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What is the real state of the union?

By Patrick Hunout and Brent Shea - posted Monday, 22 September 2003


In his "State of the Union" speech, January 28, 2003, US president George W. Bush called for both :

  • "an economy that grows" and creates more jobs - through lower taxes on dividends and greater investment – and;
  • more solidarity between Americans: "doing the work of compassion … one heart and one soul at a time".

Considering recent developments in our societies, one can doubtwhether it is possible to carry these two objectives forward together,for two reasons.

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The first is that economic growth in American capitalism is slow, especially in new job creation.

In the last two decades of the last century, neo-liberal governments ofAnglo-Saxon countries tried to deal with the problem of unemployment,but the final structure of employment in these countries wasdramatically different from before.

Unskilled, precarious, and low-wage service jobs had replaced the skilled jobs of the Fordist era of industrial production. The US economy seems to accelerate in its growth, but this growth is mainly financial: profits increase, but proportionate job creation does not follow.

The central fact is that this pattern, which may have been emphasized by short-term developments, underpins all economic development of recent decades.Substituting capital for labor seems to be one of the most prominentfeatures of corporate policies of the past 20 years.

American capitalism is a short-term, stock-exchange funded, profit-oriented type of capitalism, among others possible. In this type of capitalism, employment suffers more. Not only does this capitalism emphasize external flexibility and workforce mobility, favoring short-term contract relationships and individual career paths, it also considers the workforce as nothing more than an "adjustment variable" likely to undergo variations in perimeter or volume according to the needs, real or unreal, perceived by management.

This type of capitalism, clearly, is hostile to the spirit of community that has underpinned other models of capitalist economic development. It is articulated with liberal and neo-liberal ideologies, characterized by individualism and social class egoism, and it favors an abstract, mathematical view of economics seen as an intellectual domain apart from other social sciences.

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In reality, this economic policy has created a new working class, living off poor jobs or social welfare, with no prospects for the future. Immigrants have been used to reconstruct this new working class, economically poor, educationally impoverished, and politically passive - although it powerfully spreads its values over broad factions of society, notably youth who do not necessarily belong to the underclass. A new language, music, and fashion carries values of abandonment to short-term pleasure, limitation of personal or collective ambitions, and laissez-faire attitudes in all areas - a kind of "underclassization" of society.

In the final analysis, this economic policy is also - and probably foremost - a social policy.

It did not involve only the US and Britain. It appeared later in Continental Europe and elsewhere. Social-democrat and socialist parties helped its implementation. What had been called "Capitalism from Rhineland", a type of capitalism inspired by community spirit, that involved more social welfare and corporate staff stability and had proved its efficiency in Germany and Scandinavia (as well as in Japan), is disappearing under the impact of the "new" American model spread through globalization. Thus, in the last decade, among other similar evolutions, German management has become more hierarchical and individualistic, following the American influence.

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Article edited by Margaret-Ann Williams.
If you'd like to be a volunteer editor too, click here.



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About the Authors

Patrick Hunout is the President and Founder of The International Scope Review and The Social Capital Foundation.

Brent Shea is a TISR Editorial Executive Board Member and Professor of Sociology at Sweet Briar College, Virginia, USA.

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