Sunday, December 19, 2010

Some thoughts on efficiency. . . .

I think it is very interesting that one of the primary ‘myths’ on which the Capitalist social and economic system rests is the myth of efficiency. First let me point out in the interest of clarity that the word ‘myth’ has a number of different uses in modern and ancient thought and I am using the word to essentially refer to a socially constructed story which, though it may contain a small kernel of truth, is largely a falsehood, a narrative that greases the wheels, so to speak, of a system or social structure. This particular myth consists of the idea that the success or failure of a particular enterprise rests primarily on a basic, and measurable, level of efficiency of that enterprise and its employees. Of course, even this notion is much more complex than it first appears because while massive failures in efficiency are often obvious, the actual level of efficiency of any enterprise is fairly abstract and difficult if not impossible to measure in many cases. Anyone who appreciates art knows this problem of judgment well: it is often easy to say what is wrong with a work of art but sometimes very difficult to say what is right. Anyway, though very few capitalists will admit it, the success or failure of many enterprises rests not primarily on efficiency but on a myriad of factors. In fact one could say in many cases the success of an enterprise is over-determined, that is to say rests on too many factors to be able to be accurately measure or comprehended. Like anything in life, success may rest entirely on luck. Or it may rest on local or regional factors in production or sales. It may very well rest on the hard work of a small group of people but not always. I have seen people succeed who didn’t work hard but fell ass-backwards into their triumph. If one listens carefully to the discourse of capitalists and business advocates one will realize that in 90% of cases, when they talk about efficiencies the only thing that one can really point to is wages. They like to decorate their discourse with lots of fancy and complex talk but it almost always comes down to who can pay their workers the least in a particular sector are the most efficient, and therefore the most likely to succeed.

Capitalists are desperate to perpetuate their particular myth of efficiency because the cheaper individual units of labour are the more money they can make in the short term and, more importantly, they imagine that the less money a working population makes the easier they are to control and the more vulnerable and the easier they are to manipulate as a group. This myth of efficiency is also important because it is the most often brandished weapon against any the use of social enterprise. Thus capitalists will claim ad nauseum, and without any actual evidence, that the ‘private sector’ is more ‘efficient’ than the public one. This myth is particularly false in sectors in which there are social goals that would not necessarily be improved based on efficiencies in savings like universal education.

The reduction of success to the notion of efficiency is based upon a false modeling of enterprise. If one studies economists, therefore, one will therefore, often hear or see the phrase “all things being equal.” This is part of the effort by economists to create the illusion of a science out of what is simply not scientific. But of course there are no cases in which ‘all things are equal,’ and the idea of two or more enterprises competing in an ideal space of sales and production is simply itself a myth. Thus if a number of enterprises are competing in a sector can suddenly cut wages in half over other enterprise, this saving in ‘efficiency’ will most likely give them a significant advantage but it will not always guarantee success.

But the myth of efficiency must be perpetuated for capitalism to continue because it must continue to be seen as essentially fair and, more importantly, to be seen as a meritocracy lest people begin to question it primacy. It must continue to function as a myth the same way that the myth of the universal benefits of competition must continue to function.

But next time someone passes quickly over concepts such as efficiency or the good of competition, stop and take note and think about what they  really mean. There was a time when almost no member of the Aztec society would have questioned the divinity of the Sun because few Aztecs were willing to ask the simple question that should be asked of any prevailing idea that perpetuate power – cui bono – who benefits? 


900ft Jesus said...

I especially like your last paragraph. Often felt that way when people use the word "development" like it's just the natural, good thing to do with land. Few people seem to question that word as though it has some innate reality and isn't just a word we made, a word that needs to be re-examined time to time, like efficiency.

(That's one cute kid on your masthead)

doconnor said...

Someone should put together a list of inefficiencies of capitalism come up with a total. I wouldn't be surprised if it is as much as 30%-40% of the economny, almost as much as the government sector.

It would include things like most of the advertising and finance industries, the money made by the top 1% of income earners and the inefficacy cause by redundant research and development and secrecy of best practices.

I entirely agree with your last paragraph, but I would use a more contemporary example: Currently few of members of society question the divinity of God because few are willing to ask the simple question that should be asked of any prevailing idea that perpetuate power – cui bono – who benefits?

900ft Jesus said...

"who benefits" right

kirbycairo said...

Thanks for the comments. Yes Jesus, Development is one of those concepts too. I remember when I was living in Brighton UK and I knew a guy who was doing a PhD at the school of international development. He was questioning the Western notions of poverty and underdevelopment using contemporary French philosophers. He was pointing out what we should've known all along, that the definitions of poverty and development should not be thrust upon people from outside.

And Doconnor - yes I wonder if such a study exists? It probably does. And anyone who has worked for a large corporation knows first hand the myth of efficiency.

Anonymous said...

I was just saying to my kids the other day that "efficiency" is a code word for paying someone less wages and not paying the true value of a commodity.