CorporatisCorporatism and Beyond? A Strategic-Relational Approach

8/13/2019 CorporatisCorporatism and Beyond? A Strategic-Relational Approach

1/47

1

Corporatism and Beyond? A Strategic-Relational Approach

Bob Jessop

Adopting a novel, and prima facie improbable, combination of Marxist form

analysis and Luhmannian systems theory, this paper undertakes four tasks

that bear on the overall ITEPE research projects concern to develop a long-

term historical perspective on the evolution and inter-connectedness of three

types of intermediary institutions in the European context from the 1850s till

today, namely corporatist, neo-corporatist and governance institutions (ITEPE

2013). First, it revisits the meaning of corporatism and offers a periodization of

its successive forms in capitalist social formations and aims to establish the

differentia specifica of governance (in its narrow sense) as one mode of

coordination in complex societies. Second, it links the transformation and

strategic reorientation of corporatism (including governance) to problems of

complexity reduction and to the limits of its different forms in the course of

governing relations characterized by complex reciprocal interdependence.

This also relates to ideas of governance failure. Third, it introduces three

linked notions, namely, society effects, societalization (Vergesellschaftung)

and competing societalization principles (Vergesellschaftungsprinzipien); and

explores their meaning in Marxist and Luhmannian terms, asking whether,

while all functional systems are equal, some are more equal than others. This

has implications for any analysis of the nature and limits of governance that

assume the equality of functionally differentiated systems and/or the

indifference of different sites of societal governance in the context of the world

market, the world of states, and world society. Fourth, in the light of steps two

and three, it critically assesses the postulated fourth phase of corporatism

(governance and meta-governance) and identifies its specific limits and crisis-

tendencies. The paper concludes with some general remarks on corporatism

and governance in complex societies.

I. The Core Meaning of Corporatism

Corporatism is aword with many meanings, reflecting the long history of the

phenomena to which it refers and the range of economic, political, and social


2/47

2

interests that it mobilizes and affects. However, a broadly consensual core

definition is that it comprises an ongoing, integrated system of representation,

policy-formation and policy implementation that is organized in terms of the

function in the division of labour performed by those involved.1Other features,

however important in practice, should be regarded as contingent.

To illustrate some of the contingencies in basic arrangements:

1. Function could refer to income categories (capital, wage-labour, land

ownership, intellectual property), occupational categories, position in the

division of knowledge (types of expertise or other forms of knowledge),

branches of the national economy (or other territorial unit of representation),

fractions of capital (e.g., profit-generating, interest-bearing, domestic or

export-oriented, size of capital, national or transnational), position in a system

of functionally differentiated systems, or some combination of these

categories (which are internally heterogeneous and not mutually exclusive).

2. Policies could be determined by the designated leaders of functional bodies

and/or through consultation with members of functional corporations; and

could emerge through internal debate channelled upwards, through direct or

indirect horizontal discussion and negotiation among functional bodies, and/or

through the some other mechanism of functional decision-making that leads

to credible commitments of action on the part of the respective bodies.

3. Policy implementation could be direct (through functional corporations

themselves), undertaken by the state as the agent of corporatist bodies (e.g.,

because of its distinctive state powers and capacities), or delegated to other

economic, political or civil organs.

4. The state could be an active, passive or silent partner in establishing and

operating corporatist arrangements, which can include organizing the

conditions of corporatist organization in the form of collibration (Dunsire 1996;

see also below); and

5. Corporatism could be separate from or linked to other forms of political

representation, such as clientelism, one or more political parties in a party

system, or a pluralistic pressure group system.


3/47

3

Other aspects of contingency include: ideological justification; the economic

and/or political legitimation; the specific functional bases and precise

organizational forms of representation; the levels and sites on which

corporatist structures are organized in different functional systems,

institutional orders, and social spheres; the stakes at issue in specific

corporatist arenas; the actual scope, purposes, and mode of policy-making;

the particular forms of implementation; and the overall place (if any) of

corporatism in the overall state system. Thus historical and comparative

studies have shown that corporatism can be limited to specific sectors or

provide the basis for more general concertation; need not be confined to the

primary or secondary sectors of the economy but could extend into the

service sectors and/or welfare, health, education, scientific and other

subsystems; and can exist on one or more levels of the economy (micro,

meso and macro). These and the more basic contingencies noted above all

depend on the specific economy (local, regional, national, or pluri-national) in

which corporatism develops and its place in the world market, the specific

political discourses and practices into which corporatism gets articulated, and

the changing balance of forces involved in corporatist activities. The

continually changing nature of corporatist institutions and practices and their

different crisis-tendencies excludes a valid transhistorical definition or easy

generalization from specific cases, especially if these are drawn from different

phases or types of social formation.

For example, Schmitter contrasted two basic forms of corporatism according

to whether it was imposed from above or emerged from below. Statist

corporatism is imposed by the state. It occurs in centralized, bureaucratic

systems, with purely plebiscitary or even non-existent elections, weak single-

party systems, and inaccessible authorities with a limited recruitment base;

and it often suppresses class, ethnic, linguistic and/ or regional differences.

Conversely, societal corporatism emerges from below as a form of economic

crisis management and general economic and social bargaining. It is

embedded in political systems with: relatively autonomous, multilayered

territorial units; open, competitive electoral processes and party systems;

ideologically varied, coalition-based governments; and is compatible with a


4/47

4

plurality of social cleavages. Societal corporatism was also defined as: a form

of policy intermediation based on organized labour, business associations,

and the state; a third species of political economy between capitalism and

socialism; a distinctive type of state; a pattern of industrial relations; a partial

structure or strategy linking different societal spheres; a form of trade union

incorporation; and system of private interest government. There is also an

extensive literature on statist or authoritarian forms of corporatism, notably in

Spain, Portugal and Latin America (see Collier 1980; Williamson 1989); and

on corporatist patterns in some developmental states in East Asia (Weiss

1999). Schmitter also noted that, whereas state corporatism is anti-liberal,

usually associated with delayed capitalist development, and forms part of an

authoritarian, neo-mercantilist state, societal corporatism is post-liberal, well

suited to advanced capitalism, and associated with democratic welfare states.

These issues have generated much debate in regard to the design of

corporatist programmes and institutions and in scientific studies of corporatist

institutions and practices. In the latter regard, it is also important to distinguish

corporatist strategies (efforts to introduce and consolidate patterns of

corporatist behaviour) and corporatist policy regimes (institutionalized

structures). Corporatist strategies could simply be ad hoc responses to

specific problems with limited long-term significance (apart from possible

path-dependent effects of success or failure). Furthermore, corporatist

structures could be dignified rather than efficient (to use Bagehots

distinction). More generally, it became clear that, as a political form,

corporatism has a priori consequences for the balance of forces; it is best

seen as a structurally and/or strategically selective form of political

organization whose effects depend on organizational, strategic and

conjunctural factors. Much research also indicates that, in almost all its

manifold forms, displayed chronic tendencies towards instability. This issue

relates to the question of governance failure, i.e., the typical ways in which

different modes of governance fail (e.g., market failure, state failure, network

failure, failures of solidarity), and the first to nth-order responses to such

failure. Corporatist strategies may emerge in response to market or state

failure but this does not guarantee that such strategies will be institutionalized,


5/47

5

let alone compensate as expected for the failures of other modes of

governance, alone or in combination. This raises issues of governance,

governance failure, meta-governance, and meta-governance failure.

