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


Pages 53-59.

[The capitalist market] is in fact a very Eden of the innate rights of man. There alone rule freedom [and] equality .... On leaving this sphere of ... exchange of commodities ... we think we can perceive a change in the cast of characters. He, who before was the money owner, now strides in front as capitalist; the possessor of labor-power follows as his laborer. The one with an air of importance, smirking, intent on business; the other hesitant, like one who is bringing his own hide to market and has nothing to expect but-a hiding.
KARL MARX, Capital, 1867

The halting contribution of U.S. education to equality and full human development appears intimately related to the nature of the economic structures into which the schools must integrate each new generation of youth. We have seen both liberal educational reform and the social theories on which reform is based flounder on an incomplete understanding of the economic system. We do not intend to repeat these mistakes. We must devote enough attention to the nature of U.S. economic institutions to securely base a realistic alternative educational theory. No facile or superficial snapshot of the U.S. economy will do. We do not wish to hide the fact that our analysis of U.S. capitalism will require attention to some difficult problems in economic theory. Indeed this substantive excursion into economics on which we now embark may seem to the reader out of place in a book on education. Yet only through such a study, we believe, can one understand the workings of the U.S. educational system and the means to change it.

The economy produces people. The production of commodities may be considered of quite minor importance except as a necessary input into people production. Our critique of the capitalist economy is simple enough - the people production process-in the workplace and in schools-is dominated by the imperatives of profit and domination rather than by human need. The unavoidable necessity of growing up and getting a job in the United States forces us all to become less than we could be: less free, less secure, in short less happy. The U.S. economy is a formally totalitarian system in which the actions of the vast majority (workers) are controlled by a small minority (owners and managers). Yet this totalitarian system is embedded in a formally democratic political system which promotes the norms-if not the practice-of equality, justice, and reciprocity. The strongly contrasting nature of the economic and political systems can be illustrated by the diametrically opposed problems faced in maintaining their proper functioning. For the political system, the central problems of democracy are: insuring the maximal participation of the majority in decision-making; protecting minorities against the prejudices of the majority; and protecting the majority from any undue influence on the part of an unrepresentative minority. These problems of "making democracy work" are discussed at length in any high school textbook on government.

For the economic system, these central problems are nearly exactly reversed. Making U.S. capitalism work involves: insuring the minimal participation in decision-making by the majority (the workers); protecting a single minority (capitalists and managers) against the wills of a majority; and subjecting the majority to the maximal influence of this single unrepresentative minority. A more dramatic contrast one would be hard pressed to discover. High school textbooks do not dwell on the discrepancy.

The undemocratic structure of economic life, in the United States may be traced directly to the moving force in the capitalist system: the quest for profits. Capitalists make profits by eliciting a high level of output from a generally recalcitrant work force. The critical process of exacting from labor as much work as possible in return for the lowest possible wages is marked by antagonistic conflict, in contract bargaining and equally in daily hassles over the intensity and conditions of work. The totalitarian structure of the capitalist enterprise is a mechanism used by employers to control the work force in the interests of profits and stability. In this and succeeding chapters we will describe this economic system in more detail and analyze its substantial implications for educational policy.

Our first step is to analyze the market and property relations of capitalism, for it is here that formal political equality, legal reciprocity, and voluntary free market exchange are translated into economic domination. Of prime importance is the severely unequal ownership of productive and financial resources. Were these more or less equally distributed, economic life might not be undemocratic. The concentration of control of these resources, however, means the majority must exchange their only productive property (their capacity to labor) for a wage or salary, thereby agreeing to give formal jurisdiction over their economic activities to owners and managers. Thus formal equality in the political sphere and equal exchange in competitive markets give rise to relationships of dominance and subordinacy within the confines of the capitalist enterprise.

But these power relationships are still only formal. Once within the formally totalitarian factory or office, what prevents workers from wresting control of their activities from their employers? What prevents workers, through the combined power of their potential unity, from altering the terms of their contract with employers toward satisfying their own needs? Part of the answer lies again in market and property relations: the employer has the formal right to hire and fire. This right is effective, however, only when the cost to workers is high; that is, when there is a large pool of labor with the appropriate skills available in the larger society, into which workers are threatened to be pushed. Indeed, we shall suggest that the maintenance of such a "reserve army" of skilled labor has been a major, and not unintended, effect of U.S. education through the years.

