Ordering Principles of Social Organizations
Discussion
James Martin:
"Certain rules of organization are common. This organization is conceived as a system of linkages-- common subparts-- through which some particular controlling order prevails. It is also mentioned that in all organizations there exists a serial relation. By 'serial' is meant a controlling relation that is "assymetrical, transitive and connexive". This relation has been described by Kornai, in terms of superordination and subordination between and within the control and real spheres of an economy.
The ordering principles of social organizations throughout history have emphasized varying degrees of vertical and horizontal control. It should be added that in no organization is there a complete absense of either dimensional linkage pattern, but linkages have differed in relative formality and attachment - meaning authority over components. We shall describe the organizations stressing the vertical linkage patterns with respect to 'dominance-dependence', and those stressing the horizontal linkage with respect to 'network' or 'community'.
DOMINANCE-DEPENDENCE
The social order characteristic of our modern society has been attributed to the diffusion of 'rationality'. The autocephalous unit, as conceived by Weber, orients himself to his situation in terms of rational self-interest. Rationality, on the one hand, obliterates the reliance on custom and tradition and, on the other, places reliance on values which assume relative position through individual competition and compromise. The rational age also introduced concepts of society and individual. It was at this time that the philosophers of Europe began to question the monarchy, not certain of its replacement. The age started as a certain liberation-- as all social transitions seem-- but it stabilized within a new order of relations. It presupposed rational money accounting-- meaning effective prices determined by a competitive market. Production was determined by demand to the extent that it was 'effective' in the market. This means that it does not respond to actual social wants "unless their possessors are in a position to make them effective by sufficient purchasing power in the market" (Weber, 1947; 195)
Engels stressed the role of the modern state of producing order from the irreconcilable class conflicts, and this by essentially oppressing the ruled classes. And, with qualifications, this may be the case-- in the modern state which rationalizes its existence on the principles of Engels himself: the centrally planned socialist state. But society may be equally heteronomously determined within a laissez-faire state-- as Weber points out-- in a formally voluntary way. This is the case where unequal distribution of wealth, and especially capital goods, "forces the low-income group to comply with the authority of others in order to obtain any return at all for the utilities they can offer on the market" (Ibid; 213) This, says Weber, is the fate of the entire working class. In the 'formal rationality' that Weber gives to us, this is the most economic thing to do:
The expropriation of workers in general from possession of the means of production depends on the following principal economic factors: (a) The fact that, other things being equal, it is generally possible to achieve a higher level of technical efficiency if the management has extensive control over the selection and the modes of use of workers, as compared with the situation created by the appropriation of jobs or the existence of rights to participate in management. These latter conditions produce technically, as well as economically, irrational obstacles to efficiency. ...; (b) in a market economy a management which is not hampered by any established rights of the workers, and which enjoys unrestricted control over the goods and equipment which underlie its borrowings, is in a superior credit position. (c) from a historical point of view, the expropriation of labour has developed since the sixteenth century in an economy characterized by a progressive development of the market system, both extensively and intensively, by the sheer technical superiority and actual indispensability of a type of autocratic management oriented to the particular market situations, and by the structure of power relationships in the society. ... (Weber, 1947; 246, 247)
Weber gives as his final justification that "free labour and the complete appropriation of the means of production create the most favourable conditions for discipline" (Ibid; 248). But 'formal rationality' is only one of a duality that he defines. 'Substantive rationality'-- the ultimate values which legitimize the economic-- has often disagreed.
Weber then goes on to state the stages of this rationality - meaning toward capitalism:
There are the following stages in the development toward capitalism: (a) Effectual monopolization of money capital by entrepreneurs who have used it as a means to make advances to labour. ... ; (b) apropriation of the right of marketing products on the basis of previous monopolization of knowledge of the market and hence of market opportunities and monopolization of money capital. ...; (c) the subjective disciplining of workers who stood in a dependent relationship in the puting-out system, and the supply of raw materials and apparatus by the entreprenuer. ... ; (d) the development of work shops without a rational specialization of labour in the proces of production, by means of the appropriation by the entrepreneur of all the non-human means of production. ...; (e) the final step in the transition to capitalistic organization of production is the mechanization of the productive process and of transportation and its orientation to capital accounting. All the non-human means of production become fixed or working capital; all the workers become 'hands'. As a result of the transformation of enterprises into associations of security owners, even the management itself becomes expropriated and assumes the formal status of an official. Even the owner becomes effectively an agent for, or unofficial representative of, the suppliers of credit, the banks. (Weber, 1947; 258, 259)
The organizational manifestation of this rationality is the bureaucracy-- a dendritic pattern of vertical control. This is the process of centralization which, according to Weber, is "the most rational known means of carrying out imperative control over human beings" (Ibid; 337). The spatial manifestation is the industrial-complex -- the process of concentration which owes itself to the formalistic conceptions of scale and agglomeration. It is the spatial manifestation that shall occupy our minds presently. We will consider the organization in turn.