II. Four Phases of Corporatism and their Relation to Governance

Corporatism (or, better, the development of corporatist tendencies) has seen

four main phases in the development of capitalist social formations (especially

in the core and semi-peripheral regions of the world economy). It also has a

pre-history in pre-capitalist orders. It first arose as a politico-ideological

critique of liberal capitalism. It reflected oppositional movements among

feudal and traditional petty bourgeois classes (such as artisans and yeoman

farmers), Catholic and/or other religious groups and some intellectual circles.

They criticized the rampant individualism, social disorder and open class

conflict that accompanied the transition to capitalism and its subsequent

laissez-faire operation; and they demanded the restoration of social order

through co-operation among professional and vocational associations.

Inspired in part by medieval occupational guilds and estate representation and

also oriented to a universalistic, harmonistic state and society, this organic

corporativism was both reactionary and utopian. It could not halt the rise of a

liberal capitalism that was mediated through anarchic market forces nor of a

mass democracy based on individual suffrage.

The second phase was more practical than ideological in orientation. Its rise

coincided with that of monopoly capitalism and growing competition among

capitalist economies and it was linked with notions such as organizedcapitalism. The dominant corporatist projects did not oppose capitalism as

such, which was now consolidated and had begun to display monopolistic and

imperialistic tendencies, but aimed to avoid the risks that its logic would

generate political revolution by organized labour and/or economic domination

by foreign capital. Thus corporatist projects called for new forms of interest

organization and/or societal regulation to defuse social unrest as well as for

new institutional means and strategies to promote national economic

competitiveness. This sort of corporatism was typically urged by firms and


6/47

6

business associations but, especially in times of acute political crisis,

prolonged war or immediate post-war reconstruction, it was also promoted by

the state. How far labour movements were engaged alongside business and

the state depended on their economic and political orientation and the

balance of economic and political forces. The crisis-ridden interwar period

reinforced corporatist tendencies, leading to two outcomes. Some corporatist

structures and strategies were imposed from above by fascist or authoritarian

regimes to address acute economic, political and ideological crises. This

occurred in the context of representational and/or parliamentary crises and

further undermined the legitimacy of parliamentarism. Others emerged from

below (often with state sponsorship) to assist economic or political crisis-

management in more liberal democratic regimes, helping to compensate for

parliamentary crisis or instability by reducing governmental overload by

sharing governance responsibilities with functional bodies and/or securing

extra support by mobilizing economic interests with an interest in stability.

These patterns were so common in this period that one political theorist

predicted that the twentieth century will be the century of corporatism just as

the nineteenth century was the century of liberalism (Manolesco 1936). But

these tendencies were not all-powerful and, indeed, corporatist projects were

sometimes little more than an ideological cloak for other practices, especially

in the more authoritarian regimes of this period.

The third wave emerged in attempts at economic crisis-management in liberal

democratic regimes in the 1960s and 1970s and was based on corporatist

tendencies in post-war reconstruction. It usually took a tripartite form

(involving business, organized labour and the state) reflecting the nature ofpost-war settlements. It was often partial and tendential, intermittent and ad

hoc, and nowhere did it lead to continuous, fully institutionalized corporatist

bargaining across all sectors of the economy and state. Successful cases

helped to stabilize societies oriented to economic growth and mass

consumption by supporting already existing macro-economic measures with

incomes, labour market and industrial policies. Thus corporatism was not now

intended to replace the market economy or liberal parliamentary democracy

and nor did it do so in the core capitalist economies although elements of


7/47

7

state corporatism did survive from the inter-war period in some semi-

peripheral states. Instead, it was meant to supplement and reinforce them by

legitimating new forms of state intervention that went beyond traditional

methods of parliamentary and bureaucratic rule and by securing more

effective representation for different producer interests than could occur

through a generalized pluralism or catch-all electoral parties. They were

intended to help to stabilize the post-war mode of economic growth (by

moderating its tendencies towards stagflation) and to manage the initial

reaction to its growing crisis in the 1970s. In this context, corporatism seemed

able to provide, for a time, a real basis for securing and consolidating working-

class gains within capitalism subject to certain additional structural and

conjunctural conditions. These include strong, centralized industrial unions;

strong, centralized employers organizations, and a state which has the

capacities to intervene in economic management but also depends on co-

operation from its social partners (Notermans 2000).

It was the relative novelty of this form of corporatism and its apparent

compatibility with liberal democratic capitalism that prompted social scientific

interest in neo-corporatism and the dynamics of generalized political

exchange in the 1970s. Where the preconditions for stable corporatism were

absent, however, corporatist strategies failed to secure favourable tradeoffs

between growth, jobs and price stability and generated severe conflicts in

corporatist associations (especially trade unions). As national economies

became more open and the states primary economic concerns shifted from

macroeconomic management to supply-side innovation and international

competitiveness, however, the old neo-corporatist structures and strategies

seemed less viable. Nonetheless, the usefulness of some forms of

representation based on function within the division of labour is reflected in

the development of the fourth phase of corporatism and the emergence of

new justifications and descriptions for this phenomenon.

.

The fourth phase emerged in the 1980s, is still expanding, and is a key theme

in the ITEPE project. In contrast to the three other phases, which correspondto particular conjunctures in the development of capitalism, this phase is not


8/47

8

tied specifically to the profit-oriented, market-mediated logic of accumulation

in a market society but is related to the more general development of complex

societies marked by increasing functional differentiation. In this sense, it also

has a pre-history outside the logic of a market economy embedded in a

market societyone that overlaps with the preceding phases of corporatism.

Its differentia specificais that it involves a wider range of functional interests,

including local authorities, scientific communities, professional associations,

non-governmental organizations, and social movements; and it extends

beyond reactive economic and political crisis-management to include

proactive strategies for competitiveness and, in addition, for activities in many

other issue areas marked by their inherent complexity and political sensitivity.

Despite some research on Eurocorporatism, reflecting European economic

integration and the rescaling of statehood, such developments are less often

discussed in corporatist or neo-corporatist terms (in part due to negative

association with the crises of the 1970s and allegedly over-mighty unions).

Instead they are analysed in diverse contexts as public-private partnerships,

networking, inter-organizational collaboration, regulated self-regulation, stake-

holding, productive solidarities, productivity coalitions, learning regions, the

social economy, and associational democracy. These developments are

connected, as we shall see below, to the challenges allegedly posed by the

growing complexity of social formations. One way to connect these diverse

forms is through the concepts of governance and meta-governance (for

discussion of the terminology of governance, see Jessop 1995; on meta-

governance, see Meuleman 2008; see below for further discussion of both).

III. Phase Four: Neo-neo-corporatism or Governance?

Although the notion of governance has a long history, with the first recorded

uses of the term (or its equivalents) occurring in the 14th century and referring

mainly to the action or manner of governing, guiding, or steering conduct, it

was revived from the late 1970s onwards in relation to the alleged shift from

government to governance in politics and analogous shifts in other societalspheres. This coincided with the crisis of Atlantic Fordism and the Keynesian


9/47

9

welfare national state and, later, in the mid-1990s, with recognition of the

limitations of the neo-liberal solution of more market, less state. The 1970s

saw growing concern about governmental overload, legitimacy crisis, steering

crisis, and ungovernability and a search for new forms of governance to

address these problems. In particular, this prompted theoretical and practical

interest in the potential of coordination through self-organizing networks,

partnerships and other forms of reflexive collaboration. This is reflected in

studies of a growing range of economic governance mechanisms (such as

relational contracting, 'organized markets' in group enterprises, clans,

networks, trade associations, and strategic alliances) which coordinate

economic activities in other ways (e.g., Campbell et al., 1991; Grabher 1993;

Hollingsworth et al., 1994; Salais and Storper 1993; Storper 1993; Teubner

1993). In international relations there was a parallel growth of interest in

governance without government (e.g., Rosenau and Czempiel 1992).

