Ten Solutions to
Transform Victorian Capitalism into Democratic Capitalism
David M. Boje
June 17, 1998
Introduction
There are ten solutions to
Victorian capitalism. I think the solutions can help create democratic
capitalism. Democratic capitalism is a labor process that is democratically
governed by "We the People." We the People includes stockholders (big and
small), the community in which a corporation does business, the country
in which a multinational corporation has its charter, and mother earth.
The rise of Victorian Capitalism has taken governance of the corporation
and the labor process away from community, nation, and ecology.
First, I am opposed to multinational,
Victorian capitalism, not to forms of capitalism that are caring and environmentally
sustainable. Second, I think that corporations should be accountable to
transnational democratic alliances. Third, multinational corporate rule
needs to be dismantled so that Adam Smith's visions of smaller, more locally
accountable corporations can be sustained. Fourth, Maquiladora groups of
working women can be formed to bring about better working and living conditions.
Fifth, there should be a community-based bill of community rights that
govern the operation of corporations, such as in the example of New Mexico.
Sixth, the U.S. revolution of 1776 took control over corporate charters
and it is now time to revoke the notion of the corporation as a "natural
person" whose executives can operate above the law of the land and the
influence of the community. Seventh, read any book by Ivan Illich and you
will see ways to tame the labor process model of capital accumulation by
excessive use of technology, bigger is better corporations, etc. Ilich
says (http://www.cogsci.ed.ac.uk/~ira/illich/texts/const_revolution/const_revolution.html):
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10 percent of the human race
consumes more than 50 per cent of the world's resources, and produces 90
percent of the physical pollution.
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In the United States, for all
its gargantuan prosperity, real poverty levels rise faster than the median
income.
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Development programs all over
the world progressively lead to violence, either in the form of repression
or of rebellion.
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This is neither due to the evil
intentions of capitalists nor to the ideological rigidity of communists,
but to the radical inability of men to tolerate the by-products of industrial
and welfare institutions developed in the early industrial age.
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The production of inferiority
through schooling is more evident in poor countries and perhaps more painful
in rich countries. The 10~percent in the United States with the highest
incomes can provide most of the education for their children through private
institutions. Yet they also succeed in obtaining ten times more of the
public resources devoted to education than the poorest 10 per cent of the
population. Schools create a caste system of haves and have nots.
Eighth, use deconstruction to
provoke environmental and social auditing. Ninth, Mondragon Cooperatives
afford full democratic participation and governance of the organization
by workers. Tenth, a more limited form Is Participate Design for Participative
Democracy.
These are solutions that
will make corporations more democratic, less ruthless, and more accountable
to global citizens and the limits of our ecosystem. Enjoy.
Solutions
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Solution One: Resituating
capitalism. In my deconstruction of capital/labor (see syllabus
examples of deconstruction), I have suggested that the relationship between
capital and labor can be rebalanced. Adam Smith can be reread to recapture
his focus on limiting the size of mega corporations and to doing capitalism
with a sense of ethical responsibility to nations and workers.
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Adam Smith revisited.
Adam Smith's Wealth of Nations is one of the most mis-understood
documents. The entire book is available FREE on the web
http://www.bibliomania.com/NonFiction/Smith/Wealth/index.html
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Adam Smith's pin example is
in Chapter 1 of Book 1. But, this is not all there is to Smith's theory.
In Chapter 8 of Book 1, Smith argues that a worker is due his/her wage:
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The produce of almost all other
labour is liable to the like deduction of profit. In all arts and manufactures
the greater part of the workmen stand in need of a master to advance them
the materials of their work, and their wages and maintenance till it be
completed. He shares in the produce of their labour, or in the value which
it adds to the materials upon which it is bestowed; and in this share consists
his profit We have no acts of parliament against combining to lower the
price of work; but many against combining to raise it. In all such disputes
the masters can hold out much longer.
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Adam Smith advocated capitalism
with ethics. For example, Smith advocated not minimum wage, but a livable
wage for workers (Book 1, Chapter 8):
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A man must always live by his
work, and his wages must at least be sufficient to maintain him. They must
even upon most occasions be somewhat more; otherwise it would be impossible
for him to bring up a family, and the race of such workmen could not last
beyond the first generation.
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Adam Smith argued that corporations
should not be too large so as to drive out competition with others.
