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The Invisible Handcuffs of Capitalism

The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers

Michael Perelman
Copyright Date: 2011
Published by: NYU Press,
Pages: 280
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  • Book Info
    The Invisible Handcuffs of Capitalism
    Book Description:

    Mainstream, or more formally, neoclassical, economics claims to be a science. But as Michael Perelman makes clear in his latest book, nothing could be further from the truth. While a science must be rooted in material reality, mainstream economics ignores or distorts the most fundamental aspect of this reality: that the vast majority of people must, out of necessity, labor on behalf of others, transformed into nothing but a means to the end of maximum profits for their employers. The nature of the work we do and the conditions under which we do it profoundly shape our lives. And yet, both of these factors are peripheral to mainstream economics.By sweeping labor under the rug, mainstream economists hide the nature of capitalism, making it appear to be a system based upon equal exchange rather than exploitation inside every workplace. Perelman describes this illusion as the invisible handcuffs of capitalism and traces its roots back to Adam Smith and his contemporaries and their disdain for working people. He argues that far from being a basically fair system of exchanges regulated by the invisible hand of the market, capitalism handcuffs working men and women (and children too) through the very labor process itself. Neoclassical economics attempts to rationalize these handcuffs and tells workers that they are responsible for their own conditions. What we need to do instead, Perelman suggests, is eliminate the handcuffs through collective actions and build a society that we direct ourselves.

    eISBN: 978-1-58367-262-4
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-6)
  3. Acknowledgments
    (pp. 7-8)
  4. INTRODUCTION: Setting the Stage
    (pp. 9-20)

    The Invisible Handcuffstells a unique story about the damage that capitalism inflicts on society. Many authors have addressed the cultural, social, ecological, or ethical shortcomings of markets, such as the unequal distribution of income. Others have stressed the inherent instability of capitalism, which leads to recurrent economic crises.

    This book does something different. It takes aim at capitalism in terms of its own basic rationale—the creation of an efficient method of organizing production. In particular,The Invisible Handcuffsconcentrates on a largely ignored dimension of market inefficiency: how the failure by economists and employers alike to adequately take...

  5. CHAPTER ONE The Anti-Worker Theology of Markets
    (pp. 21-28)

    Academic economists present a great mystery. How can they muster so much brilliance and intelligence to deny any suggestion of market imperfections? These dogmatic defenders of markets warn that any measures to address economic deficiencies—other than the knee-jerk remedy of expanding market powers even further—are certain to disrupt economic efficiency. Others may acknowledge market problems, but they insist that the root cause must be people’s personal shortcomings. The proper response is to demand more from the people, not the system.

    This blind devotion to the market is a kind of religion. Like the adherents of many other religions,...

  6. CHAPTER TWO Disciplining Workers in the Procrustean Bed
    (pp. 29-54)

    The most compelling defense of the inverted priorities of Procrusteanism concerns jobs: any policy that dares to give people’s pressing needs priority over the rigid imperative of the market will surely result in a loss of jobs. In fact, the promise of job creation drives the rhetoric of almost all economic policies. Business demands tax breaks, relief from environmental protection, and a host of other special treatments, while the rich demand tax cuts for themselves, all in the name of creating jobs, even when the evidence for the job creation is weak or nonexistent.¹

    For all their talk about job...

  7. CHAPTER THREE How Economics Marginalized Workers
    (pp. 55-116)

    Economists defined their discipline as a science of choice, built upon an elaborate—albeit unrealistic—theory about how consumers determine what commodities to purchase. Factors such as the influence of other people or advertising are usually excluded from the economists’ theoretical analysis.

    Economists extended their science of choice to the workplace, where they grounded their theory on the assumption that the relationship between employer and employee was a voluntary arrangement. Each worker is assumed to decide whether the consumption that an hour of work makes possible is worth more than the sacrifice of an hour of leisure.

    Within this theory,...

  8. CHAPTER FOUR Everyday Life in a Procrustean World
    (pp. 117-136)

    All too many economists refuse to consider anything they cannot derive from the discipline’s utility-based micro-foundations as “scientific.” Economists, however, limit their concept of utility to the useful or pleasurable effects of consuming marketed goods, thereby excluding any consideration of the labor process or any non-market factors that affect the quality of life.

