In doing some background reading for my current research project on the global regulation of private wealth, I was struck by this observation about corporations from anthropologists George Marcus and Peter Dobkin Hall:
“…the internalized functions characteristic of modern, bureaucratically organized business firms has been less a means of responding to market forces than a means of eliminating them. While remaining nominally in the economic realm, corporations have increasingly become (and may, indeed, always have been) mechanisms for the maximization of social and political utilities: identity, status, power, influence.”
—from Lives in Trust: The Fortunes of Dynastic Families in Late Twentieth-Century America (1992: 257; emphasis mine)
My first reaction upon reading this was: “Preach it!” The phrase that really grabbed my attention was: “and may, indeed, always have been.” As in, maybe corporations have always been about enhancing the personal attributes—“identity, status, power and influence”—of corporate executives.
I’ve been waiting for someone to say that in print for a long time. To say that the rhetoric used to justify the existence and behavior of corporations, expressed in set phrases like “adding shareholder value,” is about as convincing as the praise of the court officials in “The Emperor’s New Clothes.”
The Emperor's New Clothes.
Whenever some executive piously intones these set phrases, it makes him (and it is usually a him) sound like an altruist who somehow got lost en route to the local Peace Corps office and wound up in the C-suite instead: “Oh well, now I’ll have to accept a multi-million-dollar salary and a private jet instead of teaching apiculture in Zambia. Fiddlesticks!” It’s ludicrous, and yet rarely does anyone in social science speak up against this farcical claim that people run companies in order to make other people—specifically, shareholders—rich.
“We are holding this meeting to respond to the continuing stream of baseless rumors that are depressing our stock, and to discuss ways in which we plan to enhance shareholder and debt-holder value.”
Amazingly, that was the actual title of an article published by Smart Money magazine 9 months before the SEC filed larceny charges against Kozlowski. Such is the power of the executives-as-philanthropists-manqués trope that a reputable financial publication essentially became the propanda arm of a deeply corrupt organization.
The delusional quality of this reporting calls to mind something that Bourdieu wrote in his autobiography:
“The grip of strongly integrated groups, the limiting case (and practical model) of which is the standard family, is to a large extent due to the fact that they are linked by a collusio in the illusio, a deep-rooted complicity in the collective fantasy, which provides each of its members with the experience of an exaltation of the ego…an enchanted image of the self.”
—from Sketch for a Self-Analysis (2008: 7)
The idea that corporate elites represent a strongly integrated group willing to take coordinated action to preserve their collective interests is nothing new. Marx theorized it in Das Kapital and other writings; Useem investigated the phenomenon empirically in The Inner Circle. But what doesn’t get talked about enough, in my view, is the element of illusion—the fantasy and enchantment that comes with being a corporate executive.
What’s really puzzling is not the illusion on the part of CEOs, but the collusion from others that supports it. Many journalists play the role of courtiers praising the emperor’s new clothes, but so do academics. Every time university professors use phrases like “creating shareholder value” uncritically, they are colluding in the illusion of benevolent executive power and drawing a veil over the self-serving uses of the corporation by executives. Personally, I’d like to see more of us—particularly in business schools—discuss the possibility that people like Kozlowski aren’t deviants, but individuals who have been caught and punished for what is otherwise accepted practice among their peers.
Sometimes the best products and business models don’t “win” in the market, while lesser products and plans triumph. Cases in point: the dominance of the QWERTY keyboard over better designs (like the Dvorak), and—in the days of Ye Olde Visual Media—the way the VHS standard consigned BetaMax, with its superior picture quality, to the dustbin of history.
The better product failed at market: Betamax video (top) versus VHS.
Economists have long puzzled over these failures and have advanced a number of explanations, including the compelling theories of Brian Arthur, whose work on increasing returns and market “lock-in” was instrumental in the US government’s anti-trust case against Microsoft. As Arthur has shown, merely having a head start in terms of market share can allow an inferior product to continue growing that share until it dominates the market, shutting out any competition.
But these cases also showcase the value that economic sociology can add to our understanding of markets, particularly through the lens of culture—the sort of variable that gets thrown into the dreaded black box of “preferences” in economic models. Black boxes exist in the world of academic theory to contain factors that are unknown, perhaps unknowable; this often gets interpreted to mean that the factors are not worth knowing about. Thus, the origins of preferences, and the ways preferences change, are treated by most economists as uninteresting and irrelevant.
Yet for sociologists, these are the most interesting things about economic behavior. Culture, class, identity and ideology—core issues in sociological research—all play a role in shaping preferences. These forces are not easy to model, which is a major reason they get left out of economic scholarship, where elegance and parsimony are valued above empirical verisimilitude. So, as one classic article put it, sociologists get “dirty hands” from dealing with lots of data and variables, while economists construct “clean models” that exclude such messy complexities.
What sociological theories may lack in “cleanliness,” however, they make up for in explanatory power. I was struck by this recently while contemplating a puzzling business failure in my own backyard: the Belgian supermarket chain Delhaize shut its doors in Cologne and Aachen, the two cities where the firm had tried to gain a foothold in Germany. Here were stores vastly superior to their competition—selling a much broader and higher-quality range of goods than anything available in local grocery chains, all at very reasonable prices—and yet the business failed.
Adding to the mystery, Delhaize had long ago proved that their business model transplanted well to other cultures by launching the chain to great success in Asia and the US. Yet they couldn’t make a go of it just across the border from the firm’s headquarters. High quality, competitive pricing and good locations weren’t enough to make the model work in Germany.
