SAMUEL BOWLES AND HERBERT GINTIS: FROM CHAPTER 3 OF SCHOOLING IN CAPITALIST AMERICA

This reading is from: SCHOOLING IN CAPITALIST AMERICA by Samuel Bowles and Herbert Gintis. New York: Basic Books, Inc., Publishers, 1976.

FROM: CHAPTER 3: "AT THE ROOT OF THE PROBLEM -- THE CAPITALIST ECONOMY

Pages 83-101.

The Structure of Economic Inequality

Q: Why does the foreman get more than the laborer?
A: Because the foreman's work is of more value than the laborer's.

Henry Baenard,
Papers for the Teacher, 1866

Our analysis of the sources of economic inequality and social immobility closely parallels that of the work process, in that both stem from the property and market institutions of capitalism, from the social relationships of work and from the dynamics of uneven development. We intend to support the assertion that the roots of inequality in the United States are to be found in the class structure and the system of sexual and racial power relationships. The school system is then but one of several institutions which serve to perpetuate this structure of privilege. But education is relatively powerless to correct economic inequality. Indeed, the class, sex, and biases in schooling do not produce, but rather reflect, the structure of society at large. The prima facie case for using education as an for economic equalization is thus weak. If, as we argue here, inequality has its origins in the structure of the capitalist economy, educational reform will be a powerful force for equalization only to the extent it can alter those aspects of the economic system which provide the institutional bases of inequality. Indeed, we believe that educational reform can become an integral part of an assault on privilege. But we are moving ahead of our story. We will return to these issues in our concluding chapters.

In the immediate post-World-War-II period, U.S. social scientists exhibited an optimism that, in the context of a rapidly advancing economy, inequality would wither away to politically manageable if not ethically levels. Arthur Bums celebrated what he detected as ". . . democratization of the distribution process . . ." as ". . . one of the greatest revolutions of history." But by the early 1960s, it was painfully evident that the heralded natural trend toward equality had not fared well. Despite vigorous growth, a vast expansion of education, and the extension the "progressive" income tax, Social Security, and other welfare programs, inequality in income has remained essentially unchanged. This relative constancy is documented in Figure 3-1. It shows the percentage of total family income accruing to each fifth in the income distribution in 1910, 1947, and 1972.

FIGURE 3-1.
Income Inequality in the United States Has Been Constant Since 1910

Note: Each bar shows the percentage of income received by the indicated quintile in the years 1910, 1947, and 1972. Source: Gabriel Kolko, Wealth and Power In America (New York: Praeger, 1962), p. 48, Table IV; council of Economic Advisors, Economic Report of the President (Washington, D.C.: U.S. Government Printing Office, 1971), p. 149, Table 38; U.S. Bureau of the Census, Statistical Abstracts of the U.S., Washington, 1974.

Moreover, the introduction of inheritance taxes has done little to alter the distribution of wealth: The wealthiest 1 percent of Americans holds about one-fifth of all wealth, and about one half of all corporate stock. The remaining one-half of corporate stock is owned almost entirely by the wealthiest fifth of the population. The top fifth also accounts for nearly all personal savings in the economy, and hence, tends to maintain its position of wealth from generation to generation. The degree of wealth inequality has remained unchanged since World War II.

Viewing this panorama of persistent inequality, the liberal community of the 1960s grew to emphasize ever more heavily the age-old distinction between inequality of economic opportunity and inequality of economic outcomes. According to this perspective, inequality of economic outcomes (income, status, or job desirability) is necessitated by the very structure of industrial society. Its harshest effects can be no more than ameliorated through enlightened social policy. Thus John Gardner, then President of the Carnegie Corporation and later to become Secretary of the U.S. Department of Health, Education and Welfare, could confidently state:

Most human societies have been beautifully organized to keep good men down. ... Birth determined occupation and status.... Such societies were doomed by the Industrial Revolution.... [But] when a society gives up hereditary stratification ... dramatic differences in ability and performance ... emerge . . . and may lead to peaks and valleys of status as dramatic as those produced by hereditary stratifications.