Likewise, in political science and policy studies, there was growing concern

with the role of various forms of political coordination that not only span the

conventional public-private divide but also involve 'tangled hierarchies',

parallel power networks, or other forms of complex interdependence across

different tiers of government and/or different functional domains. This was

signified in terms of a shift from a narrow concern with governmentto a broad

concern with a wide range of political governance mechanisms with no

presumption that these are anchored primarily in the sovereign state. In

addition, by highlighting the growing role of associations, regulated self-

regulation, private interest government, etc., such concerns challenge the

idea that civil society is the residual site of community and/or the field par

excellence of bourgeois individualism. This was also a period when civil

society was celebrated and efforts were made to absorb community

organizations and social movements into new governance mechanisms.

In this respect, the fourth phase partly reprises the second, with its twin

emphases on tackling a perceived democratic deficit in current political

institutions and on mobilizing relevant private, public, third sector, and civil

society stakeholders to develop more effective economic and social policies

in an increasingly complex world. In the 1990s this also became part of the


10/47

10

Third Way/Die neue Mitte agenda as well as neo-communitarian political

theory (Giddens 2000; Etzioni 1995). And, just as its advocates in the third,

tripartite phase sought to distance their view of corporatism from the

discredited period of authoritarian corporatism, current advocates often seek

to distance themselves from organized labour by calling for wider participation

in corporatist arrangements and define the latter in such terms as new

governance, social or territorial pacts, public-private partnership, the

networked economy, and so on. The development of the open method of

coordination in the European Union is an important example of this new

phase, linked as it is with concerns about competitiveness, the democratic

deficit, social cohesion, and the complexity of policy-making and policy-

implementation in a global era (Zeitlin and Pochet 2005).

Indeed, far from just responding to demands from social forces dissatisfied

with state and market failure, state managers have actively promoted these

new forms of governance as adjuncts to and/or substitutes for more traditional

forms of government. They do so in the hope and/or expectation that policy-

making and implementation will thereby be improved in terms of efficiency,

effectiveness, and transparency and also made more accountable to relevant

stakeholders and/or moral standards, leading to good governance. This shift

from government to governance has occurred on all scales from local states

through metropolitan and regional governments to national states and on to

various forms of intergovernmental arrangements at the international, trans-

national, supranational, and global levels. Another sign of change is use of the

notion of multi-level governance to describe new forms of public authority that

not only link different territorial scales above and below the national level but

also mobilize functional as well as territorial actors. More generally, new forms

of partnership, negotiation, and networking have been introduced or extended

by state managers as they seek to cope with the declining legitimacy and/or

effectiveness of other approaches to policy-making and implementation. Such

innovations also redraw the inherited public-private divide, engender new

forms of interpenetration between the political system and other functional

systems, and modify relations between these systems and the lifeworld as the

latter impacts upon the nature and exercise of state power.


11/47

11

IV. Complexity Theory

Various currents in the social sciences explain the growth of governance in

terms of the evolutionary advantages that the institutions and practices of

governance offer for learning and innovation in an increasingly complex and

turbulent environment. Inter-organizational negotiation and inter-systemic

context steering are said to involve self-organized guidance of multiple

agencies, institutions, and systems that are operationally autonomous from

one another yet structurally coupled due to their mutual interdependence.

Whilst their respective operational autonomies exclude primary reliance on a

single hierarchy as a mode of co-ordination among relevant agencies,

institutions, and systems, their interdependence makes them ill-suited to

simple, blind co-evolution based on the 'invisible hand' of the market or the

iron hand of command. Governance is said to overcome these problems in

providing a 'third way' between market anarchy and top-down planning. Self-

organization is especially useful in cases of loose coupling or operational

autonomy, complex reciprocal interdependence, complex spatio-temporal

horizons, and shared interests (cf. Mayntz 1993; Scharpf 1994).

One way to locate these arguments is in terms of Luhmanns analysis of three

historical modes of organizing social formations (Vergesellschaftungsmodi):

segmentation, centre-periphery, and functional differentiation. I build on this

typology by suggesting that (1) these principles are not mutually exclusive

from the perspective of world society and (2) the codes and programmes

associated with particular functionally differentiated systems can be more or

less dominant within world society. It can be shown that these extensions are

more or less implicit in Luhmanns work and, even if they were not, they are

nonetheless useful and powerful heuristic principles for understanding the

production of society effects.

The concept of society effects rests on the claim that the existence of a

'society' cannot be taken for granted: it must be constituted and reproduced

through more or less precarious social processes and practices that articulate

diverse social relations to produce a 'society effect'. The nature of any society


12/47

12

varies with its collective identity (self-description) and how its conditions of

existence are secured. It would emerge from and be based on a more

extensive substratum of social relations which included many more elemental

relations than those which are articulated to form this particular set of 'society

effects'. There are always interstitial, residual, marginal, irrelevant,

recalcitrant, and contradictory elements and, indeed, these may serve as

reservoirs of flexibility and innovation as well as actual or potential sources of

disorder. Moreover, insofar as alternative societies are possible, there is

scope for conflict over rival 'societal projects' as well as for emergent

contradictions among institutional logics. In this sense effective societalization

has both a 'social' and a 'system' integration aspect (cf. Lockwood 1964).

The concept of functional differentiation is tied to claims about a dramatic

intensification of societal complexity. In addition to the increased functional

differentiation combined with increased interdependence among functional

systems, other reasons advanced for growing complexity include:

increased fuzziness, contestability, and de-differentiation of institutional

boundaries; increased complexity of spatial and scalar relations and horizons of

action as national economies, national states, and national societies

cease to be the main axes and reference points in societal

organization;

increased complexity and interconnectedness of temporalities and

temporal horizons, ranging from split-second timing (e.g., computer-

driven trading) to an acceleration of the glacial time of social andenvironmental change;

multiplication of identities and the imagined communities to which

different social forces orient their actions and seek to coordinate them;

increased importance of knowledge and organized learning; and,

because of the above,

the self-potentiating nature of complexity, whereby complex systems

generally operate in ways that create opportunities for additional

complexity.


13/47

13

Even if these trends cannot be accurately measured and affirmed, this

Zeitdiagnostikstill has important effects. Indeed, narratives of complexity have

their own performative force and are often used instrumentally and

strategically to effect change in response to growing complexity. These

trends (or their narration) certainly seem to have promoted shifts in the

institutional centre of gravity (or institutional attractor) for policy coordination

away from hierarchy towards heterarchy or reflexive self-organization (which

is sometimes conflated with governance tout court in claims that there has

been a shift from government to governance). But disillusion with the utopias

of communism, the welfare state, and, more recently, the unfettered

dominance of market forces should not lead us to put all our trust in the atopic

vision of good governance based on horizontal and vertical solidarities and

the mobilisation of collective intelligence (Willke 2001). It is not just markets

and imperative co-ordination that are prone to fail; heterarchic governance

and solidarity are also failure-prone albeit for different reasons, in different

ways, and with different effects. In general, the greater the material, social,

and spatio-temporal complexity of the problems to be addressed, the greater

are the number and range of interests whose heterarchic co-ordination is

necessary to resolve them satisfactorily. In addition, the less direct and visible

are reciprocally interdependent interests, the more challenging is efficient,

effective, and consensual co-ordination regardless of the method of co-

ordination. These simple and obvious remarks already indicate some basic

problems of a (world) state as a governance regime.