The loss was keenly felt in the expat community here in Cologne. People don’t usually get sentimental about grocery stores, but Delhaize inspired extraordinary loyalty and appreciation among people who cared about good food. If you come from a place where a wide variety of fresh, high-quality, attractive foods–particularly fruits and vegetables–are readily available, then it’s a huge shock to walk the aisles of a German grocery store. The baked goods—bread and pastries—are terrific, and justly celebrated. But the produce and meats are really dismal, even in specialty shops, and the supermarkets are quite depressing. I come from the US, but I’ve heard the same refrain from friends and colleagues who hail from Turkey, France and Thailand.
All of us were struck to find, here in the wealthiest country in Europe, that the fruits and vegetables often look quite bedraggled, as do the meat and fish selections. Even the very expensive places tend to have the kind of quality that you would expect at a Stop-n-Shop in the US, and the selection is both unreliable and extremely limited. Some days you’ll find cucumbers, some days there will be none. There will always be apples, but at most two or three kinds instead of the six to 10 varieties you typically find in a big-city American grocery store. I have never seen a salad bar here, although I’ve offered a €100 bounty for the past three years to anyone who can show me one in a German grocery. You can compensate somewhat by going to a different specialty store for each class of food you want—fruits, meats, etc.—but the quality and reliability of the selection still isn’t very good. And few people have time to schlep to a half dozen different stores to buy their food.
These are not life-and-death issues, but they make a big difference in one’s ability to plan meals, follow recipes, or just enjoy favorite foods. When I asked German sociologist colleagues about this, I was surprised to find that they knew exactly what I was talking about: they acknowledged the poor quality of the produce and meats in German grocery stores, and blamed it on the carry-over of a wartime mentality. That is, the older generation in Germany—the parents of people in their 40s and 50s—grew up with rations and privation, and a mindset that meant eating was about survival, not enjoyment. They fed their kids for quantity of calories, not quality, creating tastes, expectations and norms that have persisted into the present day.
Tastes, expectations, norms? If you join economic sociologists in unpacking the black box of preferences, these are exactly the sorts of things you find. Clusters of these factors become the most powerful explanatory variables in sociology, like identity and culture.
Problematic Parisian peaches.
How does this help us understand the Delhaize closures in Germany—and even predict such events in future? For me, the “missing link” cropped up in a presentation by Professor Sophie Quellier of Sciences Po, who gave a talk last summer at SASE (the Society for the Advancement of Socio-Economics) on the market for peaches in Paris. She made a compelling case that consumers don’t automatically choose the highest-quality goods, but must be taught to recognize them, value them, and most importantly, buy them.
If this sounds similar to the argument about cultural products in Distinction, it is: Quellier’s thesis could be described as “Bourdieu goes grocery shopping.” For those not familiar with Bourdieu’s magnum opus, the great French sociologist used consumer survey data to show how class distinctions are reproduced through matters of taste. He finds that seemingly personal preferences—such as aesthetic choices in furniture, clothing or art—are actually learned social behaviors. Moreover, those choices have little connection to sensory experiences (such as pleasure) but rather serve to distinguish members of different classes from one another, rendering visible the structure of social hierarchy.
Quellier’s work follows the process of “educating” consumers to prefer a fine peach over less-flavorful and less-expensive varieties. It requires a sustained, intense effort, involving everything from advertisements to public taste tests, à la the “Pepsi Challenge.” To see how this works, check out this ancient Pepsi Challenge ad (with Welcome Back Kotter‘s Gabe Kaplan, of all people), which seeks to change consumer preferences with a variety of rhetorical strategies, including both conformity pressure (“Nationwide, more people prefer the taste of Pepsi to Coca Cola”–join the group!) and appeals to individuality (“Let your taste decide”–don’t follow the Coke-drinking herd!).
This series of television spots, along with print ads and in-store tastings—a veritable marketing juggernaut that carried on for years during the 1970s and 1980s—never succeeded in dislodging Coke from its position as the number one soft drink in America. Even if Pepsi was the superior product, by virtue of being chosen as “best-tasting” by the majority of test participants, it couldn’t make much of a dent in consumer preferences.
As a recent series of MRI studies showed when replicating the Pepsi Challenge, drinking Pepsi activates a part of the brain connected to the physical sensation of taste, while Coke activates a part of the brain connected with feelings about identity. Remarkably, beliefs and ideas win out over embodied sensory experience.
Which goes a long way toward explaining the Delhaize failure in Germany. Quellier’s work, combined with “neuro-marketing” research, suggest two conclusions that are particularly relevant to this empirical case:
preferences connected with food consumption are deeply-rooted and slow to change (unlike say, preferences for fashions in clothing or technology)
any effort to change food-related consumer preferences have to contend more with ideas than sensory experience—eating and drinking have more to do with the sense of self than the sense of taste
In a culture where food traditions, family culture and national history come together in a cuisine of bland flavors, fried meats and few fresh fruits and vegetables, Delhaize had little chance of succeeding. If it had put in the kind of cultural reprogramming effort described by Quellier, Delhaize might have been able to carve out a stable niche in Germany. Would it have been worth it economically? Hard to say. But without such an effort, the chain was doomed.
This also implies something about Delhaize’s successes internationally: the extent to which the chain has thrived outside of Belgium may have less to do with the quality of their products than the cultural fit between the values and preferences Delhaize represents (e.g., high quality and broad selection are important) and those of the countries where it has launched its stores. This foregrounds the role of culture in business, in everything from international expansion to mergers and acquisitions, and the value of sociological accounts in clarifying how culture works. One wonders what would happen if more business leaders had backgrounds in sociology rather than finance.
