Is Disorganized Capitalism Good?

I. Introduction

Capitalism is basically conceived as a system in which goods and services which down to the most basic necessities of life are produced for profitable exchange where even human labour-power is a commodity for sale in the market, where labour productivity is improved by technical means and where all economic actors are dependent on the market (WOOD, 2002). Capitalism has been developed for many decades with three different stages. First stage from the ninetieth century is the liberal capitalism, a system of societal organization that is based on property rights, especially the private ownership of the means of production (Reisman, 1998). The second stage from 20th century is the organized capitalism, characterized by dense cross-shareholding networks, close ties between companies and banks, and high ownership concentration (Callaghan, 2012). The final stage from the late twentieth century to the present is the disorganized capitalism which is going to be discussed in the following pages. To study capitalism as a whole is too broad to be analysed and discussed here due to the limitation of time and the existing studying tools to make this research writing possible. Therefore, here I am going argue that the disorganized capitalism is good with the analysis over its opportunities and challenges following my opinion at the last section. This paper is organized in parts in order to make it easier to follow. The first following part is the description to answer what is disorganized capitalism? The second part is going to be discussed about the features of disorganized capitalism from Lash and Urry’ perspectives. The third part is described the opportunities given by the disorganization of the capitalism. The fourth part will be described about the challenges of the disorganized capitalism. The final and concluding part will be focused on my personal opinion over whether the disorganized capitalism is good or bad as a whole based on my understanding from the research.

II. What is disorganized capitalism?

Disorganized capitalism is the process of transformation of time and space of economy and culture, featuring the rapid flows of capital, labour, commodities, electronically transmitted information and images across sovereign boundaries in the globe. Lash and Urry define the disorganized capitalism as a set of structure which is not influenced by a nation-state regulation which in turn is internationalized in order to be able to govern the global capitalism which can be made at the level of the international political order (Rafferty, 2008). Observing the disorganized capitalism through what Lash and Urry wrote in their book called The End Of Organized Capitalism, I will briefly describe some of the disorganized capitalism’s key features. (1) The growth of a world market combined with the increasing scale of industrial, banking, commercial enterprises. (2) The continued expansion of the number of white-collar workers and particularly of a distinctive service class. (3) Decline in the absolute and relative size of the core working class that is of manual workers in manufacturing industry. (4) Decline in the importance and effectiveness of national-level collective bargaining procedures in industrial relations and the growth of company and plant-level bargaining. (5) Increasing independence of large monopolies from direct control and regulation by individual nation-states. (6) The spread of capitalism into most Third World countries. (7) The decline of the salience and class character of political parties. (8) An increase in cultural fragmentation and pluralism, resulting both from the commodification of leisure and the development of new political and cultural forms since the 1960s. (9) The considerable expansion in the number of nation-states implicated in capitalist production and the large expansion in the number of sectors organized on the basis of capitalist relations of production. (10) Decline in the absolute and relative numbers employed in manufacturing industry and in the significance of those sectors for the organization of modern capitalist societies. (11) The overlapping effect of new forms of the spatial division of labour has weakened the degree to which industries are concentrated within different regions. (12) The average plant size has gradually declined. (13) Industrial cities begin to decline in size and in their domination of regions. (14) The appearance and mass distribution of a cultural-ideological configuration of postmodernism.

