GOOD LIFE AND GOOD SOCIETY

Capitalism Has Failed — Can Democratic Socialism Save our World?


Paul Adler is a distinguished American organizational theorist and professor of management. Combining academic expertise with the passionate commitment to the well-being of all, Paul offers a compelling manifesto for the urgent renewal of capitalism. In our enlightening conversation, we dive deep into the crises and contradictions of neoliberalism and explore Paul's vision for a democratic socialist society, where property is socialized, stakeholders have a say in decision-making, and economic priorities align with the flourishing of the 99%. We unveal the role of "enabling bureaucracies" and discuss whether alternative organizational models, exemplified by Kaiser Permanente and other "high-road" firms and cooperatives, could enable a more equitable and collaborative future. Join us for a thrilling conversation, a beacon of hope that change is not only necessary but also achievable.

Paul Adler

Core Concepts: Democratic Socialism, Value Rationality, Real Utopia
Unique Propositions: Enabling Bureaucracy, Collaborative Community

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BEHIND THE INTERVIEW GETTING STARTED
THE SOCRATIC DIALOGUE DIVING DEEPER
CONTINUING YOUR JOURNEY
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BEHIND the interview

Why is the interview important? Who are we talking to?

DISCOVERING THE DIALOGUE WITH

Paul ADLER

We were drawn to Paul for several reasons. Firstly, it was highly intriguing that a former president of the American Management Association advocates for Democratic Socialism, challenging mainstream economic theories. Paul's Marxist view on business, business schools, and society provides a much-needed critique of the conventional view of business as a profit-maximizing entity isolated from society. Secondly, Paul bridges the gap between Democratic Socialism, sociological theory (e.g., Max Weber's value rationality), and practical management research (e.g., Kaiser Permanente's participative "strategizing" process). He stands out as one of the few scholars who have developed a credible alternative organizational ideal type, offering both analytical insights and a blueprint for transforming real businesses. Moreover, he leverages insights from organizational research to refine Democratic Socialism, potentially making it a more viable political system. Lastly, Paul's comprehensive exploration of bureaucracy is truly fascinating. He challenges oversimplified and inaccurate stereotypes and, instead of predicting the "death of bureaucracy," argues that it will not disappear anytime soon. This nuanced perspective adds depth to his vision for a transformed society.

KEY LEARNING GOALS (click LIGHTBULB to see the INQUIRY MAP)

  • What are the six crises of capitalism, and how can they be mitigated without resorting to democratic socialism, in your opinion?
  • How do communism, democratic socialism, property-owning democracy, and social democracy differ? What, in your opinion, are the biggest challenges of democratic socialism, and can they be overcome?
  • How is the economy and free markets conceptualised within democratic socialism? What are the challenges, both theoretically and empirically?
  • What is the concept of the "ideal type" of an organization, and what are the ideal types that Adler distinguishes? How does Adler argue that value rationality can be scaled, and can you provide examples of companies that resemble a collaborative community?

✿ ABOUT PAUL ADLER


Paul Adler is a Professor of Management and Organization, Sociology, and Environmental Studies at the University of Southern California. He holds the Harold Quinton Chair in Business Policy, and currently serves as the President of the USC Academic Senate. He began his education in Australia and moved to France in 1974, where he received his doctorate in Economics and Management while working as a Research Economist for the French government. He came to the USA in 1981, and before arriving at USC in 1991, he was affiliated with the Brookings Institution, Barnard College at Columbia University, Harvard Business School, and Stanford’s School of Engineering.

Paul has published widely in academic journals, and edited several books, including The Firm as a Collaborative Community: Reconstructing Trust in the Knowledge Economy (2006), The Oxford Handbook of Sociology and Organization Studies: Classical Foundations (2009), The Oxford Handbook of Sociology, Social Theory, and Organization Studies: Contemporary Currents (2014), and co-authored Healing Together: The Labor-Management Partnership at Kaiser Permanente (2009). His most recent book is The 99 Percent Economy: How Democratic Socialism Can Overcome the Crises of Capitalism (2019).

Paul has served as chair of the Technology and Innovation Management Division and of the Critical Management Studies Interest Group of the Academy of Management, and served as President of the Academy of Management in 2013–14. 


Exploring the Critical concepts for this session

Socialism [Stanford]

Socialism is a rich tradition of political thought and practice, the history of which contains a vast number of views and theories, often differing in many of their conceptual, empirical, and normative commitments. In his 1924 Dictionary of Socialism, Angelo Rappoport canvassed no fewer than forty definitions of socialism. Our aim is of necessity more modest. In what follows, we are concerned to present the main features of socialism, both as a critique of capitalism, and as a proposal for its replacement.

Democratic Socialism [Wikipedia]

Democratic socialism is defined as having a socialist economy in which the means of production are socially and collectively owned or controlled,[2] alongside a liberal democratic political system of government.

Value Rationality [Wikipedia]

"Instrumental" and "value rationality" are terms scholars use to identify two ways humans reason when coordinating group behaviour to maintain social life. Instrumental rationality recognizes means that "work" efficiently to achieve ends. Value rationality recognizes ends that are "right," legitimate in themselves.

Enabling Bureaucracy

Organisational research present two conflicting views of the human,or attitudinal,  outcomes of bureaucracy. According to the negative view, the bureaucratic form of organization stifles creativity, fosters dissatisfaction, and demotivates employees. According to the positive view, it provides needed guidance and clarifies responsibilties, thereby easing role stress and helping individuals be and feel more effective. This article develops a partial reconcilation of the two views by introducing the coercive vs. the enabling bureaucracy.