If you have any economic sociological quotes you’d like to propose for this feature, please fire away. I’m taking suggestions.
This month’s selection is from one of my favorite scholars of all time: John Kenneth Galbraith. I first became acquainted with his ideas at the age of 18, when I went to see a panel discussion between him and Noam Chomsky (what a lineup!). There was a reception afterwards, and I somehow worked up the courage to go ask him a question. He answered kindly, then reached down from his great grey eminence (6’9″) and patted me on the head.
Galbraith seemed like a lovely man, in person and in all the interviews I ever saw with him, and he was certainly one of the best writers ever to publish on money and markets–a Mark Twain of sorts for the social sciences.
He penned a number of pithy insider critiques of the economics profession. This is among the best, and it has a special poignancy as the US and other countries begin dissecting the causes of (and laying the blame for) the 2008 economic meltdown:
The experience of being disastrously wrong is salutary; no economist should be denied it, and not many are. –from Galbraith’s memoir, A Life in Our Times, 1982: 163.
John Kenneth Galbraith--economist, ambassador, novelist: 1908-2006
After writing last month’s post about what I learned from David Stark about performativity, I decided to pick up his new book, The Sense of Dissonance. Stark’s ideas about the value of play, ambiguity and uncertainty seemed to hold a number of important implications for research and education on economic issues. So I thought it would make an interesting blog entry to interview one of the foremost contemporary sociologists about his work. In the dialogue that follows, we discuss what inspires Stark’s research, and the lessons his book holds for practitioners and scholars.
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Not a good metaphor for heterarchy, unfortunately.
Brooke Harrington: As someone who gives a prominent place to art and imagery in your research, do you have a visual metaphor for heterarchy? As I read The Sense of Dissonance, I formed a mental image of heterarchy as a kind of layer cake, in which the layers are orders of worth: the orders coexist, bound together by “frosting” to form a coherent social system. As soon as this image came to me, I wondered: what does heterarchy look like in your mind’s eye?
David Stark:: I had thought about metaphors while writing the book. That’s why I put three epigraphs at the book’s opening.
The first is from Dante, a passage from the Purgatorio of The Divine Comedy: “Fix not that mind on one place only.” I think it well expresses one of the core ideas of the book. A critical challenge of organizations in rapidly changing environments is the problem of getting trapped in your own successes. Heterarchies – organizations with multiple evaluative principles – are better able to avoid this cognitive lock-in because they are always looking out of multiple frames.
I allude to the Dante passage in the Preface where I briefly mention a sociological double vision. I like this notion. Of course, double vision is a kind of malady, things are out of focus. But “focus” can be overrated, especially if it’s the single-minded variety.
We so often hear advice, whether it is to organizations or, for example, to our students: “Get focused!” But, continuing with this visual metaphor, there is also something to be said about the importance of peripheral vision. It’s critical for athletes. It’s a useful and necessary skill for moving very quickly together with many other people, going in different directions, as I’ve been aware when navigating from one subway line to another during rush hour in the Times Square subway station. And it’s vital for organizations. If the strategy horizon is foreshortened, meaning that the future is not far away and it is highly unpredictable, then you should not be locked-in looking ahead but must also be attentive to the movement that is happening around you. Peripheral vision achieves awareness of that movement.
In personal terms, then, in thinking about advising students, we mustn’t neglect the “stay focused” part because there are serious dangers in flitting from topic to topic, a kind of attention deficit disorder. But if the injunction is limited to one, the better might be something more like, “be attentive” or “pay attention.” You can look in more than one place, but the goal to keep in mind is to be attentive to the real insights that are possible when both are held in view.
Brooke: What about the other two epigraphs?
David: If the first was a classic, the second is from pulp fiction. And whereas the first is from the Purgatorio, the second is from the Elmore Leonard’s crime novel, Mr. Paradise: “A good detective doesn’t know what he’s looking for until he finds it.”
Following on that line, the introduction of the book opens with the problem of search. But the critical search is not when I already know what I’m looking for. Search engines can do this. Instead, the more interesting search is when I don’t know what I’m looking for, yet I can recognize it when I find it.
Each side of the statement is important. As for the first, with John Dewey I’m interested in open-ended inquiry, in which the biggest challenge is less the analytic one of problem solving than the interpretive one of identifying the problem. On the second side, there are the moments of recognition. The challenges of innovation, whether in business, the arts, or science is be able to recognize the novel possibilities, and to be able to formulate them in ways that are recognizable by others. The more the innovation is outside existing categories, the greater the challenge.
Brooke: And the third epigraph, from William Carlos Williams?
David: That’s from his 1951 poem, Patterson:
Dissonance
if you are interested
leads to discovery.
This is a wonderful passage, and I like it so much. To recognize the accomplishment, one first has to be attentive to the poetic elements of the sounds themselves. You’ll need to read it aloud. Try it and you’ll hear. Dissonance if you are interested leads to discovery. It’s all consonance and assonance. As a result, the dissonance of the passage is not in the literal meaning of the words but in the discrepancy between the words and the formal elements. The words go one way; the sounds go another. The passage does what it says when you hear it in two simultaneous and dissonant voices.
In your initial question you asked, “what does heterarchy look like in your mind’s eye?” For me, it’s probably more the case of what heterarchy sounds like in my mind’s ear. There is an overarching metaphor of the book, which after all is right there in the title: The Sense of Dissonance. The metaphor is musical, polyphony. There are multiple voices, and they are not harmonious. Yet there can be a sense in this dissonance.