Progressive social policy, according to this perspective, must recognize the sober necessity of limiting aspirations as to equality of outcomes, while setting its sights on providing all with a fair shot at unequal economic reward. Social equity can then be assessed by the extent to which discrimination based on social background, religion, sex, or race have been eliminated. In this liberal perspective, the capitalist economy, though marred by substantial inequalities of income, can become the true meritocracy when finally shorn of anachronistic prejudices.

Gardner's view reflects two important strands in contemporary liberal social theory, one from economics and the other from sociology. Economists have argued that competition among profit-seeking employers will insure that the best workers are hired regardless of sex, race, or other distinctions of birth. Employers who persist in discriminating will overlook talented prospective employees and adopt an irrational job structure. As a result they will make less profits, expand more slowly than more "enlightened" employers, and eventually go out of business entirely. Milton Friedman's statement of the argument is exemplary:

The purchaser of bread does not know whether it was made from wheat grown by a white man or a negro, by a Christian or a Jew. In consequence, the producer of wheat is in a position to use resources as effectively as he can, regardless of what the attitudes of the community may be toward the color, the religion, or the other characteristics of the people he hires. Furthermore . . . a businessman or an entrepreneur who expresses preferences in his business activities that are not related to productive efficiency is in effect imposing higher costs on himself than are other individuals who do not have such preferences. Hence, in a free market they will tend to drive him out.

From sociology, Gardner borrowed the ideas of Talcott Parsons, the dean of liberal sociology. He saw the advance of the modern capitalist economy as a trend away from "particularistic" mechanisms for the determination of status and economic success; it is a trend toward the application of more "universalistic" criteria. The result, wrote Parsons, would be the demise of "ascribed status" in favor of "achieved status." Thus, in the eyes of the dominant schools of contemporary U.S. sociology and economics, the "performance orientation" and "organizational rationality" of employers, the impersonality of the labor markets and the "structural differentiation of the economic sub-system" all conspire to eliminate discrimination based on sex, race, and family background.

Yet the facts concerning inequality of economic opportunity do not support this theory. Women's suffrage and a more liberal attitude toward the "woman's place" in the home and on the job has not enhanced the economic situation of women relative to men. The slackening of racial prejudice-attested to in numerous recent surveys-and the dramatic educational gains made by blacks have resulted in little occupational or income gains for blacks relative to whites. Finally, the considerable expansion of education over the years has not increased social mobility. There is no evidence of a lessening of the economic importance of family background on life chances. And family background is important indeed: our data indicate that individuals whose parents were in the top socio-economic decile earn, on the average, well over twice as much as those from families in the bottom decile.

A fundamental error in the liberal theory of a trend toward equality of economic opportunity, we believe, is the notion that inequality of income and inequality of economic opportunity are fundamentally distinct and analytically separate phenomena. Our approach is to explain both forms of inequality as inseparable manifestations of the underlying structure of economic life. Specifically, we offer evidence that both forms of inequality are directly related to the market and property relationships which define the capitalist system, to the social relationships of work, and to the tendency toward uneven development.

Market and property relationships establish the legal, economic, and political context in which the income distribution process works. The uneven development of the capitalist economy generates not merely "pockets of poverty" but extensive income disparities between the corporate and state sector of the economy on the one hand, and the competitive and household sectors on the other. The political and economic power of the owners and managers of the corporate and state sectors results in the appropriation of the gains of technological advance and new investment opportunities by a small and privileged group. Workers in the state and corporate sector benefit, too, from their protected position. But their bargaining strength is seriously weakened by potential competition or replacement by underpaid and underemployed workers in other sectors of the economy. The segmentation of the labor force weakens the power of labor as a whole and acts as an immediate cause of much of the inequality between men and women, between blacks and whites, between the rural and urban born, and so on.

Inequality is also affected by the social relations of work, the principles which govern the allocation of jobs, authority structures, and wage differentials within the enterprise. Income inequalities based on such characteristics as educational credentials, sex, age, and race are a reflection not only of uneven development, but also the internal power relations of the capitalist enterprise. Differences in the social relationships of work also account for the economic inequality which exists between the unpaid household worker and the "employed" worker. The division of tasks and economic rewards within the household is a reflection of the sexual division of labor and is influenced by the power relationships between men and women, between adults and children. The roots of adult male supremacy in the household are to be found, we believe, in part, in customary sex roles supported by tradition and reinforced by legal discrimination and, in part, by the greater financial independence of adult mates stemming from the segmented structure of the labor force in the capitalist economy. Inequality within the household goes beyond the inequality recorded in Figure 3-1 and is a pervasive and central aspect of capitalist (and most other) economies.