Collaborative Community

This paper traces the main lines of evolution of the organization of professional work. The argument is illustrated with
material on the case of doctors and hospitals. While market and hierarchy principles have become progressively more
salient in professional work, we argue that, in parallel, the community principle has been growing more influential, too.
We further argue that professional community is mutating from a Gemeinschaft, craft guild form, via Gesellschaft forms,
toward a new, collaborative form.

Real Utopia [Wikipedia]

Real utopian sociology is an emancipatory social science created and practiced by Erik Olin Wright, a utopian studies scholar. The apparent contradiction in its name is intentional: this sociology seeks to find existing utopian projects and evaluate their potential to replace systems of domination, particularly as an anti-capitalism strategy. Simply put, real utopian sociology is the study of feasible utopian models for society and pathways to achieve them.

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GETTING STARTED

A Resource Kit to launch your explorations

Paul's Publications

You can find most publications of Paul Adler here at University of Southern California Marshall School of Business Department of Management and Organization

Google Scholar Paul Adler

Further details on Google Scholar

Odyssey of a Socialist

This is an edited version of Pauls remarks at the 2020 Academy of Management on receiving the Organization and Management Theory Division's Distinguished Scholar award. "I review the main steps of my intellectual trajectory, aiming to show how it has been enriched both by my engagement with “classic” scholars in our field–most notably Marx, Gouldner, Weber, Schumpeter, and Polanyi—and by my commitment to socialist values. I offer my case, with its strengths and weaknesses, in the hope of inspiring reflection on the role in our scholarship of such classics and our personal values, whatever they may be."

Bureaucracy Is Dead, Long Live Bureaucracy

Bureaucracy for the 21st Century: Clarifying and Expanding Our View of Bureaucratic Organization. Reviewing organizational research on bureaucracy, we find three main perspectives: bureaucracy as an organizing principle, as a paradigmatic form of organization, and as one type of structure among others. We argue that these three perspectives should be expanded to overcome the de-contextualized, reified, and narrow ways bureaucracy is often viewed.

Emergence of Management Models

In the last century and a half, U.S. industry has seen the emergence of several different management models. We propose a theory of this evolution based on three nested and interacting processes. First, we identify several successive waves of technological revolution, each of which prompted a corresponding wave of change in the dominant organizational paradigm. Second, nested within these waves, each of these organizational paradigms emerged through two successive cycles—a primary cycle that generated a new management model making the prior organizational paradigm obsolete, and a secondary cycle that generated another model that mitigated the dysfunctions of the primary cycle’s model. Third, nested within each cycle is a problem-solving process in which each model’s development passed through four main phases: (1) identification of a widespread organizational and management problem, (2) creation of innovative managerial concepts that offer various solutions to this problem, (3) emergence and theorization of a new model from among these concepts, and (4) dissemination and diffusion of this model.

Collaboration as an Organization Design

“Shared purpose,” understood as a widely shared commitment to the organization’s fundamental raison d’être, can be a powerful driver of organizational performance by providing both motivation and direction for members’ joint problem-solving efforts. So far, however, we understand little about the organization design that can support shared purpose in the context of large, complex business enterprises. Building on the work of Selznick and Weber, we argue that such contexts require a new organizational form, one that we call collaborative. The collaborative organizational form is grounded in Weber’s value-rational type of social action, but overcomes the scale limitations of the collegial form of organization that is conventionally associated with value-rational action

Critical Management and Marxism

For many years, the core of critical management studies was labour process theory (LPT), building on Braverman's (1976) reading of Marx. Recently, LPT has been losing momentum in favour of post-structuralist approaches. This paper takes one step back with the hope of taking critical management studies two steps forward. Whereas post-structuralists have largely discarded the Marxist foundations of LPT, this paper argues that LPT has been hobbled by its insufficiently Marxist foundations.

Social Capital

A growing number of sociologists, political scientists, economists, and organizational theorists have invoked the concept of social capital in the search for answers to a broadening range of questions being confronted in their own fields. Seeking to clarify the concept and help assess its utility for organizational theory, we synthesize the theoretical research undertaken in these various disciplines and develop a common conceptual framework that identifies the sources, benefits, risks, and contingencies of social capital.

Trust and the Knowledge Economy

Recent conceptualizations of trends in the structure of U.S. industry have focused on the relative importance of markets, hierarchies, and hybrid intermediate forms. This paper advances the discussion by distinguishing three ideal-typical forms of organization and their corresponding coordination mechanisms: market/price, hierarchy/authority, and community/trust. Different institutions combine the three forms/mechanisms in different proportions. Economic and organizational theory have shown that, compared to trust, price and authority are relatively ineffective means of dealing with knowledge-based assets. Therefore, as knowledge becomes increasingly important in our economy, we should expect high-trust institutional forms to proliferate..

Materialism and Idealism

Organization theory needs a framework that can elucidate the technological, economic, political and symbolic forces that are at work in and on organizations. Much organizational research can be seen as materialist, by virtue of its granting primary causal efficacy to technical—economic forces, or idealist by virtue of privileging political—symbolic forces. The conflict between materialism and ideal ism has often been inflated and/or obscured by conceptual strategies of specializa tion, eclecticism and reductionism. A metatheoretical approach to materialism and idealism is presented that clarifies the fundamental nature of the approaches and distinguishes areas of possible reconciliation from areas of irreducible conflict.

