Things That Risk Means (part 3)

Before getting to the next step in my discourse on insurance, I need to make a stop on the topic of risk. 

Like a lot of concepts big enough to organize experience, risk means different things simultaneously.  

One part is threat or peril.  You run the risk of something bad happening.  You want to minimize, mitigate, or shift risk. 

Risk also means the probability that something might happen.  I use the phrases "upside" and "downside" risk to indicate that something good could happen as well as something bad.  For most people, the word risk still leans towards the negative, but I can't help seeing it as symmetrical.    

In finance, risk has altogether different connotations. It refers to uncertainty, and gets factored into risk-reward calculations.  You trade uncertainty for the possibility of a greater reward.  You have a greater or lesser tolerance for risk. In this case, risk is largely something good.  We celebrate risk-takers.  Your investment advisor will encourage to accept more risk because of the potential for positive returns over time. Being willing to take risk is a sign of courage. 

In administration world, risk is largely the domain of "risk managers" who do things like conduct Enterprise Risk Assessments, which identify the big scary things that might happen and line up mitigation strategies to reduce their likelihood. They also manage your insurance programs.  Insurance is one of the primary mitigation strategies.

At KPMG, I was introduced to a risk framework. It identified all the functional parts of an enterprise using Porter's 5 Forces model.  This was primarily for designing audits, where the auditor's job was to identify the risks associated with each of the elements of the enterprise and develop an audit strategy to determine the degree of exposure in each and suggest procedures, policies, and systems to reduce or manage risk. But it also has been useful for making sure you see each part of an enterprise, and think through the specific features of each. 

I've used this framework to argue that we can describe each element of an enterprise in terms of the risk that it is meant to respond to, in this case meant in terms of probabilistic outcomes.  At a university, some functions are clear--the police force is in place to protect against crime, injury, and loss of property.  I did some work at UC Santa Cruz, which had an on-campus fire department.  The UCSC campus is sited beautifully, nestled in a forest.  The fire department protect the campus from burning down on a red flag day.  But you could also see the academic departments in terms of a kind of risk--what would happen if you don't fund the English department adequately? The English department is there to make sure you offer the programs and courses students need and want, thereby increasing the probability of them coming to the campus and succeeding there. You also have an English department so you won't lose ground to the alternatives those students have.  Degradation of academic programs is a serious risk. Maybe students and other stakeholders (alumni and donors, legislators, the community, faculty) don't care if you have a good English department. But do you want to risk that?      

I've always wanted to get a client to let me work with them to use a comprehensive risk framework like this to set priorities and allocate resources. So far no takers. Starting from something like the KPMG framework I would kick off conversations that are informed by a risk tolerance orientation. There is always risk in life.  It's worth understanding the risks (probably, although you could make the case for the benefits of heedlessness and recklessness).  I like the question what risk is this function (position, office, policy, etc., etc.) designed to deal with.  I like the phrasing "deal with"--not necessarily reduce or mitigate.  You ask what risk is the HR department designed to deal with, and what would happen if you didn't do it, or did less or more of it. And you ask the same question of the English department. 

If you did this you'd have the start for comparison across activities, onw of the hardest things to do. Comparison is still hard. The outcome of the risk takes disparate forms--emotional trauma (loss of a loved one), reputational damage, social insecurity, and finally financial loss. Insurance has an answer.  Convert losses and gains into dollars (currency), the universal expression of value, value reduced to commodity. This of course shows that the danger (risk) in risk framing is to exacerbate the financialization of all relationships. 

A couple more points to make.  First, people are very bad at evaluating it. Decision theory has catalogued many errors people make in evaluating the probability of a result.  They give more weight to the possibility of loss.  They don't take into account sample size. They reason by analogy. They don't recognize randomness. They respond more strongly to vivid examples and to the most available examples.   

Like a lot of potential organizing concepts, risk is mutable. A risk starts by taking one form and before you know it takes another. A university has to decide how many police officers to hire.  Hire more, and you have better chances of preventing incidents or responding more quickly. But you may find that crime incidence does not require the number of officers you have--you might be located in a safe area and can have the same results with half the officers.  Which would allow you to hire more English faculty. But if parents get wind that you cutting back on police officers, you'll be pilloried on social media.  So what started as a technical risk of crime morphed into a concern about perceptions on the part of people loosely affiliated with the organization and the place. 