Ignoring for the moment whether complexity has actually increased, the world

is too complex to be grasped in all its complexity in real time, let alone to be

governed in all its complexity in real time. One reason for this is that the

causal mechanisms that generate the present moment are complex, have

different spatio-temporal depth and rhythms, and manifest themselves at

different sites, scales, and over different time horizons. Indeed, rather than try

to theorize complexity, it is often more productive to explore how systems

and/or actors reduce complexity (cf. Jessop 2007). In the social world,

complexity is reduced in two main ways. The first is simplification through

semiosis (meaning- or sense-making), which is associated with specific


14/47


15/47

15

power/knowledge relations associated with governmentality, and the manner

of subjectivation, that is, the production of subjects capable of governing,

being governed, and self-governing. Likewise, from Marxist or analogous

critical perspectives, the objects of governance are also important because

they may contain contradictions and/or generate strategic dilemmas that resist

any simple effort at governance. Overall, this involves concern with questions

of problem-definition, power asymmetries, and domination and the effects of

specific modes of calculation, dispositive configurations, and social practices.

Complexity and complexity reduction are relevant to corporatism and/or

governance in both respects. For the success of these coordination

mechanisms and social practices depends on the adequacy of their

associated social imaginaries to the complexities of the real world and on the

relevance of the associated modes of coordination to the objects that are to

be governed. In short, for social agents to be able to go on in the world and

to govern it, at least two conditions must be satisfied. First, they must not only

reduce complexity by selectively attributing sense (Sinn) and meaning

(Bedeutung) to some of its features rather than others; but, second, their

simplifications must have sufficient variety to be congruent with real world

processes and to remain relevant to governance objectives. In short, the

success of governance depends on the adequacy of social imaginaries to the

complexities of the real world and on the relevance of the modes of

governance to the objects that are to be governed.

V. Corporatism and Modes of Governance

Four modes of coordination of complex, reciprocal interdependence are

conventionally distinguished: exchange, command, network, and solidarity

(see Table 1). This is the domain of what Kooiman (1994), implicitly

confirming the bias of steering theory and socio-cybernetics, calls first-order

governing or problem-solving. In each case, success depends on the

performance of complementary activities and operations by other actors

whose activities and operations depend in turn on the performance ofcomplementary activities and operations elsewhere within the relevant social


16/47

16

ensemble. The forms concerned are: ex post co-ordination through exchange

(e.g., the anarchy of the market), ex ante co-ordination through imperative co-

ordination (e.g., the hierarchy of the firm, organization, or state), reflexive self-

organization (e.g., the heterarchy of ongoing negotiated consent to resolve

complex problems in a corporatist order or horizontal networking to co-

ordinate a complex division of labour), and solidarity based on unconditional

commitment to others (e.g., loyalty within small communities or local units or

across imagined communities in times of crisis).

Market exchange is characterized by a formal, procedural rationality that is

oriented to the efficient allocation of scarce resources to competing ends. The

capitalist market has a formal, procedural rationality that prioritizes an endless

'economizing' pursuit of profit maximization. It requires demanding conditions

if it is to work efficiently even in its own limited terms. Imperative co-ordination

has a substantive, goal-oriented rationality that prioritizes 'effective' pursuit of

successive policy goals. It also has demanding preconditions. For, in addition

to the usual problems of creating and maintaining appropriate organizational

capacities, the algorithms required for effective ex ante co-ordination in a

complex and turbulent environment impose heavy cognitive demands. In

addition, both market and imperative co-ordination are prey to the problems of

bounded rationality, opportunism, and asset specificity2 (Coulson 1997).

Reflexive self-organization has a substantive, procedural rationality that is

concerned with solving specific co-ordination problems on the basis of a

commitment to a continuing dialogue to establish the grounds for negotiated

consent, resource sharing, and concerted action in mutually beneficial joint

projects. Solidarity in turn is characterized by unreflexive, unconditional

commitment. Its thickest form is generally confined to to small units (e.g., a

couple, family, or tight-knit communities or fate, or Bund) and, the larger the

unit, the thinner and less intense solidarity tends to become. Eventually it

changes into more unilateral forms of trust in the expertise of skilled

practitioners providing goods and services that their clients cannot provide

themselves (on trust and its failure, see Adler 2001; Fukuyama 1995;

Luhmann 1979; Gambetta 1988; Misztal 1996; Nooteboom 2002).


17/47

17

SOLIDARITY

Unreflexiv

eand

value-orie

nted

Requited

Commitment

Love

Homofide

lis

Anytime,

anywhere

Betrayal,

Mistrust

Co-depen

dency

Asymmetry

DIALOGUE

Reflexiveand

Proced

ural

Negotiated

Consent

Networks

Homopoliticus

Re-sca

ling,path-

shaping

'Noise',

'TalkingShop'

Secrec

y,

distorted

commu

nication

COMMAND

Sub

stantiveandGoal-

Oriented

Effe

ctiveGoal-

Atta

inment

State

Hom

oHierarchicus

Org

anizationalSpace,

planning

Ineffectiveness

Bureaucratism,

Red

Tape

EXCHANGE

Formaland

Procedural

EfficientAllocationof

Resources

Market

HomoEconomicus

WorldMarket,

reversibletime

Economic

Inefficiency

Market

Inadequacies

Rationality

Criterionof

Success

Typical

Example

StylizedMode

ofCalculation

Spatio-temporal

horizons

PrimaryCriterion

ofFailure

SecondaryCriterion

ofFailure

Table 1: Modes of Governance


18/47

18

Turning to the differentiaspecificaof reflexive self-organization or heterarchic

governance, it is based on instituting negotiation around a long-term

consensual project as the basis for both negative and positive coordination

among interdependent actors. The key to success is continued commitment to

dialogue to generate and exchange more information (thereby reducing,

without ever eliminating, the problem of bounded rationality); to weaken

opportunism by locking partners into a range of interdependent decisions over

short-, medium-, and long-term time horizons; and to build on the

interdependencies and risks associated with 'asset specificity' by encouraging

solidarity among those involved. The rationality of this mode of governance is

dialogic rather than monologic, pluralistic rather than monolithic, heterarchic

rather than hierarchical or anarchic. It operates on three levels. The first

concerns interpersonal networks based on trust, the second concerns inter-

organizational coordination based on negotiation and noise reduction, the

third concerns de-centred context steering oriented to the coordination of

inter-systemic relations based on negative coordination. These levels can be

nested such that interpersonal ties lubricate inter-organizational coordination

and the latter in turn facilitates de-centred context-steering.

Each of these modes of coordination of complex reciprocal interdependence

has a distinctive primary form of failure and typical secondary forms of failure.

Market failure is said to occur when markets fail to allocate scarce resources

efficiently in and through pursuit of monetized private interest the response

to which might be further extension of market mechanism or compensatory

state action. State failure is said to occur when state managers cannot secure

substantive collective goals determined on the basis of their political divination

of the public interest. Typical responses have been attempts to improve

juridico-political institutional design, knowledge, or political practice or a policy

of 'more market, less state'. More recently heterarchic governance has been

seen as a magic bullet that overcomes the problems of market and state

failure without creating its own problems. But heterarchy is also prone to

failure albeit for different reasons, in different ways, and with different

effects. Insofar as such governance aims to modify goals through ongoing

negotiation and reflection, failure would involve the inability to redefine


19/47


20/47

20

2009; Hood 1998). Third, 'meta-heterarchy' involves the reflexive organization

of the conditions of reflexive self-organization by redefining the framework in

which heterarchy (or reflexive self-organization) occurs3and can range from

providing opportunities for 'spontaneous sociability' (Fukuyama 1995; see also

Putnam 2000) through various measures to promote networking and

negotiation to the introduction of innovations to promote 'institutional

thickness' (Amin and Thrift 1995). Lastly, meta-solidarity involves forms of

therapeutic action, whether spontaneous or mediated through therapeutic

intervention, to repair or refocus feelings of loyalty and unconditional

commitment.

