The Coming of Post-Industrial Society

by Daniel Bell

  Sombart’s writings cover the rise of socialism, beginning with Socialism and the Social Movement (1806) and the development of capitalism from the first edition of Der Moderne Kapitalismus in 1902. There is no English translation of Der Moderne Kapitalismus, though a “free hand” adaptation was published by F. L. Nussbaum in 1933 as A History of the Economic Institutions of Modern Europe: An Introduction to Der Moderne Kapitalismus of Werner Sombart (New York, 1933). Sombart’s fascinating history and psychology of the businessman, Der Bourgeois, was translated and edited by M. Epstein and published as The Quintessence of Capitalism (New York, 1915), and Die Juden und das Wirtschaftsleben, translated by M. Epstein as The Jews and Modern Capitalism (London, 1913) and reissued with a new introduction by Bert F. Hoselitz by the Free Press (Glencoe, III, 1951).

  24 “Capitalism,” Encyclopedia of the Social Sciences (New York, 1930), vol. III, p. 207.

  25 Joseph Schumpeter, Capitalism, Socialism and Democracy (New York, 1942). The quotations are taken from chaps. XI-XIV, in sequence, pp. 122–123, 127, 137, 132–133,140,150, 162.

  Schumpeter, at the end, is careful to say that what he is describing is an historical tendency. As he says in the last paragraph of his section, “Can Capitalism Survive”:

  Things have gone to different lengths in different countries but in no country far enough to allow us to say with any confidence precisely how far they will go, or to assert that their “underlying trend” has grown too strong to be subject to anything more serious than temporary reverses.... The middle class is still a political power. Bourgeois standards and bourgeois motivations though being increasingly impaired are still alive. Survivals of traditions—and family ownership of controlling parcels of stock—still make many an executive behave as the owner-manager did of old. The bourgeois family has not yet died; in fact, it clings to life so tenaciously that no responsible politician has as yet dared touch it by any method other than taxation. From the standpoint of immediate practice as well as for the purposes of short run forecasting—and in these things, a century is a “short run”—all this surface may be more important than the tendency toward another civilization that slowly works deep down below. Ibid., p. 163.

  26 See Max Weber, General Economic History (London, n.d.), chap. 30, esp. p. 354.

  27 Max Weber, Gesammelte Politische Schriften (Munich, 1921), pp. 149–150, cited by Richard Pipes, “Max Weber and Russia,” World Politics (April 1955), p. 377.

  28 Max Weber, Economy and Society (New York, 1968), vol. 1, pp. 223–225. This was composed in 1913–1914; Weber died in 1920.

  29 Pipes, op. cit., p. 378. The inner quote is from Weber’s essay, Der Sozialismus (Vienna, 1918).

  30 Weber, Zur lage der burgerlichen Democratic in Russland, cited by Richard Pipes, “Max Weber and Russia,” World Politics (April 1955), p. 378. Ironically, Weber felt that there was only one rival to the bureaucrat, and that is the individual capitalist entrepreneur: “Superior to bureaucracy in the knowledge of techniques and facts is only the capitalist entrepreneur, within his own sphere of interest. He is the only type who has been able to maintain at least relative immunity from subjection to the control of rational bureaucratic knowledge. In large scale organizations, all others are inevitably subject to bureaucratic control, just as they have fallen under the dominance of precision machinery in the mass production of goods” (Economy and Society, op. cit., p. 225). Thus a socialist economy, by eliminating the capitalist entrepreneur, has no counterfoil to the bureaucrat.

  31 Hans Speier, The Salaried Employee in German Society, vol. I (New York, 1939), p. 9. In 1937 the New York State Department of Social Welfare, together with the Department of Sociology at Columbia, jointly sponsored a WPA project of translations of Foreign Social Science Monographs. In all, about 25 were translated, mimeographed, and deposited in the Columbia University Library as well as disseminated in limited distribution. One major topic was that of the “white collar worker” in Germany, and in all about ten such studies were translated including the major essays of Emil Lederer, Lederer and Marschak, Fritz Croner, Hans Speier, Carl Dreyfuss, Erich Engelhard, and Hans Tobias.

