LIMITS TO SOCIAL GROWTH OR LIMITS TO PRIVILEGE?

...They lie in the enormous wave of postwar investment in capital goods and infrastructures, and of vast armaments expenditures...

...It stems largely from a conception of economic growth that equates it to the growth of consumption...

...The national product, as well as the rate of economic growth, would be significantly lower but for the current treatment of consumption outlays in the accounts...

...With employment opportunities increasingly located in the suburbs, lowerincome persons seek accommodations there...

...Such goods then are producer goods incorporating needed producer technologies...

...For the struggle over positional goods brakes economic growth because of the instability engendered by the struggle (e.g., through inflationary wage demands...

...Health services have come to be controlled increasingly by private operators oriented toward the buildup of capital-intensive technologies, thereby creating an investment base for high volume, economies of scale, and high profitability...

...But it is not relevant to the vision of a socialist and communitarian order...

...For example, in tourism and the associated hotel and transport facilities, or in the purveyance of scenic land subdivisions, congestion enables entrepreneurs to exploit economies of scale and ensures the profitability of large-scale investment projects...

...no summary can do justice to the intelligence and subtlety with which Hirsch advances them...

...it privatizes a part of what would otherwise be public domain...

...For the excess demand on middle-class life styles reinforces the underlying inflationary thrust...

...However, a substantial proportion of household purchases should be considered, not as final consumption, but as an intermediate cost allocable to production...

...The technologies might well be superfluous under some alternative division of labor and spatial distribution of population and employment...

...Workers, through collective action, seek in time to go beyond the attainment of high material standards of living...

...He evidently believes that a form of managed capitalism, modified by the acceptance of moral restraints by contending consumption groups, would ensure social stability within the "limits to social growth...

...The frequent deterioration of suburban living also can but proximately be traced to congestion...

...and London: Harvard University Press, 1976...

...Moral restraints will not, at any rate, be effective or even acceptable...

...Indeed, Hirsch proposes certain "moral restraints" to contain the struggle for positional goods in civil bounds...

...Hirsch rejects the concerns over the "limits to growth" as misplaced...

...This requires a more social use of land (apartments instead of single-family homes) and raises the tax burden (more schools and other public facilities...

...From a producer point of view, road congestion manifests inefficient organization of automobile use, or inadequate road capacity, which at least technically could be remedied...

...Similarly, the expansion of tourism changes the conditions under which it is experienced, usually decreasing the enjoyments with which it is associated...

...208 pp...

...Hirsch does not share this vision...

...advance can be achieved...

...the possibility of general advance is an illusion...

...There is also a difference in analytical method: the limits to physical growth are usually seen as barriers imposed by increasing scarcity of nonrenewable resources, and by the threat of environmental catastrophe to capitalist economies...

...But this has not been due to the supposed fixity of positional goods for which competition has sharpened...

...Such demands entail pressure for positional goods...

...there is no analogue to the technological advance that keeps physical limitations at bay in the material sector...

...The phenomenon of too many persons driving at the same time represents a diminution of the automobile's "positional advantage" only from a pure consumption perspective, which at best is only partially relevant...

...Hirsch altogether rejects Galbraith's grand theme of private affluence and public squalor...

...Hirsch advances his argument with great skill...

...This "extension of middle-class objectives" is, however, condemned to futility...

...Evidently, affluence promises the attainment of positional goods, but the demand for such goods "seeks the undeliverable...

...If the struggle between consumption groups cannot be resolved, because it is over goods whose supply cannot be expanded, and if therefore one man's gain is another's loss, and both may lose in the struggle, then it seems best to safeguard the status quo...

...Here, too, social scarcity results from a system that is intolerant of efforts at collective planning...

...It implies, however, that the historical expansion of the material sector was not accompanied by "nonfulfillment" of demands, frustrations, and social instability, which supposedly only now arise from the intensifying competition for positional goods...

...The idea, widely accepted by economists, that formal education represents a form of accumulated capital—"human capital"— which the individual can optimize, lacks realism: [Education] serves as a pure screening device...

...He believes that, even were this dichotomy overcome, the problem of social scarcity, the tension between "aspirations" and "opportunities" would persist...

...In sum, a historical view of class conflict makes the separation of material and positional goods seem less tenable...

