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Social Identity and Class Consciousness



The current economic crisis proves how deep the contradictions inherent in contemporary capitalism really are. At the same time it is evident that the financial crisis goes hand in hand with a social crisis, since an increasing number of people lost trust in governments, trade unions and other representative institutions. A main reason why the European Left nevertheless faces severe challenges in attracting supporters seems to be an experienced loss of what has been called ‘working class identity’ in earlier times. This development has been fuelled by the continuing debate on “identity constructions” as proposed e.g. by post-modernist scholars referring to “fluid” and ambiguous concepts of identity and strictly denying any social categorization. So there is a gap between the loss of working class identity on one hand and the focus on merely social identities on the other hand. To bridge this gap the two trajectories have to be linked. Thus, it is proposed to reflect the whole discussion on “working class identity” in the light of exploitation referring to classical political economy, but additionally to integrate social identity constructions by reviving the concept of alienation.
Munich Personal RePEc Archive
Social Identity and Class Consciousness
Hardy Hanappi and Edeltraud Hanappi-Egger
December 2014
Online at
MPRA Paper No. 60491, posted 10. December 2014 18:11 UTC
Social Identity and Class Consciousness
Hardy Hanappi
TU Vienna, Institute for Mathematical Methods in Economics
Edeltraud Hanappi-Egger
WU Vienna, Department Management, Gender and Diversity Management Group
The current economic crisis proves how deep the contradictions inherent in contemporary
capitalism really are. At the same time it is evident that the financial crisis goes hand in hand with
a social crisis, since an increasing number of people lost trust in governments, trade unions and
other representative institutions.
A main reason why the European Left nevertheless faces severe challenges in attracting
supporters seems to be an experienced loss of what has been called ‘working class identity’ in
earlier times. This development has been fuelled by the continuing debate on identity
constructions as proposed e.g. by post-modernist scholars referring to “fluid” and ambiguous
concepts of identity and strictly denying any social categorization. So there is a gap between the
loss of working class identity on one hand and the focus on merely social identities on the other
hand. To bridge this gap the two trajectories have to be linked. Thus, it is proposed to reflect the
whole discussion on “working class identity” in the light of exploitation referring to classical
political economy, but additionally to integrate social identity constructions by reviving the
concept of alienation.
Keywords: diversity, exploitation, identity, working class, alienation
1. Introduction:
The current economic crisis goes hand in hand with a social and political crisis since an
increasing number of people lost their trust in government and established forms of
representation such as trade unions. As a consequence more and more right wing parties gain
increasing power all over Europe while the left wing parties are facing decreasing numbers of
. In the last decade this phenomenon can be observed for example in France, Italy,
Germany, Netherlands, Belgium, and in a rather extreme form in Hungary.
A main reason why the European Left faces severe challenges in attracting supporters seems to
be an experienced loss of what has been called ‘working class identity’ in earlier times. This
development has been fuelled by the continuing debate on “social identity constructions that
states the importance of alternatives to economic categorization systems and shifts the focus from
the material development to self-expression of people. A rather extreme and even politically
dangerous (in the sense of resulting in a self-hypnotic rather than political) position is proposed
e.g. by post-modernist scholars referring to “fluid” and ambiguous concepts of identity and
strictly denying any social categorization.
John Roemer (2010) points to the fact that also in the US the economic crisis goes hand in hand with an upswing of
right wing ideology.
This means that there are two fundamentally different, extreme positions on what is relevant for
people nowadays: the traditional working class concept refers to the material existence (and the
role of exploitation) and the social categorization concept highlights the role of diversity, a term
discussed in more detail in the following sections.
As Fraser (1995) pointed out already, one has to distinguish between the different topics
addressed by these concepts: While the topic of material existence is related to mal-distribution
of income and wealth (leading to economic inequality), diversity and identity focus on
misrecognition (stigmatizing non-conform groups). These two concepts refer to different
manifestations of contemporary capitalism (see Hanappi-Egger 2011) which clearly has to be
kept in mind when discussing new forms of addressing social groups (see also Fraser and
Honneth 2003). What links both phenomena is that they both are essential parts of the mental
models that people use to determine their behavior. They are ingredients of consciousness which
have evolved from the roots named class consciousness and alienation in the 19th century. With
respect to misrecognition the paper will show that in particular postmodern identity concepts by
reducing contradictions to interpretative arbitrariness serve as handyman of capitalist ideologies
(see Zizek 2011). Thus, the whole discussion needs to be reflected in the light of exploitation
(Hanappi and Hanappi-Egger 2003).
As this revitalizing of traditional arguments of political economy, namely exploitation (see
Hanappi 2006), shows, the concept of working class is still useful. The new context of a global
crisis involving diversity in many dimensions - clearly highlights how important the discourse
on ideology as a substantial part of the class concept itself is. Nevertheless diversity has to be
incorporated, so a synthesis of both working class identity and social categories has to be
developed to come up with more adequate and more sophisticated ideas of how to fight
Thus our contribution will be structured as follows: First, a brief overview of the historically
most relevant milestones in the development of the concept of “working class” will be given
showing the influential political and economic streams responsible for defining it. Since the
production process in the times of classical political economy was dominated by agriculture early
attempts to specify a working class refer mainly to the material level of human existence.
As next step it will be discussed when and under which circumstances the ideological framework
of capitalism subtly transformed the idea of working class identity to the social and socio-
psychological level. This finally led to the distinction between the economic living circumstances
of workers (now called employees) and the social self-understanding of people as citizens, as
men or women, as white or colored people, as conformists or non-conformists etc. The constantly
occurring mixture of the material living circumstances in society and the belonging to groups of
specific social categories finally resulted in postmodern concepts of “fluid” identities denying
any categorization and thus neglecting the naming of groups. Hence, in a fourth chapter the
ideological kernel of the scholarly work on diversity will be discussed. Finally, the paper will
outline an updated concept of working class identity called (again) social class bridging the
topic of economic background and the social hierarchization of people in modern societies.
2. The classical class concept of political economy
Since the French enlightenment social science has aimed to explain the evolution of society by
the dynamics inherent in its structure. Instead of a given destiny determined by a supernatural
being, history was assumed to be man-made. Moreover the classical authors of the 18th and 19th
century thought that the driving elements of this process were the forces of interaction between
classes of people
. They rather innocently assumed that each physical person could easily be
assigned to one of a handful of classes constituting a certain society during a certain period of
time. Indeed the respective legal superstructure of the respective era under consideration made its
class structure rather obvious. From the feudal class down to the class of slaves political,
economic, and cultural conditions followed a strictly hierarchical sequence. The classics saw
society’s progress not only as a process of reshuffling of class relations but took into account
disappearance and emergence of classes
. To understand mid- and long-run developments not
only class struggle has to be analyzed, there also has to be taken care of the possibility of
extinction and birth of new classes.
The focus of classical political economy obviously was on the emergence of a bourgeois class
and a working class, which were thought to overcome the fading feudal class. Some theoretical
effort was spent to explain on how classes constitute themselves. A straight forward proposition
was to assume that class emergence proceeds in two subsequent stages: First the primary social
reproduction process (primary metabolism) experiences a break, second the newly emerging
classes become conscious of their role and strategically promote their rise to political and
economic power (see also Hanappi 1989).
The classics distinguished four sub-processes of the primary metabolism: primary distribution
(ownership structure determined by the political regime), production (generating output of
services and commodities), secondary distribution (assigning output shares to classes), and
consumption (inputs to immediate human reproduction)
. To theorize a break of an existing
structure clearly needs the introduction of an internal dynamics of this primary metabolism,
which necessarily leads to the idea of increasing contradictions. With intensifying contradictions
their re-occurring temporary solutions become more systematic and new groups involved in these
solutions can be identified as classes, though in this first stage the members of this new classes
are not aware that this class exists and that they are part of it (see also Lukács 1971). The burden
of explaining social evolution thus came down to a concise description of the contradictive forces
at work
. And it is in this context that the concept of exploitation started to play a central role for
classical political economy. It is the mode of how the growth of plants and animals via a human
class structure is transformed into the reproduction of this structure that has to be understood as
the exploitation structure of an era. The pulsation of the primary metabolism thus is a repeated
sequence of exploitation regimes, which first flourish and then - due to their own success falter
until they finally have produced so many and so deep contradictions that they have to give room
to the emergence of a new exploitation regime.
