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Shaping the world
For each one of us, making a living means inhabiting a world we have not made and of which we can only seek to shape a minute part. Our societies too are embedded in complex engagements with the environment, which human beings before us have shaped. Our social relations are bonded into entities where the moving or visible parts are bodies, machines, buildings, commodities, images, and texts. These often conceal as much as reveal those very relations on which they depend. In a world of objects we forget the child labour in the fine Eastern carpet, or the community severed by the oil pipeline.
But our collective engagements with the world and our construction of an environment are the essential setting for any account of our social relations. These are summations of past culture, the capacities of the species as well as social relations. They are the actuality of human experience, the changes of which are recorded as history and for which we have to render an account before we can consider the specific nature of human society.
Money and capital
In the course of human history, apart from the advance of science and technology, the most pervasive change which has taken place in the relations of culture and society is the development of money. Because each one of us needs it to live we tend to forget its significance in the wider account.
In cultural terms money is the most influential and widely used measure of values. It enables us to compare objects and activities by their price or market value. Where people work for money a monetary value can also be put on things which are not bought and sold. We can put a price on leisure by calculating lost income from not working. Even though religious values are not bought or sold we can ask how much people will sacrifice to observe them. We can compare different types of food with each other, food with clothes, consumer goods with housing, or social services with military expenditure. Most importantly for production we can compare the costs of raw materials, labour and capital with the returns from sales.
Market value is one thing, what each person regards as true value is another. Each person seeks uniquely to realise their own values and find true worth regardless often of what other people think or what market values are. Nearly everyone has possessions they would never dream of selling. They might give up everything for the sake of faith or love of another person.
We also resist trade-offs between values like health, liberty, truth and courage which appear unique and incomparable. Who can say whether health is worth more than education? People often resent money measures in these areas, which is why so many countries have social provision for them. For while money provides recognisable measures of value we may still not accept the validity of the implicit order of values which prices suggest. These are determined not by some democratic poll of the value judgements of members of society, but by wealth, effective purchasing power, which is distributed very unequally.
The expenditure of those with most money will have a dominating influence on the hierarchy of values in any market. The sociologist and economist Thorstein Veblen (1857-1929) pointed out that money was often spent simply on ‘conspicuous consumption’, showing others that you were wealthy. Expenditure demonstrated high status.
But to make that expenditure requires disposable income which is normally acquired from wealth, the control of resources which can generate money income. In other words, behind the apparent objectivity and precision of money measures of values lurk power and society. In modern society this social power came to take the form of capital.
In its origin the idea of capital, which has been taken up in ‘capitalism’, referred to money which was put to use as a loan as distinct from the interest on that loan. So it hinted at all those other uses of the term ‘capital’ where it means what comes first, is more important, leads or is at the head, as in ‘capital city’. This notion of capital was pleasingly clear-cut. It was only in the eighteenth century that economists began to extend it to take in not just financial resources but any wealth which could be used to generate future wealth. This was at the time when leaders of states were looking to the new science of political economy to tell them how to create more wealth. One historian of economics has complained:
What a mass of confused, futile and downright silly controversies it would have saved us, if economists had the sense to stick to those monetary and accounting meanings of the term instead of trying to deepen them.
But of course the political economists were seeking the secrets of why money was worth something and recognised that money itself only had value in relation to the uses to which it was put, to what it bought, or to what went to make the things which were bought. In any case the idea behind capital, even in its original financial sense, was of value which could be the basis for future values; taking it beyond money to things which could be bought was only an extension of the underlying idea.
So given the transformation of the Industrial Revolution in Europe by the middle of the nineteenth century it seemed obvious to Karl Marx that capital, beyond finance, above all else meant the productive powers of modern industry, which were owned by the newly named ‘capitalists’. Marx wrote of the capitalist system and not of capitalist society. It was for him ‘bourgeois’, reflecting the city origins of the new class of factory owners. But he declared a vital link between society and capital, for factories were worthless without labour. Capital therefore was the social relation of capitalists and workers. What the one owned depended on the work of the other; that work depended on the capital of the first.
In fact capital has grown in ways Marx did not envisage and beyond any simple opposition of capitalists and workers. Financial capital is as important as industrial capital and much of this represents the savings of pension funds and insurance companies. Intellectual property, ownership of rights in inventions, films, books, computing software are a form of cultural capital increasingly important in contemporary society. So too are the trained capacities of people in specialised occupations which require long periods of preparatory study. This is human capital. This is all in addition to capital in the form of land or buildings and to social capital, the institutions which provide the infrastructure of social order, community organisation and reliability in social relations on which future value depends.
This diversification of types of capital has taken place with changes in its ownership. While wealth is still overwhelmingly concentrated in a few hands in Western societies, the state is the largest employer, and large proportions of the population have sufficient capital in the form of housing and pension entitlements to remove any interest they might have in revolution, the threat with which Marx alarmed the ruling classes for almost a century.
The confrontation of owners and workers in the workplace is no longer the focal social relation in contemporary society. The key relation is between service providers and consumers in which each transaction is a measurable contribution (even if negative) to capital, however it is distributed. Those relations are then exposed to global change to the extent that capital itself has a global unity.
There is now a widespread understanding that the organisation of capital is profoundly important for the shaping of social relations generally between people who have no direct contact with each other. This is why we talk of capitalist society. But this is only a special case of the money relation where exchanges take place on the basis of confidence in the soundness of money and trust in the people who use it. Mismanaged money, as in Germany in the 1920s, can wreak havoc and destabilise society. Without the massive inflation of those years the Nazis might never have come to power.
A well-managed currency converts easily into any other currency. In this way it means that the transaction between any one customer and a shopkeeper is only one moment in a chain of relations which may cross the world. With the communications of the late twentieth century, the buyer and seller, producer and consumer can be any distance apart on the globe. Money binds us all into one world economy and at the same time frees us from dependence on any one producer or purchaser. As such it is a force for individualisation and globalisation at one and the same time.
The main problem for society is that the popular trust in money which makes it viable as a world-wide means of exchange and measure of value seems also to involve acquiescence in a concentration of capital, which allows overwhelming influence on values to be exerted by a few people and especially by corporations. For example the world-wide popular concern for the environment under conditions of global warming is currently thwarted by the power of energy corporations. A few collectivities can impose an agenda which institutions are not powerful enough to resist.