Part of the answer to maintaining the dominance of the employer over workers lies in the direct application of force: the passage of antilabor laws and the use of the police power of the state. It is precisely against this "solution" that workers have fought their major battles and won some significant victories over the past century. The direct application of force by no means insures the maintenance of capitalist power relations, however, in part because its unlimited and undisguised use may be counter-productive, and in part because the labor-capital contract cannot stipulate all, or even most, of the requirements to insure the profitability and stability of the enterprise.

We shall argue that a major instrument wielded by owners and managers in stabilizing a totalitarian system of economic power is the organization of the process itself. The long run success of any totalitarian system requires a widely accepted ideology justifying the social order and a structure of social relationships which both validates this ideology through experience, and fragments the ruled into mutually indifferent or antagonistic subgroups.

The capitalist enterprise is no exception to this pattern. The accepted ideology is the technocratic-meritocratic perspective described in the previous chapter. The chosen structure of social relationships is the hierarchical division of labor and bureaucratic authority of corporate enterprise. The system of stratification is by race, sex, education, and social class, which often succeeds admirably in reducing the creative power and solidarity of workers.

These assertions concerning the reproduction of the power relations of economic life will be supported in this chapter. We shall also discuss their systemic implications as to the nature of economic inequality and personal development in U.S. society. We suggest that the quality of work life is inimical to healthy personal development and indeed, the structure of power in the economy would be threatened by institutions (such as liberated education) which promote full human development. Moreover, we argue that the alienated character of work as a social activity cannot be ascribed to the nature of "modern technology," but is, rather, a product of the class and power relations of economic life. Though the structural changes required are far-reaching, unalienated work can be achieved without sacrificing the material conveniences of modern life. Similarly, we suggest that economic inequality is a structural aspect of the capitalist economy and does not derive from individual differences in skills and competencies. While the extent of inequality is subject to change through changes in the structure of the economy, it is hardly susceptible to amelioration through educational policy.

In the succeeding two chapters we shall discuss how education fits into this picture. We shall suggest that major aspects of the structure of schooling can be understood in terms of the systemic needs for producing reserve armies of skilled labor, legitimating the technocratic-meritocratic perspective, reinforcing the fragmentation of groups of workers into stratified status groups, and accustoming youth to the social relationships of dominance and subordinacy in the economic system.


The village blacksmith shop was abandoned, the roadside shoe shop was deserted, the tailor left his bench, and all together these mechanics [workers] turned away from their country homes and wended their way to the cities wherein the large factories had been erected. The gates were unlocked in the morning to allow them to enter, and after their daily task was done the gates were closed after them in the evening.

Silently and thoughtfully, these men went to their homes. They no longer carried the keys of the workshop, for workshop, tools and keys belonged not to them, but to their master. Thrown together in this way, in these large hives of industry, men became acquainted with each other, and frequently discussed the question of labor's rights and wrongs.
Terrance Powderly,
Grand Master Workman, Knights of Labor,
"Thirty Years of Labor," 1889


The market and property institutions in the United States define the legal rights and obligations for all individuals involved in economic activity. The most important of these institutions are: (1) private ownership of the means of production (land, resources and capital goods), according to which the owner has full control over their disposition and development; (2) a market in labor, according to which (a) the worker does not own, by and large, the tools of his or her trade, and (b) the worker relinquishes formal control over his or her labor time during the stipulated workday by exchanging it for pay.

It is the interaction of these market and property institutions which leads to the prevailing pattern of dominance and subordinacy in production. By no means does private ownership of capital alone lead to the overarching power of business elites to control economic life. Indeed, ownership is merely an amorphous legality. Thus in state socialist countries such as the Soviet Union, many of the patterns of economic control found in the United States are observed although private ownership of capital is non-existent. Indeed, the degree to which education is similar in capitalist and state socialist countries can be attributed, we believe, to the similarity in their respective mechanisms of social control in the economic sphere. For markets and private property give economic elites a degree of power in the United States comparable to that enjoyed by a state socialist elite through direct political channels. The decisions of U.S. business leaders become operational only insofar as natural resources and labor can be quickly, effectively, and cheaply drawn into their sphere of control. To this end, flexible and responsive markets are necessary in a private ownership economy, although hardly sufficient in themselves. Finally, the market in labor will not operate when workers have attractive alternatives to wage employment. The fact that workers do not own the tools and equipment they use and the fact that there is an absence of alternative sources of livelihood insure that most individuals must offer their services through the labor market.