THE INSTITUTIONAL BASIS OF INEQUALITY

In the remainder of this chapter, our goal is to illuminate the basic economic structures and processes framework within which inequality is generated. We have chosen to stress the fundamental institutional basis of inequality because we believe that it is here that we are to locate the limits of egalitarian reform. Thus we make no attempt to present comprehensive or detailed theory or description of the income distribution process. We seek only to support our earlier assertion that the roots of unequal incomes and inequality of opportunity alike lie not in human nature, not in technology, not in the educational system itself, but in the dynamics of economic life.

The proposition that important sources of inequality are to be found in structural aspects of the economic system finds strong-but only prima facie-support in an international comparison of capitalist and socialist countries. Using data from sixty-seven countries-sixty-two capitalist and five socialist--Cromwell found that the four most equal income distributions are in socialist countries. The most unequal socialist country in his sample, Yugoslavia, ranked eleventh. Overall, Cromwell found that the income inequality (as measured by the Gini coefficient) was, on the average, 40 percent less in socialist countries than in the sample as a whole.

To understand the relationship between market and property institutions and inequality in the United States, we must begin with a rather down-to-earth question: What are the empirical dimensions of the income distribution? Income is the sum of wages or salaries, rent, interest, dividends, profits, and capital gains. (We abstract from gifts, pension payments, and government transfers.) We will call wages and salaries labor income; we will call interest, rent, dividends, and profits property income. For individuals with incomes less than $10,000 in 1971, labor income represented over 90 percent of the total income. For those in the $50,000 to $100,000 bracket, labor and property income were about equally important components of the total income; capital gains were relatively unimportant, constituting less than one-tenth of the total income. For the wealthiest individuals (those with incomes over $1,000,000), property income and capital gains (increases in the value of one's assets) accounted about equally for the total income; income from labor accounts for less than 5 percent of their income.

Overall inequality of income is the sum of inequalities in labor income, inequalities in property incomes, and inequalities in capital gains, plus a substantial additional amount of inequality which arises because the very same people who receive large property incomes are also likely to earn substantial labor incomes and reap large capital gains. Grouping capital gains and income from property together, we may investigate the contribution of three distinct sources of inequality to the overall degree of inequality. The results are quite striking. Although roughly three-fourths of total income is received in the form of wages and salaries, inequalities in labor income account for less than half of the total inequality. A little less than one quarter of the overall inequality is attributed directly to inequalities in property income; slightly more than one quarter is attributed to the fact that the large property and capital gains income-recipients also tend to receive handsome salaries. If capital gains which have accrued to individuals but not yet realized through the sale of property (so-called unrealized capital gains) are included in this definition of income, the direct contribution of capital to income inequality rises to more than half. Consideration of government transfers has little effect on these results.

Inequalities in income from property can be statistically accounted for by two facts. First, as we have already noted, property is very unequally owned. Second, the returns to capital (rent, interest, dividends, and profits as well as capital gains) are also unequal: the large owners in general receiving a higher return on each dollar of property owned. The contribution of property income to overall income inequality follows directly from the basic market and property institutions of capitalism -the private ownership of property. Uneven development is important here, too. The fact that big capitalists receive a higher return on their property may be accounted for, in large measure, by the concentration of capital in the dynamic and less competitive corporate sectors of the economy. Small property owners are much more likely to hold assets in small enterprises in highly competitive and relatively stagnant sectors, as well as in residential property.

