Principles of Group Solidarity

By Michael Hechter | Go to book overview

CHAPTER VII
THE LIMITS OF COMPENSATION IN
CAPITALIST FIRMS

The Sovereign can punish immediately any faults he discovers, but he
cannot flatter himself into supposing that he sees all the faults he should
punish.

Alexis de Tocqueville

THAT SANCTIONS may motivate compliance is undeniable. But they cannot magically be brought to bear on individual behavior. In order for sanctions to influence behavior, two analytically separate processes have to occur. On the one hand, compliance and noncompliance must be detected. On the other, a stock of adequate sanctions must be available, and members must believe that not only will their behavior be sanctioned appropriately, but also that of others, especially if they do not comply. Together, these processes constitute the mechanisms of control. Naturally, the greater the probability of detection and the greater the magnitude of the sanction, the greater the likelihood of compliance.1

Formal control mechanisms derive from planned social action and are not self-reinforcing. Establishing and maintaining them is costly. Although members always have an interest in control (because it is a necessary condition for the production of the joint good), they may not always institute it, precisely on account of these costs.2

Control costs tend to be higher in compensatory than in obligatory groups. Recall that there are three ways to obtain the compliance necessary to produce joint goods—through compensation, obligation, or some mixture of these two means. Compensatory groups arise to produce marketable commodities that are consumed mostly by nonmembers. Since the members of these groups do not receive any direct utility from the production of these goods, they must be compensated for the time they spend producing them. Naturally, this compensation is most useful when it is

1 This formulation is similar to that commonly used by deterrence theorists in criminology (Gibbs 1981), although the sanctions referred to in that literature are exclusively negative.

2 A more complete discussion of the evolution of formal controls can be found in Chaper 6.

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