There is a reductio ad absurdum problem lurking around the corner.  If having an average number of police officers is good, wouldn't double be better?  Why stop there? Eventually you end up with a college that is all cops and no teaching. Of course it doesn't get that far, but do have any basis for knowing when the balance has gone too far. There is every reason to think that biases in assessing risk almost guarantee the balance will be out of whack.  

Insurance and me and us (part 2 of something)

Insurance seems like the last thing anyone with imagination would talk about.  The very definition of bloodless bureaucracy, mundane minutiae.  It's also been part of my family history.  My grandfather was a "life insurance man"--an executive at a small company in Nebraska, with the letters CLU after his name, a lot of his identity drawn from the role and experiences he had with that company. My father-in-law was an accomplished and successful actuary, and his work experience lent weight and wisdom to his progressive convictions. In my role as a consultant and administrator, insurance and actuarial science come up pretty regularly.  We don't always think about insurance, and part of its significance is that you want to know insurance is in place and then not think about it. You want to know that it is a solid part of the infrastructure of experience, taken for granted, invisible. 

It came as a surprise then to see insurance enter into the discussion of governmentality, which seems to be the primary intellectual framework for Foucault's huge influence on organization and administration theory. Foucault saw a society as being controlled by a "triangle" of sovereignty, disciplinarity and government, with government understood as the general exercise of control--government of one's self, government of children in education, the government of souls and lives by children, and the government of a population by the sovereign. Governmentality is the set of methods in place for managing a population and the bodies of knowledge seen as necessary to do that.  It is different from government, because it is not limited to specific organization or legal structures, but it a broader web of control techniques and a set of assumptions underlying most aspects of a period's social life.   

Risk is one of modern society's key knowledge bases, and insurance is the technical method of managing risk. 

Risk emerges as an issue because modern society, with its loosening of traditional bonds of connection and social cohesion combined with technological advances unleashed new levels of peril and uncertainty. This phenomenon is at the base of Marcuse's passion, where he laments the irrationality of a technologically advanced society where those technological advances seem to have been oriented to delivering destruction and threats to existence at an unprecedented scale. This is the irrationality he sees as the end of rationality.   

Insurance emerged in the late 19th century in a society roiled by social, political, economic, and technological change.  Some of the writing that people draw on is from French scholars who address this is in a French context, such as the institution of social insurance established by the government of Napoleon III, which offered an alternative to more mutualist approaches that were emerging from a radicalized working class.  The context though was common to the industrialized world--a society reorganized into wage-dependent urban communities where people worked in mechanized environments with huge potential for injury and penury. Insurance programs were a way to compensate for that risk.  You might lose your ability to provide economic viability for your family, but we will set up a program where you will be provided compensation if that does happen.  At a different time, an injured person might expect support from a family with a more diverse household economy--some food from a garden plot, some household industry--or from their commune.   In the 19th century, it was possible that the workers themselves would make these provisions for themselves, but that would create a power center that would challenge other parts of society for legitimacy and authority. Instead, the state stepped in, 

A surprising extent of American life s governed by insurance of one sort or another.  We don't have a pension system--Social Security is an insurance plan, where you pay in for a time, with the promise of a payout/payback later based on what you put in and expectations about life expectancy--i.e., actuarial science.  In case of injury, you are covered by Workers Compensation Insurance--your employer either carries this insurance or pays into a state program.  You can barely have a place to live without out it--to buy a house, you have to have insurance covering the value of your home, some mortgages require insurance to cover repayment, and some landlords require renter's insurance.  You can't drive without insurance. And rather than a national health plan, we have health insurance.  We've created a healthcare system that will hit you with punitive charges if you use it, and your insurance is your protection against the threat that the healthcare system constitutes. Insurance is on offer for lost cell phones, defective products, flight cancellations and so on. Anything can be translated into an insurance contract.

Insurance does a bunch of interesting things from a theoretical perspective.  It has the effect of taking shared risks and converting them into individual, atomized transactions.  For instance, flood insurance takes the risk of a natural disaster, which would be shared by everyone sharing a geography, divides up the risk into parts that can be sold as individual transactions, thereby providing an individualistic way of responding to a shared threat. 

It also does create a kind of solidarity, but it is of an abstract nature unlike traditional solidarities such as family or community.  You replace what could be active forms of solidarity--say of union members contributing to mutual funds, or a community caring for the people it knows as its members--with one that is nothing other than a risk pool defined by a group of hidden technocrats.