But something like half of income inequality is due to the differences in labor incomes. How are those to be explained? They derive largely from the class structure and the structure of racial and sexual privilege. In a more proximate sense, differences in wages or salaries are associated with differing personal characteristics of workers and differing institutional, geographical, and sectional situations facing them. To illustrate these relationships, we draw on a study by Barry Bluestone on the determinants of hourly earnings. Using data from the U.S. Government's Survey of Economic Opportunity and employing the technique of multiple linear regression analysis, Bluestone isolated a number of critical institutional and other variables which affect individual labor earnings. We present his results in the following way: First, we "construct" two hypothetical individuals - one is a white, experienced, male union member working in the segment of the labor market; the other hypothetical worker is a female worker employed in the secondary segment. Using Bluestone's results, we predict the expected hourly earnings of these two workers.

The results indicate an expected hourly wage of the white male at about 3.1 times that of the black female. Of the hourly wage gap, 36 percent is due to sexual differences, 17 percent to race differences, and 22 percent to differences reflecting the primary/secondary labor market segmentation. These last relate to union membership and the profitability, capital intensity, monopolization, and degree of minority employment in the industry and occupation compared. The effects of differences in education and job experience between the two account for the remaining 25 percent of the gap. These figures certainly support our contention that education skill-related variables must be supplemented by class, sex, and race characteristics plus the aspects of uneven development in order to understand inequality in labor incomes.

Differences in conditions faced by workers in the primary and secondary segments of the labor force are not confined to inequalities in hourly earnings. Unemployment rates differ greatly as well. The high and fluctuating unemployment rates for workers in the secondary labor force allows the general level of business activity to move in its characteristic cycles without spreading serious unemployment to the more politically powerful and predominantly white male workers in the primary sector.

In fact, employment conditions are far more important than is schooling and experience as a determinant of annual earnings for female and black workers. For these workers, schooling and experience have little or no impact on annual income apart from their increasing the probability of being employed the year round. For white mates facing less uncertain unemployment conditions and having access to job ladders and significant promotion possibilities, years of schooling and job experience play a much greater role in the determination of income.

INEQUALITY AND THE SOCIAL RELATIONS OF WORK

This survey of the income distribution process in the U.S. testifies to the importance of private property in the means of production and uneven development in the economy and labor force. The data also hint at the importance of our third characteristic of the capitalist economy: the social relations of the work process. However, the importance and complexity of this third basis of inequality in capitalist society warrants a more searching analysis.

How can the social relations of work affect inequality of incomes and inequality of economic opportunity? This is affected clearly by influencing the relative earnings of various jobs, the relative proportions of job categories, and the chances of individuals passing from one to the other. For example, if all individuals participated equally in communal enterprises and divided the proceeds equally, then no inequality would be due to the internal organization; all inequality would reflect differences in revenues among enterprises. As another example, we may consider an idealized guild economy. Each enterprise has a number of masters, a larger number of journeymen below them, and a larger number of apprentices below them. If each worker begins as an apprentice and progresses to the level of master, then guild organization would imply income inequality according to age; the degree of inequality depends on the wage differentials and the numerical proportions among the three age-related categories of workers. But incomes would be equalized over the lifetime of the workers.

In the United States, however, the social relations of work in the dominant private and state sectors is neither the communal nor the guild, but rather the hierarchical division of labor. With each level in the vertically ascending hierarchy of authority, there is associated a basic wage or salary. An individual enters the firm at a particular level in the hierarchy based on education, previous experience, social class, sex, race, age, and so forth --depending on the entrance criteria of employers. From there, the individual is faced with a job ladder of limited vertical length through which he or she is promoted. These job ladders are normally fairly short and mutually exclusive. Thus entry to the job market as an unskilled worker reduces the chances of becoming a skilled worker; entry as a blue-collar worker reduces the chances of becoming a white-collar worker, and so on. Also the chances of moving up the job ladder are, beyond a certain point, quite limited. Thus only a few assembly line workers ever become supervisors; only a few steno-pool typists ever become personal secretaries; and so on. The worker's wage or salary depends on the particular job ladder, the rung on that ladder currently occupied, and the length of service.

Inequality is built into the hierarchical division of labor in several ways. First of all, positions of differential authority, prestige, and responsibility are endowed with commensurate differences in earnings. This is, in part, due to the operation of the labor market: In an economy of alienated work, the major inducement to the attainment of credentials and ability to exercise responsibility is pay. In part, wage differences in the enterprise flow from the employer's need to legitimate the authority structure and reduce worker solidarity by creating and maintaining different conditions of work and styles of life for different groups of workers.