Meta-Exchange

Meta-Command

Meta-DialogueMeta-Solidarity

Redesignindividualmarkets

De- and re-regulation

Re-ordermarkethierarchies

Organizationalredesign

Re-orderorganizationalecologies.

Constitutionalchange

Re-ordernetworks

Reorganizeconditions ofself-organization

New forms ofdialogue

Develop newidentities andloyalties.

From old tonew socialmovements

New forms ofsolidaristicpractice

Table 2 Second-Order Governance

Beyond such attempts at second-order governance, we find what Kooiman

calls third-order governance. This could also be called second-order

metagovernance, meta-metagovernance, or, best of all, in part because of its

etymological roots as well as its conceptual precision, collibration (cf. Dunsire

1996). This can be defined as the judicious re-articulating and rebalancing of

modes of governance to manage the complexity, plurality, and tangled

hierarchies found in prevailing modes of co-ordination with a view to achieving

optimal outcomes as viewed by those engaged in metagovernance. In this

sense it also means the organization of the conditions of governance in terms


21/47

21

of their structurally-inscribed strategic selectivity, i.e., the asymmetrical

privileging of different modes of co-ordination and their differential access to

the institutional support and the material resources needed to pursue

reflexively-agreed objectives. Collibration is no more the preserve of one actor

or set of actors than it is confined to one site or scale of action. Instead it

should be seen, like the various first-order forms of coordination of complex

reciprocal interdependence and the various second-order forms of meta-

coordination, as fractal in character, i.e., as taking self-similar forms in many

different social fields.

Metagovernance involves not only institutional design but also the

transformation of subjects and cultures. Whereas there has been much

interest in issues of institutional design appropriate to different objects of

governance, less attention to the reform of the subjects of governance and

their values. Yet the neoliberal project, for example, clearly requires attempts

to create entrepreneurial subjects and demanding consumers aware of their

choices and rights as well as actions to shift the respective scope and powers

of the market mechanism and state intervention. This is an area where

Foucauldian students of governmentality offer more than students of

governance. For they have been especially interested in the role of power and

knowledge in shaping the attributes, capacities, and identities of social agents

and, in the context of self-reflexive governance, in enabling them to become

self-governing and self-transforming (cf. Miller and Rose 2008). This raises

important questions about the compatibility of different modes of governance

insofar as this involves not only questions of institutional compatibility but also

the distribution of the individual and collective capacities needed to pursuecreatively and autonomously the appropriate strategies and tactics to sustain

contrasting modes of governance.

Governments play a major and increasing role in all aspects of

metagovernance in areas of societal significance, whether these are formally

private or public. They get involved in redesigning markets, in constitutional

change and the juridical re-regulation of organizational forms and objectives,

in organizing the conditions for networked self-organization, in promoting


22/47

22

social capital and the self-regulation of the professions and other forms of

expertise, and, most importantly, in the collibration of different forms of first-

order governance and metagovernance. This is especially true during periods

of crisis that threaten system integration and/or social cohesion. This is where

the link between meta-governance and passive revolution is especially strong

and where we also find major transitions in accumulation regimes, state

projects, societal visions, and so forth. Neo-liberalism is only the latest

example of such a fundamental shift in the metagovernance of capital

accumulation and its associated forms of state in their inclusive sense.

More specifically, governments provide the ground rules for governance and

the regulatory order in and through which governance partners can pursue

their aims; ensure the compatibility or coherence of different governance

mechanisms and regimes; create forums for dialogue and/or act as the

primary organizer of the dialogue among policy communities; deploy a relative

monopoly of organizational intelligence and information in order to shape

cognitive expectations; serve as a 'court of appeal' for disputes arising within

and over governance; seek to re-balance power differentials and strategic

bias in regimes by strengthening weaker forces or systems in the interests of

system integration and/or social cohesion; take material and/or symbolic

flanking and supporting measures to stabilize forms of coordination that are

deemed valuable but prone to collapse; subsidize production of public goods;

organize side-payments for those making sacrifices to facilitate effective

coordination; contribute to the meshing of short-, medium- and long-term time

horizons and temporal rhythms across different sites, scales, and actors, in

part to prevent opportunistic exit and entry into governance arrangements; tryto modify the self-understanding of identities, strategic capacities, and

interests of individual and collective actors in different strategic contexts and

hence alter their implications for preferred strategies and tactics; organize

redundancies and duplication to sustain resilience through requisite variety in

response to unexpected problems;4and also assume political responsibility as

addressee in last resort in the event of governance failure in domains beyond

the state (based in part on Jessop 2002: 219; see also Bell and Hindmoor

2009).This emerging role means that networking, negotiation, noise reduction,


23/47

23

and negative as well as positive co-ordination occur 'in the shadow of

hierarchy' (Scharpf 1994: 40). It also suggests the need for almost permanent

institutional and organisational innovation to maintain the very possibility

(however remote) of sustained economic growth.

Governance is certainly not a purely technical matter limited to specific

problems defined by the state (or other social forces) that can be resolved by

experts in organizational design, public administration, and public opinion

management. How different modes of co-ordination operate depends on their

relative primacy within the political order (government and governance in the

shadow of hierarchy) and the uneven access of stakeholders to institutional

support and resources. Among crucial issues are the flanking and supporting

measures that are taken by the state; the provision of material and symbolic

support; and the extent of any duplication or counteraction by other co-

ordination mechanisms. Moreover, as both governance and government

mechanisms exist on different scales (indeed one of their functions is to

bridge scales), success at one scale may depend on practices and events on

other scales. Likewise, co-ordination mechanisms may have different

temporal horizons and there may be disjunctions between the temporalities of

different governance and government mechanisms that go beyond issues of

sequencing to affect the viability of any given mode of coordination.

Although governance mechanisms may acquire specific techno-economic,

political, and/or ideological functions, governance is always conducted under

the primacy of the political, i.e., the state's concern with managing the tension

between economic and political advantages and its ultimate responsibility forsocial cohesion (cf. Poulantzas 1973). This holds both for the political

character of any specific process of problem definition and for the states

monitoring of the effects of specific forms of governance on its institutional

integration and ability to pursue the hegemonic or dominant state project

whilst maintaining social cohesion in divided societies. This fact plagues the

liberal prescription of an arms-length relationship between the market and the

night-watchman state since states (or, at least, state managers) are rarely

strong enough to resist pressures to intervene when political advantage


24/47


25/47

25

maximizing total revenues and the conflict over their allocation; (3) the need

for consultation among operationally and organizationally distinct but

functionally interdependent forces about the economic impact of state policies

and the political repercussions of private economic decision-making; and (4)

the problems generated by the nature of civil society as a sphere of particular

interests. Each of these features provides major incentives to adopt functional

representation to address the resulting problems for economic policy and

political stability. Nonetheless corporatism cannot suspend the contradictions

of capitalism or eliminate other conflicts in political regimes and these cause

instabilities in the very corporatist tendencies that these features help to

generate. This is an important part of the explanation for the recurrent cycles

of the rise of corporatism, its fall, and its return in a new guise (Jessop 2002).