I would love to eat your layer cake for dessert, but it might be too sweet to be the metaphor that I would adopt. First, the notion of layers is a bit too flat. True, each order of worth is relatively discrete. Each is principled, and the principles are incommensurable across orders. Yet the layer cake metaphor misses the interaction among them. The musical metaphor of multiple voices gets at this interaction.
Diversity matters – in business organizations, in our universities. But if the diverse elements stand indifferently apart, there will not be innovative recombination. In the concluding chapter of the book, I address this in reference to organizational ecology which correctly pointed to the importance of the diversity of organizations. My work points to diversity within organizations, and even more pointedly to the organization of diversity. It’s laughable if taken literally, but I noted that organizational ecology lacks sex. What’s missing is the notion of cross-fertilization.
As the second point of difference from the frosting of your layer cake: the interaction among orders of worth is not smooth. Hence the concept of generative friction, another metaphor that appears throughout the book. From Oliver Williamson we got the message that friction is bad, smooth is better. I was immunized against that message by the notions of the designer capitalists who flew into the former Soviet bloc after 1989 with their recipes, formulas, and marching orders for a “smooth transition.” Frictionless notions also abound in pop sociology adages like, “Let’s all get together and iron out our differences.”
The metaphor of dissonance displaces the commonly-held idea that coordination is all about our shared understandings. True, here as with the notion of focus and attention, organizations cannot cohere if there is absolutely no shared sense of purpose. But musical pieces can have beautiful, meaningful dissonance. Take, for example, the mature work of Charles Ives in which the overlapping of discordant musical themes – as when in “The Fourth of July” the orchestra splits into two marching bands that come crashing towards each other – creates extraordinary, and extraordinarily beautiful, dissonance.
It’s for these reasons that I titled the book The Sense of Dissonance. I sensed that the reader would see that there can be sense – reason – in the dissonant clash of heterogenous performance principles. I hoped that a few might also connect to an additional connotation that organizations might vary in their ability to have a sense of dissonance, not directly analogous to the senses of sight or hearing but more like how individuals can vary in having a sense of self, or even better, a sense of humor.
Brooke: Your description of the value of play in organizations—in the context of playing with ambiguity (p. 185 in particular)—offers a distinctive take on innovation strategy. How could someone working in a business organization apply those insights? In other words, how does one organize to promote play and thus innovation?
David: Play is hard work. Take writing, for example. I’ll sometimes try to exploit the polysemic character of terms in which there are multiple connotations operating at once. Think of accounts (narrative and book keeping), performance (a skilled staged activity and a metric), demonstrations (technical, commercial, or political with very interesting interplays among them), or the difference between two words in which one is seemingly the plural of the other – value and values. But I never think about this as “playing with words.” It’s working with words. Writers who make words work overtime should give them due recognition, as Humpty-Dumpty says in Alice in Wonderland, “When I make a word do extra work, I’m always sure to pay it very well.”
"When I make a word do extra work, I'm always sure to pay it very well."
I’m not sure that I write about “playing with ambiguity.” Perhaps there is such a phrase in the book. But more frequently I write about keeping ambiguity in play. That can take some effort. There is productive friction; but friction can also come in destructive forms. The difference is that whereas the latter is personalized and frequently petty, the former is principled. But that doesn’t mean it has to be played out in deadly seriousness.
Brooke: By the way, your description of the trading floor in Chapter 4 was strikingly reminiscent of a place where we’ve both spent a lot of productive, intellectually innovative time: the Santa Fe Institute think tank. That might be surprising to readers who take the view that academia (including think tanks) is a world apart from business, and never the twain shall meet. Can you comment on the links—or at least the potential linkages—between the two arenas?
David: SFI is an excellent example. Take first the intellectual architecture as a place where many people are working in multiple registers. Lunch time throws together people from all over the disciplinary map. And not only that, but the typical introduction is frequently something like “I’m from physics but I’m working on this problem in biology.” Or, “I’m in biology and I’m working on this problem in computer science.”
And then there is the physical architecture, as close to an open plan layout as any I know about in academia. Some smaller offices, but much of the work taking place in the common spaces, with folks writing equations on the windows. It’s not an accident that there are family resemblances between SFI and innovative businesses. Among those who had a decisive voice in the design of the new space that was opened around 1998 were not only the resident scientists (and the “external faculty”) but also major donors who had made their mark in Silicon Valley. They had a strong sense of serious play.
Brooke: In the book’s concluding chapter, you draw out some methodological implications of your work on strategic ambiguity, foregrounding the value of ethnography for studying situations—the locus of reflexive cognition and innovation through “play.” This may be surprising to those who know of your work through the series of articles you’ve published in the most prominent journals in sociology using quantitative analyses (most recently in the January 2010 issue of the American Journal of Sociology). As one of the few people in our field who have successfully straddled the quantitative/qualitative divide, how would you respond to those who question the contribution of ethnographic methods to social scientific knowledge? What value does ethnography add in a field where quantitative methods are increasingly dominant?
David: Yes, working both in ethnography and network analysis is probably an example of following Dante’s dictum of not locking into a single strategy. If those efforts have been successful, it is because I have been able to work with very talented collaborators. It was wonderful to do field research with Monique Girard in the Silicon Alley new-media startup and later in our project on socio-technologies of assembly. Daniel Beunza has to be one of the most gifted ethnographers in the field. He’s a keen observer, and no one writes better field notes. Balázs Vedres is a brilliant network analyst, never shying from a challenging theoretical problem, and making innovative methodological advances with every new project. Writing, revising and resubmitting, revising and resubmitting again… it could be a pain but with Balázs it’s really been a source of enjoyment.