Second, inequality is affected by the nature of job ladders and promotion. The pyramidal nature of the enterprise severely limits the chance of promotion, and the usual policy of segregating skilled and unskilled, blue and white-collar and technical workers, and minimizing the opportunity of workers to obtain new skills keeps the job ladders relatively short. Moreover, the usual policy of rarely placing blacks over whites, women over men, or workers of lower "social class appearance and demeanor" over workers higher on these attributes, leads to important intergroup and intergenerational inequalities.

This last observation illustrates well that the bases of income inequality within the enterprise are not exhibited solely in the hierarchical structure of jobs and related-income differences; they are evidenced as much in the process by which people are selected for the available job slots. What individual attributes are entrance keys to the various levels in the hierarchy of the enterprise, and how do they relate to the class, sexual, racial, and other characteristics of the labor force? To answer this question, we develop our analysis of the social relationships of the enterprise at some length. For in addition to completing our treatment of income inequality, this analysis provides insight into the origins and economic meaning of the class-related differences in culture, consciousness, and social behavior which are so clearly part of the stratification process. We will use our model of the interaction of consciousness and the social relationships of production in this chapter to demonstrate the intimate relationship between inequality of income and inequality of opportunity. The same model will be the basis, in Chapters 4 and 5, of our understanding of the economic meaning of education.

One can think offhand of a host of individual attributes conceivably serving as occupational "entrance requirements." They include (at least) such features as ownership of physical implements (e.g., the medieval knight owned his horse, armor, and weapons), membership (e.g., the feudal guild master), traits acquired at birth (e.g., the houseworker is ordinarily female), and traits acquired through personal development (e.g., skills, motivation, attitudes, personality, credentials). In U.S. society, it is the last of these along with a few important ascriptive traits-sex, race, and age-- that come to the fore. Thus we must focus on the supply and demand of those personal attributes and ascriptive traits that are relevant to getting ahead in the world of work.

While employers have certain restrictions on their hiring practices- child-labor and antidiscrimination laws, union regulations, social pressures for example-by and large, they employ those who can be expected to perform adequately in the work role in question. But what constitutes adequate performance in any job, of course, depends on the objectives of management. We have argued that the overriding objective of employers in organizing production and assigning workers to occupational slots is the perpetutation or enhancement of their class standing. The necessary condition for this is the profitability of the enterprise. Profitability, in turn, is sought through the complementary, but far from identical, strategies of efficiency and control.

This suggests several important types of worker characteristics which are demanded by employers. There are cognitive capacities (such as scholastic achievement) and concrete technical and operational skills (such as knowing how to do typing, accounting, chemical engineering, or carpentry). Second, there are personality traits (such as motivation, perseverance, docility) that enable the individual to operate effectively in a work role. Indeed, it is precisely these attributes that we will isolate as central to the educational process in Chapter 5. Third, there are traits that we have called modes of self-presentation (such as manner of speech and dress, patterns of peer identification, perceived "social distance" from individuals and groups of different social position). These traits do not necessarily contribute to the worker's execution of tasks, but may be valuable to employers in their effort to stabilize and legitimize the particular structure of power in the organization as a whole. Similar in function are our fourth set of traits: ascriptive characteristics such as race, sex, and age. Finally, we add to our list of attributes credentials, such as level and prestige of education. Credentials, like modes of self-presentation and ascriptive traits, are a used by employers to add to the overall legitimacy of the organization. All of these above-listed traits are the indices of adequate job performance, and we discuss each in turn.

The proper types of cognitive, physical, and operational skills are the most evident and widely discussed prerequisites to successful performance on the job. Their attainment represents a central function of the educational system. Discrepancies between skill "levels" and job "levels" are extremely dangerous to the operation of the hierarchical division of labor. Inadequate skills prohibit production from taking place; worker skills which exceed their level of status and authority threaten the legitimacy of the social division of labor within the enterprise. Thus the patterns of access to and denial of skill training in the firm are important parts of the reproduction of economic inequality. Yet there is little indication that inequality in such skills is an important cause of inequality. Indeed, in Chapter 4 we shall see that differences in measured mental abilities explain only a small portion of economic inequality. We demonstrate statistically that such differences explain neither the association of education with economic success nor the tendency for economic status to be passed on from generation to generation. Hence the association of cognitive achievement and access to higher level occupations must be largely a by-product of selection on the basis of other traits.