The four sub-systems mentioned above are just the ensemble necessary to maintain a certain
exploitation regime. Note also that in the time of classical political economy, agriculture was the
The major authors of classical political economy considered here are Adam Smith, Thomas Malthus, David
Ricardo, and to some extent Karl Marx. They mostly were writing their theoretical works having in mind the
development of the English economy between 1750 and 1848, a period labeled industrial revolution by economic
historians (compare Landes 1969).
With respect to progress the classics differed from the earlier group of economists, the physiocrats (e.g. Francois
Quesnais), which laid emphasis on the regularities of the circular flow of commodities in a country. For the latter the
understanding of reproduction of society and its class structure was the object of study (they were part of the feudal
class), while the classics were about to study change. It is interesting to see how John-Maynard Keynes in troubled
times updated physiocratic flow analysis to understand how to maintain capitalist class structure by state intervention
(Keynes 1973 (1937)).
An appraisal and some critique of this structure of classical political economy can be found in Marx (1964).
The idea that contradictions are the productive force behind evolution can be traced back at least to the scientific
revolutions of the 17th century, e,g, Descartes, and later was brought to German-speaking scholars by Hegel.
central economic activity, the political entity under consideration coincided with the territory
under the control of a given feudal class. Exploitation could be stylized as the appropriation of
corn and cattle on this territory by the ruling classes.
Certain theoretical shortcomings with respect to global economics and monetary evolution can be
traced back to these perception constraints. Only with Marx, arguably the latest representative of
classical political economy, the importance of the latter became more prominent. In his account
of the capitalist mode of production (Marx 1964) he carefully distinguishes between the world of
the primary metabolism - where use values, the labor theory of value and the emergence of the
social net product are discussed and the world of monetary appearances (prices of production,
market prices, and social net value)
Nevertheless at the time when the classical economists Malthus, Smith, Ricardo, and Marx tried
to grasp the core of the break in the primary metabolism of a feudal society to a capitalist society
the second stage of the transformation was already well on its way: the new classes were actively
building up their self-consciousness. Immediately after the French revolution the importance of
this field was recognized and a specialized task force of intellectuals, called ‘ideologues’, was
assigned to work on it
. For the working-class Marx and his followers thought it necessary to
form an international group of revolutionary intellectuals (the 1st International) to act as a catalyst
for the transformation of the ‘Klasse an sich’ (materially existing class) to the ‘Klasse für sich’
(self-conscious class)
. But the 19th century turned out to be the heroic period of the capitalist
class in its economic triumph over feudalism, which finally manifested itself in the breakdown of
the feudal political state system in World War I. While some coalition building between
bourgeoisie and working class against the feudal class occurred around the 1848 revolution, the
second ideological front of capitalist ideology fighting the communist ideas of revolutionary
intellectuals gained momentum in the last decades of the 19th century. Most of the conservative
‘peoples parties’ still existing today have their roots in these early ideological battles.
Interesting enough the major theoretical thrust of bourgeois ideology was to fight the concept of
exploitation by the destruction of the concept of class: Society was conceptualized as a
homogeneous set of human atoms, of physical individuals. In stark contrast to classical political
economy the newly founded marginalist economic theory
propagated that its final goal is to
discover the innate economic properties of ‘economic man’ (see Persky 1995, for a feminist
critique see Cohan 1982, Nelson 1995, England 2002, Hanappi-Egger 2011). Aggregating these
individuals via free markets would lead to optimal welfare. This ideological project could be used
on both class frontiers:
Vis-à-vis the feudal class it emphasized markets and market participants, which all only
had to be distinguished by their endowments (given primary and secondary distribution),
A concise treatment of Marx‘ approach from the point of view of modern mathematical economics can be found in
Morishima (1973). It shows how a consistent framework for his view could look like, and it also contains a precise
definition of the rate of exploitation. In Hanappi and Hanappi-Egger (2003) Morishima’s framework is extended to
include gender exploitation and exploitation of the 3rd world. Nevertheless it must immediately be noted that
Morishima - as well as Roemer (1981) generalizing this approach only grasp what Marx took from English
political economists, and completely neglect his ability to combine it with Hegelian dialectics.
The feudal class, of course, already had a long-standing and well organized ideological task force: the Catholic
In this respect Marx still is a proponent of French Enlightenment. ‘All you have to do to make petrified
circumstances dance is to confront them with their own tune’, he wrote. For further discussion see also Vester
The three major proponents of this school in 1874 were spread all over Europe: Jevons in England, Menger in
Austria, and Walras in France and Switzerland.
and not by nobility. The nobility was invited to join the bourgeoisie if it only would give
up any special status derived from feudal ancestors.
Vis-à-vis the working class it stipulated the idea that membership in classes does not exist
since classes do not exist. If the endowment of a worker consisted only of its labor power,
then this state of affairs was a mix of bad luck at the moment of birth and personal
inability to make a career. Note that this argument is not only a manipulative statement
directed at workers but at the same time could serve as a self-conscious appreciation of
the wealth of members of the bourgeoisie
In this ideological framework the classical notion of exploitation simply vanished. On an
individual basis it makes no sense to measure how much you exploit yourself it needs the
growth of two entities to arrive at a useful concept of exploitation. Working harder reduces the
utility of the same individual for which this increased exploitation should increase utility. A
quantitative comparison between decrease and increase of utility (e.g. by commodities consumed
with higher wages for harder work) becomes only possible if the overall process of social
production (determining wages and prices) is taken into consideration and this is exactly what
gets out of sight in this individualized perspective. The advice to the necessarily blind worker
thus collapses to: Work harder and hope for higher consumption.
After Marx death in 1883 ideological warfare on the side of the working class took on a much
more modest form. On the one hand reforms in England had somewhat improved the lot of the
working class calling into question Marx’s predictions. On the other hand membership in unions
sharply increased in the last decades before World War 1; class consciousness expressed as union
membership visibly paid off by reducing exploitation rates. Leaders of socialist parties and
unions had to pay a price for the increasing popularity: Marxs theory was too complicated to be
easily understood
by uneducated workers, ideological short-cuts had to be used. Genuine
communist ideas were mixed with religious topics, with nationalist aspirations, and the like. And
to achieve improvements in social policy in some countries socialist leaders were ready to
partially cooperate with the representatives of capitalist firms on state level. Despite a certain
variety of working class consciousness across countries due to these diverse feedbacks from
ideological leaders on their class members the tragedy of ideological confusions only became
visible in the world wars of the 20th century.
In a more general perspective class consciousness proved to be not just as being derived from the
(‘objective’) position of the class in a society’s primary metabolism, it turned out to be co-
determined by the strategically chosen ideological trajectories of the leaders of working class
movements. Several important Marxist thinkers reacted by the introduction of new concepts:
Hilferding (1910) envisaged a new type of capitalist process, i.e. ‘finance capital’, Gramsci
(1930) saw how evermore important the bridge-building between economic base and ideological
superstructure is becoming and launched the discourse ‘hegemonyand the ‘organic intellectual’.
His analysis proves to be of particular importance for contemporary political economy, and will
be touched upon later in this paper.
Note also that from a feminist point of view this also marked the division of production and reproduction field
assigning men to the former and women to the latter. The bourgeois family model became the norm after WW II
including unpaid work of wives and the breadwinner model (see Thompson 1964).
Marx work not only is complicated and hard to understand without an appropriate intellectual background, it also
is incomplete with respect to many of the most pressing questions concerning the implementation of communist
institutions (see Foley 2006, pp.86-154).
3. Meanders of class consciousness
In the 20th century the first disaster that made the lack of class consciousness of the working class
visible was the fact that in World War I national capitalist classes of France and Germany were
able to organize their respective workers around national goals. Class consciousness in general
was less binding than the well-organized surge of national identity (compare Gellner 1983).