  32 Emil Lederer, Die Privatangestellten in der modern Wirtschaftsentwicklung (1912), translated as The Problem of the Modern Salaried Employee: Its Theoretical and Statistical Basis, WPA Project No. 465–97-3–81, Department of Social Science, Columbia University.

  Lederer, who came to the United States after the rise of Hitler, became one of the founding members of the Graduate Faculty of the New School for Social Research in New York; he died in 1939. He is best known, in English, for his theory of “mass society,” which is discussed in his last book, The State of the Masses (New York, 1940).

  33 Emil Lederer, “Zum sozialpsychischen Habitus der Gegenwert,” in the Archiv für Sozialwissenschaft und Sozialpolitik, vol. 46 (1918–19). (The essay, though written in 1913, was not published until five years later.) Translated as On the Socio-Psychic Constitution of the Present Time, WPA Project 465–97-3–81 (New York, 1937), pp. 8–9.

  34 Emil Lederer and Jacob Marschak, “Der Neue Mittelstand,” in Grundriss der Sozialökonomik, IX Abteilung, I Teil (Tübingen, 1926), translated as “The New Middle Class,” ibid., (New York, 1937).

  Technically, it should be pointed out, the neue Mittelstand should not be translated as class, but estate. Marx himself, in generalizing the word class to cover all human history, has contributed a confusion about the meaning of the term. In precapitalist and pre-industrial society, social distinctions were ones of rank and position, reinforced by legal distinction and legitimized by tradition. Modern capitalist or industrial society swept away these distinctions, and created the bare, abstract materiality of “class” based on market position. This is the basis of the historic distinction of estate society and capitalist society. As Ralf Dahrendorf writes: “It is significant that in conversational German the word ‘class’ is even today restricted to the two strata of entrepreneurs and workers. Neither the nobility nor the professions nor the older groups of craftsmen and peasants are called classes. They are ‘estates’—a concept which in the case of the ‘middle estate’ (Mittelstand) has been retained even for the newer groups of white-collar workers and civil servants. An estate, however, is something else than a stratum or class, not only in everyday language but for the sociologist as well.” Class and Class Conflict in an Industrial Society, op. cit., pp. 6–7.

  35 Ibid., pp. 8–11.

  36 Ibid., p. 16.

  37 The article by Theodor Geiger, “Zur Theorie des Klassenbegriffs ...” appeared in Schmoller’s Jahrbuch, 54th Year, vol. I (1930); that of Schumpeter in Bonner Mitteilungen, no. 1, 1929. An influential book on the white-collar worker was Siegfried Kracauer’s Die Angestelhen (Frankfurt-am-Main, 1930), which portrayed the world of the white-collar worker in what we would call today Kafkaesque terms. fried Kracauer’s Die Angestellten (Frankfurt-am-Main, 1930), which portrayed the world of the white-collar worker in what we would call today Kafkaesque terms. The debate in German sociology is summarized in Hans Speier’s book The Salaried Employee in German Society, op. cit., especially chap. 1, and Erich Engelhard, “The Salaried Employee,” loc. cit., chap. 2.

  38 Summarizing a number of different studies by Otto Suhr, Erich Engelhard comments:

  ... his white collar is and remains the direct expression of his particular mode of life. This life is esteemed by him and others. Employees do their utmost to preserve the accepted standard of living. Beginning from a certain income figure the poorer they are, the more money they spend for rent in proportion to their income. Basically, pro-capita family expenses increase with income, but expenses for existential needs—food, housing, clothing—increase at a slower rate than those for life’s other needs. The commercial employee spends most for clothing and haberdashery; he economizes on food, probably [because he] wants to make a clean-cut impression. It is just this outward style of life, too well-known for further comment, which leads to positively-oriented esteem. T
he mode of living is a more deciding factor for the development of the group towards an estate than “occupation” as such. Erich Engelhard, “Die Angestellten,” in Kölner Vierteljahrsehefte für Soziologie, translated as The Salaried Employee, WPA Project (1939), op. cit., pp. 57–59.

  39 The voting evidence is summarized by S. M. Lipset, political Man (New York, 1960), chap. V, “Fascism—Left, Right and Center,” esp. pp. 134–152.