III. Features of Disorganized capitalism

To understand the disorganized capitalism, we should first understand each feature of it and here are the following features (Urry, 1987): The growth of a world market combined with the increasing scale of industrial, banking and commercial enterprises. This means that national markets have become less regulated by nationally based corporations. From the point of view of national markets there has then been an effective de-concentration of capital. This tendency has been complemented by the nearly universal decline of cartels. Such deconcentration has been aided by the general decline of tariffs and the encouragement by states, particularly the USA, to increase the scale of external activity of large corporations. In many countries there is a growing separation of banks from industry. The continued expansion of the number of white-collar workers and particularly of a distinctive service class of managers, professionals, educators, and scientists. The effect of the continuing expansion becomes an increasingly significant element which then disorganizes modern capitalism, owing to the development of an educationally based stratification system. Decline in the absolute and relative size of the core working class that is of manual workers in manufacturing industry, as economies are de-industrialized. The de-industrialization can be understood when the manufacturing’s share falls behind the service sectors. Decline in the importance and effectiveness of national-level collective bargaining procedures in industrial relations and the growth of company and plant-level bargaining. It indicated that industrial relations and the development of a company is no longer under the power of state decision. Increasing independence of large monopolies from direct control and regulation by individual nation-states and the breakdown of most neo-corporatist forms of state regulation of wage bargaining and planning; increasing contradiction between the state and capital which can lead to fiscal crises; development of universalistic welfare state legislation and subsequent challenges from left and right to the centralized welfare state. The spread of capitalism into most Third World countries. That has increased competition in many of the basic manufacturing industries (such as steel, coal, oil, heavy industry, automobiles) and the export of the jobs of part of the First World proletariat. This in turn has shifted the industrial or occupational structure of First World economies towards service industry and occupations. The decline of the salience and class character of political parties. There is a very significant decline in the class vote and the more increase in catch-all parties which reflect the decline in the degree to which national parties simply represent class interests. An increase in cultural fragmentation and pluralism, resulting both from the commodification of leisure and the development of new political and cultural forms since the 1960s. The decodification of some existing cultural forms and the related reductions in time-space distanciation called the global village likewise undermine the construction of unproblematic national subjects. The considerable expansion in the number of nation-states implicated in capitalist production and the large expansion in the number of sectors organized on the basis of capitalist relations of production. Decline in the absolute and relative numbers employed in manufacturing industry and in the significance of those sectors for the organization of modern capitalist societies. Increased importance of service industry for the structuring of social relations such as smaller plants, a more flexible labour process, increased feminization, a higher mental component. The overlapping effect of new forms of the spatial division of labour has weakened the degree to which industries are concentrated within different regions. To a marked extent, these are no longer regional economies in which social and political relations are formed or shaped by a handful of significant central manufacturing industries. Decline in average plant size because of shifts in industrial structure, substantial labour-saving, capital investment, the separation of various subcontracted activities, the export of labour-intensive activities to world market factories in the Third World, and to rural sites in the First World. Industrial cities begin to decline in size and in their domination of regions. This is reflected in the industrial and population collapse of so-called ‘inner cities', the increase in population of smaller towns and more generally of semi-rural areas, the movement away from older industrial areas. Cities also become less centrally implicated in the circuits of capital and become progressively reduced to the status of alternative pools of labour-power.

IV. Disorganized capitalism: opportunities

Due to the disorganized capitalism’s focus on consumerism and services industry, culture and symbolic value, there are always trends that help decrease global poverty rate and make a better world for everyone to live in. Here are what we should learn (Urry, 1987): § The Growing World Market decreases global poverty: The expansion of Transnational corporations, the fast increasing movement of investment from developed to developing countries, the shift of jobs from first world to third world countries, the proliferation of global networks of production and distribution. § The constant expansion of the distinctive service industries: The continued increasing number of managers, professionals, educators, and scientist across the world; the development of educational system to encourage individual achievements and mobility. § Emergence and spread of the new world culture: The overwhelming acceptation of the postmodernist ideas through consuming postmodernist goods such as media products, leisure services, and designer products. It is very much involved in consuming cognitive and aesthetic products, which produce homogeneity across the world, making all nationalities to co-exist in harmony with each other. § The declining importance of territorial boundary: The flows of technologies, information, commodities, images, and people don’t recognize the territorial boundaries and the collapse of time and space across the globe. § The growing accumulation of knowledge and skills: Obtaining one skill or new knowledge is accessible everywhere due the technologies and internet. § The rapid economic development in developing countries: the flows of special supportive technologies for business, the greater flow of foreign direct investments, and the flow of human resources from the developed to the developing and third world countries. § The spreading acceptation of human rights: The increasing number of world population with better living standards and higher education is the main driving force of the acceptation. § The decline in interstate warfare: due to the fact that more and more states across the world are economically interdependent to each other and the spreading of democratic values, so they tend to cooperate than fighting each other because they will be both the losers. The growth of social movements: The increasing students’, anti-nuclear, ecological and women’s movements which increasingly draw energy and personnel away from class politics.

V. Disorganized Capitalism: Challenges

Disorganized capitalism doesn’t have only the good side which you have read above but it also has the bad side or its challenges which threatens the world we live in. The following ideas are those challenges (Urry, 1987): § The greater exploitation from first world bourgeoisie to the third world proletariat: The expansion of the transnational corporations basically from one country to other third world country where there are abundant of labour with cheap wage, sweatshop condition, using child labour, destroying environment in an effort to remain competitive and increase profit (Weiss, 2012). § The spread of trade disputes: That divides rich and poor countries that threatens to end the capitalism regime. § The growing disparities in wealth: It separates between winners or losers, caused by the disorganized capitalism. § A threat to end the high culture: More and more people across the world start to adopt the popular culture, the culture of cognitive and aesthetic consumerism which provides the huge impact to their local, national, and regional cultures. § The decline in the number employed in manufacturing industries and in the significance of those sectors: The increasing importance of service industry for the structuring of the social relation called de-industrialization.