The next, even more disastrous ideological defeat of the working class came with the rise of
Fascism in Italy and Germany. One secret behind Fascist demagogical success was the aggressive
de-coupling of the individuals’ roles in political economy and their identity. The newly invented
link, organizing the so-called Arian part of the population to form a ‘movement’, was a reference
to an imagined biological trait independent of any economic basis. The ingredients for the
construction of this most dangerous collective identity are now well known
(i) Use some visible biological traits of human individuals (e.g. color of skin) to replace
the categories of political economy;
(ii) convince your target group that the self-esteem of its members currently is unduly
hurt, that they do not occupy the superior social position, which history has reserved
for them;
(iii) propose and implement drastic measures to fight the group of (seemingly biological)
enemies that wickedly undermine the rise to glory of the biologically superior;
(iv) use modern information technology to broaden and to cement your ideological credo.
Though the historic example of the plan of an Arian race to extinct the Jews is instructive, the
general recipe of Fascist ideology is still much more generally applicable than this single case
would suggest. In particular the tremendous increase in the capabilities of modern information
technology - as compared to Adolf Hitler’s first broadcasting device, the ‘Volksempfänger’ – has
freed the fourth point of the list above, electronic manipulation, from many technical limits.
So with World War II not only the immediate destruction of working class institutions took place,
also a long-lasting damage to class-consciousness of the working class could be observed. As the
atrocities of Fascist regimes became publicly known to everybody after the war large parts of the
working population shied away from anything looking like political ideology; pragmatism was
the name of the game. Even more so as Western leaders put a spotlight on Stalin’s terrible policy
in the 30-ties as revealed by Khrushchev in 1956
. Workers in the Western hemisphere became
disillusioned, instead of sticking to a communist vision of a radically different, better world they
were content to subscribe to small improvements institutionally conquered by social democratic
parties typically following the slow pendulum of governance in democratic two-party systems.
Working-class consciousness was transformed into voting behavior.
All these ideological battles, of course, took place in front of the primary metabolism of society,
which still was based on exploitation. It was just the link between material developments and the
The interpretation of these historical facts, of course, has led to a wider range of theories; see e.g. (Wippermann,
1997). Some more formal treatments of fascist mechanisms can be found in Eatwell (1993) or Hanappi and Horak
From this time onwards Western leaders could always point at the Russian example to show where a communist
revolution could lead to. As long as there seemed to be a need for a mild version of socialism to pacify Western
workers, this became the raison-d’être of social democratic parties in Europe.
worlds of interpretation which became less and less visible. This not only concerned the working
class, at least in Europe the capitalist class till the end of the 70-ties lost a considerable part of its
‘animal class instincts’ to the compromising style of bureaucratic capital interest management.
Institutionalized state-managed exploitation in Europe had become possible not only because of
the advancements on the ideological battlefield; there also was the fact that the war had destroyed
almost half of the capital stock in continental Europe and investment demand for reconstruction
created a growth environment that allowed for simultaneous (stronger) profit and (weaker) wage
. The loss of class consciousness, of course, could not be consciously observed by class
members, it was simply experienced emotionally as a feeling of ‘modernity’, an expression on
which ‘modern’ sociology quickly jumped to spin a theoretical apparatus
When exploitation rates in the USA finally where threatened by competition from again rapidly
growing Europe (Germany) and Japan, the economic war on global export shares was opened by
a sudden switch to flexible exchange rates in 1971. Two oil crisis and a synchronous recession in
all OECD countries were the consequence. And there it was again: Economic crisis induced the
political leaders of the capitalist class to re-enter the ideological battlefield again in the early 80-
ties. Margaret Thatcher, Ronald Reagan, and Helmut Kohl started a large scale ideological
initiative to destroy the institutionalized results of class compromise of the last 30 years. With
respect to the European working class it aimed at the implantation of capitalist firm logic in each
single brain of each single employee
. Social democratic parties, having lost their mission after
the breakdown of the SU, only could survive by adapting to the distorted perceptions of their
clients. And they did so with enthusiasm as their leaders were ideologically as disarmed as their
voters. This state of affairs still characterizes the situation of working class consciousness in
Europe today.
On the background of these developments it is interesting to take a closer look at the more recent
fashion of social identity theories and in particular at its extreme generalized form, at
postmodernism. First, occurring in the 80-ties, as a reaction of some leftist French philosophers
on the apparent loss of a revolutionary subject, postmodernism some 20 years ago became a full-
fledged non-paradigm for some sociology departments. It is interesting because it indicates how
an almost total loss of any materialism, in Marx’ view ‘dialectical materialism’, leads to an
almost total loss of theoretical orientation
to an abandonment of science, which is disguised as
the ultimate latest fashion of science.
But the latest deep world economic crisis in a dramatic way has brought this old question on the
table again: Is it possible to construct the link, better the ‘interplay’, between the primary
metabolism of a global human society and the way in which classes of people perceive it, in such
A whole set of other economic policy measures - including a boost in trade integration, an extension of the credit-
system, and the acceleration of exchange rate exploitation of 3rd world countries fostered this ‘growth miracle’. At
its beginning the politically induced support of the Marshall Plan aid from the USA played a pivotal role too (see
also e.g. Kolko and Kolko 1972).
In economic theory the correlating strand of theory has been called the ‚neo-classical syntheses. It chose John
Maynard Keynes as its originator (it still is the question if this does justice to Keynes) and was accepted by workers
and capitalists as the doctrine allowing state intervention to guarantee a smooth growth of capitalism. Despite its
weak theoretical basis it appeared to be a quite useful and adaptive rule set, making it easy for the social democratic
leaders to substitute it for any kind of non-modern Marxist class analysis.
The force of visions in political economy has been treated more detailed in Hanappi (2011).
In Marx‘s language postmodern thought would be an example of complete theoretical alienation.
a manner that progress (global welfare enhancement) as class action becomes visible again? And
how could social identity contribute to such an elaborated concept?
Postmodernist thought as well as mainstream economics necessarily remain mute in face of the
looming depression, at best they can serve as daunting example for what theory building has to
avoid. The next chapter will explore this question.
4. Diversity: A tool fostering exploitation?
After having discussed how the concept of working class has vanished in neo-classical economic
theory (compare also Hanappi 2014a), this section will highlight a rather new approach subtly
contributing to the exploitation of people, namely a certain interpretation of the concept of
diversity and (on the organizational level) diversity management.
As already mentioned in the last decades there is a shift in scientific attention away from
investigating the material living circumstances and exploitation relations of people and towards
the study of psycho-social identity constructions. Tajfel and Turner (1986) developed a Social
Identity Theory (SIT) closely related to social categorization theory - stating that human beings
tend to discriminate against out-group members not sharing their characteristics. According to
SIT a person has several “selves”, each activated only in a specific context. Thus, an individual
has multiple social identities derived from its membership in different social groups.
Hence, the starting point for the determination of a social group is the human individual and the
rather dubious general set of characteristics it is assumed to possess. Instead of classes derived
from the political economy of a certain historical era, SIT constructs ahistorical usually
overlapping groups of individuals sharing the same characteristics. The trend from the study of
class dynamics towards investigating groupings of individuals was then further carried on by a
variety of scholars in different fields. From the point of view of methodological individualism,
which still was the common denominator of all of these approaches, the fact of overlapping
groups appears as a problem of multiple selves of an individual. Political economy problems are
drowned in a sea of psychological introspection.
With respect to economic performance a new concept based on SIT emerged in the era of Ronald
Reagan, namely a certain concept of diversity, which on the firm level called for “diversity
management”: Based on the human rights movement in the US fighting for equal opportunities in
the labor market and against discrimination due to gender, sexual orientation, race and ethnicity,
affirmative action programs were negotiated guaranteeing employment-quotas for minorities.
These progressive political achievements were devaluated during the economic era of Ronald
Reagan. Contrary to the idea of (political and economic) empowerment of historically
disadvantaged groups, this type of diversity management focused on the economic performance
of firms and on how the contributions of individuals from diverse groups (determined by SIT)
could add to it. Given the unavoidable overlaps the role of group differences was down-played
and the role of individuals was emphasized (see Kelly and Dobbin 1998). The basic idea of
diversity referring to differences of persons and diversity management as a prescription to handle
individuals was to achieve productivity gains (for a general discussion see, e.g. Prasad et al
(1997), or Kersten (2000)).