THE DIFFUSION THEORY OF DEVELOPMENT
The traditional theory of development equated development with modernization, with developed- or modern-state refering to the accumulation of capital in concentrated productive stock structured toward the industrial process and exchange economy. The benefits of such concentration are to 'trickle-down' and influence the entire social system. The traditional systems would lose their power as the modernizing processes assmilated more and more of the resident populations: differentiating social activities, specializing economic functions, and offering contractual dominate - subordinate relations. The term 'diffusion', also 'from-above' has been applied to this dissemination of development. It was based on twin assumptions of the system's benevolence and stability. It was considered to be both orderly and evolutionary.
There were many terms used in describing the processes expected, most having synonomous implications. Hirschman (1958) suggested that key sectors be chosen for investment which had the most value on the basis of 'backward- and 'forward-linkages' within the input-output model. This form of concentrated investment would allow the greatest return for public capital and managerial skills. Private capital was then invited to balance the input-output matrix, seizing on external economies and market demand. Furthering the concept of concentrated investment, the growth-pole concept-- which envisioned a 'spatial diffusion' of economic growth-- was introduced. There would be a 'filtering' of innovations down the urban hierarchy, as well as a 'spreading' of economic benefits from urban center to hinterland areas (Berry, 1972).
The economic cores are central to a 'nested hierarchy of spatial systems' (Hansen, 1981). Through communication and transportation, political administration and market monopolization, the dominance of the center over the periphery was cumulative. Within the formal rationality, it appeared the only way of articulating the development process and integrating the periphery into the market economy. Outside this formal rationality, we might expect some dissension which came from the sociological perspective.
DEPENDENCY THEORY OF DEVELOPMENT
The other side of the top-down-diffusionist model is the dependency model in which development is seen as an essentially disruptive process which destroys traditional social organizations and assimilates the disorganized populations on unequal terms. Peripheral areas are seen as subordinated to the foreign metropolis, production becomes directed soley to an exchange market established in core areas with little or no regard for local self-interests or direction.
The diffusion of development envisioned for the peripheral areas provided both 'linkages' and 'leakages' to the external markets. Linkages refered to the downward transmission of consumer goods and services, not facilities for production. Production in the industrial mode requires a degree of scale both in managerial and capital factors. It also requires certain agglomerative economies for suppliers and markets. Leakages refered to reduced multiplier effects of decentralized investment whereby most of the full effect was displaced back to the center markets.
The national economy as measured in the formalistic economic methods refers to those sectors that are assimilated into the world exchange medium. In the poor agrarian societies this is an 'enclave' economy at best. With the expansion of the exchange market was the disruption of the traditional economy of rural industry and crafts and the dislocation of its productive elements. These elements were basically left to join the structurally underemployed in the metropolis. Taking the dependency theory to its conclusion, regional development should secure a dual process of selective closure to the exchange market coupled with the development of a use-valued economy which satisfies territorial objectives with its own resources. Most territorial objectives concern the provision of basic needs-- e.g., nutrition, health care, education, shelter, etc. The resultant linkages and leakages then consist of activity impulses from below which feed into the market economy and may influence also the price-signals - hence, development - of the greater economy.
Development would need to be considered again as an integral process of widening opportunities for individuals, social groups, and territorially organized communities at small and intermediate scale, and mobilizing the full range of their capabilities and resources for the common benefit in social, economic, and political terms. This means a clear departure from the primarily economic concept of development held in the 1950s and 1960s with its ensuing presssure on individuals, social groups, and territorially organized communities to develop only a narrow segment of their own capabilities and resources as determined 'from above' by the world system .... (Stohr in Stohr and Taylor, 1981; 39, 40)
When we begin to discuss use-valued organizations and territorial mobilization, the economic literature becomes clumsy. Here the research becomes eclectic, borrowing from the other social sciences of anthropology and sociology. It is here, also, that we must take leave from the 'dominance-dependency' dualism, and enter the realm of horizontal organizations.
As stated previously, we assume that all organizations are structured vertically. Compatriots of the 'bureau'-- economists, academicians, technicians-- have stressed the vertical attachments, and perhaps neglected the horizontal perspective. The development that ensues from the bureau's directive is an extension of its rationality into its environment. The logic of planning, the compartmentalized operations and the evaluative criteria are gradually regarded as inherent to the system so studied.
The bureau may also express the horizontal self-organizing impulses, but only to the extent that the dependency theorists have exaggerated its disruptive effects. Some of these impulses are strictly stimuli-responsive. Some are not so strict, reflecting more a self- defining process. In the former case, the vertical linkages would serve as input channels to the internal process, in the latter case, they would serve as output channels."