While this might explain the recurrence of corporatism (and governance), it

does not, however, explain the failure of this approach to the coordination of

complex reciprocal interdependence in capitalist social formations. To explain

this we must look beyond the division of labour, the division of knowledge, the

sphere of exchange relations, and the nature of civil society as a sphere of

possessive individualism and particular interests. We must examine the

fundamental aspects of the capital relation itself and its implications for the

nature and dynamic of social formations dominated by profit-oriented, market-

mediated accumulation. In particular, against the explicit arguments of

modern systems theory, we must ask about the conditions in which the logic

of one so-called functional system (the economy) can come to dominate the

overall organization of world society. I develop this argument in two steps. In

this section, I explore some basic contradictions of the capital relation and the

problems that they pose for the premature harmonization of contradictions

(Bloch 1959: 178) through corporatism and/or efforts to govern the capital

relation. Section VII then considers the extent to which, and the conditions

under which, these problems could come to dominate not just the organization

of the capitalist market economy but also world society as a whole.

Marx (1967) identified an essential contradiction in the cell -form of thecapitalist mode of production, namely, the commodity, between its exchange-


26/47

26

and use-value aspects. On this basis he unfolded the complex dynamic of this

mode of production including the necessity of periodic crises and their

creatively destructive role in renewing accumulation. I suggest that all forms of

the capital relation (insofar as revenues derive from free trade and the rational

organization of production, thereby excluding profits from different forms of

political capitalism, such as predatory capitalism, force and domination, or

unusual deals with political authority), embody different but interconnected

versions of this basic contradiction (on political capitalism, see Weber 2009).

These impact differentially on (different fractions of) capital and on (different

categories and strata of) labour at different times and places (Jessop 2002).

Thus, productive capital is both abstract value in motion (notably in the form of

realized profits available for reinvestment) and a concrete stock of already

invested time- and place-specific assets in the course of being valorized; the

worker is both an abstract unit of labour-power substitutable by other such

units (or, indeed, other factors of production) and a concrete individual (or,

indeed, collective workforce) with specific skills, knowledge and creativity; the

wage is a cost of production and a source of demand; money functions as an

international currency exchangeable against other currencies (ideally in

stateless space) and as national money circulating within national or pluri-

national spaces subject to state control; land functions both as rent-generating

property (based on the private appropriation of nature) and as a more or less

renewable and recyclable natural resource (modified by past actions);

knowledge is the basis of intellectual property rights and a collective resource

(the intellectual commons). Likewise, the state is not only responsible for

securing key conditions for the valorization of capital and the reproduction of

labour-power as a fictitious commodity but also has overall political

responsibility for maintaining social cohesion in a socially divided, pluralistic

society. Taxation is an unproductive deduction from private revenues (profits

of enterprise, wages, interest, and rents) and a means to finance collective

investment and consumption. And so on (see Jessop 2002).

The tension between the two co-existing poles, each of which is a naturally

necessary or inherent feature of a given contradiction and, indeed, which


27/47

27

together define it in their opposition, generates strategic dilemmas on how to

handle the contradiction. For example, does or should the state treat the

(social) wage mainly as a source of demand, a cost of production, or attempt

to reconcile these aspects? The first case is illustrated in the Keynesian

welfare national state (or KWNS), the second in neo-liberal austerity politics or

export-led growth, and the third in welfare regimes based on flexicurity.

Analogous arguments hold for other contradictions and dilemmas. The

plurality of contradictions and their interconnections, the possibilities of

handling them at different sites, scales, and time horizons, etc., creates

significant scope for agency, strategies and tactics to affect economic

trajectories. How they are handled also shapes the form of subsequent crises

but does notdetermine the nature of subsequent regimes, which also depend

on the formal and material adequacy outcome of path-shaping initiatives.

Each contradiction has its own aspects and is actualized in its own ways in

particular institutional and spatio-temporal contexts, giving rise to a complex,

overdetermined, contradictory and multiply dilemmatic ensemble of social

relations. While many institutions are related to fundamental categories of the

capital relation, their specific forms and logics are irreducible to these basic

categories. They modify the forms of appearance of contradictions and

dilemmas but cannot abolish the underlying structural and strategic problems.

Partial resolutions can be achieved through institutional fixes and spatio-

temporal fixes. These fixes both emerge, to the extent that they do, in a

contested, trial-and-error process, involving different economic, political, and

social forces and diverse strategies and projects; and they typically rest on an

institutionalized, unstable equilibrium of compromise. An institutional fix is a

complementary set of institutions that, via institutional design, imitation,

imposition, or chance evolution, helps to provide a temporary, partial, and

relatively stable solution to the rgulation-cum-governance problems involved

in constituting and securing a social order. It can also be examined as a

spatio-temporal fix (or STF), and vice versa. STFs establish spatial and

temporal boundaries within which the always relative, incomplete, provisional,

and institutionally-mediated structural coherence of a given order (here, a

mode of growth) are secured to the extent that this occurs. Issues of


28/47

28

institutional design apart, this also involves building support in and across

many conflictual and contested fields for the respective accumulation

strategies, associated state projects and, where it is relevant, hegemonic

visions. STFs help to displace and defer the material (stofflich) and social

costs of securing such coherence beyond the spatial, temporal, and social

boundaries of the institutional fix. Thus zones of relative stability depend on

zones of instability elsewhere and/or at the cost of future problems.

These distinctions are useful in exploring how institutional and spatio-temporal

fixes contribute to the overall rgulation-cum-governance of the capital

relation. Specifically, contradictions and their associated dilemmas may be

handled through:

hierarchization (treating some contradictions as more important than

others);

prioritizationof one aspect of a contradiction or dilemma over the other

aspect;

spatialization (relying on different scales and sites of action to address

one or another contradiction or aspect or displacing the problems

associated with the neglected aspect to a marginal or liminal space,

place, or scale); and

temporalization (alternating regularly between treatment of different

aspects or focusing one-sidedly on a subset of contradictions, dilemmas,

or aspects until it becomes urgent to address what had hitherto been

neglected).

The prevailing strategies modify each contradiction, with the result that they

are mutually presupposed, interiorizing and reproducing in different ways the

overall configuration of contradictions. Different configurations can be

stabilized based on the weights attached to 1) different contradictions and

dilemmas and their dual aspects; 2) the counter-balancing or offsetting of

different solutions to different contradictions and dilemmas; 3) different

patterns of social conflict and institutionalized compromise; 4) differences in


29/47

29

the leading places and spaces for accumulation; and 5) the changing

prospects of displacing and/or deferring problems and crisis-tendencies. The

complex structural configuration of a given accumulation regime depends on

institutional and spatio-temporal fixes that establish the primacy of one or

more contradictions and assign a primacy for governance to one rather than

another of its aspects. Other contradictions are regularized/governed

according to how they complement the current dominant contradiction(s).

Nonetheless, these fixes are not magic bullets: they cannot eliminate

contradictions and dilemmas and, whatever their capacity to temporarily

harmonize or reconcile them, they create the conditions for the next crisis. In

terms of corporatism and governance, these crises take the form of crises in

corporatism arrangements and governance crises.

Three further sets of remarks are relevant here. First, in addition to any

problems, failure-tendencies, and dilemmas inherent in specific modes of

coordination, the success of governance is also affected by the dependence

of capital accumulation on maintaining a contradictory balance between

marketized and non-marketized organizational forms. Although this was

previously understood mainly in terms of the balance between market and

state, governance does not introduce a neutral third term but adds another

site upon which the balance can be contested. For new forms of governance

provide a new meeting ground for the conflicting logics of accumulation and

political mobilization. A key aspect of this problem in capitalist social

formations is the capacity to develop and consolidate specific spatio-temporal

fixes. Strategically, as capitalism's contradictions and dilemmas are insoluble

in the abstract, they are resolved partially and provisionally, if at all

through the formulation-realization of specific accumulation strategies at

various economic and political scales in specific spatio-temporal contexts.