The underlying concept of diversity therefore referred to a variety of social categories grouped
along different dimensions. Gardenswartz and Rowe (1994) further structured diversity as a four
layer model including the inner kernel of personality, the set of so-called internal dimensions
(i.e. gender, ethnicity, race
, age, disability, sexual orientation), the set of external dimensions
(e.g. geographic location, education, religion, marital status, …) and work-related diversity (e.g.
work content, seniority, management status, division/work field belonging,….). The internal
dimensions were also termed “unchangeable” and thus should not serve as reasons for
discrimination in particular from a legal perspective
. Furthermore religion and marital status
should also not be reasons for not hiring or promoting people since these criteria might be
independent from their fitness for a certain job. The concept of discrimination in this discourse
usually is not referring to the general ability to distinguish but is reduced to the legal right to use
certain characteristics of a potential worker as a criterion for the employment decision of a firm
. Anti-discrimination measures then do not call into question the right of the owner of the
firm to employ whoever she or he wants, they only limit the range of causes, which are
eventually put forward to underpin a decision. This narrowing down of the concept of
discrimination implies a reduced meaning of ‘diversity’
. In this context diversity evidently only
refers to a set of traits of individual potential workers. If a firm owner employs workers, which in
total have a broader range of traits, then she or he has achieved greater diversity. Diversity
management consequently refers to those parts of management activity that try to achieve an
optimal match between this level of diversity, the legal framework the firm is embedded in, and
the core tenet of profit maximization.
Several other concepts are defining diversity in a similar way (see Cox 1993; Thomas 2001)
sometimes more or less sophisticated, but all of them emphasizing the role of social identity
aspects (for an overview see also Hanappi-Egger 2004; 2011) and the need of “celebrating
diversity” (see Cox 1993). Acknowledged ‘social identity’ in the mind of the worker, sometimes
experienced as ‘respect’, is seen as a possible link to voluntary higher labor intensity fuelling
firm profits. As long as the cost for producing this ideological effect is lower than the effect on
additional profits diversity management has its place in firm management. Note that both,
marginal cost and marginal profits, are expected values and thus the typical instruments for
bargaining between proponents of diversity management and firm owners.
Diversity management was imported in Europe by affiliates of US-American companies (such as
Ford, Microsoft, IBM), but it became clear that some local adaptations had to be made. In
particular due to legal frameworks such as e.g. maternity protection law or general employment
regulations, US practices had to be modified. Nevertheless more and more European companies
were formulating diversity mission statements and were establishing measures and programs
fostering the recognition of women, minorities, lesbian-gay-bi-inter-transgender people, elderly
employees and the like.
In the meantime much critique concerning the concept of diversity respectively diversity
management is formulated by various groups: The perspective of “describing” human beings by a
Note that the term “race” cannot be translated in German as “Rasse” due to the Nazi connotation of this term
preventing that human beings could be classified based on biological traits. Instead the according German meaning
usually used is “ethnicity/skin color” nevertheless being aware that no socio-psychological skills can be derived
from this.
The EU anti-discrimination guideline e.g. forbids discrimination in the work context based on gender, sexual
orientation, age, religion, ethnicity and disability.
This legal right to be given equal access to the pool of potential employees historically extended to a similar right
to be given access to the pool of potential buyers of a commodity. E.g. black US citizens in southern US states have
to be given the right to enter shops that white US citizens are allowed to enter.
A far more general framework for the concept of diversity has been proposed in Hanappi & Hanappi-Egger
disjunctive set of social categories does not represent the fact that many discriminatory practices
do not relate to either the one or the other of these, but are rather intersectional (see also McCall
2005), overlapping. This for example leads to the emergence of black feminism and the need to
focus on the discriminatory intersection of gender, race and class in particular in the US-context.
Furthermore the mentioned classification systems refer to specific aspects of individuality but
ignore others. So the question is who and why someone is getting a voice?
Also the functionalist perspective that diversity can be managed is causing a lot of discussion. Or
as Magala (2009, p. 30) put it: “[…] we realize that ‘diversity management’ has also been turned
into a managerialist ideology of the second half of the first decade of the 21st century. […] This
ideological turn also followed growing awareness of diversity’s entanglement with ideologically
obscured (but very sensitive) links to inequalities. Celebrating differences, we are legitimizing
the inequalities inherent, implicitly included in ‘otherness’ and ‘difference’. Inequalities, which
emerge as the raw energy resource of social dynamics and change (because they give rise to the
powerful forces of upward social mobility reinventing and transforming societies), have to be
managed and legitimized (so that the sans-culottes or anarchists or hippies or terrorists do not
blow everything up). The socially acceptable price for managing and legitimizing them fluctuates
as much as the price of a barrel of oil on stock exchanges.
A completely different, but most general critique stems from post-modern scholars, who are
generally questioning the value of grand narratives” (see Rosenau 1992, Hanappi-Egger 2011).
With respect to diversity and social categorization they argue that identities are fluid and context-
specifically shaped and dynamically created. Hence, the difference-oriented approach aiming at
internal homogeneity will reproduce stigmatization and thus is not adequate to the complexity
and relativity of individual perceptions of the self and the world.
As a consequence even the naming of groups is denied, as well as identifying any other points of
fixation. Distinction is seen as a purely linguistic construction; hence disadvantaged groups
cannot and should not - be addressed. The political implication of this standpoint is clear: at the
end there are no groups anymore since a shared and inter-subjective understanding of group
identity is not possible (for further critique on post modernism see also Codrescu 1986, Giddens
1987, Thompson 1993, Fraser and Nicholson 1989).
Besides this extreme standpoint which will not be followed further since it is not relevant for any
political agenda, the astonishing phenomenon in the diversity discourse is that “class” is left out
in most scholarly work in particular in Europe. Although class is a salient issue, Kirton and Green
(2010, p. 6), authors of one of the most influential UK-textbooks on diversity management e.g.
state that “we do not offer an explicit class analysis of inequalities, because of the intersection of
class with other sources of labor market disadvantage we concentrate on. We start from the
position that certain groups of people enter employment and organizations already disadvantaged
by wider social inequalities as reflected in, for example, the education system.” Such a position
clearly contributes to the ideological attempt to make class vanish as a relevant category
Hanappi-Egger and Ukur (2011) e.g. highlight the diversity context of Kenya and show the irrelevance of certain
social categories such as sexual orientation - representing a highly tabooed topic. On the other side “tribes” – a
category not at all considered in a “Western” context is a highly influential aspect in social life in Kenya.
Hanappi-Egger (2011) emphasizes the role of educational systems and textbooks in myth-building and in creating
taken for granted knowledge to maintain the ideology of capitalism in particular in business education (see also
Althusser 1997, Zizek 2011).
On the other hand the neglect of the concept of class even in the somewhat critical works just
mentioned appears to be straight forward: Starting from a more or less arbitrarily chosen set of
traits (of ‘dimensions’) of an abstract human individual, it cannot be expected that the dynamics
of a particular era of political economy can be derived. Nevertheless ideological class struggle
takes place; in this case by directing intellectual forces (including those of mild critics) towards a
theoretical dead-end (methodological individualism) stating that class has ceased to be an
important concept.
Coming back to the topic of the paper a much broader view on diversity and social identity has to
be investigated in detail to elaborate the interplay with the traditional “working class” concept.
Nancy Fraser (1995) has made an interesting contribution to the discussion of social
differentiation by outlining the distinction between the injustice of distribution
and injustice of
recognition: “Here, then, is a difficult dilemma. I shall henceforth call it the redistribution–
recognition dilemma. People who are subject to both cultural injustice and economic injustice
need both recognition and redistribution. They need both to claim and to deny their specificity.
How, if at all, is this possible?”
