SOC 420 Second Paper 2013 Winter: The Interactions between the Universal Market and the Social Norm of the Financial Independence of Young Adults

Xiaorui Huang

SOC 420 Political Economy
Paper 2

Instructor: Prof. John Foster

2013-Mar-4^th

Grade: A+

The Interactions between the Universal Market and the Social Norm of the Financial Independence of Young Adults

Introduction

The universal market constructed in monopoly capitalism is a nearly inescapable web entrapping its inhabitants and determining conditions of their lives (Braverman 194). The construction and expansion of the universal market lead to the destruction of family as a previously dominant social institution for production and other social activities. In this process, social norms change accordingly. One of norms formed is the financial independence of young adults from parents. Within Braverman’s theoretical framework of the universal market, I analyze the interactions between the universal market and the social norm of the financial independence[1] of young adults in the United States. On one hand, the expansion of the universal market contributes to the formation of this norm. On the other hand, this norm reinforces the expansion of the universal market in return.  

The Universal Market Promotes the Financial Independence of Young Adults

            The conquest of household manufacturing by the universal market is accompanied by a series of changes in social norms. Braverman points out that the commodification of labor and home provisions instills a “powerful urge in each family member toward an independent income” (191). In other words, the construction of the universal market encourages the formation of the social norm of the financial independence of young adults.

            The correlation between the development of this norm and the expansion of the universal market can be shown by a comparison between America and China. In America, a country has reached the maturity of capitalism with a universal market completely built, the idea of the financial independence of young adult is widely accepted and valued. According to a 2012 survey by Pew Research Center, even though the economic downturn since 2007 has significantly impaired the financial well-beings of young adults, 67% of parents and 66% of young adults in America believe that young people should achieve financial independence by the age of 22. On the contrary, in China, where capitalism did not start until 30 years ago and the universal market has not yet fully permeated, young adults are not compelled as much as their counterparts in America to make their own livings. An online survey[2] shows that only 42% of young adults agree that financial independence is an obligation for college graduates (qtd. in Yan). Another study[3] shows that in 65% of households in China, young adults at least partially rely on parents for financial support (qtd. in Zhao). 

The difference between America and China in the extents to which the norm of financial independence of young adults is accepted is correlated to the different levels to which the universal market is built in the two countries. Based on Braverman’s argument mentioned above, it is reasonable to argue that the expansion of universal market at least partially causes the formation of the norm of the financial independence of young adults.

Financial Independence of Young Adults Reinforces the Expansion of the Universal Market

            While the expansion of the universal market promotes the social norm of financial independence of young adults, this norm in return reinforces the universal market in three ways. First, it provides extra labor force for the development of the universal market. As a social norm, it compels young adults to earn their own incomes instead of receiving financial support from parents. Since the universal market either destroys or discredits nearly all its alternatives, the only way for the majority of young adults to gain income is to sell their labor in the market in exchange for wages, which fulfills capitalists’ demand for labor force.

Particularly, young adults satisfy the need for labor force by retail and service sectors during the expansion of the universal market. According to Braverman, the institutionalizations and commodification of care and entertainment of human beings, a necessary step in the expansion of the universal market, calls for a large amount of labor in retail, hospitality, and service sectors in general (194). Not a coincidence, these sectors are exactly the largest employers of young adults. Statistics show that in 2011, service, sales, and office (non-managerial) occupations together count for 64% of all jobs taken by workers between the ages of 16 and 24 (U.S. Bureau of Labor Statistics). In this sense, the social norm of the financial independence of young adults “feeds” the universal market with the inflow of young workers and contributes to its expansion.

The second way that the norm of financial independence of young adults reinforces the universal market is enlarging the reserve army of the labor. While young adults (16 - 24) meet the market’s need for low-wage labor, their unemployment rate is generally higher than other age cohorts (U.S. Bureau of Labor Statistics). In other words, the inflow of young adults to labor market increases both the absolute number of the unemployed and the percentage of it to the whole labor force. According on Marx’s theory, the reserve army “through their active competition on the labor market, exercise a continuous downward pressure on the wage level” (Sweezy 87). Therefore, by pushing young adults into labor market and thus enlarging the reserve army of labor, the social norm of financial independence of young adults helps capitalists exploit labors in general. As a result, capitalists are further enriched and empowered. Meanwhile, workers with low wages and no savings have their subsistence tied up to their jobs, and are forced to pay tribute to the expansion of the universal market.

