Tuesday, September 28, 2010

Standardization: state vs. capitalist

James C. Scott, author of the well-received Seeing Like a State, has an interesting lead essay on Cato Unbound a while back, entitled "The Trouble with the View from Above", which largely recaps the argument of his book. Briefly, that argument is that states, in their efforts to improve what he calls "legibility", tend to introduce and enforce various forms of "standardization" to societies -- in names, measures, practices, and so on -- which, in ignoring or overriding local or "vernacular" knowledge and practices, can and often does result in considerable social damage. Legibility -- meaning being able to see what people are actually doing -- is important to states (or, more concretely, to state rulers) because without it they lack the means to control the society effectively -- especially, of course, to tax, but also to regulate, commandeer, and administer. So this is what he means by "seeing like a state".

Now, this argument in itself is an excellent one, and he develops it with an impressive and fascinating attention to detail and concrete example. The problem is that he tries to carry it too far -- into an argument dealing not just with state-enforced standardization but with standardization as such, and particularly with what he calls "large-scale capitalist" standardization. As he says at the end:
... large-scale capitalism is just as much an agency of homogenization, uniformity, grids, and heroic simplification as the state, with the difference that, for capitalists, simplification must pay. The profit motive compels a level of simplification and tunnel vision that, if anything, is more heroic that the early scientific forest of Germany. In this respect, the conclusions I draw from the failures of modern social engineering are as applicable to market-driven standardization as they are to bureaucratic homogeneity.
This, I think, is just mistaken -- in a number of ways, but in one important and interesting way in particular. To deal with some of the other ways first, it's a mistake to ignore the difference between the state and the capitalist firm in the purpose or use of standardization -- for the former, it's primarily for the purposes of control, with obvious potential for abuse; for the latter, primarily for efficiency, with just as obvious potential for benefit. It's also wrong in its focus on standardization as such as the problem rather than on state-enforcement, which latter really does override and often suppress vernacular practices rather than co-exist with them.Whereas standards that are used or even prevail not because they've been imposed but because their general efficiency or even "legibility" make them generally attractive, to individuals as well as to firms and states, and often in conjunction with other local systems and practices, are real improvements, and not just in the state's ability to collect taxes. And the routine academic disdain for the "profit motive" here seems merely simple-minded prejudice, especially since, as I'll get to, it may well be that motive that requires more rather than less attention be paid to local knowledge, preferences and the like.

Which leads me to the more interesting aspect of his error. He's right that large-scale capitalist enterprises generally foster standardization, and even impose it where they have property rights to do so, since this is really an aspect of their scale itself -- that is, the competitive advantage of their size lies precisely in the efficiencies that widespread standardization brings, allowing them to provide goods at a lower cost than smaller, more local rivals can. But cost is not the only economic variable, and in becoming dependent on standardization (among other problems of size or scale), this is also the source of their primary disadvantage. This is because, without being able to impose standardization in the way states can, such large-scale enterprises are vulnerable to other, typically smaller and more local or regional competitors that can make use of local knowledge, cater to more particular tastes, and/or accommodate vernacular practices -- that is, in other ways than raw cost, small is not just beautiful, it's typically more flexible, adaptable, and nimble. The economic landscape everywhere, in other words, is a fractal one, with a few large entities competing more or less stably at one end of the scale, innumerable small start-ups constantly appearing and disappearing at the other end, and all manner of enterprises of mixed sizes and durability in between, all existing in just those vernacular niches that the large-scale firms have had to neglect in order to achieve their standardization efficiencies.

And all of this is driven by the so-called "profit motive", which requires not just minimizing costs but also maximizing the quality of service and/or goods at the same time. Contrast that with the control motives of the state, and it becomes apparent why capitalist and statist standardization are radically different phenomena, with quite different consequences for society.

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