...through which employers identify individuals with certain qualities that the educational process tests and certifies but does not itself produce...

...These accounts recognize but one institutional category of production—the enterprise (overwhelmingly the private firm...

...social relations underlying commodity production...

...I will offer here some thoughts about a recently published book by Fred Hirsch, Social Limits to Growth.' The title seems to place the book in the framework of debates over the physical "limits to growth," but its subject bears no relation to them, except insofar as it shares a pessimistic view about the future of a liberal market economy sustained by "growth" strategies...

...It consists, as Robert Heilbroner has written, in "the right to reap private benefit from the use of the means of production, and the right to utilize the dynamic forces of the marketplace for private enrichment" (The Limits of Capitalism, p.71...

...The threat to social stability from economic instability has mounted...

...The struggle between consumption groups that he postulates obscures, on one side, the defense of privilege (or the effort to extend it to new spheres) and, on the other, the pressure for collective provisioning of vital goods and services...

...Economic growth in time tests, as it were, society's absorptive capacity for consumption...

...Roads become congested, parking restricted, and public transport systems decay...

...Moreover, working-class struggles have almost invariably been accompanied by demands for improved working conditions, which, where they had to be met, necessarily abridged managerial prerogatives...

...Hence economic insecurity deepens, contention between classes intensifies, the fabric of civil society is tested...

...Here again, it has been the intrusion of capitalist interests, often supported by public policies and displacing collective provisioning, which has transformed the conditions of consumption...

...When so viewed, it is almost tautological to say that social scarcity is thereby deliberately fostered...

...Economic success on the conventional reckoning contributes in this way to frustration, tension, and inflation...

...Morality itself becomes an issue...

...For Hirsch, it lies in the relation between different consumption groups—on the one hand, the minority that either has the resources or "arrives" early enough to be in position subsequently to reap capital gains or, more generally, to maintain positional advantages...

...Cambridge, Mass...

...This capacity does not relate to the acquisition and use of consumer goods as such, but to the collective impact of these goods, and to the changes in the social and physical environment that consumption growth generates...

...Ever] increasing income in real terms...

...Simon Kuznets, upon whom Hirsch here relies, has pointed to the changes in social and economic structure that accompany growthe...

...The exclusive, heavily guarded and walled apartment complex contributes to the neglect of the city...

...Hirsch's is also an argument against socialism...

...Such scarcity manifests itself in the congestion of many areas of life in Western societies—in private automobile transportation, recreational and tourist facilities, the incursion of urban ills in the suburbs...

...here, competition "yields gains for some only by dint of losses for others...

...The educational needs of a producer democracy would be quite different therefore, and so would be its educational institutions...

...It would therefore give less priority to material consumption...

...These approaches, however, often fail to explain the phenomena with which he deals, and I will challenge some of them...

...An academic degree holds the promise of a good job and advancement in a private or public bureaucracy, thereby seeming to assure a competitive advantage in the struggle for positional goods...

...It spreads to the well-paid jobs in bureaucratic hierarchies, jobs required to attain and maintain social place...

...The fixity of positional goods, which Hirsch postulates, means that if these goods, being in irremediably scarce supply, were socialized, everybody, not just the majority, would be worse off than before...

...Congestion" results, vitiating affluence...

...all purchases of households are for final consumption...

...will be found to be needed to secure specific facilities in the positional sector, as the level of general welfare rises...

...This means that certain groups of consumer goods should be regarded as sustaining the role of the consumer as producer...

...That "latecomers," having to pay the capitalized value of the positional object to "early comers," may be disadvantaged or prevented altogether from buying it does not affect the nature of the privilege...

...Prices of positional goods rise relative to material goods, screening out those unable to afford them, and helping to relieve congestion...

...They are engendered, not by resource scarcities, but by the contradiction of the expanding availability of material goods and the inherently static supply of what he terms positional goods...

...However, the managing of capitalist economies has become the most fundamental problem of the '70s...

...Social security" turns into real scarcity in the face of existing technical means and human capacities that could eliminate it...

...are induced also by "real" growth, as increased competition for products in limited supply raises their relative prices or lowers their quality...

...H irsch's view of social scarcity, furthermore, does not square with his keen critique of the treatment of consumption in the national accounts...