In addition, the social norm of the financial independence of young adults reinforces the universal market by practically replacing older members of society who are economically less active with young adults who are economically more active. In the universal market, people are primarily assigned the roles of labor and consumer. In both roles, young adults function better than older people and thus serve the interest of capitalists and the universal market better. In terms of labor, capitalists prefer younger, cheaper workers over older ones (Foster & McChesney 134). With the inflow of young adults to the labor market, capitalists can replace older workers who are deemed to be unproductive, too expensive, or difficult to control with young adults who are cheaper and more productive. Since almost all lower-end jobs have been deskilled, the inexperience of young adults becomes irrelevant or even beneficial as they are easier to manipulate. In terms of consumption, young adults are generally more consumptive than older people with the same purchasing power. This is because the sales effort and the educational process that promotes market over other alternatives (e.g. family) work more on younger generations than older ones (Braverman 191). Thus, by encouraging the inflow of young adults into labor market and allowing capitalists to constantly replace older workers with younger ones, the norm of financial independence of young adults leads to the transfer of purchasing power (i.e. wages) from older people to young adults, which then promote consumption and the expansion of the universal markets. Combining both labor and consumption sides, this norm practically encourage the replacement of older workers who are less productive and consumptive with young adults who are more productive and consumptive, which serves the interest of the universal market and the capitalists. 

Conclusion

The interactions between the universal market and the social norm of the financial independence of young adults are mutually beneficial. While the expansion of the universal market contributes to the formation of this norm, this norm in return reinforces the expansion of the universal market by providing extra labor force, enlarging reserve army of labor, and helping filter the society out all but economically active members that best serve the interests of the market and the capitalists. It is noteworthy that, however, the social norm of the financial independence of young adults is not itself evil. It is formed under the historical conditions of the expansion of the universal market, and is therefore born to serve the interests of the universal market and capitalist economy.

Works Cited

Braverman, Harry. "The Universal Market." Labor and monopoly capital: the degradation of work in the twentieth century. 1974. Reprint. New York: Monthly Review Press, 1998. 188-96. Print.   

Foster, John Bellamy, and Robert Waterman McChesney. "The Global Reserve Army of Labor and the New Imperialism." The endless crisis: how monopoly-finance capital produces stagnation and upheaval from the USA to China. New York: Monthly Review Press, 2012. 125-54. Print.

Sweezy, Paul Marlor. "Accumulation and the Reserve Army." The theory of capitalist development; principles of Marxian political economy. New York: Monthly Review Press, 1942. 75-95. Print.

United States. Bureau of Labor Statistics. "Labor Force Statistics from the Current Population Survey." U.S. Bureau of Labor Statistics. N.p., 6 Feb. 2013. Web. 5 Mar. 2013. <http://www.bls.gov/cps/tables.htm>.

Yan, Tingting. "When do you stop receiving financial support from parents." ChinaTaizhouNet. TaizhouNet, 6 Apr. 2012. Web. 3 Mar. 2013. <http://www.taizhou.com.cn/news/2012-04/06/content_568754.htm>.

"Young, Underemployed and Optimistic | Pew Social & Demographic Trends." Pew Social & Demographic Trends - Public Opinion Polling, Survey Research, & Demographic Data Analysis. Pew Research Center, 9 Feb. 2012. Web. 5 Mar. 2013. <http://www.pewsocialtrends.org/2012/02/09/young-underemployed-and-optimistic/1/>.

Zhao, Jian. "The analysis on the NEET group in Chinese college graduates." Shi Ji Qiao 4 (2008): 119-20. n.a.. Web. 2 Mar. 2013.

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[1] In this paper, financial independence means exclusively one person earning an income that is sufficient enough to make a living without external financial support. Other types of individual independence (e.g. producing one’s own basic needs directly) are not discussed in this paper.

[2]^{, 3} These two pieces of data have only limited credibility because the original studies from which they are extracted are untraceable. Also, the effort to search for more credible data failed. For further study, more accurate and credible data is needed.