Such spatio-temporal fixes delimit the main spatial and temporal boundaries

within which structural coherence is secured, and externalize certain costs of

securing this coherence beyond these boundaries. The primary scales and

temporal horizons around which such fixes are built and the extent of their

coherence vary considerably over time. This is reflected in the variable

coincidence of different boundaries, borders or frontiers of action and the


30/47

30

changing primacy of different scales. Political boundaries, for example, have

seen medieval polymorphy, Westphalian exclusivity, and post-Westphalian

complexity. Likewise, the consolidation of capitalism witnessed the national

eclipse of the urban scale as cities were integrated into national economic

systems and subordinated to the political power of national territorial states.

And the national scale has since been challenged by the rise of global city

networks more oriented to other global cities than to national hinterlands.

As part of a given spatio-temporal fix, different institutions, apparatuses or

agencies may specialize primarily in one or other horn of a dilemma, deal with

it over different temporal horizons, or address different aspects at different

times. The state may also alter the balance between institutions, apparatuses

and agencies by reallocating responsibilities and resources, allowing them to

compete for political support and legitimacy as circumstances change, etc.

Such strategies may be pursued entirely within the state or extend to the

division between state and non-state modes of governance. Another way to

manage potential problems arising from the limits of different modes of policy-

making or crisis-management is through variable policy emphases across

different scales of action and temporal horizons. For example, in Atlantic

Fordism, the national state set the macroeconomic framework, the local state

acted as its relay for many nationally-determined policies, and

intergovernmental cooperation in various international regimes maintained the

conditions for national economic growth. Likewise, in contemporary neoliberal

accumulation regimes, a relative neglect of substantive (as opposed to formal)

supply-side conditions at the international and national levels in favour of

capital flows in and through space is partly compensated by more

interventionist policies at the regional, urban and local levels, where many

material interdependencies among specific productive capitals are located

(Gough and Eisenschitz 1996).

There can also be a temporal division of labour with different institutions,

apparatuses or agencies responding to contradictions, dilemmas and

paradoxes over different time horizons. This is reflected in the conventional

distinction between planning and execution within organizations and in the


31/47

31

primacy of different temporal horizons across organizations (for example,

banks and central banks, computer-programmed arbitrage funds and long-

term venture capital funds). Similarly, corporatist arrangements have often

been introduced to address long-term economic and social issues where

complex, reciprocal interdependence requires long-term cooperation

thereby taking the relevant policy areas outside the short-term time horizons

of electoral cycles and parliamentary in-fighting. In both cases there is scope

for activities to rebalance relations among these institutions, apparatuses or

agencies through differential allocation of resources; allowing them to

compete for legitimacy in changing circumstances.

VII. Ecological Dominance

Any claim that different functional systems may be more or less important

faces two challenges that arise from the assumption in modern systems

theory that functionally differentiated systems perform essential functions in

society and are non-substitutable. The first challenge is structural. For modern

systems theory implies that no single functional (autopoietic) system could

determine societal development in the first or even last instance. All such

systems have absolute (not relative) operational autonomy. For example, the

modern economy is a self-perpetuating system of payments; the modern legal

system is a self-contained and self-modifying system of legally-binding legal

decisions; the science system is a self-perpetuating system of scientific

communications coded in terms of true/false; and the political system

produces collectively binding decisions that generate further political

decisions. Nonetheless this operational autonomy is limited by a given

systems relation to its external environment and, more specifically, by its

material dependence on the performance of other systems that operate

according to their own codes and programmes. These constraints can be read

as sources of relativization of autopoiesis and encourage the relevant system

to construct simplified, selective models of these constraints and integrate

these models into its operations. Each system models these constraints

differently, reflecting their observed relevance to its own reproduction. Despite

such constraints, however, each system can maintain its operational


32/47

32

autonomy insofar as it has its own operating codes and has sufficient time to

implement them, faces competing demands so that it can choose which to

process, and has the general legitimacy or societal trust needed to operate

without having constantly to justify its specific activities on each occasion.

Without such conditions, a functional system can lose its operational

autonomy. This poses an interesting question, pursued below, about the

conditions under which other functional systems might lose some operational

autonomy to the economy (or, indeed, vice versa).

The second challenge is strategic. For, according to systems theory, modern

societies are so highly differentiated and polycentric that no single system,

central decision-making body, or ruling class could ever coordinate their

diverse interactions, organizations, and institutions and ensure their

harmonious cooperation toward a common end. Once systems reach

'autopoietic take-off', they only respond to problems defined in their own

terms. External demands stated in other codes and/or in terms of more

general noise from the everyday life-world will be dismissed as irrelevant or

else handled as an irritation to be avoided or overcome in whatever way the

perturbed system itself thinks fit. If we accept that modern societies are

characterized by functional differentiation, it is likely that there are competing

societalization principles, processes, and projects, associated with efforts to

extend the code and programme of one functional system at the expense of

others. For example, in addition to marketization, which, in one of its possible

meanings, extends the logic of profit-oriented, market-mediated economic

action to sets of social relations where it is absent, one could explore rival

principles linked to other functional systems such as juridification,

medicalization, militarization, sacralization, politicization, or scientization or,

indeed, with identities and values anchored in civil society (or the lifeworld

rather than system-world) such as ethnicity or race (apartheid), gender

(patriarchy), generation (gerontocracy), or nationality (nation-statehood).

To address these challenges, I want to build on a concept mentioned once in

Niklas Luhmanns systems theory but later implicitly (and incompletely) onseveral occasions and in different contexts in his later work. This is the


33/47

33

concept of ecological dominance. In general terms, in the context of the

synchronic and diachronic system interdependencies, this exists to the extent

that one system in a self-organising ecology of self-organising systems that

are formally equal and non-substitutable imprints its developmental logic on

other systems' operations more than any of the latter can impose their

respective logics on that system. In short, even if all functional systems are

equal, some may be more equal than others. It has more influence on the

development of other systems, positive or negative, than they have on it. The

concept can also be fruitfully applied, as the field of organizational ecology

indicates, to inter-organizational relations.

Ecological dominance is a contingent emergent relationship between two or

more systems rather than a naturally necessary property of a single system. It

is always differential, relational, and contingent. Thus, a given system can be

more or less ecologically dominant; its dominance may vary across systems

and in different spheres or aspects of the lifeworld; and/or with changing

circumstances; and the continuation of any dominance will depend on the

development of the entire social ecosystem as a whole.5This does not mean

that the ecologically dominant system is unaffected by the operation of other

systems or that specific social forces will not attempt to reverse, brake or

guide that dominance. Rather, as its name implies, ecological dominance

involves an ecological relation where one system becomes dominant in a

complex, co-evolving situation; it does not involve a one-sided relation of

dominationwhere one system unilaterally imposes its logic or will on others

(cf. Morin 1980: 44). This capacity is always mediated in and through the

operational logics of other systems and the communicative rationalities of the

lifeworld. There is no 'last instance' in relations of ecological dominancethey

are always differential, relational, and contingent. The relative ecologicaldominance of a system will differ across systems, depends on specific social

relations, and is always doubly tendential.

I now argue that the profit-oriented, market-mediated capitalist economy, with

its distinctive, self-valorizing logic, tends to have just those properties that

favour its ecological dominance over other types of social relations. Drawing


34/47

34

on a diverse literature, I present seven properties associated with ecological

dominance in Table 3. The following paragraphs indicate how they relate to

the logic of capital accumulation in an increasingly integrated world market.

