Monday, April 22, 2013

Chapter 6: Systems Analytic -- Theory behind the model: Habermas & Legitimation Crisis

6d


Theory behind the model -- Habermas & Legitimation Crisis
   Part of what I want to do in this section is find some features of the system-analytic that can be separated out of the theory and used to analyze the data I have constructed.  Traditionally in Marxist theory a crisis tendency is created by the law of value. When wage labour is exchanged for capital the state cannot intervene to compensate for the falling rate of profit. Held synthesizes the problem (citing Habermas in “Wirchlichkeit und Reflexion”):

The state cannot intervene substantially in the economic process ‘without setting off an “investment strike”; nor can it avoid, in the long run, cyclical disturbances of the accumulation process … nor can it even control crisis substitutes, that is, chronic deficits in the public budget and inflation’. (p. 288)

   Orthodox Marxism allows that the average wage as equal to the cost of reproduction of labour power. Habermas says this view prejudices the stabilizing effect of unionization as a consequence of its success in altering exploitation. [Cites K&HI, pp. 10-12], Held, p. 289. Held notes that Habermas, 

...holds that the nature of economic crisis cannot be established without more evidence concerning productivity and government intervention. His belief seems to be that this evidence will demonstrate the inadequacy of a purely economic analysis of crisis. For economic crisis can, in his opinion, be averted – but only through increased activity on the part of the state. (p. 289)

   Habermas finds that the Marxist orthodox view on the falling rate of profit/surplus value is weak for two reasons. The first reason is important in public education policy analysis. According to Habermas advanced capitalism ‘alters the conditions under which surplus value can be appropriated’ and [liberal capitalism] is in part altered by ‘governmental policy in education, technology, and science’. Held summarizes the first weakness with traditional Marxian analysis as follows:

… by uncritically utilizing the conceptual strategy of value theory, the economic theory of crisis is deprived of a possible empirical test. It cannot dogmatically be assumed that the law of value still holds; that is, that commodities still exchange at their value. The increasing role of the state has, Habermas argues (as he did in Towards a Rational Society), altered the form of the production of surplus value. In particular, governmental support of the material and non-material infrastructures indirectly contributes to the production of surplus value by increasing the productivity of human labour. This is expressed in the cheapening of constant capital and a rise in the rate of surplus value. 


    The second point weakening traditional Marxian analysis is the “erosion of the free competition of the labour market” as a consequence of the condition of “reflexive labour,” a product of state activity arrived through funding of education, research and administration.  This has an effect on the price of labour when labour is understood as a commodity. 

An important element of this problem is whether reflexive labour, e.g. research, administration (much of which is non-productive in the classical Marxist definition), should be regarded as productive. Habermas’s position is that such labour does contribute to the production of more surplus value by altering the conditions under which surplus value can be appropriated; it is ‘indirectly productive’. As a result, he concludes: ‘the classical fundamental categories of the theory of value are insufficient for an analysis of governmental policy in education, technology and science’. Furthermore, ‘it is an empirical question whether the new form of production of surplus value can compensate for the tendential fall in the rate of profit, that is, whether it can work against economic crisis’ – a question which as been insufficiently explored.[cites Legitimation Crisis, p.4] (pp. 288-89)

    Habermas argued that increased activity on the part of the state can generate a different type of crisis, a ‘rationality crisis.’ When the economic system transfers the crisis to the political system, a crisis occurs when the requisite number of rational decisions are not forthcoming. By extension we might find public education policy struggling to mediate an economic crisis transferred to the political system with an end result in public education reports that is potentially irrational. The 1971 Alberta report is perhaps an example of this with the dual choice scenario it sets up between ‘person-regarding society’ and the ‘second-phase industrial society’. According to Habermasian theory some qualifiers are required here however: 1) A rationality crisis can be ruled out if the state’s ability to adjust to a contradictory environment is unpredictable. 2) Second, the state can make its policy available to its opponents and strike a compromise with these players. 3) Third, the state has time to plan its objectives whereas the market is unpredictable. Therefore the market’s chaotic activity cannot be directly transferred to the administrative system. (The three aforementioned points are constructed from Held’s interpretation on Habermas’ theory, p. 291). A rationality crisis can be averted, but if it cannot be averted then a legitimation crisis is possible. The ‘hand of the state’ is not invisible as is the ‘hand of the market’. More and more demands are made on the state and the state is less able to administratively respond to the demands it will experience by a legitimation crisis. We should perhaps be able to see what Held outlines as a key feature of systems-analytic (and a feature of Western capitalism since the Second World War) -- that for the 20th century and through fiscal policy and provision of services such as public education, the state has been able to “buy its way out of” legitimation problems.
   Habermas’ advanced capitalism can be understood in terms of three systems – the economic, administrative and legitimation systems. In Part II of “Legitimation Crisis” Habermas outlines a “descriptive model of advanced capitalism” in the first section. Advanced capitalism may also be expressed as “organized or state-regulated capitalism.” According to Habermas advanced capitalism includes two features: 1) economic concentration referring to “the rise of national and multinational corporations as well as organization of markets for goods, capital, and labour” (p. 33), and 2) state intervention into the market as functional gaps develop. (p. 33) With the rise of oligopolistic market structure the end of liberal capitalism or competitive capitalism was indicated. “The supplementation and partial replacement of the market mechanism by state intervention marks the end of liberal capitalism.” The concept of ‘steering mechanism’ is a main idea for Habermas’s system. Habermas writes that, “the steering mechanism of the market remains in force as long as investment decisions are made according to criteria of company profits.” (p. 33) No matter how much the range of capitalism is restricted, state intervention in respect of the “allocation of scarce resources” will not occur as long as society and its growth is of secondary importance to private enterprise. 
The Economic System
   Habermas writes that during the sixties a three-sector economic model based on the United States was proposed. In the private sector two conditions existed – a private sector driven by competition and a second sector containing oligopolies that ignored the competitive private sector and allowed the private competitive sector to operate competitively on the edges. A third public/monopolistic sector was defined as operating without regard for the market. In particular the armaments and space industries represented this sector. The armaments and space industries are either private firms on state contract or complete extensions of the state. If they are more at arm’s length they are nevertheless wholly reliant on state contracts. The public/monopolistic sector includes the following characteristics: 1) capital-intensive industries; 2) strong unions; 3) rapid advances in production in the monopolistic sector with less rationalization in the public sector. The competitive sector, on the other hand, is characterized by: 1) labour-intensive industries; 2) less well organized workers with lower wages, and; 3) companies that cannot be rationalized. This is the economic system described by Habermas. Of course, it is significant that the capital-intensive qualities and rapid advances in production defining the public/monopolistic sector are tied into public education, technology and scientific research.
The Administrative System
   In advanced capitalism the state supports the economic system (perhaps in the sense of the derivative model defined by Barrow). The state regulates the economic cycle and is involved with global planning. 1) The state “regulates the economic cycle as a whole;” and 2) the state “creates and improves conditions for utilizing excess accumulated capital.” (p. 34) The state cannot interfere into investment freedom and limits itself in terms of tinkering with planning to avoid instabilities. Habermas writes,

