Book Review – The Culture of The New Capitalism


[This is a repost but a relevant one as I chose Richard Sennett as my sociologist of the semester.]

Richard Sennett’s The Culture of the New Capitalism should be read as one more chapter in Sennett’s exploration of the transformation of labor and institutions, something he started in the 1970s with The Hidden Injuries of Class and continued more recently with The Craftsman (review to come).

“All that is solid melts into air.” This quote from Marx has been used and reused by Bauman (see his whole “liquid” conditions series of books) and it is also a recurring theme in Sennett’s book: the progressive dismantling of what Pierre Bourdieu might call the structuring structure and the structured structures of labor.


The first part of Sennett’s book is a comparison between the modern Weberian bureaucracy both in its positive aspects (social integration, what Sennett calls its contribution to social capitalism, militaristic efficiency and organization of time, its predictable promotional paths) and its negative traits (the famous Iron Cage, its ritualistic and alienating tendencies). The bureaucratic model pervaded modern society in multiple institutional incarnations. So, what is changing?

“The fresh-page thesis asserts that the institutions which enabled this life-narrative thinking have now “melted into air.” The militarization of social time is coming apart. There are some obvious institutional facts on which this thesis is founded. The end of lifetime employment is one such, as is the waning of careers spent within a single institution; so is the fact, in the public realm, that government welfare and safety nets have become more short-term and more erratic.” (25)

And then, of course, there is globalization both in its deterritorialized and deeply territorial forms.

Sennett outlines three aspects in which the iron cage comes apart:

  1. the shift from managerial to shareholder power in large companies
  2. this shift in power involves a demand for short-term results (“impatient capital”)
  3. the development of new technologies of communications and manufacturing

Giant pension and investments funds have generated enormous amounts of capital in search of profitable returns all over the world, both cause and effect of globalization since the late 1970s. This is when shareholder power emerges in corporate governance, as opposed to executives.

And with this development comes short-termism.

“Share price rather than corporate dividends was their measure of results. Buying and selling shares in an open, fluid market yielded quicker – and greater – yields than holding stocks for the long term. For this reason, whereas in 1965 American pension funds held stocks on an average for 46 months, by 2000 much in the portfolios of these institutional investors turned over on an average of 3.8 months.” (40)

Making money quick is nothing new. What changed are the institutional, cultural and technological ways of doing so.

“The combined effect of so much unleashed capital and the pressure of short-term returns transformed the structure of those institutions most attractive to empowered investors. Enormous pressure was put on companies to look beautiful in the eyes of the passing voyeur; institutional beauty consisted in demonstrating signs of internal change and flexibility, appearing to be a dynamic company, even if the once-stable company had worked perfectly well. (…) Institutional solidity becomes an investment negative rather than a positive. Stability seemed a sign of weakness, suggesting to the market that the firm could not innovate or find new opportunities or otherwise manage change.” (40-41)

The willingness to destabilize or stress the system of one’s own organization is a sign of dynamism, flexibility and embrace of change (something expanding beyond corporations into the realm of higher education, for instance, as demonstrated by Marc Bousquet in his book, How The University Works, and also a process described by Sennett himself in The Corrosion of Character, detailing the case of Lou Gerstner leadership at IBM).

The power of impatient capital was of course multiplied by the rise of information and communication technologies as well as revolutions in manufacturing, refrigeration and containerization.

Institutionally speaking, ICTs permitted the removal of middle level bureaucracy and the emergence of a new form of centralization with accelerated power without discussion or interpretation. This came in addition to outsourcing, off-shoring and massive lay-offs. Whereas an essential effect of the modern bureaucracy was social inclusion of the masses (for social, political and economic reasons), the new corporation is lean and mean and can function with fewer people.

The new organization requires a new conception of the self and identity. This is where culture enters the picture. The new self is one adapted to these new social, economic and institutional conditions: a self that eschews dependency upon others or upon companies or institutions or the state. This is not individualism, this is the era of flexible (sometimes virtual) networks and contacts rather than stable and deep relationships.

What is the new institutional reality of corporations (Again, this was addressed at greater length in The Corrosion of Character)? Three main processes define it:

  1. Delayering: getting rid of layers within the organization and having these functions transferred to other places or individuals.
  2. Casualization: short-term, renewable employment within the organization where workers can be moved from task to task.
  3. Non-linear sequencing: task or problem-solving oriented rather than fixed-function labor.

Put together, these characteristics define organizations revolving around shorter time frames devoted to small tasks. Organizations then creates ill-defined conditions and contexts in which human relations and problem-solving skills are key and surveillance (especially computerized) is extensive, generating institutionalized paranoia. These are high-stress systems; their personal product: anxiety.