She goes on to develop a sophisticated view of justice in society by distinguishing at one extreme
collectivities exposed to exploitation, such as the working class in a Marxian sense, and on the
other extreme collectivities exposed to marginalization by lack of recognition. As an example she
mentions gays and lesbians who suffer from “the authoritative construction of norms that
privilege heterosexuality. Along with this goes homophobia: the cultural devaluation of
homosexuality. Their sexuality thus disparaged, homosexuals are subject to shaming, harassment,
discrimination, and violence, while being denied legal rights and equal protections all
fundamentally denials of recognition. To be sure, gays and lesbians often also suffer serious
economic injustices; they can be summarily dismissed from work and are denied family-based
social welfare benefits. But far from being rooted directly in the economic structure, these derive
instead from an unjust cultural-valuational structure.” (Fraser 1995, p. 77)
In between these two poles exist various overlapping collectivities which she calls bivalent:
“Bivalent collectivities, in sum, may suffer both socioeconomic mal-distribution and cultural
misrecognition in forms where neither of these injustices is an indirect effect of the other, but
where both are primary and co-original. In that case, neither redistributive remedies alone nor
recognition remedies alone will suffice. Bivalent collectivities need both.” (ibid, p. 78)
Nancy Fraser intends this matrix to be used as an analytical tool to investigate both mentioned
aspects of injustice, which entails knowing the various forms of discrimination which different
social groups can face (see Fraser and Honneth 2003).
This line of argument thus touches upon the phenomenon of alienation as discussed in Marx’
political economy and implicitly described in chapter3 above. Alienated global working classes
are confronted with legal and cultural superstructures that restrict not just their economic income
but indeed deny their very existence as relevant participants in political-economic evolution.
Hence the wish for recognition, for some diffuse ‘justice’ and ‘equality’ to be restored. The latter
terms were borrowed from early capitalism’s ideology in its fight against feudalism. Ruling
ideology today still uses these terms in its legal and cultural superstructures, despite or better:
because of the fact that they are void with respect to economics. To reclaim their importance
therefore is an unconscious cry for a reversal of alienation. It addresses epiphenomena in the
Note that Fraser’s notion of distribution has to be enlarged: While Fraser is referring to secondary distribution in
the discourse on mal-distribution from the point of view of classical political economy this omits all other aspects of
the primary metabolism, e.g. primary distribution.
superstructure, and might well indicate unrest. But this potential for a change can only be
organized into a valid political force by establishing links to the actual economic processes. It is
only the interaction between superstructure and economic base, which can overcome alienation
As we assume that the class dynamics representing exploitation and the material existence of
people as well as the dimensions of individual alienation referring to individually experienced
elements like exclusion and lack of recognition - still play a crucial role, a more systematic
system of links between political economy and recognition can be developed.
Hence, in the following we will sketch the interplay of both trajectories a horizontal axis along
which the dynamics of political economy are shown and, a vertical axis along which individually
experienced alienation according to individual characteristics is shown.
Before doing so a possible specification of the dimension of recognition, the set of traits of a
human individual, is depicted in figure 1.
Figure 1: Axis of individual dynamics
The first part of the sequence of traits of human individuals starts with some randomly distributed
properties given at birth of the individual. At birth each of the traits can assume one value out of
a finite set of possible values (e.g. the geographical location of birth, color of the skin, etc). Some
coincidences of values of certain traits have a higher probability than others (e.g. geographical
location in Africa and black skin has higher probability than location in Finland and black skin).
This question is elaborated in more detail in (Hanappi and Hanappi-Egger, 2012b).
Random traits
at the point of birth:
Processes and data
Permanent traits:
Life trajectory of an individual
Start values (and start
programs) are set
Path dependent
development of values
(and programs)
Death: data (and
programs) are deleted
The next part of the sequence contains traits, which change to some extent during lifetime. In
particular changes in this multi-dimensionless space are induced by socialization, education, and
work. Where these trajectories start depends crucially on the random event at birth.
Finally there are two individual characteristics that accompany each human individual longer
than just till retirement: age and health finish only with death. They constitute the third set in the
The three parts therefore distinguish crudely between random one-shot traits, partially controlled,
changing traits, and continuous lifetime traits. The vertical axis therefore not only is a list but also
leads from the random seed of births via individual development to some measurable lifelong
companion variables.
The life of an individual can be described as a trajectory starting with the values of some traits
being set randomly. Values of traits in this context can be data, or data interpreted as instruction
set (e.g. genes)
. In the sequel a path-dependent process sets in that changes these values and
adds new traits with changing values. Some traits are just reporting values; that is they
summarize a state at a certain point in time (e.g. age and health). At death all traits cease to
It is straight forward to define social groups along this sequence of traits of an individual as sets
of individual humans with the same value in some traits. If more than one trait is equal for some
members then subgroups emerge. The already mentioned dependence between the values of
different traits then provides a rich field for empirical research of sociologists.
But the concept of a social group has to be distinguished from the concept of a class. The social
group is built as a collection of individuals with the same values n some (more or less arbitrarily
chosen) traits the whole procedure still is based on methodological individualism. In contrast to
that the concept of a class starts with an analysis of the overall metabolism of the organic unity of
a total society; and to do that for a specified era in history tries to understand the dynamic
evolution of this total by introducing the theoretical concept of class and class relations. This is
the archetypical research program of political economy.
As a consequence, along this second (horizontal) axis of political economy (compare figure 2) the
four typical stages of a society’s metabolism are depicted: (i) primary distribution, (ii)
production, (iii) secondary distribution, (iv) consumption. Classical English and French political
economy characterized feudalism along these lines as a rule set that assigned land ownership to
the class of members of high nobility (primary distribution), assigned production activities to
farmers, and had another part of the ruling class - low nobility - to control the distribution of
products (secondary distribution) in a way that ensured the reproduction of this class structure
With the transition to a new mode of production, to capitalism, new classes emerged.
It is tempting to consider an analogy between data and processes in the social sciences and space and time and its
unification in modern physics. But this is an issue that goes far beyond the scope of this paper.
Pierre Bourdieu also considers these trajectories of individuals in an n-dimensional space of directions (here called
traits), and proposes to summarize certain sets of values at a certain point of time as something he names ‘capital’
(economic capital, social capital …). Though, like political economists, he also uses this term for certain stock
variables it would be confusing to adopt this usage in the current context.
Consumption only entered this picture when Thorstein Veblen explored the direct links between the consumption
behavior of a ruling class (conspicuous consumption of the leisure class) and consumption of the exploited classes
(subsistence consumption): ‘As seen from the economic point of view, leisure, considered as an employment, is
In figure 2 both dimensions are coupled. On the vertical axis traits of individuals are shown while
on the horizontal axis the class inducing phases of political economy are depicted.
Figure 2: Social versus individual dynamics - alienation
All elements Aij in the emerging table constitute fields of potential alienation, and the higher the
alienation, the larger the latent force calling for a revolution in political economy. The
contradictions experienced by an individual with respect to its trait i in the context of stage j of
the social metabolism build up, but need a trigger event to unload their energy. For every mode of
production the stages along the horizontal axis need to be supplemented by the dynamics of class
relations, i.e. a second, historically specified structure. The classical proposition of Marx in the
19th century after he specified his proposition of class dynamics - then was that latent force
becomes manifest force if only class members of a revolutionary class become conscious of their
class status. Almost a hundred years later the fascist movement showed that the potential energy
closely allied in kind with the life of exploit; and achievements which characterize a life of leisure, and which remain
as its decorous criteria, have much in common with the trophies of exploit.’ (Veblen, 1899, p. 44).
Primary distribution
Secondary distribution
Axis of the Society
Axis of
the individual
Elements of alienation:
sources of social
identity construction
of an alienated and impoverished population not necessarily will only flow into the formation of a
progressive, revolutionary class. One of the most important tasks for current social scientists
following the research program of classical political economy thus is to formulate an adequate
model of contemporary class dynamics
Note that the earlier mentioned narrow view of diversity management sets out to channel the
latent energy present in the alienation of individual employees into the consolidation of existing
class structures, i.e. maintaining productivity gains. Working only along the vertical dimension to
support the maintenance of existing horizontal dynamics can be considered to be the background
agenda of social identity theory. To better understand this agenda a brief recapitulation in the
perspective of the just re-introduced concept of alienation is necessary.
Constructing social identity is to display certain traits along the vertical axis as being important
traits in a kind of mirror (a carrier medium), important for potential members of this social
identity group. To possess social identity changes the behavior of an entity, since it fills a gap in
its consciousness: the individual insignificance produced by alienation
With modern media technology the intended change of behavior (by providing social identity)
can to some extent be engineered by those controlling the media. This is exactly the point of
‘diversity management’ described above, in particular when combined with ‘corporate identity’
measures. The latter example shows that it might be promising to invent new traits along the
vertical axis (e.g. ‘corporate identity’) to steer a target group towards a set of intended behavior.