Further essays and materials from other authors
Strategic planning

The long-running debate between the ‘rational design’ and ‘emergent process’ schools of strategy formation has involved caricatures of firms' strategic planning processes, but little empirical evidence of whether and how companies plan. Despite the presumption that environmental turbulence renders conventional strategic planning all but impossible, the evidence from the corporate sector suggests that reports of the demise of strategic planning are greatly exaggerated.

Sittlichkeit and Socialism

In this essay Michael Nance explores how Axel Honneth in "Freedom’s Right" offers a nuanced and historically rich discussion of the moral possibilities and limits of market society. Building on Hegel, Polanyi, and Durkheim, Honneth argues that market society is not inherently morally objectionable if economic markets are ‘embedded’ in a system of other social institutions that rein in the market’s pathologies and excesses. In fact, Honneth argues that economic markets can provide a site for recognitive interactions in which agents experience what, following Frederick Neuhouser, he calls social freedom.

Varieties of Capitalism

Varieties of Capitalism and institutional comparative advantage: A test and reinterpretation. How do national-level institutions relate to national comparative advantages? We seek to shed light on this question by exploring two different sets of hypotheses based on the Varieties of Capitalism and other branches of comparative capitalisms literature.

Scaling Up Alternatives to Capitalism

In these times of crises, capitalism and the far-reaching marketization of our societies has again become a subject of contestation and critique. Alternative organizing is one response to the critique of capitalism. As an embodied and constructive form of critique it takes place in prefigurative organizations and communities on the ground that experiment with alternative forms of organizing economic exchanges and lives. These prefigurative initiatives are seen as central actors in a social transformation toward an alternative economy. However, they oftentimes remain autonomous and disconnected, questioning their potential to contribute to a broader social change. This paper sets out to explore how and when alternative organizing as practiced in communities and organizations can scale upwards to lead to a more profound social transformation of our societies

Selected published works

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the socratic dialogue

Live video recording and podcasts

Explanations, artefacts and references from the interview

Changing systems

The '3.5% rule': How a small minority can change the world (BBC)

The 3.5% rule

Website and Ted Talk of Erica Chenoweth who found this 3.5% rule when studying nonviolent civil resistance

What have we learned? Our "Best Bit" takeaways from the Interview

KEY INSIGHTS FROM THE INTERVIEW FOR OUR INQUIRY

Here you can find the most memorable insights from our interview, related to our three inquiry questions. Simply select from the drop down menu on the right -->