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Adam Smith did not advocate
maximizing the accumulation of capital to a few. Rather, he saw that since
the majority of a society is its workers, there was a need to raise the
quality of life of the entire society:
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Is this improvement in the circumstances
of the lower ranks of the people to be regarded as an advantage or as an
inconveniency to the society? The answer seems at first sight abundantly
plain. Servants, labourers, and workmen of different kinds, make up the
far greater part of every great political society. But what improves the
circumstances of the greater part can never be regarded as an inconveniency
to the whole. No society can surely be flourishing and happy, of which
the far greater part of the members are poor and miserable. It is but equity,
besides, that they who feed, clothe, and lodge the whole body of the people,
should have such a share of the produce of their own labour as to be themselves
tolerably well fed, clothed, and lodged.
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Adam Smith favored regulations
of wages that were fair to workers. He noted that owners sometimes created
wage minimums that, like Nike, were below poverty standards (Book 1, Chapter
10):
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Particular Acts of Parliament,
however, still attempt sometimes to regulate wages in particular trades
and in particular places. Thus the 8th of George III prohibits under heavy
penalties all master tailors in London, and five miles round it, from giving,
and their workmen from accepting, more than two shillings and sevenpence
halfpenny a day, except in the case of a general mourning. Whenever the
legislature attempts to regulate the differences between masters and their
workmen, its counsellors are always the masters. When the regulation, therefore,
is in favour of the workmen, it is always just and equitable; but it is
sometimes otherwise when in favour of the masters
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Second Solution: Global
democracy and the transborder alliance Muto Ichiyo (1996) of Japan
argues that people can form transborder alliances to resist the excessive
power of gargantuan multinationals like Nike (see
http://www.corpwatch.org/trac/feature/planet/gr_focus.html).
70 percent of global trade is controlled by just 500 corporations. He seeks
to bring about a Global Radical Democracy.
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I argue that global radical
democracy is the major challenge of our times. Everyone can see that power
concentration has reached an unprecedented height in the late 20th century,
in an unimaginably more sophisticated and penetrating manner than in the
middle of the century. Global inequality has aggravated and the environment
is being irreparably destroyed, but there is yet no major force to reverse
the trend. A single power bloc of a new type is dictating terms of competition
and survival to all peoples of the world.
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Generally, the global structure
has become more undemocratic than in the first half of this century as
nation states, in spite of their nationalistic rhetoric, have become, and
been forced to become, players in this single globalisation game built
around the cause of global capital accumulation.
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Solution 3: International Forum
on Globalization's The 5 D-Model is a worldwide movement
for dismantling corporate rule and seizing democratic control over our
economic, social, and environmental future in the 21st century
(See
http://www.corpwatch.org/trac/feature/planet/gr_ifg1.html).
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defining corporate rule;
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dissecting corporate rule;
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denouncing corporate rule;
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disrupting corporate rule; and
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dismantling corporate rule.
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Related Site Taking Back the
Power. David Korten's "A New Day is Coming" (See full text at http://www.context.org/ICLIB/IC40/Korten.htm).
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The legitimacy of the world's
dominant mega-institutions - both public and private - is at a near historic
low. These institutions are so big, so distant, so beholden to special
interests and so costly to maintain that they are simply unable to respond
in any useful way to the broader human interest -no matter who stands at
their helm.
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Fourth Solution. Maquiladora
Reform Groups. Carmen Valadez and Jaime Cota have these facts to
add (See http://www.corpwatch.org/trac/feature/sweatshops/organize.html):
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Young women represent about
70% of a labor force estimated at 776,000.
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The filthiest production practices,
with a clear racist intent of bringing to the southern countries the most
polluting industries and production processes. Many of the chemicals and
toxins used have been barred in their countries of origin.
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The systematic violation of
labor and gender rights of maquila workers.
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Women and men workers continue
to fight only against low salaries, mistreatment and sexual harassment,
and have added an important new component: the struggle for the health
and survival of the work places and the communities surrounding the maquila.
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Women are forced to live in
neighborhoods (colonias) without basic services such as electricity, water
and sewers.
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In Mexico, during the Fourth
Workshop of Women Workers of the maquila, held in Tijuana on June 23-25,
1995, a Network of Women maquila Workers with International Links was formalized.