It converts human life into a form of capital.  Life insurance is designed to recover the lost earnings/value of the life, and it encourages individuals and families to look at lives as a form of private capital stock.  Turning a life into capital makes them equivalent. Exchange value over use value. Economics over ethics. 

It converts social relations and actions into calculations, expressed in the common denomination of dollars. It implicitly makes the case that anything can be measured and financialized. 

Insurance is an extremely effective tool for training people to understand relationships is society as agonistic. An insurance policy is an alternative to a lawsuit.  

The insistence in the US on providing access to health care through insurance has an almost mind-boggling effect.  It means that for most of us, medicine is not cast in terms of health, but in terms of risk.  The point about medicine is that you have to protect yourself from it, because if you encounter it naked (without insurance coverage), it will destroy you financially.  The threat of a medical malpractice suit is the primary vehicle we depend on to provide an incentive for good care, and I'm sure hospital administrators if not providers treat each patient as a potential litigant.

The role of insurance means that relationships are defined in terms of their potential for conflict--the operating assumption that conflict is always just around the corner. Cooperation has no weight. 

One of Foucault's key arguments is that these structures get worked into the fabric of experience. They become common senses.  They become invisible. A historically specific invisible hand. 

    

Dean, Mitchell. (1999)   Governmentality: Power and Rule in Modern Society. Sage.

Defert, Daniel (1991)  "'Popular Life' and Insurance Technology" in The Foucault Effect: Studies in Governmentality.  Graham Burchell, Colin Gordon and Peter Miller, eds.  University of Chicago

Ewald, Francois (1991)  "Insurance and Risk" in The Foucault Effect: Studies in Governmentality.  Graham Burchell, Colin Gordon and Peter Miller, eds.  University of Chicago

Foucault, Michel (1991)  "Governmentality" in The Foucault Effect: Studies in Governmentality.  Graham Burchell, Colin Gordon and Peter Miller, eds.  University of Chicago.

Marcuse, Herbert (1964). One-Dimensional Man.  Beacon.

A story from Chicago about disciplinary power in action, the first part of a series

This is going to be the first in a series of posts about risk and some related topics like insurance.  I would say that may not sound fascinating just wait until you read it, but really it probably is just something that occupies unused space in my brain and won't be so fascinating.

I want to start with one story.  My friend Laura Weathered developed an artist live-work space in Chicago called the Bloomingdale Arts Building.  Her initial vision was to set it up as a co-op for low-and moderate-income artists, and she started down this path.  People applied to be part of the project, and they went through co-op training.  This was going to be hard work for the people involved, because it would more collective and mutually-responsible than simply renting a studio or an apartment. But they all knew what they were signing on for and were aligned with the mutualist goals.  

Going through the permitting process, she ran into a roadblock with the City.  They would provide subsidized loans, but only to the owners of individual units, not to the building as a whole, so they moved ahead with the project as condos. The City financing was critical to make it affordable for the people the project was going to serve. 

Laura was operating from and within a left-wing context, so she immediately saw an ideological character of the decision.  The city government, while dominated by the Democratic party, was fundamentally conservative, as any leftist knew who had either battled the cops in Grant Park or knew the stories. 

The project was successfully completed.  The cooperative character of it survived to some extent--the people in the complex had relationships with each other, and it had a cooperative feel when you were there.  But disputes that came up over the years would have probably been handled differently if it had been fully collectivized.     

The point of this story is to question the ideological character of the decision on condos versus the coop form. That decision certainly curtailed the degree to which the project could develop a collective organization, but it is not clear that the decision was ideological, reflecting a desire of the City officials to promote a certain political order.  

In the minds of the City officials, it is likely that it struck them as simply more practical to approve Bloomingdale as a condo project rather than a coop. Individualized liability created clearer accountability for the loans. They would know who was responsible for paying back what.  If a coop owed them money, they would have less understanding of who they were dealing with.  If the coop was not operating particularly functionally, it would make it even harder to resolve the dispute. exacerbate the City's challenges.  I'm sure the City officials saw condos as cleaner. 