1. WHAT IS GOOD?
On Marxist Ethics as Ethical Prior
  • One needs to start from some ethical prior. And there, I think the Marxist view is not a particularly unusual one. I think Marxism takes on board a fairly widely shared sense that a good society would be one characterized by equality, by mutual respect, by human dignity and by the Kantian categorical imperative. I would note that based on the Kantian imperative, capitalism is out of moral bounds. One of those three fundamental features of capitalism, we just talked about, the status of treating other people as a means to your own wealth accumulation, is by definition immoral. It’s treating others as you would never want them to treat you, as merely a means to your own gratification.
On Flourishing as a Result of Dynamic Historical Development
  • I think the other way of getting to Marxist ideas, is not to begin with some ideal version of where we’d like to go, but to observe the nature of conflicts we see around us in society, and to analyze them as objectively as we can and understand the inner dynamics. And that was perhaps the novelty of Marx’s take on the world, arguing that socialism wasn’t some ideal that we should be propagandizing and trying to convince people to buy into, but that socialism was the inner tendency of historical development itself. (…) When we are globally as interconnected as capitalism has made us, when we are no longer struggling to generate enough surplus to feed our entire population, when we have an abundance of technological resources the way we do; when we are no longer struggling just to put food into people’s mouths; when we have the kind of universal education that modern capitalist society affords us, then socialism becomes an almost inevitable tendency of development to fight the self-inflicted crises of capitalism.
Marxists Ambivalent View on Capitalism
  • Marx has a kind of interesting ambivalence towards capitalism. On the one hand, capitalism creates a context in which, as individuals, we are freed from the constraints that we experienced in feudal or slave society. We are free to work for whoever we want, to start up our own business if we can pull together the resources, we can buy what we want, we can consume what we get, we have an enormous amount of freedom that comes with the institutionalization of the market as the fundamental economic mechanism. (…) On the other hand, this form of individualism we see under a capitalist condition is a very truncated one. And arguably a kind of a duplicitous representation of reality. To say that we are free to work for whoever we want, is also the say: you are free to starve by choosing not to work for anybody. It is not the case that we are free to work for somebody else or for ourselves, because you only get to work for yourself, if you’ve got the capital resources that enable you to do that. So the freedoms we enjoy as individuals in a capitalist society have this strange, half real, half illusory quality. And it’s important, I think, to keep both aspects in mind that indeed, a true individualism would not negate its relations to the broader community. This is a very sick kind of individualism, in which the individual liberty comes at the expense of one’s organic connection to the wider community. But that’s the way capitalism sets it up.
Six Crises of Contemporary Capitalism
  • I have been particularly preoccupied by a series of crises and pain around us that seems more intractable and seems to reflect really basic features of capitalism. Therefore I call these crises systemic crises rather than crises amenable to solutions within the prevailing ideological, economic, political systems. So what are these systemic crises?
  • Firstly, economic, the level of irrationality in the way our economy works oday is hard to overstate. (…) 40% of Americans couldn’t cover an emergency expense of $400 without borrowing or selling some of their possessions. 20% of American adults in any given month are not able to pay the month bills in full. (…) On any given night, half a million Americans are homeless, or sleeping outside or in emergency shelters or in transitional housing programs, that at the same time, we have 17 million homes that are unoccupied. Right, as irrationality goes. It’s pretty serious. And then we have from a purely economic point of view, just an incredible amount of waste, wasteful consumption, mountains of E-waste, we accumulate around the planet proliferate, disposable unrepairable, me-too products.
  • Second, workplace disempowerment is a kind of a hidden crisis. Gallup runs a poll on workplace engagement. And it’s a pretty interesting survey. Looking across American firms over 50% of all employees are not engaged in their work, as opposed to moderately or very engaged.
  • Third, there is an enormous amount of social disintegration (and discrimination). There are ways in which the capitalist core of the economy continually reproduces discrimination against women and minorities. We create so much stress in the workplace juggling home and work responsibilities, we find enormous proportion of American adults reporting rather extreme levels of stress. I won’t go into the peculiarities of the American criminal justice system, and health inequities, but many of these social problems, find their source in the really fundamental features of a capitalist economy that puts so much burden on the individual to make their own way in life.
  • Fourth, international conflict at a time when we need so desperately international cooperation, in particular, to deal with the climate crisis, but also to deal with nuclear proliferation or to deal with contagious diseases. You know, what we see over and over again, is the rivalry of countries which is not just based on national pride and the egoism of national leaders but on competing business interests of the business classes of America versus China versus England versus the EU, etc.
  • Fifth, the lack of environmental sustainability. If I had to pick one of these crises, as most clearly grounded in the fundamental features of a capitalist economy, it surely would the unsustainability of our industrial infrastructure, accelerated climate change, the loss of biodiversity, the depletion of the nitrogen and phosphorus cycles, air pollution already causing 5-6 million premature deaths each year.
  • Finally, all this crises are met by an unresponsive government. Governments are very firm-driven, eg. patent and copyright regulations privilege corporations, the oil and other extractive industries gain tax preferences, and corporate and financial institutions fund lobbying efforts to fight for deregulation of the banking and securities sectors. At the same time the state has been reluctant to produce legislation and create policy that supports the rights of workers, the poor, and people of color.
Is ethical capitalism possible?
  • To be sure, firms have some room for philanthropy. To be sure firms can sometimes do well by doing good, no doubt, to be sure firms can do a lot better than what they many do in terms of their environmental and social responsibilities and thereby make even more money. Many firms can do that. My point is very simple. I don’t see how that space for win-win opportunities is getting us anywhere near enough to deal with problems like the global climate crisis. I will also make the same claim about cycles of unemployment. No one has shown me that capitalism is capable of sustaining itself for more than a couple of decades at a time without a major economic crisis that it generates and throws workers and their families out of work. That is a recurrent feature of every form of capitalism we have ever seen, including the Nordic. So I think the fundamental problem here is that if we rely exclusively on businesses doing what they want to do, while in reality these are broader systemic problems. It is simply unrealistic to expect firms to solve these problems voluntarily.
  • Can we imagine government stepping in? In the form of a welfare state to remedy those problems and set enterprises on a path where in order to maximize their profits they have to satisfy these other social or environmental needs that we have? (…) Even the most enlightened government in the world cannot afford to impose on the private sector regulations or taxes of the magnitude needed. This would cripple the private sector’s profitability and throw millions of people out of work. The government would lose its legitimacy, and the government would fall to. Can we solve these big problems without imposing on business crippling levels of regulation and taxation? I say the answer’s no. The clearest evidence for this argument is in the case of the environmental crisis. Everybody’s making happy talk about how we can impose a carbon tax and steer the industry towards as a zero emissions future. It’s too late to do that, fellas, the business community has successfully resisted the imposition of regulations and taxes. When this problem became obvious 40 years ago, they have successfully resisted every effort to impose even modest levels of emissions control. And now we’re faced with a dire emergency, where we would need to impose massive reductions of emissions very rapidly on an enormously complex economy.
On democratic socialism
  • When we talk about democratic socialism, let’s split the two parts, the socialism and democracy. The socialist part comes from the idea that we would be treating the country’s economic resources as common property, a social property, not as private property. And we would decide together somehow, how to use those resources to satisfy our goals. In the authoritarian version of socialism it’s some government elite, some party elite that decides what those goals are, and decides how to use the country’s resources to achieve them. In democratic socialism there is some democratic process for deciding on the country’s goals, on the goals of the industry, the region, the country as a whole and deploys those resources to achieve those goals in through social property rather than private property. In more detail:
  • The economy would be organized in three rings.(…) In ring number one are organizations that are simply part of the government apparatus, their extension of government. E.g. in the in the United States, most of our electricity generation is through investor-owned utilities. There’s no reason to have investor-owned utilities. Nationalize the damn things, turn them into government agencies. We will have a Ministry of Industry, which will run the electricity generation process for us. Ring number two, you might imagine another group of socialized enterprises where they don’t own their own equipment or land, they lease those from the government. Our representatives in government, through consultation with civil society in various forms, articulate some economic, environmental, social goals, through a process of collaborative planning. These goals are then put to these enterprises in the second ring. And these enterprises are then asked to make proposals for how they can contribute to our shared goals at the regional industry and national level. There will be a dialogue there. They are independent entities, albeit operating on leased equipment and land from the government and reliant on government financing. But there’s a dialogue there as to how the enterprise is going to satisfy the planning goals that we set for. And then the third ring would be the residue of private enterprise.
  • My idea was (…) based on the experience of the better managed big corporations and their strategic planning processes. Quite a few of them have developed mechanisms for involving middle managers and even frontline employees in the identification of new strategic opportunities, in the identification of strategic threats, in identifying the strengths and weaknesses to build on or remedy in order to achieve our goals. Based on these insights of collaborative planning we can have a dialogue in our cities, you know, enterprises, in our industries, and at the national level. And we can imagine a national dialogue about what our goals are, and then in a second round a national dialogue about what specific plans might enable us to reach those goals. And then the third dialogue about budgeting, about what resources everyone is going to get in order to pursue the three cycles of corporate planning that we see in big corporations. It’s a pretty robust process there. And it’s not that difficult to imagine that this could play out on the biggest scale of region and country.