You ask about the value of ethnography. The good ethnographer is inquirying, precisely in the Dewian sense. If there is something common to all good ethnography it is that one does not start out knowing what one is looking for. That’s a rule, the first. And then there are rules of method about the conditions under which one can conclude that some practice has been recognized.
Because, at some level, science is not about making truths but about opening up the terrae incognita, the inquiring posture of a good ethnographer and a good quantitative analysis are not so very different. Accordingly, there are skills that are fungible across the research techniques. At one moment while we were doing the preliminary analysis working deep into the data for “Social Times of Network Spaces,” Balázs excitedly interjected “You’re doing ethnography of the data.”
In the last chapter of the book, I do advocate moving from the study of institutions to the study of situations. Ethnography is especially well-suited for analyzing situations. Not trivially, it is done in situ. It’s there – in the spaces and places where people live and work – that people make sense of their world and where we can get a sense of the important issues. It’s in perplexing situations that we can recognize what counts. If economic sociology is about the study of worth (not only in business but in many realms of life), that seems to be a good place to be.
J.L. Austin, linguistic philosopher and father of "performativity."
To my own great vexation, I suffered for a couple of years under some sort of mental block about the term. I understood performativity in its original context, in the work of linguistic philosopher J. L. Austin, who observed that language can do more than simply state facts: it can also be a kind of action. Statements such as “I dub thee Sir Galahad, Knight of the Round Table” doesn’t describe a condition, but instead makes something happen. Austin called these “speech acts” performativeutterances.
So far, so good. But once scholars in other fields—including gender and queer theory, as well as sociology—adopted the term to their own ends, I lost the thread of meaning. Every time I learned what performativity was supposed to mean in economic sociology, that knowledge promptly got dumped out of my short term memory buffer rather than going into long-term storage. Then I’d have to start all over again.
And then I was lucky enough to hear David Stark give a short lecture in Paris last summer—at the annual meeting of the Society for the Advancement of Socio-Economics—and he solved my performativity problem just like that. His explanation was so elegant and concise that I wrote it on a Post-It note and put it up on my office wall. The Post-It reads:
If you show someone a map and say ‘this is how people get from Point A to Point B,’ the statement is performative when it creates the behavior it describes. In this case, a path gets worn in the ground between Point A and Point B.
Thus, performative statements don’t reflect reality (as in the declarative statement ‘this is a pen’), but intervene in it. Performative language is an engine, not a camera.*
A model becomes performative when its use increases its predictive capabilities.
—David Stark, Paris, 17.07.2009
The elegance of this statement still delights me. It’s like the Gettysburg Address of sociology in terms of its parsimony.
This doesn’t entirely capture what was so compelling about Stark’s presentation, however. The missing piece is the visual: images of a path, drawn first as a set of directions, and then as a description of actual travel routes. Every time I saw the Post-It, it called up those images from Stark’s presentation, but I couldn’t easily convey the images to others.
So I asked if I could post the original presentation slides that were such a revelation for me. Stark graciously agreed, so here are the core ideas of his talk in three images, forming what he has elsewhere called a “silent lecture.”
By way of context, assume that you start with a location, as in slide 1; then someone asks for directions through that location, resulting in slide 2, and ultimately slide 3.
With tax season upon us, it is almost obligatory for Americans to complain about what they’re shelling out to Uncle Sam. According to Gallup polls, 46 percent of Americans think their taxes are too high.
In a lengthy essay/suicide note posted on his website, Stack styled himself after the early American patriots of “no taxation without representation” fame, reminding us all of the unique prestige of tax revolt in American history. As Stack points out, some of the first lessons American children receive about their nation’s history equates taxes to oppression, and revolt against those taxes to the struggle for liberty and justice for all. This probably contributes to Americans’ widespread distrust of taxation, and the acceptance of that distrust as normal and natural.
But that view of taxation is not shared worldwide. In fact, citizens of some countries are actually happy about paying taxes. If you’re an American reading these words, that statement probably sounds pretty far-fetched. But consider this: the citizens of Denmark pay the highest income taxes in the world (an average of 48.3 percent), and are also the happiest people in the world.
It’s not just that Danes pay those high income taxes: they also pay a Value Added Tax of 25 percent on every cup of coffee or pair of sneakers they buy, making the outcry in my hometown of Chicago over having the highest sales tax of any major city in the US (a whopping 10.25 percent) look picayune by comparison. And then there’s Denmark’s tax on new cars: a heart-stopping 180 percent. So if you buy a car with an MSRP of € 20,000 , you’ll pay an additional € 36,000 to get the car registered and licensed.
The Danish car tax, in and of itself, would probably be enough to provoke armed rebellion in the United States. So why do the citizens of Denmark not only tolerate the array of taxes they pay, but appear downright happy about them?
The key to this attitude seems to lie in Danes’ trust in government and each other—something I noted in an earlier post. As this video interview with a pair of Danish sociologists suggests, this trust stems from several factors. Among the most important is the widely-shared belief that their society is just, and that socio-economic goods are equitably distributed. As a result, many Danes seem satisfied that they are getting their money’s worth–that is, they enjoy tangible benefits of the taxes they pay in terms of universal health care, tuition-free education through the university level, and employment benefits and security far beyond anything available in the United States.