However, the choice of condo over coop was not neutral.  The effect was to keep the people in the mode of individual economic agents, entrepreneurs, consistent with neo-liberal governance. The effect was also to kill in the crib the potential manifestation of a cooperative entity that would form a mutually responsible alternative to the individual entrepreneur of the self. This is a perfect example of Foucauldian disciplinary power.  An unspoken pattern of thought--an episteme--prevails that guides the official's decision about how to finance this project. 

I'm telling this story because it is an example of the disciplinary tool functioning in a specific decision. It seem to be the case that the person making the decision would not have consciously been trying to promote an ideology or accrue power, but is simply trying to be competent. The pursuit of competence is what makes the disciplinary wheel go round. I'm going to get back to this phenomenon in talking about insurance.  

Huebner, Jeff. (2001.) "A City Without Art." The Chicago Reader, Nov. 1, 2001 https://chicagoreader.com/news-politics/a-city-without-art/

Replacing management with administration

A important driving impetus for O.C. McSwite's in Legitimacy in Public Administration is anxiety about the legitimacy of public administration as a discipline. Public administration focuses on the role and "legitimacy of administration as a part of democratic governance."  The problem is that administration can be seen as taking power away from the people and their elected representatives and vesting it in the hands of unaccountable bureaucrats and other experts. As a discipline, PA resides within Political Science, which studies the mechanisms of democracy like elections and legislation. McSwite's experience was that political scientists questioned the legitimacy of PA's subject and methods. Public Administrationists were seen as apologists for authoritarianism. 

I approach the legitimacy of PA from a different direction.  In part it relates to the fact that I am a bad Public Administration student.  I'm interested in organizations, the Administration part of PA, but have been slow to absorb that I'm expected to care about the Public part. It seems strange to be to run across accounts of employee motivation and run across Public Service Orientation as a category.  Suggesting that the people working for a government agency are psychologically different from people in other sectors.  That's not so much my experience on street level, especially not in a town like Nashville where the State government is one of the largest employers, so employment with a State agency is just one of the logical and in some cases most available options for gainful employment and career advancement.  

I'm quite inclined to jumble up for-profit, public, and non-profit organizations. Legitimacy is a central question in Political Science, applied to governments, public agencies, officials, sovereigns, etc. But I see no reason why one should not look into the basis of legitimacy of for-profit enterprises. In the study of for-profits, rather than legitimacy you have agency and shareholder rights. It seems very simple. Are you making money for people who have a right to that profit?  You might debate the trade-off between short and long-term returns, and you probably need to do something to explain away public goods and make them someone else's problem.  Problems for the political scientist rather that the management scholar. 

But for-profit companies make up a huge part of the building blocks of our society, and as a constituent component of the social order they deserve to be subject to scrutiny on the basis of legitimacy. This is obvious on the part of the massive corporations like Facebook and Google that provide and manage much of what passes for public space today. We are long pas the point where shareholder interests can govern them. But I also think that the real estate developer who knocked down an older shopping strip in my neighborhood that was home to several locally important businesses to build a new Mapco should face questions of legitimacy. So far we have no effective ways for addressing the legitimacy of Facebook, and there is no legal basis for controlling that developer's actions. To start, there is at least a moral question and an assertion that people in society with no contractual interest in Facebook or that shopping center have a legitimate interest in what happens. Thinking in these terms--the basis for legitimacy for an economic actor--would point towards ways of managing the marketplace that give greater weight to the socially constructive and constitutive nature of any organization. We might never be able to move towards a different legitimacy framework in the US legal structure, but it seems like a legitimacy framework might ask the right questions. 

To me the question about the legitimacy of PA as a discipline is to compare it to the other primary discipline for studying organizations and the action of individuals within them--Management.  Management training focuses on for-profit organizations, but readily applies itself to the non-profit sector and there is a great longing in society to see public agencies managed rather than administered--run more like businesses.  I was trained in a business school, and it would have made sense for me to continue on and pursue a doctorate in management, but its approaches and methods didn't seem to get at truths that concern me.

Management science is going to evaluate organizations, strategies, and tactics in terms of profit or economic return. Questions about human experience are valuable only insofar as the answers lead to stronger economic performance.  Impact on society is also either an afterthought, or something that is of interest only if you can make the circuitous case that in the end it pays.   