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Solution 5: Community based
organizing in New Mexico State (See
http://www.corpwatch.org/trac/feature/hitech/swop.html).
Jeanne Gauna of the SouthWest Organizing Project seeks to make Intel Corporation
accountable to the New Mexico community. SWOP has drafted a Community Environmental
Bill of Rights:
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Right to clean industry
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Right to be safe from harmful
chemical exposure.
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Right to prevention
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Right to know
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Right to participate
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Right to protection and enforcement
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Right to compensation
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Right to clean up
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Solution 6. Taking Back Corporate
Charters. See
http://www.ratical.com/corporations/index.html.
Richard L. Grossman and Frank T. Adams argue that the revolution of 1776
sought to control the exploitative excesses of Crown Corporations like
Hudson's Bay Company and the East India Trading Company. This is why the
U.S. Declaration of Independence begins with "WE THE PEOPLE" "American
colonists feared corporations and vowed to put them under democratic control
For 100 years after the signing of the Declaration of Independence, citizen
vigilance and activism forced legislators to keep corporations on a short
civic leash." There were initially few corporate charters, and those granted
were controlled by citizens and legislatures. There was scaled voting so
large and small investors had a say in corporate governance. Corporations
who engaged in abusive practices routinely had their charter revoked and
were forced to disband. But, latter half of the 19th century, corporations
hired legions of lawyers and some questionable judges declared that the
corporate rate of return on investments (i.e., profit) was corporate property
and, hence, could not be meddled with by citizens or by their elected representatives.
Railroad, mining and manufacturing companies were even granted the power
of eminent domain, workers (the courts also ruled) were responsible for
causing their own injuries on the job, and courts ruled that laws passed
as a result of widespread citizen organizing were unconstitutional. In
1886, the corporation was declared a "natural person," a citizen who was
beyond the reach of the law. This movement seeks to reimpose community
and legislative control by holding corporate officers accountable for their
corporation's action and revoking their armor as "natural persons." Multinational
corporations such as Nike, who consistently break labor and environmental
laws should have their charters rescinded.
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Read Any Book by Ivan Illich.
In Ivan Illich: Toward a History of Needs. New York: Pantheon, 1978 ---
Illich speaks out about the inequities of the 1st world using
up most of the world's energy for no good reason. For example, here is
a list summarized from http://www.cogsci.ed.ac.uk/~ira/illich/facts/social_effects.html.
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The United States puts between
25 and 45 per cent of its total energy (depending upon how one calculates
this) into vehicles: to make them, run them, and clear a right of way for
them when they roll, when they fly, and when they park. For the sole purpose
of transporting people, 250 million Americans allocate more fuel than is
used by 1.3 billion Chinese and Indians for all purposes.
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The model American male devotes
more than 1,600 hours a year to his car. He sits in it while it goes and
while it stands idling.
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The model American puts in 1,600
hours to get 7,500 miles: less than five miles per hour. In countries deprived
of a transportation industry, people manage to do the same, walking wherever
they want to go, and they allocate only 3 to 8 per cent of their society's
time budget to traffic instead of 28 per cent.
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Man, unaided by any tool, gets
around quite efficiently. He carries one gram of his weight over a kilometer
in ten minutes by expending 0.75 calories. Man on his feet is thermodynamically
more efficient than any motorized vehicle and most animals.
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Man on a bicycle can go three
or four times faster than the pedestrian, but uses five times less energy
in the process.
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Bicycles are not only thermodynamically
efficient, they are also cheap.
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Illich is making a point. More
and more technology is not always more efficient, equitable, or sustainable.
He seeks a convivial level of technology use. Illich argues that "Modern
poverty is a by-product of a world market catering to the ideologies of
an industrial middle class" (See A Consitution for Cultural Revolution
at
http://www.cogsci.ed.ac.uk/~ira/illich/texts/const_revolution/const_revolution.html).
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The bicycle also uses little
space. Eighteen bikes can be parked in the place of one car, thirty of
them can move along in the space devoured by a single automobile. It takes
three lanes of a given size to move 40,000 people across a bridge in one
hour by using automated trains, four to move them on buses, twelve to move
them in their cars, and only two lanes for them to pedal across on bicycles.
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Bicycles let people move with
greater speed without taking up significant amounts of scarce space, energy,
or time. They can spend fewer hours on each mile and still travel more
miles in a year.