Meanwhile, things could not be more different in the United States, which ranks 23rd in the world happiness rankings, and where distrust of government has been virtually axiomatic since the Reagan era—if not before. This helps account for a paradox: while the United States has among the lowest income tax rates in the world, and we have nothing like the VAT and auto registration taxes that Danes pay, Americans rarely challenge each others’ complaints about “high taxes.”
In fact, one of the remarkable things about Joe Stack’s anti-tax rant/suicide note is how much it resembles what now constitutes “mainstream” rhetoric on taxation in America—particularly in the aftermath of the government bailout of financial firms following the 2008 economic crisis.
Stack wrote:
“Why is it that a handful of thugs and plunderers can commit unthinkable atrocities (and in the case of the GM executives, for scores of years) and when it’s time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days if not hours?”
Compare this to CNBC newsman Rick Santelli’s now legendary on-air rant of February 2009, in which he sounds many of the same notes as Stack, using virtually identical arguments and references to American history:
So while Stack’s violent actions took this rhetoric to the extreme, the evidence suggests that he was no outlier in his perspective on taxation in America: his basic views are apparently shared by a wide swath of his fellow citizens, from television news reporters to the Tea Party movement to think tanks like the conservative Cato Institute.
What accounts for this extreme disparity between American and Danish attitudes toward taxes? And what does this have to do with the differences between the two countries in terms of happiness?
The evidence suggests that both phenomena stem from perceptions of fairness. While—as the two video interviews from Denmark suggest—many Danes believe that they benefit personally from their tax contributions, the rhetoric of people like Stack, Santelli and others suggest that many Americans believe they get little to nothing in return for their tax contributions. Instead, they believe their taxes benefit the “free riders” in US society—whether conceived as “welfare queens” at the bottom of the socio-economic ladder, or as corporations and executives at the top.
Thus, Stack signed off with this bitter epigram: “The capitalist creed: From each according to his gullibility, to each according to his greed.” For him, it was a bitterness unto death; for like-minded Americans, these beliefs contribute to a sense of pervasive injustice that frustrates their “pursuit of happiness” and makes April 15 a day of national resentment rather than a simple administrative deadline.
“What we owe to the future is a capacity to produce.”*
This concern for the future, I think, underlies many of the behaviors we associate with the habits of people who lived through the Great Depression. The meaning of all that patching and mending, of raising chickens in the backyard and so forth, was not just to reduce consumption expenses, but to conserve the resources they did have for production–for future-building.
Of course, the ability to fix things and grow your own food are themselves types of productive capacity. In less complex societies, with less division of labor, survival depended upon those skills. One had to be able to provide for most, if not all, of one’s own needs independently, or within the household unit.
By the time my grandparents were born, that was no longer the case: for example, both my paternal grandparents grew up in the city of Chicago, and had to buy clothes and some of their food from stores, rather than making everything themselves. This isn’t a bad thing–just a modern thing. As Emile Durkheim–one of the founding fathers of sociology–famously argued, specialization and the social division of labor are necessary conditions for the material and intellectual development of societies. His point was that if everyone had to attend to their own survival needs, rather than paying someone else to provide them with food, clothing, and other necessities, it would be difficult for any one person to pursue certain valuable but time-intensive specialties, like scientific research.
My grandparents didn’t have the family wealth necessary to specialize that much: the Great Depression cut short their educations, so that my grandmother had to drop out of school at 15 to begin earning money as a maid for wealthier families, and my grandfather (who had hoped to become a lawyer) made it only part way through an associate’s degree program before his tuition money ran out and joined the Marine Corps.
While their individual trajectories were curtailed by the Great Depression, their frugal habits meant they accumulated a surprising amount of productive capacity at the family level of analysis. Specifically, they were able to save enough so that their first child, my father, could get a good education at a private Catholic school, and then become the first person in the family to earn a college degree. My grandparents themselves continued to live very modestly–in their 60s, they subsisted on Social Security and lived in a single-wide trailer in Florida mobile home park.
But because they were able to give my father the benefit of all the productive capacity they’d accumulated–their savings from blue-collar jobs, and all the methods they used to avoid spending money in other ways–he was able to make big leap in upward mobility. That future-oriented momentum made it possible for me to go even farther, so that the granddaughter of a woman who had to leave school in the 10th grade could graduate with a PhD from Harvard 70 years later. My grandmother died a few years before I graduated, but I think of her and my grandfather often, not only because I loved them but because I feel obliged to keep building on what they started.
That’s where the satisfaction of fixing things comes from: I’m not only remembering people I loved through imitation, but perpetuating their legacy by conserving productive capacity in many of the same ways they did.
Thus, what economist Robert Solow has written of the intergenerational transmission of wealth also holds for cultural and social capital:
“We have actually done quite well at the hands of our ancestors. Given how poor they were and how rich we are, they might properly have saved less and consumed more. No doubt they never expected the rise in income per head that has made us so much richer than they ever dreamed was possible.”**
To the memories of Rose Marie Coglianese Harrington (1913-1996) and William Joseph Harrington (1911-1999).
__________
*Bell, Daniel. 1979. The Cultural Contradictions of Capitalism. London: Heinemann Educational Books. p. 273.
**Solow, Robert M. 1974. “The Economics of Resources or the Resources of Economics.” American Economic Review 64: 1-14.
Glen Elder’s landmark study of the effects of economic catastrophe over the life course, Children of the Great Depression, turned 35 last year, and history threw it a little party by reminding us of the dramatic ways in which events in the stock market can shape the biographies of an entire generation.
