The Fall and Rise of the Petty Bourgeoisie: Changing Patterns of Self-Employment in the Postwar United States

(1989) - George Steinmetz, Erik Olin Wright

Journal: American Journal of Sociology
Link:: https://www.journals.uchicago.edu/doi/10.1086/229110
DOI:: 10.1086/229110
Links::
Tags:: #paper #SocialClass
Cite Key:: [@Steinmetz1989]

Abstract

This articleexploresthe historical trajectoryof the self-employed segmentof the laborforcein the UnitedStates,particularlysince 1940. Self-employment declinedinthe UnitedStatesalmoststeadily fromthe 19thcenturyto the early1970s. Since then,it has risen everyyear.Explainingthis reversal in the historical fortunes ofthe pettybourgeoisieis the central task of this article. We reachfour basic conclusions:first,the reversal in the declineof the self-employedis statisticalls yignificant and robustacrossa rangeof definitionsofself-employment rates.Second,thisreversalis nota simple countercyclical responseto the increase in unemployment sincethe middle 1970s. Third, part of the resurgence of self-employment resultsfromthe expansionof variouspostindustrial servicesthat tendto havehigherlevelsof self-employment withinthem.Within postindustrial sectors,however,therehas notgenerallybeen any increasein self-employment. Fourth,a significant partofthe expansionofself-employment is explainedbyan increasein self-employmentwithinmostof the traditional sectorsof the industrial economy

Notes

Extracted Annotations (14/03/2022, 03:11:42)

"Self-employment declined in the United States almost steadily from the 19th century to the early 1970s. Since then, it has risen every year." (Steinmetz and Wright 1989:973)

"We reach four basic conclusions: first, the reversal in the decline of the self-employed is statistically significant and robust across a range of definitions of self-employment ates. Second, this reversal is not a simple countercyclical response to the ncrease in unemployment since the middle 1970s. Third, part of the resurgence of self-employment results from the expansion of various postindustrial services that tend to have higher levels of self-employment within them" (Steinmetz and Wright 1989:973)

"employment. ourth, a significant part of the expansion of self-employment s explained by an increase in self-employment within most of the traditional sectors of the industrial economy." (Steinmetz and Wright 1989:973)

"The typical class schema for sociological studies runs from upper-white-collar to lower-blue-collar and farm occupations, and the self-employed are fused with these categories according to their occupational activities" (Steinmetz and Wright 1989:975)

"Self-employment means, iterally, being employed by oneself and is primarily contrasted to two other conditions: being employed by someone else a wage earner) and earning an income without being employed at all (i.e., a rentier of one sort or another who receives an income without working)" (Steinmetz and Wright 1989:979)

"self-employment" hus describes the intersection of two dimensions of economic relations: first, whether one's income depends on selling one's capacity to work and, second, whether in order to work one has to enter the abor market" (Steinmetz and Wright 1989:979)

"Actual societies, of course, are never made up of pure modes of production, whether capitalist or other. As Wolpe 1980), Wright (1985, p. 11), and others have argued, actual societies should be analyzed as specific combinations of modes of production. For the category "self-employment," this mplies that certain self-employed-small employers-combine characteristics of the pure petty bourgeoisie and the capitalist class" (Steinmetz and Wright 1989:980)

"positions are an example of what Wright (1978) called a "contradictory location within class relations, a location that is simultaneously situated in two distinct forms of class relations.(" (Steinmetz and Wright 1989:980)

"historical terms, simple commodity production is generally regarded by Marxists as a form of precapitalist production, as one of the forms of production that existed in feudal society and that gained particular historical importance in the transition from feudalism to capitalism. Social categories rooted in simple commodity production-peasants, artisans, small shopkeepers, and so on-are therefore generally seen as a kind of anachronism, as categories whose long-term social existence is continually eroded by the dynamic forces of capitalis" (Steinmetz and Wright 1989:981)

", Marx identified two long-term causal processes that shape the fate of both the petty bourgeoisie and small employers (e.g., [1867] 1977, pp. 776-81). First, there is an inherent tendency for the expansion of capitalism to destroy all precapitalist forms of economic relation" (Steinmetz and Wright 1989:981)

"The second long-term causal process that shapes the fate of self-employment is the "concentration and centralization of capital" (Steinmetz and Wright 1989:981)

"Taken together, these two causal processes led Marx and later theorists to predict that the petty bourgeoisie (understood as small employers and the " pure" petty bourgeoisie combined) would gradually wither away under the dual pressure of the destruction of simple commodity production and the concentration/centralization f capital" (Steinmetz and Wright 1989:981)