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Solution Eight: Use Deconstruction
to Provoke Environmental and Social Auditing. Accounts have the power
to decide how the environment gets represented in income and balance sheets.
ISO14000 is becoming a worldwide standard for corporate ecological accountability
that is changing how assets are valued. SA7000 gives guidelines for social
auditing. Deconstruction is a part of this transformation (See Accounting
for the Environment in Order for it to Count by Jane Andrew and Mary A
Kaidonis at
http://les.man.ac.uk/cpa96/papers.htm/andrew.htm).
Citing from Andrew and Kaidonis: Derrida deconstruction exposes the "textual
unconscious" [Grosz,1989,109], that lies behind accounting representations.
Deconstruction in accounting can challenge attempts to privilege theories,
techniques and models as superior journeys to the discovery of knowledge
[Derrida, 1978]. It creates spaces for the oppressed Other within the accounting
system. Rubenstein [1992] claims that there is now a new class of 'stakeholders',
which include people yet unborn, animals, plants and micro-organisms. Deconstruction
can be used to reveal the binaries (dualities) perpetuated in status quo
accounting measurement practices. Other related papers:
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A View From the Bottom: Deconstructing
the Principal-Agent Model by Michele Chwastiak at http://les.man.ac.uk/cpa96/papers.htm/chwastia.htm.
This paper uses deconstruction to argue that a paradigms ideological strength
and resilience lies in its ability to rationalize, normalize, and legitimize
various means of controlling the labor process in such a way that
it appears as if labor benefits from its own degradation and exploitation.
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Social and Environmental Accounting:
A Review of the Non-Role for Accounting by Glen Lehman at http://les.man.ac.uk/cpa96/papers.htm/lehman.htm.
Lehman's viewpoint is that accounting reports obfuscate the distortions
between what is reported and the actual value relations underlying those
numbers (reification). "Accounting is a compliant participant in the exploitative
process of capitalism." What is need is to deconstuct who accumulation
and possession are driving forces. Habermas' model provides some guidance
through a language model based on an ideal-speech situation where normative
and moral issues are discussed.
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Accounting for the Environment
by Mehenna Yakhouhttp http://les.man.ac.uk/cpa96/papers.htm/yakhou.htm.
This paper looks at environmental and social accounting practices, particularly
at life cycle models.
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For a good example of story
deconstruction, see STORYTELLING AND ETHICS IN FINANCIAL
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ECONOMICS by Sara Ann Reiter
at http://les.man.ac.uk/cpa96/abstract/reiter.htm
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Solution 9: Mondragon Cooperatives.
Mondragon is a postmodern organization that operates according to democratic
principles of participation and ecology. (see http://www.sfworlds.com/linkworld/mondragon.html).
The producers own the capital. "The Mondragon Corporacion Cooperativa (MCC)
began in the town of Mondragon in 1956 when a group of five young engineers
were encouraged by their socialist priest, Father Jose Maria." "MCC has
grown in its forty years of operation to include 160 employee-owned cooperatives,
involving 23,000 member owners, with sales grossing US$3 billion in 1991."
Profits from this cooperative are recycled to the local community. "Statistics
show the Mondragon cooperatives to be twice as profitable as the average
corporation in Spain with employee productivity surpassing any other Spanish
organisation." "Management is responsible and accountable to members, that
is in producer co-ops to directors elected by and from worker-owners."
(See http://www.solbaram.org/articles/mondra.html).
"Each member's capital account is credited each year with his share of
the co-op's profits, but may also be debited with his share of any losses."
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Solution 10: Participative
Design for Participative Democracy. See
http://www.nmsu.edu/~iirm/articles/democ.html
and
http://www.nmsu.edu/~iirm/articles/hewpack.html
for an overview. Whereas, Mondragon invites workers to participate in the
division of profits and ownership, the participative democracy movement
limits democracy to how the work gets done. Fred and Merilyn Emery are
leaders in the Participative Democracy movement. PDPD is based upon the
democratic design principle...Coordination and control of work tasks is
done by those doing the work. Their search conference approach attempts
to transform organizations from DP1 to DP2 (http://www2.wi.net/~rpurser/contents.htm).
DP1 is design principle one. DP1 organizations do not allow workers to
participate in decisions that control their own work. DP2 organizations
allow workers to participate in how the work gets organized and conducted.