...Competition for positional goods intensifies, but the supply of such goods is relatively fixed...

...Indeed, the market encompasses an ever wider sphere of individual activities that hitherto have lain outside of it...

...He has created new conceptual approaches...

...They begin to demand equality of economic opportunity...

...The automobile becomes a necessity...

...Its causes must be sought in the capitalist context, which shapes economic growth, and which facilitates the appropriation of its fruits by private and public bureaucracies for purposes alien to humane interests, inimical to the social use of the social product...

...The sources of economic growth, however, lie in the creation and diffusion of productive technologies—processes that are unlikely to end soon...

...Social scarcity has indeed, perhaps increasingly, accompanied economic growth...

...For Galbraith, the content of social struggle lies in the relation between producer, incarnated in corporate power, and consumer, more or less victimized...

...Economic growth thus tends to depress the positional advantages expected from rising consumption...

...nevertheless, it sustained the social power of entire land-owning classes...

...Hirsch's view of economic growth and of the affluent society it creates differs fundamentally from Galbraith's...

...Bourgeois resistance to workingclass wage demands during the 19th and much of the 20th century makes one question Hirsch's assertion that, "As long as the collective goals remain confined to acquisitions in the material sector...

...In addition, the market acts to internalize public benefits...

...The limitations on the reproduction of the kernel of affluence—place and position—are the more daunting because they are inherent in the social situation...

...His belief that "the vast increase in material productivity has pushed the frontier of mass demand into terrain where there is no longer more for all" and that therefore "one man's gain is often another's loss and that both may lose from the struggle"—all this lacks foundation...

...Many of today's "material" goods were yesteryear's "positional" goods...

...So to pose the issue is to foresee difficult political struggles on the road to a socialist and communitarian order...

...Households are by definition units of consumption...

...it is also misleading...

...Private schools impinge on the quality of public schools...

...The truth of these conclusions hinges on accepting Hirsch's separation of a "material" from a "positional" sector...

...Pressures from those seeking access arise from a situation in which locational decisions are made largely on criteria of private advantage, without regard to what happens to city or suburb...

...Better provision of public goods, in Galbraith's sense, would not solve this problem...

...In such times, the system of privilege itself comes under pressure, as income flows that sustain it— capital gains, dividends, speculative profits— decrease...

...The broadened accessibility of health services has transformed them into an industry, run on principles of industrial and managerial engineering and marked by a rationalized division of labor...

...without disturbing the middle-class growth process...

...This shifts the competitive struggle to education...

...Let us now examine them more closely...

...Here, congestion is, in part at least, an outcome of the capitalist mode of producing given services, which sustains the system of privilege...

...For analytical purposes, such separation may be admissible...

...Hirsch's argument provides a subtle rationale against striving for social and economic equality...

...Like tourism and commercialized recreation, health services furnish still another example of how the rise in consumption has affected the conditions of delivery...

...Privilege, while not assigned by law or custom in capitalist societies, is no less well established for that...

...The issue then is whether to maintain the system of privilege or to abolish it, and with it the social sources of scarcity...

...assuredly, they would not impinge on privilege...

...Congestion in turn makes for inflation, for friction between consumption groups, and for social instability...

...The conditions of consuming positional goods would deteriorate further...

...The slot in the bureaucratic hierarchies one eventually fills is largely determined by the pecking order of the universities attended, one's grades, and one's connections...

...A producer democracy would have less need for administering bureaucracies than the corporate state, which requires them in part to maintain its rule...

...Commercialization, by tending to favor those who have the necessary means, acts to select—hence to limit—access to positional goods...

...The expanding consumption of material goods, Hirsch maintains, changes the conditions of their use to the user's detriment...

...The flaw in the affluent society lies not in the false values of affluence but in its false promise...

...The illusion of general advance is likewise the illusion of affluence...

...But education is also a device for controlling social scarcity...

...For example, when automobiles cease to be a luxury and come to be widely owned, their "positional" value diminishes...

...To the extent that the demands for private consumption underlying the collective wage claims take the form of positional goods in restricted absolute supply—for education that provides better access to the more sought-after jobs, for housing in the more sought-after locations—such demands are doomed to eventual nonfulfillment...

...As against Hirsch, Galbraith is right...