It will be years before we know how the many job losses and home foreclosures of the past year will affect today’s children. But it has been fascinating to watch the ways in which young adults have altered their behavior to resemble
SAN FRANCISCO: Heidi Kooy holds one of her chickens as she walks through her yard, which she calls the 'Itty Bitty Farm in the City.' Kooy is one of many Americans who have started to raise chickens in their urban yards to try and save money on food costs during the economic downturn.
the frugal habits of their grandparents and great-grandparents. The much-mocked Early Bird Special at restaurants is not just for senior citizens anymore, and tiny urban backyards are hosting experiments in micro-level animal husbandry. My paternal grandmother used to tell me about her large, poor Italian immigrant family raising chickens in the backyard of their home on the South Side of Chicago, but having grown up in a very rural suburb–about a quarter mile from a very fragrant dairy farm–I could not get my head around the idea of chickens living in the city. But apparently it works, and if the pic at left is any indication, urban poultry wrangling is enjoying a revival.
And so, more generally, is frugality. The habits themselves are nothing new–I know I picked up a lot of them just from observing my grandparents, which makes me a grandchild of the Great Depression–but it seems that the broad scope of the economic crisis made it more socially acceptable for those of us non-senior-citizens who love the Early Bird Special, or city-dwellers who try to raise our own food, to let our freak flags fly.
For a long time, prior to the most recent financial meltdown, there did seem to be a kind of stigma attached to frugality. For example, it was fine for teens and young adults to wear thrift shop clothes, but–at least in the milieux I frequented–it was understood as a phase, rather than as a way of life. And while recycling was de rigeur, it usually involved bottles and jars that formerly contained pricey products from gourmet groceries.
But in the economic boom of the 1990s, when I was a young adult setting up house on my own for the first time, I found that the version of frugality I’d learned from my grandparents just drew a lot of puzzled and faintly disapproving responses. Nobody bothered me about stuff I did in the privacy of my own home, like making chicken broth from the leftovers of a roasted chicken (yum!), or turning fabric remnants (the cheap leftovers found in bins at sewing stores) into home crafts projects.
But out in public, it was another story. Like the time I took a pair of dull tweezers to the local hardware store, to see if the staff could sharpen it for me. (I had a whetstone to sharpen kitchen knives, but it was too thick for use with the tweezers, and sandpaper was too bendy.) From the looks I got, you would have thought I had asked the hardware store’s staff to remove my gall bladder. The response was, in short, “we don’t do that here…and why would anyone ask in the first place, you weirdo?” I was advised, in tones ordinarily reserved for the cognitively impaired, to go out and buy a new pair of tweezers, like a normal person. (I nodded politely and found a place in Texas– Tweezerman–to do the sharpening by return mail.)
Still, I wondered, why the weird reaction from others? Why should anyone care if I wanted to sharpen a dull pair of tweezers rather than throwing them away?
Two things:
First, I drastically underestimated how common it is (was?) for Americans to throw away perfectly usable and/or fixable items. For example, while searching the web for pointers on how to darn a thin cotton pillowcase, I ran across this on a blog about household tips:
“…back in my free-spending years I would throw away a perfectly good shirt or pants rather than repair them. That included throwing away clothes that just needed a button sewn on.”
I’m still in shock at this statement. I somehow made it to the ripe old age of 41 without realizing that grown men and women would throw away a perfectly good piece of clothing for want of a button. How little I knew: Apparently, Americans toss 70 percent of their old clothes into the trash, even though much of is perfectly usable, needing only cleaning or minor repairs. All told, this adds up to a minimum of 6.6 million tons of clothes per year going into American landfills. (In Los Angeles, clothing makes up an astounding 10 percent of landfill content.) It’s all reminiscent of Aldous Huxley’s novel, Brave New World, in which a recorded voice whispers in the ears of newborn babies,“I do love having new clothes . . . old clothes are beastly, we always throw away old clothes. Ending is better than mending, ending is better than mending.”
2. Outside the context of a widespread economic crisis, fixing and saving things probably came across as eccentricity rather than frugality. This illustrates a classic insight at the heart of sociology and social psychology: the power of the situation. Context shapes attributions, especially how we judge the actions and motives of individuals. In good economic times, a non-senior-citizen showing up for the Early Bird Special might draw a few snickers and snide remarks; but where there is widespread experience and recognition of financial hardship, the same behaviors by the same people receive more favorable interpretations.
So the one positive thing I can say about the economic meltdown that began in September 2008 is that it made the world a little more welcoming for grandchildren of the Great Depression–people like me, who learned to enjoy mending and darning, making our own clothes and growing our own food (some of it, at least), and eating supper at 5pm!
In honor of those wonderful teachers, my grandparents, and the good things they took out of their experiences of poverty, I spent New Year’s Eve on a mending spree: darning a silly (but beloved) pillowcase as painstakingly as if it were the Shroud of Turin; learning a new knitting technique to shorten the sleeves on a sweater (miraculously, it worked!); and restringing a broken necklace. It was a surprisingly satisfying way to celebrate the end of a broken decade.
For the first time in my life, I had a non-Christmas on December 25th. No tree, no gifts, no cards. I wish I could say this was motivated by a noble, conscientious objection to commercialism, but really, it was just a combination of pregnancy-related austerity measures (i.e., saving money for the Blessed Event) and plain old bodily fatigue (I can’t bend over to tie my shoes, so there was no way I could wrangle a Christmas tree into a tiny top-floor apartment).