This idea, of course, is not new at all, religious groups (e.g. Christians), military organizations
(e.g. the Marines), and fascist movement (e.g. Arians) all have used it. In the beginning it usually
works best with a core group of most alienated individuals.
And though several examples are pointing in that direction, this type of manipulation is not
directly connected to malicious goals: Consider the notion of a pure ‘human individual’ stripped
from all qualifying special traits certainly a theoretical construct with a profound appeal of
social identity. The praise of the rights of this human individual (embracing all possible traits
randomly chosen at birth) was certainly a progressive idea in the first half of the 19th century,
when it helped to overcome feudalism (which insisted on the family trait as sole quality
. This ambivalence in face of the progressive role for social identity construction can
only be overcome by a closer look at the specific historical case, at the dynamics of political
economy. This reminds on the two aspects of alienation mentioned above. Some amount of
increasing alienation stems from additional division of labor on a global scale and can hardly be
avoided. But another part of alienation is specific to the capitalist mode of production and can be
overcome by changes in the political power and decision structures.
The fight for recognition thus could be channeled into different streams. The predominant
(narrow) diversity and recognition discourse would typically propose to use a rise in individual
In (Hanappi & Hanappi-Egger, 2012a) we intend to provide an important piece for the mosaic of contemporary
class analysis.
Alienation on the one hand is a necessary consequence of increasing division of labor in all commodity producing
societies: the world of commodities encounters its own individual producers in their consumption process as an alien
set of products and services the set of production processes is too complicated to be understood by a single
producer. On the other hand a more specific experience of alienation takes place in a capitalist mode of production,
where workers experience that part of their life time, transmitted as labor time, is taken away by an alien force
(capital) and materializes as profit, as social value that is at the disposal of an alien group, a ruling class.
This progressive character can even be revived many decades later as the human rights movement in the USA
did show.
self-esteem for a coupling with labor intensity. Such a self-amplifying feedback loop would
provide not only competitive advantage for the firm but would also conform to the social
aspirations of (19th century) capitalist humanism. Moreover, these measures would not exhaust
themselves by removing alienation of the workforce. They remain under the spell of capitalist
firm organization, the abstract humanist agenda does not interfere with the old managerial dogma
‘stay hungry’ (for less alienation). The discussion on diversity management today in particular
applies a kind of “divide and conquer” strategy: Splitting the disadvantaged groups in smaller and
smaller units and exposing them to competition is a tricky way to a) shift the focus from
economic topics to recognition and b) to eliminate solidarity and therefore the chance to build
critical masses.
Looking out for channels which indeed could reduce alienation, it is clear that they coincide with
a political change removing capitalist accumulation mechanisms. Since World War 1 such
actions typically materialized as specific labor laws implemented by states with labor movement
representatives in their governments. At least since the early eighties the room for this channel is
diminishing, a long-run conservative political roll-back could be observed. Alienation as an
omnipresent phenomenon is surging.
At the same time the role of nation states as mediators for changes in class dynamics has been
dwindling away during the last three decades. There is strong empirical evidence that the most
powerful agents in global political economy now are some large transnational corporations,
which are able to influence national governments of the strongest countries. Governance
including military intervention - is coming under direct control of capitalism’s ruling class again.
There even would not be an opposing class, which is global and consistent enough to bargain on
compromises, not to speak of the lack of global political institutions serving as platforms for such
bargaining procedures.
Given this state of affairs a return to theory, to an update of the class dynamics of political
economy seems to be extremely important. Indeed there have been some theoretical efforts to
modernize and to modify the class concept to improve the understanding of the elements along
the vertical axis
. It is as well possible, and perhaps more promising to try to continue to trace
the evolution of classes along the recent history of political economy, providing an updated
version of the specification of the horizontal axis. This is what is proposed next.
Conclusions: Updating working class concepts
Exploitation of nature and exploitation of man by man is the common denominator of all forms
of primary metabolism of the human species. For feudalism classical political economy has
structured this process as briefly sketched in the previous chapter.
But how can class analysis of classical political economy serve as a starting point for the analysis
of today’s political economy? Which changes have occurred and which enhancements would be
Notably Pierre Bourdieu (1985) developed a new class concept, which promised to provide more adequate
descriptions of actual behavior. Unfortunately it concentrated on sets of behavioral rules (practices), and did not link
up to economic processes proper. An interesting survey of this and other concepts of class can be found in (Wright
necessary to grasp the essential new features, which now after 200 years of turbulent
development characterize capitalism?
One immediately evident shortcoming of classical analysis is that the scope of its models was
always restricted to the dynamics of a typical European nation state
. Though an extension to a
larger territorial unit at first sight looks a bit trivial, the history of the two great waves of
globalization the first just before WWI, the second starting in the last decades of the 20th
century should teach the opposite. The first wave of ‘imperialism’ brought the final breakdown
of the unhappy coalition of feudal political rule and capitalist economic rule in Europe’s nation
states, giving birth to the purely capitalist national governance system still prevailing today. In
each nation state political and economic power became united in the same bourgeois class, with a
special part of this class the state bureaucracy managing national class compromises. From
that point in time onwards class struggle was partially transferred to institutionalized conflicts in
state institutions; with severe implications for class consciousness. The second wave of
globalization taking off in the early 80-ties was characterized by an incredible increase of the
power of transnational corporations reaching out for global advantages by the use of local nation
states’ conditions. In the course of this process globally acting firms, including financial
intermediaries, became more powerful than national working classes, national bureaucracies, and
other nationally bound parts of the bourgeoisie. If one adds the above described blurring effect of
the ideology of modernity and postmodernity in the advanced industrialized countries after
WWII, then a dramatically changed situation for the possible emergence of global working class
consciousness becomes visible (see also O’Rourke and Williamson 1999). In that respect the
discourse on diversity sketched in the previous chapter is just the tip of an iceberg of an intricate
ideological warfare. Alienation not just occurs, it now occurs in different forms in different parts
of an economically extremely interconnected world. Therefore there emerged a kind of second
order alienation between the different parts of the world experiencing different forms of first
order alienation. It has become extremely complicated to communicate between these worlds,
and thus a superficial pseudo-communication along the language of soap operas and media-
corporation devices has been evolving. Second order alienation has become a so-called ‘cultural’
An update of the concept of working class thus has to consider that we now have to address a
global working class. What connects its different parts working in different continents are global
value chains (compare Serfati 2008) that are organized by transnational corporations and
international finance, with a diversity of national SMEs at the leaves of the global production
structure. Marx famous aspiration that the worker has no home country has been turned upside
down: Today capital has no home country and workers are caught in a kind of globalized
nationally adjusted - second order alienation. These changes along the horizontal axis in figure 2
have rendered the traditional project of progressive enlightenment along the vertical axis a bit
obsolete. The idea had been that an intellectual avant-garde (the 1st International) would act as
catalyst and would help to let working class consciousness emerge more or less spontaneously
across all the dimensions of individuals, i.e. the vertical axis in figure 2. The two world wars of
the 20th century dramatically proved this expectation to be wrong. WW1 mainly showed that with
Even when Ricardo compared relative cost structures of two states to argue for free trade, the assumed two states
were typical European examples. Marx theory of exploitation was not extended to cover large scale exchange rate
exploitation, his interest in the topic only reached to some remarks on an ‘Asiatic mode of production’.
Some of the most outstanding Marxist intellectuals of the 20th century Lukasz, Benjamin, and Adorno have
been the prophets of this development. To some extent and with limited success so-called ‘cultural Marxism’,
e.g. Stuart Hall (compare Johnson 2014), has taken up the political dimension of this line of research.
the support of the media of the nationally ruling class, national identity can dominate class status.