The things that are of secondary importance to management are primary for me. Society is built through organizations of all types. That organizational experience is often inhumane and debilitating, and keeps reverting to various kinds of authoritarianism. Can these organizations can work in humane ways, can people retain their humanity in those environments? Management studies seems to offer little opportunity to go deep into those questions.  Public administration, thanks to the more ambiguous objective statements of public organizations, asks better questions about what goes on with and in organizations, and in other ways people come together.  Administration is more likely to imagine reorganizations of society.  Management will only tune up what is already here. 

So I'd flip the tables on legitimacy of these disciplines--PA, Poli Sci, Management. I would expand Public Administration into a field called Administration Studies and then have that drive the analysis of for-profit organizations, rather than the dispiriting sight of public organizations trying to get in line with ethically and intellectually impoverished business management.  And in the end, I would like to see businesses administered rather than managed. 

This may seem like a very technical distinction, but if you take Foucauldian ideas about governmentality into account, a society's technical practices (techne) and its ways of understanding (episteme) produce the disciplinary power that shapes the social world. Extending the application of legitimacy could create movement in the episteme and in the techne that start to shake something loose.  Simply getting past the point of feeling stuck would be a good start, as long as we can avoid spinning off into political authoritarianism.

Anti-dichotomy (part 2 of 2)

In the previous post, I tried out my current thinking about a global political and governmental landscape in which three models operate. Part of the point was simply to start setting up this model so I can use it to analyze contemporary social, economic and political systems.  But part of what interests me is how this deviates from prevailing analytical models that depend on dichotomous conceptual structures. 

We tend to explain things in terms of spectrums between one pole and another. If you want to increase the dimensions, you move to a pair of one-dimensional spectrums that produce 2x2 models. With my tri-polar model, you could decide it is begging for a fourth option to be complete. Take the three models (neo-liberalism, traditional authoritarianism, state capitalism) and add social democracy. This could be worked into a grid, with the level of democracy on one axis and level of collectivism on the other

Neo-liberalism: high democracy, low collectivism

Authoritarianism: low democracy, low collectivism

State capitalism: low democracy, high collectivism

Democratic socialism: high democracy, high collectivism

The thing is, this really doesn't hold water.  Authoritarianism can have high collectivism for the right people.  The collectivism of state capitalism is of a different nature than something that might be called socialism. Rating them both high on collectivism suggests they share a characteristic, where in fact they have different characteristics that might be described with the same word.  

The grid only makes sense as an artificial symmetry.   

Analytical habits gravitate to spectrums, bi-polar models, and grids.  All of which violate the complexity of experience. At any given time, a few different models will be at play in the field. The task is to look at what is there and make sense of what you find.  Dichotomous thinking leads you too quickly to reductions of complexity. 

The pitfalls of dichotomous thinking reminds me of the way my friend David Dark takes up charged words that are part of an agonistic pair. He will subvert a term like conservative (or evangelical) by redefining it and connecting it with meanings and associations that we conventionally think of as its opposite.  This used to aggravate me.  My thinking: We need to be able to give things names that we can stick with.  And we are involved in a struggle that is important, and we need to be able to line up on the side of what is right.  As Florence Reese would ask, Which side are you on?    

Today it occurs to me that David was engaging in an act of discursive sabotage which had the effect of denying all combatants use of the asset or weapon.  What happens then? They need to reconsider how they relate to each other on the field, and maybe they will find that discursive violence doesn't work as well with the new terms.  It opens up a moment to consider the possibility of discursive compassion--feeling together.  The players might not take up the option, but the rupture makes something possible.  

Tri-polar system (part 1 of 2)

In the political science literature, a lot of work rides on placing people on a left-right spectrum. Problem, is I don't think the categories are real, but are defined in circular ways. Rather than a set of policy positions defining position on the spectrum, it seems like the policy positions are selected to characterize left or right on the basis of the correlation between those positions and people you have already defined as left or right wing. Why should a position in favor of abortion rights be inherently "left" wing? Doesn't it make as much sense for a right-wing authoritarian to embrace abortion as a tool for controlling and shaping the population? We use a pro-choice position as an indicator of liberalism because it is a position typical of people we think of as liberals.

You also run lots of writing that sets up an opposition between neo-liberalism and a more collective alternate form of social organization and government, some form of a renewed welfare state or maybe socialism. The assumptions of neo-liberalism are so deeply embedded that the alternative is to a great extent theoretical. You have a problem of actually existing collectivism, similar to the problem one used to have with actually existing socialism. 