Little did I know I was joining a movement of sorts. I mean, I’m familiar with projects like AdBusters’ “Buy Nothing Day,” and “Buy Nothing Christmas,” whose creators have done a genius parody of the commercial nexus with their Buy Nothing Catalog. And I’ve heard of people spending the day doing volunteer work, giving charitable donations in the name of a person for whom they’d ordinarily buy a gift, or making homemade gifts and cards for one another.
One reason gifts are so fraught with social tension is that giving and receiving them inevitably tangles us in a web of signs and symbols–particularly those related to identity. To quote from Schwartz,
Gifts are one of the ways in which the pictures that others have of us in their minds are transmitted (1967: 1).
And vice-versa: when we give gifts to others, we signal something about how we see them. The potential for hurt feelings is virtually limitless, which is one reason for the proliferation of websites devoted to the theme “Worst Gifts Ever.”
So for some people, opting out of gift-giving can bring blessed relief from this social challenge. But another challenge remains: how to fill the gap left by eschewing the ritual exchange?
After Googling “Christmas without gifts,” I was surprised to find a remarkable diversity of ideas for gift-free celebrations. They were not just clever, but also sweet and appealing (to me, at least). Here are two of my favorites:
“On Christmas day, we go to Waffle House and eat breakfast and we leave her [the waitress, presumably: Ed.] a $100 tip.
Obviously, not everyone will have the wherewithal to leave a $100 tip. I certainly don’t. But even when I can’t leave a big tip, I’ve sometimes written thank you notes to wait staff on the back of my bill; at one of my favorite restaurants, I regularly wrote my thank yous in haiku form, which became a source of amusement for the whole staff (laughing at me or with me, it didn’t much matter).
“My personal best Christmas memories involve family Christmas traditions like looking for the Star of Bethlehem on Christmas eve, and making Christmas wishes in the starlight. Others go caroling, some build snowmen.”
To these terrific ideas I can only add The Gift of Sloth. Meaning: a vacation from doing anything you dislike.
The Gift of Sloth
Hate making the bed? Skip it! You can give the same “gift” to your loved ones: if it’s someone’s regular household chore to wash the dishes, they get the day off. Woohoo! Merry Slothmas!
Note: This is ideal for that hard-to-buy-for-person-who-already-has-everything. Instead of giving them more stuff, take some away!
Now what about you? If you’ve celebrated Christmas–or some other traditionally gift-focused holiday–without presents, what was it like? What did you do instead of exchanging gifts?
This isn’t so much a post as the exorcism of an idea that has been rattling around in my brain like a poltergeist for the past 10 days: to wit, the eerie similarity between a certain well-known Monty Python sketch and responses to the taunt leveled earlier this month by French President Nicolas Sarkozy at the failure of the “Anglo-Saxon market model.” From the high dudgeon expressed by the UK government and financial authorities, you’d have thought that Sarko had called Gordon Brown a “son of a silly person.”
I blow my nose at you, so-called Gordon-Brown, you and all your silly Anglo-Saxon market models!
But Sarkozy was just expressing a bit of Gallic glee at seeing a Frenchman–Michel Barnier–named as the EU’s new financial regulator, with authority over the economic powerhouse that is the City of London, home to 80 percent of Europe’s hedge funds, over 500 banks, and weapons-grade smugness. Who can blame the French President for a bit of what his neighbors to the East would call schadenfreude?
What a strange person...Is there someone else up there we could talk to?
jkjkjkjalk
Meanwhile, rather than simply ignoring Sarkozy’s snark, UK political and financial authorities have engaged in what can only be described as a collective freakout. The Telegraph warned that the City of London would meet the same fate as former financial capital Antwerp in an opinion piece subtly titled “City in Danger of Falling Victim to EU Wiles.” Wiles! Oh those wicked, wicked froggies, with their delectable baked goods, and their supermodel First Ladies, and their wily ways!
Then The Times of London claimed that Sarkozy had “gloated” with “an edge of menace” at the announcement of Barnier’s appointment. The article was titled, with a War of the Worlds flourish, “We Are in Charge Now, Sarkozy Tells the City.” That the Times’ editors failed to caption Sarko’s picture with the words “Resistance is useless!” can only be described as a tragic oversight.
“If anyone in the European project thinks for a minute that they are capable of subverting the years of effort it took us to make the UK the world’s financial centre, they are sadly mistaken.”
Ooohhhh…”sadly mistaken”!?! The next lines of the quote must have been something like: “You’ll be sorry, Sarko-man! We shall be avenged for this impudent taunting of yours! Bwaahahahah…” [Flies off into the night, presumably back to the BBA Bat-Vault. You know there is one.]
Honestly, it’s almost funnier than the Monty Python “French Taunting” sketch. If this is history repeating itself, can the first time be comedy and the second time farce?
About Economic Sociology
Brooke Harrington explores the social underpinnings of money and markets. Read more…
For the first time in my life, I had a non-Christmas on December 25th. No tree, no gifts, no cards. I wish I could say this was motivated by a noble, conscientious objection to commercialism, but really, it was just a combination of pregnancy-related austerity measures (i.e., saving money for the Blessed Event) and plain old bodily fatigue (I can’t bend over to tie my shoes, so there was no way I could wrangle a Christmas tree into a tiny top-floor apartment).
And I’ve heard of people spending the day doing volunteer work, giving charitable donations in the name of a person for whom they’d ordinarily buy a gift, or making homemade gifts and cards for one another.