While global planning manipulates the boundary conditions of decisions made by private enterprise in order to correct the market mechanism with respect to dysfunctional secondary effects the state actually replaces the market mechanism whenever it creates and improves conditions for the realization of capital. (p. 35)

According to Habermas the state replaces an aspect of the market mechanism through the instrument of public education and related public educational tools. For example, Habermas notes seven features, three of which include education, research and related. The state, for example, replaces the market mechanism when it creates the realization of capital in the following three areas that include aspects of education: 1 -- through improvement of the material infrastructure (transportation, education, health, recreation, urban and regional planning, housing construction, etc.); 2  -- through improvement of the immaterial infrastructure (general promotion of science, investments in research and development, provision of patents, etc.); 3 -- through heightening the productivity of human labour (general system of education, vocational schools, programs for training and re-education, etc.). (p. 35) Any replacement strategy practiced by the state is intended to improve capital investment. 
The Legitimation System
   When the market enervates and the steering mechanisms prove inadequate, the ideology of the market (described by Habermas as the “basic bourgeois ideology of fair exchange”) likewise weakens and another intervention is required – the “recoupling of the economic system to the political.” This recoupling creates a demand for greater legitimation. The state is no longer securing the conditions for production as it had with liberal capitalism. The state is now actively involved in securing the requirements for production. It needs legitimation but it cannot rely on the traditional ideology that underlined liberal capitalism. This part of Habermas’s system perhaps provides some explanation into why the public education reports of the 20th century remain ‘hidden’ obscuring the history necessary to facilitate change in the 21st century. Habermas writes:

With the appearance of functional weaknesses in the market and dysfunctional side effects of the steering mechanism, the basic bourgeoise ideology of fair exchange collapses. Re-coupling the economic system to the political – which in a way repoliticizes the relations of production – creates an increased need for legitimation. The state apparatus no longer, as in liberal capitalism, merely secures the general conditions of production (in the sense of the prerequisites for the continued existence of the reproduction process), but is now actively engaged in it. It must, therefore – like the pre-capitalist state – be legitimated, although it can no longer rely on residues of tradition that have been undermined and worn out during the development of capitalism. Moreover, through the universalistic value-systems of bourgeois ideology, civil rights – including the right to participate in political elections – have become established; and legitimation can be disassociated from the mechanism of elections only temporarily and under extraordinary conditions. This problem is resolved through a system of formal democracy. Genuine participation of citizens in the processes of political will-formation [politischen Willensbildungsprozessen], [Habermas fn5], that is, substantive democracy, would bring to consciousness the contradiction between administratively socialized production and the continued private appropriation and use of surplus value. In order to keep this contradiction from being thematized, then the administrative system must be sufficiently independent of legitimating will-formation. (p. 36)

The “depoliticized public realm” encourages “political abstinence” and mass loyalty. In combination with civic privatism, exists an emphasis on career, leisure and consumption. (p. 37) Civic privatism and career/leisure/consumption ideology raises the expectation of “suitable rewards” represented by money, leisure time and security. Further, “This [civic] privatism is taken into account by a welfare-state substitution program, which also incorporates elements of an achievement ideology transferred to the educational system.” (p. 37) The “depoliticized public realm” is explained by democratic elite theories (Habermas cites Schumpeter and Weber) or by technocratic systems theories (tracing, according to Habermas, to the institutionalism of the 1920s.) These theories are integrated into the ideology in the same way that capitalistic development in its early phases was interpreted as “natural.” (p. 37)

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