IV. Disorganized Capitalism: Personal Analysis

As discussed above over what the disorganized capitalism is, what its advantages and disadvantages are above, I can conclude that disorganized capitalism is a type form of capitalism if I compare to the organized capitalism, a nation-state form of capitalism. Although the disorganized capitalism provides both opportunities and challenges, here I personally argue that disorganized capitalism is good with many arguments below: First argument is the decrease in the overall global poverty due to the growing world market. The transnational corporations have notably expanded across the globe, bringing jobs from the first world to the third world countries, marking the expansion of capitalism through disorganized capitalism. Also, the rapid flow of foreign direct investment to the developing countries transform their rural area into a small cities, the small cities to bigger cities with modern technologies, innovation, education helping the local people to better their education and living standards and to be able to be aware of the world they are living in. Now a corporation, established and located in the United States, is not only providing jobs for American people but also for Korean, Chinese, Cambodian people. That, creates a network of international production and distribution, makes every part of the world more interconnected and interdependent to each other like a village. Second argument is the increasing recognition new world culture which creates a harmonious world. Basically, the spread of the culture features shared norms based on mass consumerism. Due to the power of global media, advertisings, and products, more and more countries start adopting that norms and act like they are universal. The homogenization of mass culture can be seen as everything from foods, dress, and education to advertising and the spreading of postmodernist products. Branding is one of the rapid spread of the mass culture like APPLE and SAMSUNG. The circulation of cognitive and aesthetic signs with the capitalist products also help make the mass culture to be recognized faster. Angry bird sign is the good example of how people from every part of the world come to one stand together although it involves in the manipulation of taste. Third argument is the decline in importance of territorial boundaries which prove the better relation between countries to countries with the flow of goods, technologies, information, images, and people across sovereign borders in the globe. You can find products from the United States in Asian and European countries easier; for example, COCACOLA and PEPSI are solving in every country in both continents. Also, people start having multicultural awareness and understanding, which is one of all factors to make peace in the local level from region to region. Fourth argument is the rapid development of developing countries such as India and China in large contribution reduce the total global poverty. The combination of total population in India and China is bigger than the combination of the total ten ASEAN countries’ population plus the population of United States and Japan. Therefore, the development of the two giant countries can really reduce the total global poverty resulting the disorganization of the modern capitalism which can also be called global capitalism. The fifth argument is the growing accumulation of skills and knowledge which increase the world human capital. Skills and professionals are transferred from the developed countries to the developing countries through foreign direct investment attached with technological experts, professional workers, and skilled workers. Those experts help people in the host countries to learn from doing and their experiences. Sixth argument is the spread of acceptation of human rights. This has to do with a lot of things related to the core values of disorganized capitalism, emphasizing on freedom and democracy. This can be understood by tracing back to the origin of the capitalism which comes from the free world like the United States and Japan. Whenever the businessmen and factory owners from the mentioned countries decide to invest in other countries, they always adopt and respect the values of human rights. Those values are cultivated in the people of the host countries through investments. Final argument is the decline in interstate warfare. Due to the greater and greater interdependence in economic relations of every state and the spread of trades and businesses, states start to realize that to fight each other is a stupid idea because no one is the winner in that fight. In conclusion, the disorganized capitalism is good based on arguments I discussed above although there are some challenges.

References
Azmanova, A. (2010). Capitalism Reorganized: Social Justice after Neo-liberalism. Melden: Blackwell. Callaghan, M. H. (2012). Changing Ideas: Organized Capitalism and the German Left. Koln: Max Planck Institute for the Study of Societies. Rafferty, R. W. (2008). Introduction to Global Politics. New York: Routledge. Reisman, G. (1998). Capitalism. Ottawa: Jameson Book. Saeger, S. S. (1996). Globalization and Deindustrialization: Myth and Realtity in OECD. New York: MIT press. Urry, S. L. (1987). The End of Organized Capitalism. Madison: University of Winconsin Press. Weiss, R. (2012). The Politics and Economics of Globalization. Phnom Penh: Pannasastra University of Cambodia. WOOD, E. M. (2002). The Origin of Capitalism. London: VERSO.