The lesson learned by WW2 goes one step further: The identity construction used by Fascism
adds an important, seemingly biological though completely mistaken component to the
nationalist feature: the Aryan race. Moreover the construct of ‘Nationalsozialismus’ even
integrates the buzzword ‘socialism’ in its defining characteristic to mobilize parts of the working
class for its own goals. This shows that on the level of individuals alienation had proceeded far
enough to allow for almost arbitrary, but psychologically well-designed and heavily propagated
indoctrination not only of the general population but also of large parts of the working class. The
current explosive mixtures of national and religious upheavals around the globe show that certain
elements along the vertical axis of individuality are particularly well-suited to thwart, even to
dominate, the goals of progressive enlightenment: nationalism and religion. Both are evolving
traits, nationalism is part of socialization (compare fig. 1), and both therefore have to be
considered as essential ideological battlefields for progressive enlightenment. With respect to the
catalyst intellectual avant-garde this implies that history teaches to argue against nationalism and
religion, in fact any kind of mysticism. Though a closer look at the different ideological
battlefields, the different elements of alienation Aij in figure 2, reveals that usually in each
element there are contradicting forces to be considered. Some aspects of unavoidable alienation
ask for support and shelter, e.g. some local cultural responses to the global division of labor,
while other aspects of the same element run counter progressive enlightenment, e.g. local
resistance against education. Even in the fight against nationalism there might be a narrow range
of temporary coalition possibilities as Garibaldi and Fidel Castro have shown. And to accept
some ethical short-cuts as long as science can give no satisfying answer might temporarily be a
terrain shared with religious attitudes. The difference that distinguishes a class of organic
intellectuals in the 21st century from its precursors in the 19th century has to be its explicit
treatment of each of these local ideological struggles, which is in stark contrast to any belief in
an automatic emergence of working class consciousness. This is the reason why Antonio Gramsci
introduced the concepts of ‘hegemony’ - indicating a relative overall success in the diversity of
ideological battles - and of ‘organic intellectual’ – indicating that the avant-garde has to be rooted
in the respective local culture of the working class. The move from considering just one country
to a consideration of the world economy thus has heavy implications. Can a global class of
organic intellectuals, which is able to achieve these complicated tasks emerge at all? A
preliminary answer becomes possible if the other blind spot of received alienation theory is
This second shortcoming of received theory is even more difficult to remedy: The technical
evolution and implementation of information and communication techniques has led to a marked
shift in the interaction scheme between what the classics saw as ‘material base’ and the
corresponding ‘ideological superstructure’. For the classics there has been some kind of balanced
oscillation between the influences running from economic processes to the world of ideas about
them, and currents running in the counter direction: from ideological constructs to material
interventions in the economic process. Starting with Smith’s suggestion that the economic actions
of a capitalist, which at first sight in the ideological world of moral philosophy looked like
‘private vices’, in the longer run via the intermediation of markets might turn out as welfare
enhancements; and ending with Marx’s suggestion that class position first determines class
consciousness, which then enables conscious class struggle that in turn changes class structures,
and provokes new class consciousness
. The 20th century proved that with the help of advancing
information and communication technologies the self-consciousness of large masses of people
can be severely manipulated and decoupled from their more and more alienated position in a
(globally) divided production processes. But even along the exploitation process axes itself the
evolution of money forms into ever more abstract information spheres proved to change the rules
of the game. The Great Depression of the 30-ties as well as the still lingering global financial
bubble of today show how pure expectations of future exploitation rates can keep abstract and
material accumulation alive for some time. But as is the case for any phenomenon in the world of
information, changes can come very fast and with little warning. The shift towards a highly
interconnected world with tightly knit information networks thus has led to an enormously
increased global fragility. Correcting feedbacks from material processes that could prevent too
large bubbles arrive relatively slow and usually occur in parts of the world not monitored in the
location of the high-speed source of the disturbance. The consciousness of ruling classes tends to
be split in small and local pieces too.
Compared to the 19th century the situation thus has changed dramatically. Classical political
economy in fighting mistaken views of the world could point at the correcting power of direct
interaction between a human observer and its natural environment. This fundamental procedure
enabled enlightenment bringing light into the dark systems of belief deriving its prestige from
the successes of the natural sciences since the 17th century. The celebrated method of the
controlled experiment was and is the icon of such scientific practice. Political economy and class
analysis of the 20th and 21st century do not have this device at their disposal. Not only had the
theorists in this field to substitute experimental methods by the force of abstraction, also the rest
of the population the object of enlightenment cannot derive the truth of a statement from
observing the direct interplay between their actions and nature’s response. With respect to
political economy the large majority of the population nowadays has to rely on predetermined
interpretations delivered via modern ICT devices. In this sense enlightenment clearly seems to
have lost the battle and the recent surge of mystic shortcuts
and religions can be explained.
To enable a qualitative jump in the force of abstraction the only way to master the current
impasse a new type of intellectual class is needed. Second order alienation and the loss of first
order alienation energy in the dead ends of electronic visions (e.g. computer gaming) still can be
understood, and made part of a highly complicated model of the dynamics of political economy.
But this new global class of organic intellectuals must be able to team-up to achieve this
complicated goal. Fortunately enough today’s information and communication technologies are
enabling a new kind of class formation. Contemporary organic intellectuals in principle can
communicate globally and can use resources of knowledge globally. Using Gramsci’s
terminology one could call them second order organic intellectuals they should be equipped to
overcome second order alienation, to deal with the set of ideological battlefields mentioned
Contrary to his (implicit) scientific approach, in his role as revolutionary activist Marx propagated that in the near
future the class structure will collapse into the fight between two classes (capitalists and workers), and that the latter
as the only necessary class for the primary metabolism will thus in the end be the carriers of the unique and adequate,
common consciousness communism. This forecast, though useful as a political program of the 19 th century, proved
to be wrong.
One of the most dangerous viruses of this kind has been microeconomic theology’ (compare Hanappi 1994),
which indeed managed to seduce some of the brighter minds in academia and to some extend has to be held
responsible for the dispersion and endurance of the current global, economic crisis.
The update of the concept of working class thus goes hand in hand with an update of what is
considered as the catalyst that can stimulate working class consciousness. This proposed group of
an intellectual avant-garde has been labelled ‘global class of organic intellectuals’. It indeed will
have to be a newly emerging global class since it will have to play a pivotal role in the global
production and reproduction process. The new global working class which it will address will be
characterized not just by the role its members play at the local workplace, their status will include
their global role in both spheres: the material sphere of quantitative economic production as well
as the information sphere with its varying forms of necessary as well as manipulative forms of
alienation. The long-run goal of the class of organic intellectuals, of course, has to be the
convergence between their class and the global working class. In this process evidently a new
understanding of global democratic governance has to emerge. This is particularly important
since in the moment the majority of the global working class lives outside the OECD countries
while the majority of the class of organic intellectuals presumably lives in OECD countries.
Besides this necessary vision some more pragmatic short-run guidelines for progressive policy
seem to be important.
The contemporary global correlate of the classical national working class in a first step probably
will be a coalition of consciously diverse communities all across the globe organized by the
global class of organic intellectuals. The strongest force uniting these communities presumably
will be a symbolic common enemy. But in which respect can an enemy of a globally diverse set
appear as common? As far as capitalism is concerned the answer is straight forward: Groups in
this coalition are those that not only feel exploited, but that actually are exploited. To determine
their exploitation status all elements (exchange rates, working conditions, the individual traits in
figure 1, etc.) have to be taken into account. Rough guesses are not difficult to make, but more
elaborated estimations certainly will have to replace them. To do that an international network of
political economists is needed that provides theoretical background concerning the merging of
individual trait dimensions with economic status (compare e.g. Hanappi and Hanappi-Egger
2003) as well as econometric estimations. Currently exploitation often is experienced as being
exerted by an immaterial ‘capitalist logic’, the ‘enemy’ being the diffuse notion of ‘global
finance’ eventually backed up by military intervention. This ‘enemy’ first occurs as neutral cost
minimizing imperative, not paying attention to the diverse specificities and completely unable
to ‘recognize’ all those parts of a global population that do not promise high enough future profit
rates, i.e. ‘growth’ (of capital). This can lead to a first unifying slogan for the global working
class: reproduction instead of capital accumulation (‘growth’).