  40 Raymond Aron, 18 Lectures on Industrial Society (London, 1967), p. 235. The book was published in France in 1962, but as Aron notes in his foreword to the French edition, the lectures were given as a course in the Sorbonne in 1955–1956 and, as is common with professorial courses at the Sorbonne, distributed in roneoed form by the Centre de Documentation Universitaire. The interest in the topic led to their book publication though as Aron points out the original form, as lectures, was maintained.

  In effect, as Aron points out, those choosing to emphasize the idea of industrial society pay homage to Marx by emphasizing the forces of production as the central idea; those who wish to emphasize the distinction of capitalism and socialism focus on social relations. For Aron’s discussion of the alternating emphases in social thought on the “forces of production” and the “social relations of production,” see ibid., pp. 2–3.

  41 Ibid., p. 42.

  42 This does not mean that socialist and bourgeois economics have been the same. For political or ideological reasons, the Soviet economy has often denied economic rationality. The most famous example is that during Stalin’s lifetime, the Soviet economy used no capital pricing because of the ideological dogma that only labor, not capital, created value and that the interest rate was exploitative. The idea that the interest rate could be used to measure the marginal efficiency of capital and was essential for any accounting only gradually came into Soviet planning. Similarly, though the technique of linear programming was invented first by a Russian economist Kantorovich in the late 1920s, the idea was denounced as “bourgeois economics” and not used until almost forty years later after the technique had been “reinvented” independently during the war by a Rand economist George Dantzig.

  Some of this ideological dogmatism is present in the refusal of Russian planners to accept the market as a mechanism of economic allocation (though the major reasons today are primarily political). For many communists the market is associated with capitalism though actually it is only a technique whereby the user (consumer or intermediate producer) decides upon the basis of demand what is to be produced rather than the central planner. Paradoxically, in the 1930s discussion on the possibility of rational pricing under socialism, it was Marxist economists like Oskar Lange who insisted that only under socialism could the market freely operate to guide production whereas under capitalism the market was distorted by monopoly and unequal income distribution. (See Lange et al., On the Economic Theory of Socialism (Minneapolis, Minn., 1938.)

  Perhaps the most startling remnant of ideological infantilism in this regard is Fidel Castro’s announcement that he hopes—soon—to bring socialism into Cuba by abolishing money, and that everything would then be “free”—as if in so doing one does away with the problem of comparative costs of items, and the reasons for the differential prices—and exchange—of products.

  43 Lederer and Marschak, op. cit., p. 7.

  44 Brzezinski, op. cit. See part II, sec. IV, “Ideas and Ideals Beyond Ideology.”

  45 Jean Meynaud, Technocracy (London, 1968), pp. 95, 140–141.

  46 From Quel Avenir attend l’homme? (Paris, 1961), quoted in Meynaud, ibid., p. 146.

  47 This distinction is also made in an interesting book by two Marxist writers, Frederic Bon and Michel-Antonie Burnier, Les Nouveaux Intellectuels (Paris, 1966). See chaps. IV and V, “Les Intellectuels Technocrates,” and “Les Intellectuels Techniciens.”

  48 This argument is developed in chap. 6, “Technocracy and Politics.”

  49 One is not restricted to the specific focus of techniciens; if I read Dahrendorfs term “service class” rightly (see footnote 14), he would include this group, and little more, as the core or what he sees as the ascending new class in society.

  50 Inevitably, Marxologues disagree on this, as on so many other interpretations of Marx’s thought. Thus Martin Albrow, in his excellent little book. Bureaucracy (London, 1970), writes: “The section devoted to bureaucracy constituted an important part of the Kritik das Hegelschen Staatsrechts. It was a topic on which Marx had clearly thought deeply. But thereafter he scarcely gave it any attention. He made occasional mention of the bureaucrats, but the Kritik was neither cited nor published and the Marxist theory of the state developed in independence of it” (p. 69).

  Shlomo Avineri, however, in his The Social and Political Thought of Karl Marx (Cambridge, England, 1068) argues: “... an insistence on the importance of understanding bureaucracy both historically and functionally runs through all of Marx’s writings after 1843. For Marx, bureaucracy is central to the understanding of the modern state” (p. 49).