2. HOW TO CRAFT GOOD ORGANISATIONS?
The good organisation in principle
  • In my view a good organization is not very different from anybody else’s view. It’s an organization in which people they’ve come together to produce something they care about producing and they organize themselves so that they are as effective as possible in the collaborative work they need to achieve the business’s goals. And they leave at the end of the day having the feeling that they’ve been treated with dignity and respect. Maybe that’s all I need to characterize a good organization. I would argue that, in a capitalist world, a for-profit enterprise encounters some pretty insurmountable obstacles to achieve that goal. And those obstacles are, fairly simply stated, because the purpose that might bring people together in a collaborative way, is only ever half the purpose of the organization, the other half is generating profit for its investors
From purpose…
  • I got drawn to the question of shared values when trying to understand how some of the organizations I studied came to perform so much better than others. (…) If people in the organization share some sense of collective purpose, lots of good things happen. In their local problem solving, when they encounter contingencies in their work, they can be guided to the extent that they have internalized those shared purposes of the organization. In this way they can make better choices without having to refer up the chain of command which would slow down problem solving, and probably reduce the quality of problem solving because of the problems are being solved further away from the place where they will be experienced.
…to rational shared values
  • So, if we are bound by the concept of the good life we can see that protecting privacy, for instance, would be an important domain for regulation.So how do they get that? Well, that’s complicated. But in the work I’ve done with Charles Heckscher, we tried to identify some general principles that seemed to explain the sorts of things firms were doing to sustain that sense of shared purpose. (…) We found ourselves going back to Max Weber’s typology of social action, and a corresponding typology of organization.
  • Interaction can be instrumentally rational. We can interact with other people because we have some goal in mind for ourselves, and we look to maximize what we can get from the other person to satisfy those. (from another text) Members’ relationships to the organization is itself merely instrumental to their own individual material ends. Social action in this type is organized either by bureaucracy or by internal markets. As employees are to take the organization’s purpose as given, and to behave in an instrumentally rational way, if they want to keep their job, they are to implement the corresponding procedures or incentives as efficiently as possible.
  • Human interaction can also be motivated by tradition, where we do the same things because out of habit or reverence for some sacred tradition.
  • It can be motivated by affectual commitments. Humans can interact with other people based on the feelings of anger or love or desire. The charismatic organization is an organization based on affect, on an emotional connection to an inspiring leader and inspiring vision. It’s an emotion driven organization.
  • And it can be value rational, where our interaction with others is based on our shared commitment to some higher value. This is the collegial organization in Weber’s terms. And we’re all familiar with collegiality as a norm for those of us who work in universities — even if we don’t often find our departments very collegial. But sometimes on a good day we know what it means to be in a collegial organization. We treat each other as peers. We make decisions by consensus. There is an element of mutual respect based on our respect to each other’s professional training. (…) But we eventually came around to decide that what we found was a distinctive form of organization that maybe didn’t even exist in Weber’s time. (…)
  • They’ve been trying to build an organization in which the shared norm of interaction is one of value rationality, and where we expect everybody to be contributing to our shared purpose, but we do it at scale. So what enables them to preserve value rationality at scale, when Weber taught us that when value rational, collegial organizations grow in size and complexity, they inevitably become bureaucratic? (…) We believe it is distinctive form of organization that in some ways is still emergent: for sustaining that shared purpose, at large scale, for developing the disciplines that enable them to ensure consistent behavior across such large organizations, but do it through standards and procedures that are not alienating, that are experienced as enabling and not coercive (…). And where we preserve that sort of creative individualism at the same time, as in people’s minds, they experience a commitment to the collective good.
3. HOW TO DEVELOP GOOD LEADERSHIP AND TRANSFORMATION?
  • I think the evidence supports the proposition that capitalism is a system of recurrent economic and financial crises. God knows, we can debate why, but the crises are empirical facts. And so there will be another one of those soon enough. And who knows how people respond in the face of a massive crisis, the political cards will be shaken up, as they are in every one of these major economic crises, for better and for worse. So that opens up new possibilities, good and bad. (…)
  • I think the path here is via building mass movements around the various fundamental challenges we face, bringing those social movements together in the United States context. That’s a huge challenge. I think it’s also increasingly a challenge in Europe, where the old social democratic parties have lost the hegemonic role on the left, and now we see a proliferation of parties of all different stripes. (…)
  • The one thing that I would point out is that if the conservative forces in the United States have had such great success, a lot of it is because they read Lenin and took it seriously. They understood that if you have a dedicated core of professional revolutionaries, you don’t need many people to transform a society. And they have a dedicated core of activists that work locally, in school councils, in city councils, in neighborhood committees, in their local churches. The conservative right, especially the more Christian fundamentalist activists, far right in American politics, have been incredibly effective Leninists in doing that deep work of convincing their fellow citizens of their point of view. They get into real conversations with the people at the local school board meeting, at the local church session on a Sunday morning. The left has not done that work. (…) So I think there’s a lot of work to be done by an organized, progressive movement that actually goes door to door, meeting to meeting, household to household and bar to bar. But you have to go where the people are.
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diving deeper