One thing that characterizes the left/right liberal/conservative discourse and discussion of neo-liberalism and its alternatives is that in both cases you are dealing with a one dimensional spectrum or a bi-polar opposition. There is no reason experience should be limited to this dimensionality, and framing things this way does not line up with what I see when I really look.

I see 3 alternative political and economic philosophies in competition: neo-liberal democracy, Western style or traditional authoritarianism, and State capitalism. Neo-liberalism is what is practiced in most democracies in the world today, with markets as the basis for all activity, with the model extended ever deeper into social relationships and disciplinary tools training people to act as entrepreneurs of the self. Much of the role of government is to set up and enforce a clean set of rules so all can play. Loyalty to the market trumps all. In the US, the major competitor to this model is outright authoritarianism, where the goal of government is to privilege parts of society who will support the dominance of a singular leader. Authoritarianism maintains markets but is willing to distort them in favor of politically "appropriate" actors. Loyalty to the leader and its faction trumps all. In State capitalism, the State intervenes in the market actively, and combines state-owned (socialized) and private enterprise in shifting ways. It maintains markets, but does not trust them to serve society well enough to provide necessary social stability and to inspire pervasive acquiescence among the population. Stability of the nation trumps all in state capitalism.

The traditional authoritarian models include Hungary, Russia, Turkey, Brazil, and the Philippines, and importantly Trumpism. I'm tempted to call it neo-authoritarianism, but mostly for the parallelism with neo-liberalism, and I haven't work out a clever set of distinctions to distinguish neo- from old school authoritarianism. But then again, sometimes I doubt whether neo-liberalism is a new thing, or a continuation of liberalism after a short interruption with a Keynesian variant.

In the US, the biggest split in society is between those who want to maintain a neo-liberal democracy and those who long for authoritarianism.

China is the main example of state capitalism, and even if it where the only one, the fact that 20% of the people in the world live there justifies elevating it to a world-level system. Some other countries may fit this model--say Iran.

From what I can see, these models can account for pretty much every country on the globe. There was a time when some of the northern European countries stood apart, but they've mostly been subsumed into neo-liberalism.

The difference between prevailing neo-liberalism and a theoretical alternative model does make it into electoral politics in the Democratic Party where there is some struggle between moderate democrats and a democratic socialist flank. But for now the democratic socialist model is mostly theoretical, and it is hard to see the path for it coming into practice. You might argue that some municipal governments are trying it out--say Portland or Seattle--but even there, they get pushback from a business sector--the thing that defines much experience in Seattle is really big companies, and tech-based civic boosterism is strong. Also, there is only so much that you can do on the municipal level. Most tax policy gets set on a State level. Important functions like prisons and universities are on that level.

For now, I'm using this tri-polar model to understand the socio-political landscape. We'll see how it holds up.

Soft on markets

I have started into literature that takes a critical approach to accounting and finance.  A good place for me to hang out a bit, and see what I can do with 30 years of finance experience.  

For me, accounting as much as anything has some quality of baseline truth or inviolable structure. In college, I was surprised to see that in addition to rational organization of free labor and separation of business from the household, Max Weber attributed the rise of capitalism in the west to double-entry bookkeeping (Weber, 21-22).  At the time it seemed oddly mundane. In business school I finally learned some accounting , and quickly in work that followed I saw the discipline as a remarkable system that created a pervasive lingua franca to tie together almost everything going on in an organization. When accounting was corrupted, like Enron, it threw the whole economic system into question.  Accounting would answer questions like whether Donald Trump is actually wealthy or just faking it in spectacular fashion. When you are in an environment where the same rules don't apply or the information is not available--like China--it greatly amplifies the sense of disorientation. 

Accounting works according to a mix of common practice, something like Common Law, and formal rules--importantly, rules developed outside governmental structures and therefore insulated from democratic pressure. Accounting rules carry assumptions and values that are easy to leave unexamined.  The most basic premise of double-entry bookkeeping--that every asset is offset by an obligation of the same size--sounds like a primarily moral argument, and I'm not sure I can unpack its implications. Critical studies of accounting will take the word accounting literally with different meanings, and treat it both as counting and recording, and taking account for and of, and documenting or creating accountability.  What are you accounting for, and to whom.  In standard business school thinking, it's pretty simple--economic returns, created by the organization for the benefit of owners. But in the organization, there are other people to be accountable to, and other things to be accountable for.