If the ruling class recognizes resistance from the new formed coalitions as forerunners of a new
global working class, then it will change tactics towards ‘divide and conquer’: giving privileges
to some members only to stir unrest in the coalition. At this point solidarity backed up by a
theoretical blueprint that promises improvements for all will become important. In other words
inter-group recognition becomes mandatory, and again the theory identifying exploiters is
This is the latest point in time when the new global class of organic intellectuals has to be ready
to present implementable visions. Needless to say that less civilized options for the future global
political economy are blossoming all around the world, waiting for a chance to step in.
In (Hanappi and Hanappi-Egger 2013) and (Hanappi 2014b) the necessity to study also the recently emerging
factions of the ruling class is highlighted. This not only concerns the distinction between different national classes
but also between firm owners, financial intermediaries, and those executing capitalist state power.
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... It enters the internal models of individuals as an invisible but almighty force; only data perceived on international stock exchanges allows to perceive the moves of the monster. When Rudolf Hilferding at the beginning of the twentieth century tried to update Marx' concept of capital by writing his influential book Das Finanzkapital, 17 he barely could know to which wonders this latest transformation of the species character of social value will lead. ...
... Such a classification still sticks to a linear view of a bipolar class concept that spans between proletariat and capitalist class and allows for a gray zone in the middle. As argued elsewhere-and contrary to Tony Blair's exclamation "we are all middle class now"any consistent theoretical concept of social value necessarily provides a sharp border between 17 See Ref. [15]. 18 Compare [16] for a definition of the capitalist algorithm. ...
... Compare[17].22 In[18] this class is described in more detail. It is named global class of organic intellectuals.23 ...
... Institutions and jurisdiction are an epiphenomenon of political economy dynamics. 23 See also (Hanappi, 2018). 24 In (Hanappi, 2018c) the question of the enduring role of capital in such a future setting is posed. ...
... It might be only a question of time till Europe experiences the emergence of this type of 'leader' again. 11 Compare(Hanappi and Hanappi-Egger, 2018) for a more detailed treatment of this point.12 In the current debate on the immigration of African refugees to Europe the plan to have a new type of concentration camps to select who should be allowed to enter Europe is in this spirit. ...
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This policy paper combines a large number of acute contemporary problems in political economy and shows that it is possible to bring them under one broad common umbrella: The choice between humanism or racism. To do so more fine grained definitions of humanism and racism are put forward. From that theoretical perspective the possible policy options for further European Integration are discussed. It is argued that Europe could be a role model for global evolution if it is possible to overcome racism and to use diversity as a creative force. As a driving agent for such a development the emerging class of organic intellectuals is identified.
... But to be able to do so European governments must show that they themselves are capable to defend their emancipatory unification process against the threats of renewed nationalism and isolation policies within a 'fortress Europe' 21 . Perhaps the scientific community that already spreads its intellectual network across the involved 19 See also [Hanappi and Hanappi-Egger, 2012]. 20 The basic logical structure of this thought seems to be a common feature of monotheist religions of the Middle East. ...
... 35 At this point of the argument a second thought on the importance of the internet and the widespread availability of mobile phones might be appropriate -and can lead to original new policy proposals. 36 Of course, the search for a new and global revolutionary class -the material counterpart to global consciousnessis high on the agenda of social researchers working in the Hegel-Marx-Schumpeter-Dramsci tradition (see Hanappi-Egger 2012, 2013). 37 This is the reason why in Figure 1.1 "finance institutions" are put in the upper layer of entities based on expectations. ...
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This chapter shows that fundamental theoretical progress is needed to understand the current state of deep crisis. Evolutionary economic theory often is misinterpreted as the narrow task to provide some fine-tuning of the assumptions of microeconomics concerning a firm’s innovation behavior. The more methodologically inclined scientific community at least would add that evolutionary economics is part of complexity research, that the interaction of non-equilibrated micro-units eventually will lead to surprisingly simple structured macroeconomic patterns. To experiment with economic complexity it always needs simulation of mostly heterogeneous sets of agents, which in turn produces a Babylon of outcomes of simulation runs. Traditional macroeconomists typically find it difficult even to communicate with researchers in evolutionary macroeconomic simulation models, two different languages, parallel worlds seem to exist. To improve mutual understanding, and to show how far evolutionary economic simulation can advance political economy by explaining traditional macroeconomics as a (mostly rather implausible) special case of its own more general approach, is the aim of this chapter. Arguing from the opposite side it has to be taken serious that received macroeconomic theory can help tremendously to structure the Babylon of simulation runs – it helps to build bridges from and to the tower of Babylon.
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Social transformation and transition from socialist to liberal market economy in Bosnia and Herzegovina and other countries of former Yugoslavia, followed by war atrocities, initiated a series of economic and social challenges: deindustrialization, high unemployment, dubious privatizations, impoverishment, ethnic rivalries and structural changes. In this paper, we observe the mentioned social processes focusing on identity politics resulting in transformation of class identity into workers' national identity. The main presumption is that certain critical social moments serve as a trigger for "shift" in primacy of class compared to national identity and vice versa. To address this, we are using cases of workers' resistance/strikes/ protests during the social transformation from socialist into market economy, and after the completed privatization and reign of ethno-national policies in former Yugoslavia countries.
For over thirty years David S. Landes's The Unbound Prometheus has offered an unrivalled history of industrial revolution and economic development in Europe. Now, in this updated edition, the author reframes and reasserts his original arguments in the light of debates about globalisation and comparative economic growth. The book begins with a classic account of the characteristics, progress, and political, economic and social implications of the Industrial Revolution in Britain, France and Germany. Professor Landes here raises the much-debated question: why was Europe the first to industrialise? He then charts the economic history of the twentieth-century: the effect of the First World War in accelerating the dissolution of the old international economy; the economic crisis of 1929–32; Europe's recovery and unprecedented economic growth following the Second World War. He concludes that only by continuous industrial revolution can Europe and the world sustain itself in the years ahead.
What has management to do with myths? And how does gender enter the stage? This book identifies frequently used key arguments in gender discussions on management and organizations and will unmask them as myths. Be it that management is rational, be it that organizations are gender-neutral, be it that women will change technology, will be shown to be a set of superficial declarations not withstanding critical scrutiny. All the “reasons” for gender-specific organizational phenomena will be proved to exist simply to maintain power structures and thereby systematically (but subtly) reproduce dominant organizational cultures and stabilize taken-for-granted knowledge in particular with respect to gender issues. The demystification of selected organizational phenomena is based upon several of the author’s recent research projects and empirical studies.
This book was originally published by Macmillan in 1936. It was voted the top Academic Book that Shaped Modern Britain by Academic Book Week (UK) in 2017, and in 2011 was placed on Time Magazine's top 100 non-fiction books written in English since 1923. Reissued with a fresh Introduction by the Nobel-prize winner Paul Krugman and a new Afterword by Keynes’ biographer Robert Skidelsky, this important work is made available to a new generation. The General Theory of Employment, Interest and Money transformed economics and changed the face of modern macroeconomics. Keynes’ argument is based on the idea that the level of employment is not determined by the price of labour, but by the spending of money. It gave way to an entirely new approach where employment, inflation and the market economy are concerned. Highly provocative at its time of publication, this book and Keynes’ theories continue to remain the subject of much support and praise, criticism and debate. Economists at any stage in their career will enjoy revisiting this treatise and observing the relevance of Keynes’ work in today’s contemporary climate.
Tiexi—“West of the Tracks”—is a district of Shenyang, the city once known as Mukden. For 50 years it was China's oldest and largest industrial base, a fortress of the socialist planned economy. This chapter examines the significance Wang Bing's decision to look at the death of a heavy industry district that once symbolized the triumph of socialism. It argues that the film demands attention to the price being paid for marketization, in terms of both personal upheaval and the abandonment of socialist ideals. The film stands as a monument to the otherwise undocumented destruction that accompanies the more frequently celebrated construction that is going on in other parts of China.
Sociologists disagree not only on how best to define "class" but also as to its general role in social theory and continued relevance to sociological analysis. This book explores the theoretical foundations of six major perspectives of class through the contributions of experts in the field. While some assume that classes have largely dissolved, others believe class remains one of the fundamental forms of social inequality and social power. Moreover, some see class as a narrow economic phenomenon, while others adopt an expansive conception. © Cambridge University Press 2005 and Cambridge University Press, 2009.