“Anxiety attaches to what might happen; dread attaches to what one knows will happen. Anxiety arises in ill-defined conditions, dread when pain or ill-fortune is well defined. Failure in the old pyramid was grounded in dread; failure in the new institution is shaped by anxiety. When firms are reengineered, employees frequently have no idea of what will happen to them, since modern forms of corporate restructuring are driven by issues of debt and stock-price value generated in financial markets, rather than by the internal workings of the firm.” (53)

This is reinforced by the widespread use of consultants as perfect illustration of the sociological idea that distance = social inequality. Hiring consultants – increasing social distance – accomplishes certain things that are positively viewed by investors:

  • an ideological signal that power is being exercised
  • potential institutional disruption signalling that “change” (always positive) is afoot
  • a shift in responsibility for painful decisions (“the consultants said we should do it”)
  • command without accountability (see the IMF / WB economists imposing shock economic therapy upon other countries without any accountability for the catastrophic results)
  • power without commitment to the organization

According to Sennett, this dismantling of the iron cage of the modern bureaucracy produces three types of social deficits, which, put together, amount to a decline in social capital (the Putnam thesis):

  1. low institutional loyalty
  2. diminishment of informal trust among workers
  3. weakening of institutional knowledge

Culturally, all these institutional aspects translate into the devaluation of stability and delayed gratification in terms of prestige and the valuation of risk-taking and problem-solving skills. This, in turn, has consequences for the stratification system:

“Class counts for everything. A child of privilege can afford strategic confusion, a child of the masses cannot. Chance opportunities are likely to come to the child of privilege because of family background and educational networks; privileges diminishes the need to strategize. Strong, extensive human networks allow those at the top to dwell in the present; the networks constitute a safety net which diminishes the need for long-term planning. The new elite thus has less need of the ethic of delayed gratification, as thick networks provide contacts and a sense of belonging, no matter firm or organization one works for. The mass, however, has a thinner network of informal contact and support, and so remains more institution-dependent.” (80)

Specter of Uselessness

Sennett sees the specter of uselessness as a major source of anxiety in society, but here again, redefined by institutional change and shaped by distinctive forces:

  • the global labor supply: when one’s skills are easily replaced by another labor force in another part of the world
  • automation (which can generate automated uselessness)
  • the management of ageing

Uselessness is tied to the fear of skills extinction as experience becomes less valued and skills can be bought in a younger worker rather than expending resources on retraining an older, more expensive, worker.  As a result, large numbers are left behind, in situations of marginality due to unemployment or underemployment in a culture that loathes dependency and that the welfare state (diminished as it is) is ill-equipped to deal with.

This leads to a related and essential topic of the book: the declining prestige of craftsmanship.

“Craftsmanship would be: doing something well for its own sake. Self-discipline and self-criticism adhere in all domains of craftsmanship; standards matter, and the pursuit of quality ideally becomes an end in itself. Craftsmanship emphasizes objectification: (…) a thing made to matter in itself. (…) Understood this way, craftsmanship sits uneasily in the institutions of flexible capitalism. (…) The more one understands how to do something well, the more one cares about it. Institutions based on short-term transactions and constantly shifting tasks, however, do not breed that depth. Indeed, the organization can fear it; the management code word here is ingrown . Someone who digs deep into an activity just to get it right can seem to others ingrown in the sense of fixated on that one thing. (…) And he or she stands at the opposite pole from the consultant, who swoops in but never nests. Moreover, deepening one’s skills in any pursuit takes time.” (104-105)

So what does the flexible organization look for? According to Sennett, potential abilities that tend to be amorphous and therefore, applicable to a variety of domains and settings, such as problem-solving or interpersonal skills. For Sennett, this is ultimately what standardized tests are expected to measure: solving a variety of problems with a limited amount of time and no time to think things through in any deep or complex manner. Ability then is detached from learning, experience and achievement. From his studies, Sennett found that evaluations of abilities by management are much more personal and go straight to a sense of self:

“Judgments about potential ability are much more personal in character than judgments of achievement. An achievement compounds social and economic circumstances, fortune and chance, with self. Potential ability focuses only on the self. The statement “you lack potential” is much more devastating than “you messed up.” It makes a more fundamental claim about who you are. It conveys uselessness in a more profound sense. (123)

[Emphasis mine] One can see then how potential ability stands in opposition to craftsmanship and how disempowering it is. What can one do when one lacks abilities? One can work at one’s crafts but not at one’s abilities. And again, in this context, abilities are defined as amorphous and non-specific (ability to work well with other, to think outside the box, to be collaborative, etc… these phrases are, in a way, meaningless and subject to subjective assessment).