Unleash your curiosity and discover new insights

✿ Good Life and Good Society

Further explorations about socialism and alternatives to capitalism - both supportive and highly critical perspectives

How to be an Anti-capitalist for the 21st Century

Erik Olin Wright

The Great Transformation: The Political and Economic Origins of Our Time

by Karl Polanyi

Capital: Volume 1: A Critique of Political Economy

by Karl Marx

The Road to Serfdom

by F. A. Hayek

The Case for Socialism

by Alan Maass

The Socialist Tradition: From Crisis to Decline

by Carl Boggs

The Third Way: The Renewal of Social Democracy

by Anthony Giddens

Democracy at Work: A Cure for Capitalism

by Richard Wolff

The Crisis of Democratic Capitalism

by Martin Wolf

The Conquest of Bread

by Peter Kropotkin

The Socialist Temptation

by Iain Murray

The Socialist Manifesto: The Case for Radical Politics in an Era of Extreme Inequality

by Bhaskar Sunkara

Wege aus dem Kapitalismus?

by Smail Rapic (Editor)

How will Capitalism end?

by Wolfgang Streeck
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In our webcast series “Leaders for Humanity” we engage with distinguished thought leaders who are passionate about human-centric change, bridge theory and practice in their work, and are willing to provide guidance and personal wisdom to our #GoodOrganisations Inquiry. In “Socratic Dialogues” we examine three critical questions together: a) what is good? b) how can we craft good organisations? c) how can we as leaders or individuals contribute?

For the full transcript and additional resources: https://goodorganisations.com/leadersforhumanity
Webcast on YouTube: www.youtube.com/c/goodorganisations
Podcast on Spotify: https://open.spotify.com/show/3B5NN89pIDPgGDEPqNv0W7
Soundcloud: https://soundcloud.com/goodorganisations
Anchor: https://anchor.fm/good-organisations
Stitcher: https://www.stitcher.com/podcast/leaders-for-humanity

To note: We work on the basis of a semi-automatic transcript. Please forgive orthographic errors and inaccuracies. Sometimes the script might be missing context — it is best “consumed” as a complement to the full webcast.


What is good?

On Marxist Ethics as Ethical Prior

  • One needs to start from some ethical prior. And there, I think the Marxist view is not a particularly unusual one. I think Marxism takes on board a fairly widely shared sense that a good society would be one characterized by equality, by mutual respect, by human dignity and by the Kantian categorical imperative. I would note that based on the Kantian imperative, capitalism is out of moral bounds. One of those three fundamental features of capitalism, we just talked about, the status of treating other people as a means to your own wealth accumulation, is by definition immoral. It’s treating others as you would never want them to treat you, as merely a means to your own gratification.

On Flourishing as a Result of Dynamic Historical Development

  • I think the other way of getting to Marxist ideas, is not to begin with some ideal version of where we’d like to go, but to observe the nature of conflicts we see around us in society, and to analyze them as objectively as we can and understand the inner dynamics. And that was perhaps the novelty of Marx’s take on the world, arguing that socialism wasn’t some ideal that we should be propagandizing and trying to convince people to buy into, but that socialism was the inner tendency of historical development itself. (…) When we are globally as interconnected as capitalism has made us, when we are no longer struggling to generate enough surplus to feed our entire population, when we have an abundance of technological resources the way we do; when we are no longer struggling just to put food into people’s mouths; when we have the kind of universal education that modern capitalist society affords us, then socialism becomes an almost inevitable tendency of development to fight the self-inflicted crises of capitalism.

Marxists Ambivalent View on Capitalism

  • Marx has a kind of interesting ambivalence towards capitalism. On the one hand, capitalism creates a context in which, as individuals, we are freed from the constraints that we experienced in feudal or slave society. We are free to work for whoever we want, to start up our own business if we can pull together the resources, we can buy what we want, we can consume what we get, we have an enormous amount of freedom that comes with the institutionalization of the market as the fundamental economic mechanism. (…) On the other hand, this form of individualism we see under a capitalist condition is a very truncated one. And arguably a kind of a duplicitous representation of reality. To say that we are free to work for whoever we want, is also the say: you are free to starve by choosing not to work for anybody. It is not the case that we are free to work for somebody else or for ourselves, because you only get to work for yourself, if you’ve got the capital resources that enable you to do that. So the freedoms we enjoy as individuals in a capitalist society have this strange, half real, half illusory quality. And it’s important, I think, to keep both aspects in mind that indeed, a true individualism would not negate its relations to the broader community. This is a very sick kind of individualism, in which the individual liberty comes at the expense of one’s organic connection to the wider community. But that’s the way capitalism sets it up.