SOC 420 First paper 2013 Winter: The Present Survival Relying on Future Death: The Sales Effort and Monopolistic Capitalism

Xiaorui Huang

SOC 420 Political Economy
First Paper

Instructor: Prof. John Foster

2013-Feb-12

Grade: A+

The Present Survival Relying on Future Death:

The Sales Effort and Monopolistic Capitalism

Introduction

With capitalism reaches maturity and monopolistic economy replacing competitive economy, the tendency for the surplus to rise becomes the principle. In this phase of capitalism, normal production and consumption mode can no longer generate enough outlets for increasing surplus, which is the root for stagnation of capitalist economy. As a result, idle capital concentrates in a few hands; productive capacity is far from fully utilized, and the whole economy suffers from chronic stagnation. The sales effort is one of the approaches developed by capitalists to stimulate demand for consumption, drive investments, and absorb surplus. According to Baran and Sweezy, sales effort is one of the most powerful factors that shape economy and other social institutions (115).

A side effect of the sales effort as a method to drive surplus absorption is the wasteful utilization of resources, which becomes increasingly significant in a long term. I argue that while it counteracts chronic stagnation of monopolistic capitalism, the sales effort will lead to depletion of natural resources and pose an ultimate threat of capitalist economy. In addition, with research and development being compromised by the sales efforts, technological progress is very unlikely to help transcend the limits of natural resources and save capitalist economy. Therefore, paradoxically, the capitalist economy replies on the sales effort, a surplus-absorption mode that will ultimately lead its death, to temporarily maintain its existence.

The Sales Effort Causes Wasteful Utilization of Resources

The sales effort under monopolistic capitalism both upsizes and speeds up the flow of goods from production phase to consumption phase, which introduces significant wasteful utilization of resources. Here I analyze three ways (although there are many others) that sales effort causes and accelerates wastes of resources.

First, the sales effort subdivides people’s needs and desires, and reduces people’s tolerance of using one product for multiple purposes. Baran and Sweezy argues that oligopolistic corporations use advertisements to “establish and maintain a pronounced difference between their products and those of their competitors” (116). One way of doing this is to subdivide people’s needs and desires and artificially create different “niches” for products with overlapping functions. A quintessential example is cosmetic products. Take lip make-up products for instances: originally a lipstick satisfies almost all needs; then cosmetic industry through advertisements introduces lip liners, lip plumper, lip balms, and lip-glosses, etc., each allegedly satisfy a unique need and is both indispensable and irreplaceable. Consumers are persuaded to buy all of them, even though there is actually great overlap of their functions. As a result, consumers demand more than what they actually need, which leads to unnecessary high level of production and resources exploitation. In this sense, by intentionally subdividing people’s needs and desires, sales efforts lead to wasteful utilization of natural resources.

Another way that sales efforts cause wasteful utilization of resources is discouraging shared use among people. For example, housing industry cites child psychologists and claims that each child needs a private room to develop individuality (Robbins 22). This advertisement discourages parents to share bedroom with children or children share bedrooms with their siblings. While the scientific validity of this advertisement remained unverified, consumers are likely to be swayed by it and tend to build or buy bigger houses, which inevitably increase unnecessary consumption as well as resource utilization.

Thirdly, the sales efforts also accelerate wasteful resource utilization through bringing future needs and desire to present, which consists two elements. First, the advertising industry creates constantly changeable fashions and encourages people to pursue these fashions. This encourages consumers to keep buying new and “fashionable” stuff to replace older ones before they wear out. In other word, the future need to replace a product after its use value depletes is replaced by a much temporally nearer need to buy new stuff when older ones’ “fashion value” deplete. Second, the “selling” industry employs credit system to enable consumers to use their future purchasing power to buy goods at present time. Since consumers’ demands are only valid if they actually make the purchase, the credit system virtually brings future needs of people to present. Both elements combined speed up the flow of goods from production to consumption. Considering the fact that such a flow involves wasteful utilization of natural resources, the sales effort accelerates the wasteful utilization created by itself.

Generally, while it can boost demand for consumption and counteract the tendency of stagnation of monopolistic capitalism, the sales effort causes and accelerates the wasteful utilization of natural resources.

Wasteful Utilization of Resources Poses An Ultimate Threat to Monopolistic Capitalism

Baran and Sweezy do recognize massive waste of natural resources as a negative impact of the sales effort; however, with their main focus on political economy, they appear to underestimate the significance of wasteful utilization of resources. They claim that “there is of course a waste of resources in such cases (i.e. the sales effort drives investment that would not take place otherwise); but in the presence of unemployment and idle capacity, these resources would have otherwise remained unutilized” (127). In this argument, Baran and Sweezy seem to indicate that unutilized resources are negative to economy, which is rather short-sighted as they fail to consider unutilized resources as necessary reserve for future development in a world with limited resources.