What are the implications of all this for politics, and especially for progressive politics? Well, not so good for Sennett as politics becomes an object of consumption as well and politicians package themselves as consumer objects.

Consuming Politics

Ok, let me take a detour here: it seems to me that, as I was reading Sennett’s book, that I was truly reading about the Obama campaign and about Obama as consumption object. Think about it for a second: Obama campaigned on himself, not as a Democrat, liberal, progressive. Actually, he ran away from these labels. He also revealed contempt for experience and promoted his “skills”, especially, his negotiating skills (his claim to be able to bring everybody to the table and reach a consensus… an amorphous skill, applicable to any domain).

He did not provide specific programs and policies (again, when one asked his supporters to provide such information, one would be invariably referred to the website as the immediate response). He also rejected past experience (contempt for the struggles of the 60s). And, of course, he pushed the idea of his “judgment” as his major asset. Finally, charisma was a major asset. In this sense, it was really a campaign packaged for the impatient consumer, with little interest in detailed wonkery as well as major ageism involved (combined with misogyny). No deferred gratification here.

I would argue that Obama was successful in packaging himself in a way that fit the “creative class” (euphemisms for privileged classes), the media, college students who have been socialized in an SAT environment and expect to work in new organizations and see themselves as citizen-consumers. Indeed, as Sennett explains, the citizen-consumer is

  1. offered political platforms which resemble product platforms (the candidate as product in and of himself)
  2. gold-plated differences (what Sennett calls the symbolic inflation of trivia)
  3. asked to discount “the twisted timber of humanity” (concerns of the disadvantaged and complex social and political issues are dismissed as getting in the way of “transformation” whatever that means)
  4. credit more user-friendly politics
  5. accept continually new political products on offer

All these go against progressive politics, according to Sennett (indeed, Obama has never presented himself as progressive or liberal, his supporters have projected these attributes upon him as part of the well-known process of imaging):

“User-friendly makes a hash of democracy. Democracy requires that citizens be willing to make some effort to find out how the world around them works. (…) My point is not that people are lazy but that the economy creates a political climate in which citizens have difficulty in thinking like craftsmen. In institutions organized around flexible labor, getting involved deeply in something risks making the worker seem ingrown and narrowly focused.” (171)

Sennett ends his book by again emphasizing craftsmanship (something I’m guessing he has picked up in his latest book) and focusing on the Dutch solution to broken life narratives (something also heavily present in The Corrosion of Character).

I enjoy reading Sennett but I have to confess that parts of the book annoyed me, especially the ones about consuming desires. I have to confess that Freudian-type sociology bores me and leaves me frustrated mostly because I would like something more empirically grounded. I understand that Sennett is not just a sociologist but also a social thinker or philosopher, and the most philosphical parts of the book are the ones that did slow me down. I much prefer his labor and institutional analyses. I find them more powerful. But again, no one describes institutional realities as he does.

10 thoughts on “Book Review – The Culture of The New Capitalism

  1. Follow up:

    This author mentions the loss of craftsmanship AKA… also known as the de-skilling thesis that HArry Braverman once made. The only problem that I see is that he does really go into any mentioning of risk (from what I can tell) :)

  2. He does not mention risk (although he does mention Beck) because it is very clearly the background to that which he is discussing. It’s very obvious when you read the book.
    Part of it is because his focus is different: basically, the institutional and personal consequences of conditions such as risk.
    There is a bit of Braverman there, obviously, but I would argue that Sennett takes it a bit further by adding the superseding of craftsmanship with “potential skills”. Something I have not seen discussed that way before, except in his own “Corrosion of Character”.

  3. hi hon! (i miss you at corrente!)

    can you recommend anything current on China and India in terms of labor and their rising middle-classes, etc?

    this is interesting, on China’s “millenials” (all only children and vastly different from their parents and grandparents–and being brought up to operate — and materially succeed — in today and tom’w’s world (which looks like a global China to me in many ways–mostly bad). —

  4. Well, hi there, Amberglow, thanks for dropping by! I miss (some of) you guys too!

    To answer your question, you might want to try

    – the chapter on China in William Greider’s One World, Ready or Not
    – the chapter on China in Manuel Castells’s End of Millenium
    – the book China and Globalization
    – Also, Le Monde Diplomatique has an English online version (cheap subscription needed though) with regular articles on China.

    I hope this helps.

    Hey… didya know Sarah Palin’s a dominionist?? (runs and hides :-D )

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