Six Crises of Contemporary Capitalism

  • I have been particularly preoccupied by a series of crises and pain around us that seems more intractable and seems to reflect really basic features of capitalism. Therefore I call these crises systemic crises rather than crises amenable to solutions within the prevailing ideological, economic, political systems. So what are these systemic crises?
  • Firstly, economic, the level of irrationality in the way our economy works oday is hard to overstate. (…) 40% of Americans couldn’t cover an emergency expense of $400 without borrowing or selling some of their possessions. 20% of American adults in any given month are not able to pay the month bills in full. (…) On any given night, half a million Americans are homeless, or sleeping outside or in emergency shelters or in transitional housing programs, that at the same time, we have 17 million homes that are unoccupied. Right, as irrationality goes. It’s pretty serious. And then we have from a purely economic point of view, just an incredible amount of waste, wasteful consumption, mountains of E-waste, we accumulate around the planet proliferate, disposable unrepairable, me-too products.
  • Second, workplace disempowerment is a kind of a hidden crisis. Gallup runs a poll on workplace engagement. And it’s a pretty interesting survey. Looking across American firms over 50% of all employees are not engaged in their work, as opposed to moderately or very engaged.
  • Third, there is an enormous amount of social disintegration (and discrimination). There are ways in which the capitalist core of the economy continually reproduces discrimination against women and minorities. We create so much stress in the workplace juggling home and work responsibilities, we find enormous proportion of American adults reporting rather extreme levels of stress. I won’t go into the peculiarities of the American criminal justice system, and health inequities, but many of these social problems, find their source in the really fundamental features of a capitalist economy that puts so much burden on the individual to make their own way in life.
  • Fourth, international conflict at a time when we need so desperately international cooperation, in particular, to deal with the climate crisis, but also to deal with nuclear proliferation or to deal with contagious diseases. You know, what we see over and over again, is the rivalry of countries which is not just based on national pride and the egoism of national leaders but on competing business interests of the business classes of America versus China versus England versus the EU, etc.
  • Fifth, the lack of environmental sustainability. If I had to pick one of these crises, as most clearly grounded in the fundamental features of a capitalist economy, it surely would the unsustainability of our industrial infrastructure, accelerated climate change, the loss of biodiversity, the depletion of the nitrogen and phosphorus cycles, air pollution already causing 5-6 million premature deaths each year.
  • Finally, all this crises are met by an unresponsive government. Governments are very firm-driven, eg. patent and copyright regulations privilege corporations, the oil and other extractive industries gain tax preferences, and corporate and financial institutions fund lobbying efforts to fight for deregulation of the banking and securities sectors. At the same time the state has been reluctant to produce legislation and create policy that supports the rights of workers, the poor, and people of color.


Is ethical capitalism possible?

  • To be sure, firms have some room for philanthropy. To be sure firms can sometimes do well by doing good, no doubt, to be sure firms can do a lot better than what they many do in terms of their environmental and social responsibilities and thereby make even more money. Many firms can do that. My point is very simple. I don’t see how that space for win-win opportunities is getting us anywhere near enough to deal with problems like the global climate crisis. I will also make the same claim about cycles of unemployment. No one has shown me that capitalism is capable of sustaining itself for more than a couple of decades at a time without a major economic crisis that it generates and throws workers and their families out of work. That is a recurrent feature of every form of capitalism we have ever seen, including the Nordic. So I think the fundamental problem here is that if we rely exclusively on businesses doing what they want to do, while in reality these are broader systemic problems. It is simply unrealistic to expect firms to solve these problems voluntarily.
  • Can we imagine government stepping in? In the form of a welfare state to remedy those problems and set enterprises on a path where in order to maximize their profits they have to satisfy these other social or environmental needs that we have? (…) Even the most enlightened government in the world cannot afford to impose on the private sector regulations or taxes of the magnitude needed. This would cripple the private sector’s profitability and throw millions of people out of work. The government would lose its legitimacy, and the government would fall to. Can we solve these big problems without imposing on business crippling levels of regulation and taxation? I say the answer’s no. The clearest evidence for this argument is in the case of the environmental crisis. Everybody’s making happy talk about how we can impose a carbon tax and steer the industry towards as a zero emissions future. It’s too late to do that, fellas, the business community has successfully resisted the imposition of regulations and taxes. When this problem became obvious 40 years ago, they have successfully resisted every effort to impose even modest levels of emissions control. And now we’re faced with a dire emergency, where we would need to impose massive reductions of emissions very rapidly on an enormously complex economy.


On democratic socialism

  • When we talk about democratic socialism, let’s split the two parts, the socialism and democracy. The socialist part comes from the idea that we would be treating the country’s economic resources as common property, a social property, not as private property. And we would decide together somehow, how to use those resources to satisfy our goals. In the authoritarian version of socialism it’s some government elite, some party elite that decides what those goals are, and decides how to use the country’s resources to achieve them. In democratic socialism there is some democratic process for deciding on the country’s goals, on the goals of the industry, the region, the country as a whole and deploys those resources to achieve those goals in through social property rather than private property. In more detail:
  • The economy would be organized in three rings.(…) In ring number one are organizations that are simply part of the government apparatus, their extension of government. E.g. in the in the United States, most of our electricity generation is through investor-owned utilities. There’s no reason to have investor-owned utilities. Nationalize the damn things, turn them into government agencies. We will have a Ministry of Industry, which will run the electricity generation process for us. Ring number two, you might imagine another group of socialized enterprises where they don’t own their own equipment or land, they lease those from the government. Our representatives in government, through consultation with civil society in various forms, articulate some economic, environmental, social goals, through a process of collaborative planning. These goals are then put to these enterprises in the second ring. And these enterprises are then asked to make proposals for how they can contribute to our shared goals at the regional industry and national level. There will be a dialogue there. They are independent entities, albeit operating on leased equipment and land from the government and reliant on government financing. But there’s a dialogue there as to how the enterprise is going to satisfy the planning goals that we set for. And then the third ring would be the residue of private enterprise.
  • My idea was (…) based on the experience of the better managed big corporations and their strategic planning processes. Quite a few of them have developed mechanisms for involving middle managers and even frontline employees in the identification of new strategic opportunities, in the identification of strategic threats, in identifying the strengths and weaknesses to build on or remedy in order to achieve our goals. Based on these insights of collaborative planning we can have a dialogue in our cities, you know, enterprises, in our industries, and at the national level. And we can imagine a national dialogue about what our goals are, and then in a second round a national dialogue about what specific plans might enable us to reach those goals. And then the third dialogue about budgeting, about what resources everyone is going to get in order to pursue the three cycles of corporate planning that we see in big corporations. It’s a pretty robust process there. And it’s not that difficult to imagine that this could play out on the biggest scale of region and country.