The personality traits and forms of consciousness required of workers are those which facilitate their harmonious integration into the hierarchical order of the enterprise. In the dominant corporate and state sectors, this exhibits four essential characteristics. First, the duties, responsibilities and privileges of individuals are determined neither according to individual preference nor cooperative decision by workers, but rather by a system of formal and informal rules which guide the individual worker's participation in the work process and set limits on his or her actions. Second, the relationships among workers are characterized by hierarchical authority and interdependence. An individual's actions are closely tied to the wills of his or her superiors, and the results of these actions have repercussions on large numbers of other workers. Third, while control emanates ultimately from the top, the principle of hierarchical authority implies that middle-level workers have essential, though circumscribed, areas of decision and choice. Fourth, that jobs are determined on the basis not of workers' needs or interests, but rather in the interests of profitability implies that workers cannot be adequately motivated by the intrinsic rewards of the work process.

These characteristics of the hierarchical division of labor influence the personality traits required of workers. In Chapter 5, we will present a rather extensive empirical study of the personality traits of the "good worker." We are content here with a general survey. All workers must be dependable (i.e., follow orders) because of the strong emphasis on rules and the complex interrelations among tasks that define the enterprise. Similarly, all workers must be properly subordinate to authority (i.e., diligent in carrying out order as opposed to merely obeying orders). Furthermore, all workers, insofar as they have areas of personal initiative, must, to some extent, internalize the values of the organization. Lastly, all workers must respond to the external incentives of the organization-the crudest being threat of dismissal and the more subtle including the possibility of promotion to a higher status, authority, and pay.

While respect for rules, dependability, and internalization of norms are required to some extent by all workers, there are important qualitative differences between levels. These tend to follow directly from differences in the scope of independent decision-making which increases with hierarchical status. Thus the lowest level of worker must simply refrain from breaking rules. On the highest level, the worker must internalize the values of the organization, act out of personal initiative, and know when not to go by the book. In between, workers must be methodical, predictable, and persevering; at a somewhat higher level, they must respond flexibly to superiors whose directives acquire a complexity transcending the relatively few rules that apply directly to their tasks. As we move up in the hierarchy, the crucial determinants of job adequacy pass from rule-following to dependability-predictability to subordinateness to internalized values, all with an overlap of motivation according to external incentives and penalties. (Doubtless penalties play a larger role in the lower levels and incentives at the higher ones.)

It follows that the hierarchical division of labor affects inequality not only through wage differentials, but also through the divergent patterns of consciousness and motivation to which it gives rise. These patterns, as we will point out, tend to be transmitted through the family and impose severe limits on the functioning of the educational system.

We turn now to the importance of self-presentation as attributes relevant to the allocation of individuals to status positions. Numerous studies have shown these personal attributes to be definite (albeit often covert) criteria for hiring and promotion. Three statistical studies seem germane. First, Hamilton and Roesner found that among employers of disadvantaged workers, personal appearance was between three and two times as important a selection criterion as any of the following: work experience, specific job training, high-school diploma, or test Scores. Second, Leland P. Deck, Director of Labor Relations at the University of Pittsburgh, found that among ". . . 1967 graduates of the University of Pittsburgh the height of the individual worker was more important as a determinant of earnings than either grade point average or cum laude degree." Lastly, a recent survey of the salaries of 15,000 executives found that those who were "overweight" were paid significantly less than others, the penalty to the obese being in some cases as much as $ 1,000 a pound!

However, because most of the relevant studies are descriptive rather than statistical, they defy comparison with other data on personal attributes as to importance in the stratification process. We must content ourselves with a simple presentation of the arguments. Erving Goffman has documented the importance of self-presentation in a number of cases: doctors, nurses, waitresses, dentists, military personnel, mental patients, funeral directors, eighteenth-century noblemen, Indian castes, Chinese mandarins, junk peddlers, unionized workers, teachers, pharmacists, as well as in the relationships between men and women and blacks and whites.