"n. First, given the massiveness of capitalist development over the past 100 years, one might have expected (in light of the theoretical claims of the classical Marxist argument) that the petty bourgeoisie should have virtually disappeared by now." (Steinmetz and Wright 1989:982)

"Second, and perhaps even more telling, there are strong indications that the erosion of self-employment has at least temporarily stopped in many advanced capitalist countries and, perhaps, has even been reversed" (Steinmetz and Wright 1989:982)

"Self-employment s countercyclical response.-One suggestion from historical literature is that-the growth of self-employment s a micro-level response by workers to economic duress; this produces short-term countercyclical responses of self-employment to unemployment" (Steinmetz and Wright 1989:983)

"Postindustrialism. While theorists who analyze contemporary social trends with concepts of the postindustrial or "information" society have not systematically addressed the question of self-employment, heir general arguments about the effect of new technologies suggest that a rise in self-employment might be part of a qualitatively new phase of economic development (Bell 1973; Touraine 1971; Hirschhorn 1984; Huber 1982; Nora and Minc 1978)." (Steinmetz and Wright 1989:987)

"Decentralization in the older ndustrial sectors. -Finally, several approaches predict that small firms (and hence self-employment) hould become more prevalent even n the older, nonpostindustrial ectors of the economy, in response to contemporary macroeconomic changes" (Steinmetz and Wright 1989:987)

"series analysis. -Time-series analysis is used to test for the presence of trends in U.S. self-employment fter 1948 and for countercyclical responses to unemployment. All the time-series models nvolve generalized least-squares regression using a maximum-likelihood estimator of p as a correction for autocorrelated error" (Steinmetz and Wright 1989:993)

"The "shift-share" analysis.-Shift-share analysis will be used to explore the patterns of changing self-employment cross and within industries from 1940 to 1980" (Steinmetz and Wright 1989:993)

"One possible explanation for the reversal of the historical trajectory of the petty bourgeoisie is that expanding opportunities for self-employment re in one way or another bound up with the transition to a postindustrial society. An alternative explanation is that market transformations re leading to decentralization of ownership in all sectors, even the older ones." (Steinmetz and Wright 1989:998)

"Two things are important to note in the overall patterns in table 7. First, they indicate that the period 1950-70 was the period of the most intense decline in self-employmen" (Steinmetz and Wright 1989:999)

"Second, the decline in self-employment proportions in the 1950s and 1960s was fairly general across the entire economy: it occurred within every broad sector" (Steinmetz and Wright 1989:999)

"33 Two patterns are particularly important for understanding the overall decline in the sector shift effects from the 1950s to the 1970s. First, there is the steady reduction in the effect of declines in the extractive sector (primarily agriculture) on selfemploymen" (Steinmetz and Wright 1989:1001)

"The second result in table 9 is the steadily increasing importance over four decades of sectors whose expansion has a positive effect on the proportion of people self-employed" (Steinmetz and Wright 1989:1002)

"More generally, there is a striking difference between the industrial and postindustrial sectors of the economy: whereas the positive class shift effects on self-employment are concentrated in the various industries within the transformative sector, the positive sector effects are concentrated in postindustrial sectors" (Steinmetz and Wright 1989:1006)

"Construction alone accounts for greater than a third of the positive class shift effects" (Steinmetz and Wright 1989:1006)

"Four general conclusions stand out among the results of the various data analyses presented here" (Steinmetz and Wright 1989:1006)

"First, there is strong evidence that the numerical Taking 36" (Steinmetz and Wright 1989:1006)

"decline of the petty bourgeoisie that has marked the ong-term history of American capitalism has at least temporarily stopped and perhaps been modestly reversed. Second, this cessation of the historical decline of the petty bourgeoisie is less a direct consequence of countercyclical movements of people from unemployment to self-employment han in the past" (Steinmetz and Wright 1989:1007)

"Third, the growth of postindustrial services does appear to explain the expansion of self-employment partially, but this s entirely through a direct sectoral change effect, not because self-employment s generally increasing within postindustrial sectors. Fourth, it appears that self-employment has grown within the older, more traditional industrial sectors of the economy in recent years" (Steinmetz and Wright 1989:1007)

"The data in this study do not allow us to explore directly the possible explanations for this expansion of self-employment within traditional industrial sectors of the economy" (Steinmetz and Wright 1989:1007)

"The American class structure appears to be in a period of significant structural reorganization. As noted by Wright and Martin 1987), the strong tendency toward proletarianization within the wage-labor force that existed in the 1960s was reversed in the 1970s. We also now see that the decline of the petty bourgeoisie that had persisted since the 19th century has been halted, at least temporari" (Steinmetz and Wright 1989:1009)