The good organisation

The good organisation in principle

  • In my view a good organization is not very different from anybody else’s view. It’s an organization in which people they’ve come together to produce something they care about producing and they organize themselves so that they are as effective as possible in the collaborative work they need to achieve the business’s goals. And they leave at the end of the day having the feeling that they’ve been treated with dignity and respect. Maybe that’s all I need to characterize a good organization. I would argue that, in a capitalist world, a for-profit enterprise encounters some pretty insurmountable obstacles to achieve that goal. And those obstacles are, fairly simply stated, because the purpose that might bring people together in a collaborative way, is only ever half the purpose of the organization, the other half is generating profit for its investors


From purpose…

  • I got drawn to the question of shared values when trying to understand how some of the organizations I studied came to perform so much better than others. (…) If people in the organization share some sense of collective purpose, lots of good things happen. In their local problem solving, when they encounter contingencies in their work, they can be guided to the extent that they have internalized those shared purposes of the organization. In this way they can make better choices without having to refer up the chain of command which would slow down problem solving, and probably reduce the quality of problem solving because of the problems are being solved further away from the place where they will be experienced.


…to rational shared values

  • So how do they get that? Well, that’s complicated. But in the work I’ve done with Charles Heckscher, we tried to identify some general principles that seemed to explain the sorts of things firms were doing to sustain that sense of shared purpose. (…) We found ourselves going back to Max Weber’s typology of social action, and a corresponding typology of organization.
  • Interaction can be instrumentally rational. We can interact with other people because we have some goal in mind for ourselves, and we look to maximize what we can get from the other person to satisfy those. (from another text) Members’ relationships to the organization is itself merely instrumental to their own individual material ends. Social action in this type is organized either by bureaucracy or by internal markets. As employees are to take the organization’s purpose as given, and to behave in an instrumentally rational way, if they want to keep their job, they are to implement the corresponding procedures or incentives as efficiently as possible.
  • Human interaction can also be motivated by tradition, where we do the same things because out of habit or reverence for some sacred tradition.
  • It can be motivated by affectual commitments. Humans can interact with other people based on the feelings of anger or love or desire. The charismatic organization is an organization based on affect, on an emotional connection to an inspiring leader and inspiring vision. It’s an emotion driven organization.
  • And it can be value rational, where our interaction with others is based on our shared commitment to some higher value. This is the collegial organization in Weber’s terms. And we’re all familiar with collegiality as a norm for those of us who work in universities — even if we don’t often find our departments very collegial. But sometimes on a good day we know what it means to be in a collegial organization. We treat each other as peers. We make decisions by consensus. There is an element of mutual respect based on our respect to each other’s professional training. (…) But we eventually came around to decide that what we found was a distinctive form of organization that maybe didn’t even exist in Weber’s time. (…)
  • They’ve been trying to build an organization in which the shared norm of interaction is one of value rationality, and where we expect everybody to be contributing to our shared purpose, but we do it at scale. So what enables them to preserve value rationality at scale, when Weber taught us that when value rational, collegial organizations grow in size and complexity, they inevitably become bureaucratic? (…) We believe it is distinctive form of organization that in some ways is still emergent: for sustaining that shared purpose, at large scale, for developing the disciplines that enable them to ensure consistent behavior across such large organizations, but do it through standards and procedures that are not alienating, that are experienced as enabling and not coercive (…). And where we preserve that sort of creative individualism at the same time, as in people’s minds, they experience a commitment to the collective good.


The Transformation

  • I think the evidence supports the proposition that capitalism is a system of recurrent economic and financial crises. God knows, we can debate why, but the crises are empirical facts. And so there will be another one of those soon enough. And who knows how people respond in the face of a massive crisis, the political cards will be shaken up, as they are in every one of these major economic crises, for better and for worse. So that opens up new possibilities, good and bad. (…)
  • I think the path here is via building mass movements around the various fundamental challenges we face, bringing those social movements together in the United States context. That’s a huge challenge. I think it’s also increasingly a challenge in Europe, where the old social democratic parties have lost the hegemonic role on the left, and now we see a proliferation of parties of all different stripes. (…)
  • The one thing that I would point out is that if the conservative forces in the United States have had such great success, a lot of it is because they read Lenin and took it seriously. They understood that if you have a dedicated core of professional revolutionaries, you don’t need many people to transform a society. And they have a dedicated core of activists that work locally, in school councils, in city councils, in neighborhood committees, in their local churches. The conservative right, especially the more Christian fundamentalist activists, far right in American politics, have been incredibly effective Leninists in doing that deep work of convincing their fellow citizens of their point of view. They get into real conversations with the people at the local school board meeting, at the local church session on a Sunday morning. The left has not done that work. (…) So I think there’s a lot of work to be done by an organized, progressive movement that actually goes door to door, meeting to meeting, household to household and bar to bar. But you have to go where the people are.


For our full Leaders for Humanity interview with Paul Adler see: https://www.youtube.com/watch?v=nmxaUTNnjVs&list=PLAPiHnsKsNHvIX9ScwluwGVsMH8DI5z-1&index=18

Transcript, Materials and Notes: https://goodorganisations.com/LeadersForHumanity_S1/#PAULADLER

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