First, regarding the first of the three factors internal to a given system or

institutional order that contribute to ecological dominance, the capitalist

economy gets increasingly disembedded from other systems, internal

competition to reduce socially necessary labour-time, socially necessary

turnover time,6and naturally necessary reproduction time becomes an ever

more powerful driving force in capital accumulation. Extra-economic

pressures on the economy are thereby translated into competition among

capitals to find new opportunities for profit in these pressures and/or to exit

from particular markets in order to preserve capital by investing elsewhere

(including in liquid assets). Different degrees of liquidity, flexibility, and

fungibility mean that capitals vary in their ability to respond to such pressures

and competition. Interest-bearing capital controls the most liquid, abstract,

and generalized resource and therefore has the most capacity to respond

opportunities for profit and external perturbations. Derivatives have developed

as the most generalized form of this capacity and, indeed, have an increasing

role in the commensuration of all investment opportunities in the world market,

serving thereby as a self-generating, self-referential expression of capital in

general on a world scale (cf. Bryan and Rafferty 2006, 2007).

Second, the capitalist economy is internally complex and flexible because of

the decentralized, anarchic nature of market forces and the dual role of price

formation as a flexible mechanism for allocating capital to different economicactivities and as a stimulus to second-order observation, learning and self-

reflection. A contributing factor to ecological dominance in the natural world is

a given species superior capacity to tolerate environmental disturbances

(Keddy 1989: 18-19). By analogy, this capacity is well-developed in the

capitalist economy because of its greater internal complexity (multiplicity and

heterogeneity of elements), the looser coupling among these elements, and

the high degree of reflexive capacity (self-monitoring) (Baraldi et al., 1998:151). Further, as capitalism develops, different organizations, institutions and


35/47

35

Table 3: Seven Factors Relevant to Ecological Dominance

in the relation among Functional Systems

Internal

Scope for continuous self-transformation because internalcompetitive pressures are more important than external

adaptive pressures in the dynamic of a given system

Extent of internal structural and operational complexity and

the resulting scope for spontaneous self-adaptation in the

face of perturbation or disruption (regardless of the external

or internal origin of adaptive pressures)

Capacity to engage in time-space distantiation and/or time-space compression) to exploit the widest possible range of

opportunities for self-reproduction

Trans-

versal

Capacity to displace internal contradictions and dilemmas

onto other systems, into the environment, or defer them into

the future

Capacity to redesign other systems and shape their

evolution via context-steering (especially throughorganizations that have a primary functional orientation and

also offer a meeting space for other functional systems)

and/or constitutional (re)design

External

Extent to which other actors accept its operations as central

to the wider systems reproduction and orient their actions toits reproduction needs (e.g., through their naturalizationwithin system programmes or decision premises as

naturalized constrains or imperatives). Organizations also

have a key role here through their capacity to respond to

irritations and expectations of several functional systems

Extent to which a given system is the biggest source of

external adaptive pressure on other systems (perhaps

through the implications of recurrent system failures,

worsening social exclusion, and positive feedback effects)

and/or is more important than their respective internal

pressures for system development.


36/47

36

apparatuses tend to emerge to express different moments of its

contradictions, dilemmas and paradoxes and these may then interact to

compensate for market failures in the context of specific spatio-temporal fixes.

Third, capital has developed strong capacities to extend its operations in time

and space (time-space distantiation) and/or compress them in these regards

(time-space compression). The mutual reinforcement of such distantiation and

compression facilitates real-time integration in the world market and makes it

easier to maintain its self-expansionary logic in the face of perturbations.

These capacities are related to the anarchic, formal, procedural rationality of

the market, its reliance on the symbolic medium of money to facilitate

economic transactions despite disjunctions in time and place, its highly

developed abstract and technical codes (with well-developed mechanisms of

capitalist accounting and monetary returns as its easily calculable formal

maximand), and the requisite variety of its internal operations. This increases

capitals resonance capacity to react to internal and external conditions

(Luhmann 1988a: 37-41). The greater this capacity relative to other systems,

the greater is the scope for capitals ecological dominance.

Fourth, through these and other mechanisms, capital develops its chances of

avoiding the emergent structural constraints of other systems and their efforts

at control, thereby increasing its indifference to the environment (cf.

Lohmann 1991; Luhmann 1988a, b). This holds especially for the only

economic subsystem that has become more or less fully integrated on a

global scale: international finance (Luhmann 1996). This does not mean that

finance (let alone the economy more generally) can escape its overall

dependence on the diverse contributions of other functional systems to its

operations or, of course, from crisis-tendencies rooted in its own

contradictions and dilemmas. Efforts to escape particular constraints and

attempts at control can nonetheless occur through its own internal operations in

time (discounting, insurance, risk management, futures, derivatives, hedge

funds, etc.) or space (capital flight, relocation, outsourcing abroad, claims to

extra-territoriality, etc.), through the subversion of the logic of other systems


37/47

37

owing to the colonization of organizations central to the latters operation by

the logic of exchange value, or through simple personal corruption.

Fifth, in contrast to natural evolution, where species must adapt to or exit from

their environment, social evolution may involve reflexive self-organization and

efforts to redesign the environment. This may extend to efforts to shape the

co-evolution of organizations, systems, and, eventually, world society and to

change the mode of social evolution (e.g., through extending market relations

into ever more spheres of social life). Where different organizations and

systems seek to adapt to and/or to change their environment, the logic of

evolutionary progress is toward ecosystems that sustain only the dominant,

environment-controlling species, and its symbionts and parasites (Bateson

1972: 451). This poses the question of the relative capacity of different

organizations and systems to change their environment rather than adapt to it

and the general limits of societal steering.

Sixth, the primacy of accumulation over other principles of societalization

(e.g., national security, racial supremacy, religious fundamentalism, social

solidarity) depends on the relative influence of the self-descriptions and social

values of functional systems, especially as these are articulated and

represented in the mass media and public sphere and in struggles for political,

intellectual, and moral leadership. The importance of such self-descriptions

and values may vary within generalized societal communication (everyday

language and the mass media) in relation to: (a) alternative logics of societal

organization; (b) secondary coding in each functional system such that

economic considerations are decisive in the choice among alternatives that fit

its primary function, e.g., choosing research topics, deciding what is

newsworthy, calculating quality of life years in the medical system; (c) the

decision premises of organizations; (d) the weight of different interests in

negative coordination among organizations with different functional primacies

(where such coordination aims to avoid mutual blockages in the application of

their respective codes), and (e) changing public opinion. The struggle for

hegemony will also be easier where social forces cross-cut functional systemsand seek to harmonize their operations through positive or negative


38/47

38

coordination. Parallel power networks are a key mechanism of system and

social integration in this regard (Poulantzas 1978; Baecker 2001, 2006). This

does not mean that a hegemonic vision represents the singular identity of

[world] society. Its task is not to represent an entire society but a particular set

of particular interests as the illusory interests of society (cf. Marx/Engels 1976;

Gramsci 1971).

Seventh, the ecologically dominant system is the most important source of

external adaptive pressure on other systems. In general, any increase in the

complexity of one functional system increases the complexity of the

environment of other systems and forces them to increase their own internal

complexity in order to maintain their capacity for autopoiesis (Baraldi et al.,

1998: 96). For the first four factors above, increasing internal complexity with

repercussions for other systems in an emerging world society is most likely to

characterize the world market. Indeed, for Wagner (2006), it is the system

with the highest tendency to fail with the most significant consequences for

other systems that will gain Primat or, in my terms, ecological dominance.

This is likely because the organizations vital for the realization of other

CorporatisCorporatism and Beyond? A Strategic-Relational Approach

Documents

Transcript of CorporatisCorporatism and Beyond? A Strategic-Relational Approach