cost to its economic growth would potentially be large.  The internet is a means of value creation, it makes certain members of the labour force more valuable in the international market, and it brings information to the population.  It is difficult to have the first two without the last.

Technological innovation and knowledge moves between nations far more quickly and easily than either capital or labour.  A large proportion of the growth in developing countries’ incomes can be traced to rapid technological transfers from developed nations.  Some social changes it brings in its slipstream can be traced to its primary mechanism of wealth creation and adjustment in the valuation of productive factors.  The fuel efficient cars which are cheaper to run as well as less polluting can fall into this category, as it is primary outcome of the market operation which can be sought by the environmentalist.  The indirect mechanisms of social change are also of interest to the reformer.  The cars which are more fuel efficient and less polluting may also make life more pleasant for pedestrians on the pavements, although this was probably not the primary intention of the driver in buying a fuel efficient car.

Capitalism in this arrangement is the leading mechanism for economic growth, and an important vehicle for carrying new technology and know-how into a country.  Technology, if it is to be adopted in a country, should be compatible with capitalism’s operation.  More plainly, it should help create profit.  The technology can be engineered to ensure that its primary mechanism and indirect mechanisms are compatible with the goals of the reformer.  Embedding the goals in the technological luggage of capitalism means that they have to be adopted by countries if they do not wish to fall behind in production.

In its conventional operation and independently of its technological effects, capitalism has been and continues to be a social revolutionary influence which if it was a person would have been imprisoned many times over.  It has been charged as a major influence on the formation of democracy, feminism, socialism, and communism.  Wealthy countries with highly repressive governments generally owe their income to oil, not capitalist growth.  It may be reasonably argued that the independent wealth creation of a capitalist system would form a bourgeoisie with their demands for influence, not a hegemonic society.  In principle, a social reformer could adapt the operation of capitalism rather than its technology, in order to find a system which improves wealth creation and consequently brings change.  However, they might find that compared with technological adaptation, such structural adaptation is more difficult to identify, allows less flexibility in design, and takes longer to diffuse.

To create successful major social movements requires popular pressure, but also requires cooption of existing structures, even those lined up against movement in the first place.  The most efficient way to do so is often to use capitalism, and the most efficient way to use capitalism is to insert within it a profitable technological innovation compatible with the movement’s social aims.  To remain exclusively committed to the strength of moral argument as a means to change many of the world’s problems is like trying to race on foot against a jet plane.

James Waters is a research fellow at the Westminster Buisiness School, University of Wesminster  

References

[1] Kopczuk, W., Slemrod, J., Yitzhaki, S. (2005). The limitations of decentralised world redistribution: An optimal taxation approach. European Economic Review. Vol. 49, pp. 1051-79

[2] Alesina, A., Dollar, D. (2000). Who gives foreign aid to whom and why? Journal of Economic Growth. Vol. 5, pp. 33-63

Subscribe to this comment's feed

Write comment