Farzana Aman Tanima, Judy Brown, and Jesse Dillard did a study of microlending programs that addresses accounting and accountability critically. Microlending programs have been celebrated as vehicles for advancing women in impoverished environments and providing them with new grounds for independence and dignity.  They are also seen as cost-effective, loans not grants so they are repaid, a strategy that allows the program to leverage investment dollars for a more extensive impact. It's cheaper than outright giving people money or providing services. The system works depends on accountability systems that hold the borrowers accountable for making payments on their loans, which is then reinforced by borrower group which allow the microfinance institution to have a level of collective accountability, and which provide a structure for borrowers to hold each other accountable.  They self-police.  A prime example of a capillary disciplinary tool.    

Tanima and her co-authors point out how this system serves to create entrepreneurs, in effect neo-liberal subjects, who serve to extend market logics deeper into communities--again, a disciplinary tool that works at a very local level deeply integrated with the social fabric. Tanima et al's primary critique is that microlending is a neo-liberal alternative to providing a true social safety net, and that in developing women as entrepreneurs prepared for the global marketplace, the programs do nothing to develop them as citizens able to advocate for themselves and engage in political action founded on their interests.  

The authors turn to Gender and Development studies for an alternate set of values by which they evaluate microlending--hold it accountable.  For GAD, the goal is to produce empowered citizens, not entrepreneurs.  Those citizens will be capable of organizing to gain access to "rights, resources, and accountability"   In fact they would replace programs to promote entrepreneurs with programs to critique the claims of and legitimacy of markets. They argue that the value of the borrower groups is that they could be--and I think they would say should be--a platform for developing empowered citizens. 

In this study, Tanima et al point out that the accountability in the microlending programs is one-way--the women are accountable to the lender for both repayment of the loan and also for retooling themselves as neo-liberal subjects.  There is no accountability going the other direction, from the lender to the borrower. These authors argue that "accountability should hold powerholders--MFIs, donors, governments and global development institutions--answerable for their commitments to pro-poor development and women’s empowerment."  

This simple idea seems to me very useful.  In any organization, there could be a lot more mutual accountability. As a thought experiment on budgeting, I'm trying to workout how administrative leaders could be accountable to others in the organization, on terms the other community members define, rather than accountability defined by the leaders. In those cases, the choice of the bases for accountability will in all likelihood extend leadership dominance of discourse through other means. 

While I don't argue with Tanima, Brown and Dillard's argument that microlending functions as a disciplinary tool that supports a neo-liberal order, I do find myself resisting some implications in their arguments. The core criticism here is that the women would be better off abandoning their forays into the market in favor of advocating for a social safety . The authors would probably not say that microlending or similar entrepreneurial activity should be cast aside completely in favor of pure welfare statism, but there seems little room for legitimacy of these market-oriented ideas. I'm not sure where any entrepreneurial activity would stand if development organizations in fact concentrated their resources on training women to critique this markets and entrepreneurship, identify damages related to them, and express the overriding importance of collective social programs. 

At this point, I just have to admit that I am soft on markets.  I think it is great for people to develop businesses, even if it is just freelance work.  I always encourage people thinking about this direction.  There is dignity in providing for yourself directly.  Creating a business or an independent income is challenging and intellectually rewarding.  It provides freedom.  DIY culture is built on this.

There probably partly reflects my poor life choices, which have resulted in spending most of my life in entrepreneurial and freelance roles.  If I had played it smart, I'd have a steady job and a guaranteed pension.  Instead, have I just made lemonade from lemons, made do?

I was horrified by Reagan and Thatcher, and Blair and Clinton, as neo-liberalism came in.  But a critique with no breathing room for markets leaves me cold.  Part lies is this intolerance for markets and the lack of acknowledgement that markets are to some extent creative and generative (as well as destructive). While not necessarily an element of this article, in the critiques of neo-liberalism I sometimes see resistance to quantifying activity and performance.  Measurement is not the only thing that matters, but it does provide an entry point to understanding an organization that we need.  I like that I can look at audited financial statements and tell some things about an organization--sometimes specific history, sometimes a general sense of where some of its effectiveness lies or is lacking.    

What I found interesting about my reaction to this article is that it was so much an emotional reaction. It felt like something was being rejected here that I was not prepared to let go of. I approach big bureaucracies with ambivalence at minimum, and look for the spaces where people can act in freedom.  One of those spaces is where they are working for themselves, and finding their partners and collaborators.  