  How to mediate this stark difference? By making a distinction. In the Critique of Hegel, Marx discusses the role of bureaucracy as a quasi-independent force, standing between the State and Civil Society. In his later political writings, particularly in The Eighteenth Brumaire and The Civil War in France, bureaucracy is seen as identical with the state apparatus, and it is the state, even though “the instrument of the ruling class,” which, at times, “strove for power on its own,” under the guise of representing the general interest. The idea, however, that the bureaucracy could be an independent force in modern society disappears from Marx’s writing. This discussion, it should be emphasized, is in the framework of western social development. Bureaucracy was for Marx a central feature of the “Asiatic mode of production,” a theme that is developed in Karl Wittfogel’s Oriental Despotism (Yale University Press, 1957).

  Marx’s Critique of Hegel’s Philosophy of Right was published first only in 1927, by D. Riazanov, as part of his collection of Marx’s early writings. A full English translation appeared only in 1971, edited by Joseph O’Malley (Cambridge, England). Excerpts appeared in the U.S. in the edition, Writings of the Young Marx on Philosophy and Society, ed. Lloyd Easton and Kurt H. Guddat (New York, 1067), pp. 152–202. The translations used below are from Easton and Guddat, modified in one instance by the use of a section from Avineri where it made more colloquial sense.

  51 Reprinted in Selected Essays of Karl Marx, ed. H. J. Stenning (London, n.d.), p. 82.

  52Hegel’s I’hilosophy of Right, trans. T. M. Knox (Oxford, 1949), pp. 190, 192. The discussions of “the executive” are in paragraphs 287–297, pp. 186–193.

  53 See Eastern and Guddat, op. cir., pp. 184, 185, 186; Avineri, op. cit., pp. 23–24.

  54 As Avineri well puts it:

  Civil society is totally emancipated from political limitations; private life, including economic activity, becomes completely independent of any considerations relevant to the commonwealth; and ail political restrictions on property and economic activity are abolished. Economic individualism and laissez faire express this dichotomy between civil society and state, with human society now fully conscious of its alienation and of the division of human life into a private and public sphere. Ibid., pp. 20–2 1.

  55 Reprinted in Karl Marx, Selected Works, vol. II (Moscow, 1936), pp. 423,424.

  56 For an authoritative discussion of this point, see Leonard Krieger, “The Uses of Marx for History,” in the Political Science Qxtarterly, vol. LXXV, no. 3.

  57 The reference is in Albrow, op. cit., p. 70.

  58 As Bakunin observed in a famous passage:

  ... a strong State can have only one foundation; military and bureaucratic centralization. In this respect the essential difference between a monarchy and a democratic republic is reduced to the following: in a monarchy the bureaucratic world oppresses and plunders the people for the greater benefiit of the privileged propertied classes as well as for its own benefit, and all
that is done in the name of the monarch; in a republic the same bureaucracy will do exactly the same, but —in the name of the will of the people.... every State, even the most Republican and the most democratic State—even the would-be popular State conceived by M. Marx—are in their essence only machines governing the masses from above, through an intelligent and therefore a privileged minority, allegedly knowing the general interests of the people better than the people themselves. The Political Philosophy of Bakunin, ed. G. P. Maximoff (Glencoe, III., 1953), p. 2 11.

  59 Leon Trotsky, The Revolution Betrayed (New York, 1937), pp. 5–6. To save elaborate footnoting, further citations of pages are given in brackets after quotation; all references are to this edition. Except where otherwise indicated, emphases are added.

  60 See V. I. Lenin, The State and the Revolution, in Selected Works (Moscow, 1951, published in England 1953), vol. II, part I, pp. 249–250, 280. “Such a beginning,” Lenin added, “on the basis of a large-scale production, will of itself lead to the gradual ‘withering away’ of all bureaucracy ... to an order in which the functions of control and accounting—becoming more and more simple—will be performed by each in turn, will then become a habit and will finally die out as the special functions of a special section of the population” (ibid., p. 250).

  61 The article by Trotsky, entitled “The USSR in War,” appeared in The New International (November 1939). As he formulated the question:

  However onerous the second perspective may be, if the world proletariat should actually prove incapable of fulfilling the mission placed upon it by the course of development, nothing else would remain except openly to recognize that the socialist program, based on the internal contradictions of capitalist society, ended as a utopia. Ft is self-evident that a new “minimum” program would be required—for the defense of the interests of the slaves of the totalitarian bureaucratic society.