Central to Goffman's analysis of self-presentation is his concept of the "front" of a performance, defined as ". . . that part of the individual's performance which regularly functions in a general and fixed fashion to define the situation for those who view the performance." This front consists of personal behavior and characteristics (insignia of office or rank; clothing, sex, age, and racial characteristics; size and looks; posture; speech patterns; facial expressions; bodily gestures and the like) as well as physical setting (e.g., size, location, and amount of carpeting and/or windows in one's office). Moreover, argues Goffman, these fronts are not merely personal and idiosyncratic, but are socially regularized and channeled. Thus, on the one hand, modes of self-presentation take on a social class character, and on the other, physical settings are assigned not to individuals but to authority levels.

We may now consider the importance of our last two sets of employability traits: ascriptive characteristics (race, sex, and age) and acquired credentials (educational degrees and seniority). We have argued that the legitimacy as well as the smooth control over the work process requires that the authority structure of the enterprise respect the wider society's prejudices. In particular, socially acceptable power relationships must be respected. A recent national survey revealed, for example, that while few women become supervisors, almost all who do so supervise other women workers: Women workers are seventeen times more likely than male workers to have female supervisors. In this, the economic system reinforces racial, sexual, and other distinctions of birth.

We make no claim that these distinctions originated as a capitalist contrivance, although a strong case could probably be made that the form and strength of both sexism and racism here are closely related to the particular historical development of class relations in the United States and Europe. Save credentialist distinctions, all predate the modem capitalist era. "Rational business practice" has reinforced and extended them, while consigning less useful prejudices to gradual extinction. The credentialist mentality, we believe, was, at least in part, contrived to perpetuate the concept of social rank in a society increasingly eschewing distinctions of birth. We will return to this point in future chapters.

The individual employer, acting singly, normally accepts social values and beliefs and will violate them only in the interest of long-term financial benefits. The broader prejudices of society are thus used as a resource by employers in their effort to control labor. In this way, the pursuit of profits and security of class position reinforces racist, sexist, and credentialist forms of status consciousness.

The importance of sex, age, race, and educational credentials in the determination of one's income is thus not an expression of irrational and uninformed employment policies, subject to correction by "enlightened" employment practices and social legislation. Less still are those distinctions likely to be eliminated by the competition for "good" workers among profit maximizing capitalists, as traditional economic theory would predict. Quite the opposite. The policy of basing pay on race, sex, credentials, and seniority is used by employers to control workers in the pursuit of profits.

Ideally, we could assess the importance of the social relationships of work in the income distribution process by conducting in depth surveys of the internal wage and authority structures of a large representative sample of firms. Not surprisingly, these studies are few and far between, so we are forced to rely on survey data. Fortunately, the last decade has produced a number of large representative samples of income recipients. We will rely particularly on the data provided by the University of Michigan's Panel Study of Income Dynamics, produced under contract with the U.S. Department of Health, Education and Welfare and the Survey of Economic Opportunity conducted by the U.S. Office of Economic Opportunity. These data, aside from lending support to the view outlined in the previous sections, tell a distressing story. Two of the most important avenues for getting ahead economically-education and job experience-work most effectively for the already economically advantaged, particularly white males. For most females, blacks, and white males of poorer family backgrounds, these avenues turn out to be rather short, dead-end streets.

While seniority and educational credentials are thought to be generally rewarded in the labor market, statistical evidence indicates that this is only partly the case. The acquisition of a college degree or a few gray hairs does indeed yield a substantial monetary return for white males. This economic payoff to aging and schooling is, of course, a complex phenomenon which involves the learning of productive skills in school and on the job. But far more important, we believe, is the symbolic value of seniority and educational credentials in allowing a person to be promoted to a position of authority over other workers. If we are correct, we should find that seniority and education have much less impact on earnings among those who for reasons of sex or race are excluded from consideration for positions of authority. Bluestone's data on the determinants of hourly earnings indicate that this is precisely the case: The economic return to schooling is twice as high for white males as for blacks or females. Moreover, Bluestone's results merely reiterate a finding consistently generated in studies of this type.