In my perspective, in a long term, the wasteful utilization of resources introduced by the sales effort is as significant as its political-economic function of increasing aggregate effective demand. Furthermore, while the sales effort counteracts stagnation of monopolistic capitalism, it poses an ultimate threat to monopolistic capitalism.

In the face of various global environmental issues including energy crisis and global warming, the waste of resources introduced by sales efforts have gradually manifested as a significant concern that threat almost all aspects of social lives. As the sales effort becomes an integral part of monopolistic capitalism, economy is increasingly dependent on it for surplus absorption. However, the limits of natural resources determine the unsustainability of such a surplus absorption mode.  If no intervention occurs, the final stage of a monopolistic capitalism relying on the sales effort will probably be a phase of a very high demand for consumption and very low level of production that, due to resource depletion, is far from satisfies the. Great social upheaval is foreseeable in this circumstance. Of course, when the shortage of natural resources threats the ruling class, it may take measures to adapt to it. Perhaps the sales effort will be largely cut off and frugality be promoted among lower classes. In other words, lower classes will experience a great contrast between the previously consumerist lifestyle and the later shortage of living necessities. In this case, the ruling bourgeois is likely to have difficulties keeping the lower classes under control without triggering a revolution that overthrows capitalism. In this sense, the sales efforts poses an ultimate threat to monopolistic capitalism by making it depends on wasteful utilization of natural resources and leading it to a revolution triggered by depletion of resources. However, different from the communist utopia in Marxist theory, the sales effort will leave the post-capitalist society with a world of resources shortage, which, if anything, is a dystopia. 

Inability of Technological Progress under Monopolistic Capitalism to Transcend Limits of Natural Resources

Some may argues that technological advance could solve the problem of limited natural resources and enable monopolistic capitalism continue to exist and develop with the help of the sales effort, which is highly questionable. Although human creativity and the resulted technological progress have contributed greatly to the development of human civilization, it is doubtful, if not impossible, for technological advancement to help mankind transcend the ultimate limits of natural resources. Even if there existed an ideal technological level that could help human transcend the limits of natural resources, it is unlikely to happen under monopolistic capitalism. This is because the research and development sector as a whole is penetrated and undermined by the sales effort, as discussed by Baran and Sweezy (94-95, 129-130). Specifically, the goal of capitalists who have financial capability to invest in technological research is maximizing profits, which, in monopolistic capitalism, make them favor profit-oriented researches over researches for real technological advancement. In other words, technological research in monopolistic economy is compromised to be part of profit maximizing strategies. According to Baran and Sweezy, monopolistic capitalism slows down both the introduction of innovations and the replacement of older technologies by newer ones (94-95). Moreover, through their political power, capitalists often intervene in governmental research on new technologies that may threat their profits. An example is Big Oil’s lobbies that successfully keep governmental research funding on renewable energy much lower than the subsidies to oil corporations. Thus, technological researches for real advancement in both private and public sectors are suppressed in monopolistic capitalism. Therefore, it is highly unlikely for technological progress under monopolistic capitalism to help human beings transcend limits of natural resources and save monopolistic capitalism.

Conclusion 

While the sales effort is considered effective in counteracting chronic stagnation of monopolistic capitalism, its side effect of wasteful utilization of natural resources poses an ultimate threat to capitalist economy. Specifically, the sales effort leads the monopolistic capitalism depending on it to an anti-capitalism revolution triggered by depletion of resources. In addition, with research and development being compromised by the sales efforts, technological progress is very unlikely to help transcend the limits of natural resources and save capitalist economy. By and large, the capitalist economy replies on the sales effort, a surplus-absorption mode that will ultimately lead its death, to temporarily maintain its existence. Such a paradox reaffirms Baran and Sweezy’s conclusion that capitalism is not a “socially necessary economic system” (141).

Work Cited

Baran, Paul A., and Paul M. Sweezy. Monopoly capital. N.Y.: Monthly Review Press, 1966. Print.

Robbins, Richard H.. "Constructing the Consumer." Global problems and the culture of capitalism. Boston, MA: Allyn and Bacon, 1999. 11-31. Print.