    The marginalization of work in economic theory is remarkable. Economists realize that in the real world the labor process is necessary for the production of the commodities that provide utility, but their theory holds that what workers do on the job is devoid of utility. Frank Knight,...

  9. CHAPTER FIVE International Procrusteanism
    (pp. 137-148)

    This short chapter shifts focus from conditions in the United States to address the scourge of Procrusteanism that is sweeping across the world. The rhetoric of international Procrusteanism, unlike its domestic version, pays little attention to the need to impose working-class discipline. Instead, international Procrusteanism focuses on the need to discipline governments so that they discipline the workforce.

    International Procrusteanism represents more than just the intensification of world trade. Often described as globalization or neoliberalism, it represents a new phase in capitalist governance. International Procrusteanism allows dominant nations to avoid the expenses and responsibilities of colonial administration, in effect, contracting...

  10. CHAPTER SIX Adam Smith’s Historical Vision
    (pp. 149-176)

    It is time now to explore the intellectual roots of Procrustean economics. This chapter will explore the little-known Procrustean side of Adam Smith. Associating Adam Smith with the authoritarianism of the Procrusteans might seem somewhat incongruous. People popularly identify Smith with the invisible hand, not the invisible handcuffs. This favorable interpretation is understandable.

    Virtually every contemporary school of economics finds something to admire in Smith. As Jacob Viner, a conservative University of Chicago professor, wrote, “Traces of every conceivable sort of doctrine are to be found in that most catholic book, and an economist must have peculiar theories indeed who...

  11. CHAPTER SEVEN The Dark Side of Adam Smith
    (pp. 177-200)

    Although Smith’s language was less antagonistic toward labor than many of his contemporaries, he was hardly a great friend of workers. For the most part, he merely suggested that once his idealized merchant-workers adopted middle-class values—what he called “a general probity of manners”—they would prosper.¹ In turn, this personal transformation would produce a stronger economy, along with better people.

    Yet what Smith saw occurring around him could not give him much confidence. The rise of market-based industrialization was a juggernaut degrading a large swath of humanity in crowded cities. Smith was not at all pleased when he looked...

  12. CHAPTER EIGHT Keeping Score
    (pp. 201-222)

    The concept of the Gross Domestic Product might seem unrelated to Procrusteanism. However, in imitation of Procrusteanism, it emphasizes commercial values while ignoring a plethora of human costs and benefits, including work, workers, and working conditions.

    An old adage suggests the relevance of this defect of the GDP: “What gets measured, gets managed.” In other words, so long as the public accepts the GDP as a reasonable measure of economic performance, Procrustean policies can flourish with little or no concern for those things missing from it, such as work, workers, and working conditions.

    The individualistic perspective of Adam Smith, as...

  13. CHAPTER NINE The Destructive Nature of Procrusteanism
    (pp. 223-270)

    One of Karl Marx’s deepest insights was to understand that capital is a social relation and not just a thing. People who are unfamiliar with Marx’s analysis may be perplexed by the idea that capital is a social relationship, that a factory is not merely a building populated with various machines but also a reflection of the relationship between those who own the factory and those who work in it. People who study the evolution of technology, however, understand how social relations shape technology.

    David Noble provided one of the most in-depth analyses of the interplay between technology and the...

  14. CHAPTER TEN Where Do We Go from Here?
    (pp. 271-314)

    Presently, two conflicting trends are colliding. On the one hand, those in control are successfully accumulating more power, solidifying the hold of Procrusteanism. On the other hand, the application of these new powers is producing dismal results, except for the most privileged sectors of society. Once people come to recognize the growing gap between economic performance and the potential productivity of society, the destructive nature of Procrusteanism will, hopefully, become self-evident.

    Even so, the ideology of the status quo is so thoroughly ingrained that little progress—or even little hope of progress—appears on the horizon. We can only hope...

  15. Notes
    (pp. 315-346)
  16. Index
    (pp. 347-360)