These system-defining institutions, of course, did not appear full-blown at a point in time in the United States. Indeed, this form of economic organization is quite unique in the history of civilization. Its sway is an episode covering about two centuries and embracing at no time more than a substantial minority of the world's population. Its emergence required centuries of struggle on the European Continent. The very idea that the building blocks of society-human beings (labor) and nature (land, the physical environment and tools)-could be regulated by the forces of supply and demand on a free market would have been inconceivable and repugnant even as late as the seventeenth century. An efficient organizational form for the control of the labor of most by a few which did not involve direct coercion-as under slavery or serfdom-was equally inconceivable.

In the United States, unlike Europe, market and property institutions were developed and strengthened quite rapidly. For preindustrial America already possessed essential elements of a capitalist class structure. United States capitalism sprang from a colonial social structure closely tailored to the needs of British mercantile policy. Whereas, in Europe, the transformation of property relations in land from a system of traditional serfdom and feudal obligation to the capitalist form of private ownership required half a millennium of conflict and piecemeal change, in the United States, private property was firmly established from the outset. Only in seventeenth-century New England did land-use patterns approximate communal property relations of an earlier European era. In areas held by native Americans, communal property relations also predominated. With these exceptions, private property and markets in land and capital were the rule in the United States since the early days of colonization. However, the emergence of a developed market in labor, perhaps the most critical aspect of capitalist growth, involved at least two centuries of protracted and often bitter struggle.

A work force conducive to vigorous capitalist expansion requires a supply of workers large enough to satisfy the needs of capital while maintaining a "reserve army" of potential workers of sufficient size to keep wages and worker demands at a minimum. This requires, as we have seen, that workers have little recourse but to sell their labor power-i.e., that they be separated from their own means of production. These conditions were far from fulfilled in colonial America.

First, colonial America was characterized by an abundance of land and by scarce supplies of labor: The extensive Western frontier and the ease of entry into craft and artisan production thinned the labor supply up to the turn of the twentieth century. Thus free labor was not the basis of early capitalist development in North America. Over half of the white colonists during the first century of settlement were indentured servants. Black slavery added enormously to the labor supply: At the time of the Civil War, over one-third of the Southern population were slaves.

Ensuring the conditions for rapid capital accumulation-an adequate and cheap labor supply-in a land-abundant and labor-scarce continent was no simple task. Slavery and indentured servitude were but one solution. The development of a well-functioning labor market required huge influxes of immigrants: before the Civil War, Northern Europeans of Irish, German, English, Scotch, and Scandinavian stock, and later on, Eastern and Southern Europeans. Since the Civil War, also, the continual erosion of labor-intensive single-family farming in agriculture and the encroachment of the "cash nexus" on the household has added millions of workers-black and white, male and female-to the wage-labor force.

The second aspect of the development of the market in labor involves the separation of workers from their instruments of production. By the time of the American Revolution when private property was the rule, the ownership of the means of production was still quite widespread. About 80 percent of the nonslave adult males in the United States were independent property owners or professionals-farmers, merchants, traders, craftsmen or artisans, businessmen, lawyers, doctors, and so on. By 1880, this figure had fallen to 33 percent and, at present, more than 90 percent of all adults in the labor force are nonmanagerial wage and salary workers. In the course of this transformation to a wage-labor system, the family farm fell to corporate agribusiness; craft-organized shops were replaced by the factory system; and the services became bureaucratized.

This process has been far from placid. Rather, it has involved extended struggles with sections of U.S. labor trying to counter and temper the effects of their reduction to the status of wage labor. That these radical thrusts have been deflected, by and large, into manageable wage or status demands bespeaks the power of the economic system to legitimize its structure, but in no way suggests that the perpetuation of the system was ever a foregone conclusion. Indeed, we shall argue in later chapters that the shifting patterns of educational reform throughout history have been, in part, responses to the threat of social unrest accompanying the integration of new groups into the wage-labor system.

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