References for Ivan Illich Solutions
AUTHOR: Illich, Ivan 1926-
Lister, Ian
TITLE: After deschooling,
what?
IMPRINT: London 14 Talacre
Rd, NW5 3PE : Writers and Readers Publishing Cooperative, 1976
NOTES: Originally published
in a different physical format:After deschooling, what? / Ivan Illich.
London : Writers and Readers Publishing Cooperative , 1974.
SUBJECT: Educational sociology
Education
AUTHOR: Illich, Ivan 1926-
TITLE: Celebration of awareness
: a call for institutional revolution
IMPRINT: Harmondsworth :
Penguin Education, 1976
SERIES: Penguin education
specials Pelican books
NOTES: Originally published:
Garden City [N.Y.]: Doubleday, 1970; London: Calder and Boyars, 1971
SUBJECT: Social change
AUTHOR: Illich, Ivan 1926-
TITLE: Deschooling society
IMPRINT: Harmondsworth :
Penguin, 1976
SERIES: Pelican books
SUBJECT: Educational sociology
Education
AUTHOR: Illich, Ivan 1926-
TITLE: Disabling professions
IMPRINT: London : Boyars,
1977
SERIES: Ideas in progress
SUBJECT: Professions --
Social aspects
AUTHOR: Illich, Ivan 1926-
TITLE: Energy and equity
IMPRINT: London : Calder
& Boyars, 1974
SERIES: Ideas in progress
Open Forum
SUBJECT: Transportation
-- Social aspects
Transportation -- Cost of
operation
Energy policy
Social history -- 1970-
Transportation -- Passenger
traffic
AUTHOR: Illich, Ivan 1926-
Verne, Etienne
TITLE: Imprisoned in the
global classroom / Ivan Illich and Etienne Verne
IMPRINT: London : Writers
and Readers Publishing Cooperative, 1976
CONTENTS: Includes 'Political
inversion' by Ivan Illich
SUBJECT: Education -- 1965-
Education -- Aims and objectives
Educational sociology
AUTHOR: Illich, Ivan 1926-
TITLE: In the vineyard of
the text : a commentary to Hugh's Didascalicon
IMPRINT: Chicago : London,
: University of Chicago Press, c1993
SUBJECT: Hugh, St. Victor.
Didascalicon Learning and scholarship --
History -- Medieval, 500-1500
Manuscripts, Medieval --
History
AUTHOR: Illich, Ivan 1926-
TITLE: Limits to medicine:
medical nemesis: the expropriation of health
IMPRINT: Harmondsworth New
York : Penguin, 1977
SERIES: Pelican books
NOTES: Definitive version
of the author's paper: Medical nemesis - the expropriation of health, published
in 1975
SUBJECT: Social medicine
Medicine -- Philosophy
Medical care
Iatrogenic diseases
Delivery of health care
Ethics, Medical
Iatrogenic disease
Philosophy, Medical
Politics
Quality of health care
Social medicine
AUTHOR: Illich, Ivan 1926-
TITLE: Shadow work
IMPRINT: Boston, Mass. London
: Boyars, 1981
SERIES: Open forum
NOTES: Bibliography: p118-152
SUBJECT: Economics
AUTHOR: Illich, Ivan 1926-
TITLE: Tools for conviviality
IMPRINT: [Glasgow] : Fontana/Collins,
1975
NOTES: Previously published:
London : Calder and Boyars, 1973
SUBJECT: Economic development
-- Social aspects
Industry -- Social aspects
AUTHOR: Illich, Ivan 1926-
TITLE: Toward a history
of needs
EDITION: 1st ed
IMPRINT: New York : Pantheon
Books, c1978
CONTENTS: Contents: Useful
unemployment and its professional enemies.--Outwitting developed nations.--In
lieu of education.--Tantalizing needs.--Energy and equity
SUBJECT: Social history
-- 20th century
Social problems
Economic development --
Social aspects
AUTHOR: Pattanayak, Debi
Prasanna 1931- Illich, Ivan 1926-
TITLE: Multilingualism and
mother-tongue education
IMPRINT: Delhi New York
: Oxford University Press, 1981
SUBJECT: Native language
and education -- India India -- Languages
India -- Scheduled tribes