Tanima, F. A., Brown, J., & Dillard, J. (2020). Surfacing the political: Women’s empowerment, microfinance, critical dialogic accounting and accountability. Accounting, Organizations and Society, 85, 101141.

Weber, Max (1958). The Protestant Ethic and the Spirit of Capitalism. Charles Scribner's Sons.

Where's class

One thing that surprised me about returning to the graduate classroom in the social sciences was the lack of conversation about class.  I think most of my professors would consider themselves left-wing or progressive, so it was not a function of ideological aversion.  But in training people to research public administration, class did not emerge as a frequent touch point. Although, really I’m not surprised.  Class always struck me as a problematic as an analytical or even an organizational tool—it’s hard to define.  In the U.S., or maybe in contemporary society more generally, we are sloppy in how we use the term.  We talk about working class, middle class (divided into lower middle class and upper middle class), upper class, maybe about lower class, but there are no real lines here.  And these categories have nothing to do with the definitions in Marx.  We define class, when we define it, in terms of some sort of income bands, although working class can sometimes mean a certain kind of work—a union electrician is working class even with an income in the 6 figures, a poorly paid unionized teacher may or may not be considered working class. 

For Marx, class was a position in the social order defined by the relationship to the means of production. Those who owned it were the bourgeoisie, those who worked for wages were the proletariat.  Subsequent theorists like Gramsci added subsumed classes—people like professionals who work on behalf of either the owners or the workers.  

Whereas the normal American class formulation with its varieties of class bands would be populated in a somewhat balanced way (at least pyramidal), for Marx class distribution is very polarized—a small number in the bourgeoisie, a great number in the proletariat.  The Occupy Movement with its invocation of the 1% seemed to get back to this sort of starkly differentiated class sorting, but it was still an arbitrary income cutoff and did not relate to function.  Should we talk about the 1% or the 0.1% (the billionaire class)?  What about those at 2%, 3%, all high incomes?  Would a non-profit hospital or university exec be considered part of the same elite as someone with a controlling interest in a corporation? 

When I was younger, there were debates over whether one should talk about race and gender, or whether these needed to be understood as secondary to class conflict.  Well, in 2021, there is much more discussion of race and gender, and a much stronger and more cogent critique of existing systems coming from those perspectives.  The classic Marxist class-first argument seems to have taken a back seat.

The temptation to prioritize between race, gender, sexuality and class of course creates false conflicts.  CRT gives us the concept of intersectionality which allows you to navigate this stuff pretty well.  A female CEO experiences misogyny as a woman, but experiences it differently than a woman who is not in the C-suite and/or is black, an immigrant, indigenous, etc.

The best precis on class I’ve run across lately is in Kathy Ferguson’s The Feminist Case Against Bureaucracy, a fine book that looks to have some very actionable ideas which I’ll address in another post.  She presents a breakdown of class that is a little more complicated than 19^th century Marxism, but still has a functional base: “the elite, consisting of directors and top executives, who make policy; the ‘new working class,’ made up of highly skilled technical, managerial, and professional employees, who occupy the middle level of organizations; and the industrial and clerical working class, whose positions generally have low educational requirements and involve highly routinized, fragmented work. At the bottom are the marginal workers who occupy the “casual jobs” of the secondary labor market, whose relationship to large organizations is tangential and insecure, and who move back and forth between the roles of worker and client.”  (p. 84).  These definitions have a good grounding in function, although the boundaries will blur, of course, and the emergence of the contemporary tech economy (the book was published in 1984) might mix this up.

I’m still not sure that class, either defined in terms of relationship to the means of production or a schema like Ferguson’s can prove very important analytically in today’s world.  It does not seem that people identify themselves along these lines or experience solidarity within these groups. Distinctions within any of these classes seem stronger than distinctions between them. Unions will argue with this, but who they represent is so spotty, and seems to have nothing to do with a functional class distinction.  The presence of unions has more to do with how certain groups of workers are handled in certain kinds of organizations—they survive in legacy large commercial organizations, and they expand in government organizations where they seem more to represent professional interests more than class. Unions today have suffered from an assault so relentless that they arguably have been forced to distort themselves simply to survive, and have ended up in a form that can only represent narrow interests.

Kathy Ferguson. 1984. The Feminist Case Against Bureaucracy. Temple University Press.