Additional evidence for our view is found in the sample collected by the Institute of Social Research at the University of Michigan. These data support three conclusions. First, if individuals are classified according to their hierarchical position (using their responses to direct questions concerning their authority in the work place), the return to schooling among those classified as "managers" is substantially higher than among those classified as "workers." Those excluded from authority in the work place evidently benefit little from additional schooling. Second, among those classed as workers, the economic return to schooling is virtually the same for men and women, blacks and whites. Thus the differences in the monetary returns to schooling found in the Bluestone study likely reflect little more than differing access to positions of authority in the enterprise. Third, the economic return to schooling depends upon class origins as well as present class status. Preliminary results of Lee Rainwater's analysis, of the Institute of Social Research sample indicate that whites of high social class background enjoy economic returns to education that are 66 percent higher than those for either whites of low social class background or blacks.

Turning to the economic payoff to aging and experience, a similar pattern emerges. Data from the U.S. government's Survey of Economic Opportunity clearly indicate race and sex differences in the economic effect of age: White males are more likely to earn higher incomes as they grow older than are blacks and females. Data presented by the President's Council of Economic Advisors reveal that even among white males, it is predominantly the more educated who reap the gains from aging. Finally, detailed evidence of the payoff to experience for white males indicates that only those in occupational categories involving the possibility of exercising significant control over other workers do white male workers reap any economic payoff to experience.

Some economists have attempted to explain these data by differential learning on the job. According to this view, income rises with age because productive skills are learned on the job, not because aging allows one access to positions of power or privilege. We do not doubt the importance of skills learned on the job. However, we are skeptical that on-the-job learning explains the relationship between age and income. Were this the case, we would expect that among workers of the same length of experience in a particular job differences in age would not be associated with differences in income. The data from the Institute for Social Research Survey show this to be decidedly not so. Age significantly affects income independently of job tenure. Indeed, the monetary returns to age are five times the returns to job tenure in this particular survey.

To some extent, of course, these data on the economic return to aging and schooling reflect the segmentation of labor, the returns to education and age being significant only in the primary segment of the labor force. Yet, we find in the evidence striking support as well for our view of the role of the social relations of work in the process, whereby the pay of whites and blacks, of males and females is determined.

Conclusion

Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past.
KARL MARX
Eighteenth Brumaire

In 1913, John Dewey, doubtless the most penetrating of American educational philosophers, offered a most incisive observation. Education can foster personal development and economic equality while, at the same time, integrating youth into adult society only under one condition: a thorough extension of democracy to all parts of the social order. For personal development consists in the acquisition of the full range of powers -physical, emotional, cognitive, spiritual, and aesthetic-to control one's life. Economic justice is built on a society of individuals capable of interpersonal relationships on the basis of equality and reciprocity.

Dewey's ideal society can only occur, we now see, when economic life itself is democraticized -when all relationships of power and authority are based on participation and democratic consent. But the social relations of economic life in the United States are by no means democratic and egalitarian. Starting from this fact, we have argued that alienated labor and income inequality are rooted in the social relations of the capitalist economy. These relations are embodied in the structure of property and market relations in the systems of control within the capitalist enterprise and in the dynamic of uneven development.

This analysis suggests, then, that the failure of liberal educational reform must be linked to fundamental characteristics of the economy. Also, that an adequate execution of the educational system's goal of integrating youth adult society will conflict with its role in promoting equality and full development. In the following chapters, we suggest that the basic outlines of the U.S. educational system and the conflicts which periodically shake its foundations and reroute its development are best understood through an analysis of the contradictory forces operating on the system. The struggle between working people and capital in the economy has its counterpart in educational conflict. On the one hand, employers and other social elites have sought to use the schools for the legitimation of inequality through an ostensibly meritocratic and rational mechanism for allocating individuals to economic positions; they have sought to use the schools for the reproduction of profitable types of worker consciousness and behavior through a correspondence between the social relationships of education and those of economic life. On the other hand, parents, students, worker organizations, blacks, ethnic minorities, women, and others have sought to use schools for their own objectives: material security, culture, a more just distribution of economic reward, and a path of personal development conducive not to profits but to a fuller, happier life.

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