...2 Thereby it imposes what Hirsch calls a commodity fetishism far more insiduous than Marx's conception implies (i.e., a mask for the 2 As an extreme but nonetheless telling example, Hirsch cites the marriage contract recommended by the magazine Ms, "in which mutual obligations of both parties on household duties, sexual tolerance, and a host of other matters are drawn up and specified in...

...Their use is not an individualistic act of consumption competing for social place, but a socially induced necessity...

...they impinge upon the positional sector, hitherto the preserve of the middle class...

...The book finally comes across as an elaborate apologia for the 'Twentieth Century Fund Study...

...For example, the struggle for higher wages or a shorter work week has historically been marked by violence and repression (and still remains to be won by large groups of workers...

...The economic product it evokes then comes out flawed...

...For Hirsch, as noted earlier, the relation between rising material standards and the "stagnant" positional sector translates into a relation between consumption groups...

...This is so, Hirsch seems to argue, not only because there are objective limits set to the expansion of the positional sector...

...on the other hand, the latecomers who must suffer the deterioration in the social environment caused by the declining availability of positional goods— robbing the material standard of living they have attained of its promise of plenitude...

...For example, the capitalization of favorably located land and structures is anchored in the right to privatize benefits that derive from the market demand engendered by economic development...

...I f we bear in mind the writings of the great socialist and anarchist writers, the yearnings of much of the European working class, and such luminous experiments as the kibbutz, then we see that at the core of such an order lies a producer democracy, and the planned provision of collective goods (e.g., land and its use, health services, transportation, recreational and learning facilities...

...So primogeniture worked to the disadvantage of heirs other than the firstborn...

...This means that the existing system of privilege must not be disturbed...

...Such abridgment must certainly be seen as the loss of a "positional good" for the managerial class...

...g., urbanization, the separation of household and workplace, certain dress and associational requirements—which result in outlays classed as consumption, but which should be assigned to production and should therefore be regarded as intermediate costs, i.e., a part of the final value of consumer or investment goods, not as final goods themselves...

...Since it would be primarily based on work and community, a producer democracy would be intellectually, socially, and politically more active than the present society...

...These consumption groups form at one point in his book antagonistic classes (though he eschews the term...

...This is the logic of what Hirsch says, yet it is in reality but a projection of existing conditions, whose relation to their capitalist context I have outlined...

...One consequence is the deterioration of public goods as its fiscal basis is eroded...

...To the extent that education is a screening device...

...Hirsch's concept of social scarcity does not adequately explain congestion...

...And so the problems Hirsch deals with would subside...

...The country club substitutes for the public park...

...Such barter exchanges or contractural commitments focus in effect on the narrow commodity aspect of the relationship—the sexual and other favors to be exchanged—to the neglect of the associated external conditions, such as the spirit in which the exchange is undertaken...

...As a result, collective wage demands, besides being induced by inflation through leapfrogging bargaining effects...

...explicit detail...

...The] social imbalance which Galbraith correctly diagnosed is grounded more deeply than in an excessive dominance of corporate oligarchies...

...The concept of social scarcity does not apply...

...Presumably, scenic land sites would become cluttered with country homes, suburban sprawl would worsen, the universities would become overcrowded with aspirants for needless jobs in expanding, mostly useless bureaucracies...

...The extension of the market to spheres that, for social and economic reasons, should be restricted to collective provisioning (of which Hirsch writes with cogency), may also be viewed as an expansion of the system of privilege...

...but these matters are not at issue here...

...For example, in the United States most car ownership is indispensable for the trip to or from work...

...For expansion of consumption tends to give rise to "social scarcity," a scarcity of social place or position...

...He argues that such limits do indeed exist, but lie within society, not outside it...

...But Hirsch's terminology and his careful circumscription of antagonistic consumption groups, rather than of classes, must be considered as more than mere analytical devices: they obscure the focus of social contention, which is privilege—a term that is absent from Hirsch's vocabulary...

...Analytically, such limits lie outside the growth process itself...

...His proposals cannot be discussed here...

...Social Scarcity of large categories of positional goods relates to this "system of privilege" in capitalist society...

...existing structure of privilege, although in an original way...

...Congestion has been a result, not a cause, of this transformation...

...Tese are mostly cogent arguments...