Sociology Plus
Disorganized Capitalism Definition
Disorganized capitalism is the tendency of contemporary capitalist societies and their class structures to become increasingly fragmented and disorganized through a variety of processes. Associated above all with Scott Lash and John Urry (The End of Organized Capitalism, 1987) and with Claus Offe (1985), the concept describes the breakdown of the organized interaction between capital, concentrated into corporations, and labor, concentrated into trade unions — a breakdown attributed chiefly to economic restructuring and recession.
Key Developments
Several interrelated developments define the process. The first is the growing globalization of industry and the rise of a genuine “world market,” which reduces the ability of any single capitalist society or company to control its own destiny; national markets are less regulated by dominant corporations, tariffs, and cartels, and individual nation-states lose command over their economic fortunes, so that firms operate in conditions of permanent insecurity. This includes the breakdown of “neo-corporatist” forms of state regulation and welfare provision, and the appearance of contradictions — such as fiscal crises — between these state forms and the accumulation of capital.
A second development is technological and occupational. The constant emergence of new technologies transforms production and makes all investment risky, while the service class, positioned between capital and labor, expands. Traditional, labor-intensive heavy industry declines in the West as jobs are exported to the Third World and as flexible, knowledge-based, labor-saving forms of work organization spread through high-tech and service sectors. Alongside this comes the demise of full employment, widening divisions between the employed and the unemployed, and the growth of the informal sector.
A third development is cultural and political. New social movements — ecological, feminist, and others — arise as traditional class-based politics decline, a shift bound up with class dealignment. Culture becomes increasingly fragmented and pluralistic, distinctive national identities and values are undermined, and societies are continuously transformed both “from above” and “from below,” keeping ideas, industries, cities, and classes in a state of flux. This fragmentation is closely linked to the growth of a postmodern culture organized around specific interest groups rather than social classes.
Implications and Significance
Disorganized capitalism carries significant implications for liberal democracies. The failure of corporatist organizations to meet their objectives, the difficulty of managing both political demands and distributional conflicts, and class dealignment together undermine liberal-democratic assumptions about political participation and representation, with knock-on effects for the character of civil society. Crucially, the concept departs from earlier views that advanced capitalism is either more organized than its predecessors — through state controls, monopoly, and the like — or destined for a final, terminal crisis. Instead, disorganized capitalism implies neither stability nor breakdown, but a system undergoing continual internal adjustment.