Is More Mittelstand the Answer? Firm Size and the Crisis of Democratic Capitalism

Corporate concentration is currently being discussed as a core reason for the crisis of democratic capitalism. It is seen as a prime mover for wage stagnation and alienation, economic inequalities and discontent with democracy. A tacit coalition of progressive anti-monopoly critiques and small business promoters considers more deconcentrated corporate structures to be a panacea for the crisis of democratic capitalism, arguing that small firms in competition are better for employment, equality and democracy. This paper offers a brief outline of ideas of the anti-monopoly and small business ideal and critically evaluates whether a more deconcentrated economy may live up to these promises. While we agree that the plea for strengthened antitrust enforcement contains relevant and promising prospects for reform, our analysis concludes on a decidedly critical note. In particular, we caution against romanticized notions of the small capitalist firm.

Is freedom as non-domination a right-wing idea?

Sean Irving’s book Hayek’s Market Republicanism: The Limits of Liberty shows that the commonly accepted reading of Hayek as a liberal thinker is mistaken, and that his political writings are best understood as belonging to the broader tradition of republicanism. The distinction is important for understanding many aspects of Hayek’s thought, and especially his rejection of social justice and majoritarian democracy. In that sense, one of the book’s more general merits is its implicit contribution to ongoing debates between republican ‘freedom as non-domination’ and liberal ‘freedom as non-interference’. Irving focuses on what he sees as a contradiction between Hayek’s chief concerns about the state as the main source of domination and his disregard for private forms of power, and especially within the capitalist firm. I argue, however, that the example of Hayek should lead us to consider a more prosaic conclusion: freedom as non-domination is a concept less useful for criticising the free market than Irving and left-leaning Republicans seem to assume.

Proto-CSR Before the Industrial Revolution: Institutional Experimentation by Medieval Miners’ Guilds

In this paper, we argue that antecedents of modern corporate social responsibility (CSR) prior to the Industrial Revolution can be referred to as “proto-CSR” to describe a practice that influenced modern CSR, but which is different from its modern counterparts in form and structure. We develop our argument with the history of miners’ guilds in medieval Germany—religious fraternities and secular mutual aid societies. Based on historical data collected by historians and archeologists, we reconstruct a long-term process of pragmatic experimentation with institutions of mutual aid that address social problems in the early mining industry, and thus before the rise of the modern state and the capitalist firm. Co-shaped by economic and political actors, these institutions of mutual aid have influenced the social responsibility programs of early industrialists, modern social welfare legislation, and contemporary CSR. We conjecture that other elements of proto-CSR might have evolved according to similar trajectories.

Recovering Personhood

Possessive individualism undermines the realization of full personhood, and it enables the capitalist firm to shed any sense of obligation to those who must rent or sell their labor power in order that they might eat. The fundamental crisis of capitalism is that the self-absorbed individual and the self-dealing capitalist firm are locked in a perverse contest in which their mutual dependence is both acknowledged and resented. Re-creating historic ideas of obligations—civic duties—seems impossible to imagine. A more plausible transition is to be found in the idea of loyalty: loyalty to others with whom we work, with whom we share social spaces, and with the community at large. Loyalty from the capitalist firm toward its workers would be a start. Loyalty from the acquisitive selfish individual would be helpful in restoring a shared and necessary sense of personhood.

Reimagining the Individual

Beginning in the 1980s, inequality of incomes in the metropolitan core began to increase. This great divergence was most pronounced in the Anglophone world—Great Britain, the United States, Canada, Australia, and New Zealand. This divergence suggests that there is nothing inherent—structurally determinative—in capitalism as it operates in the rich metropole that brings about this unwelcome trend. Rather, inequality is willful—intended. Ironically, inequality is enabled by the prevalence of possessive individualism that reveals the acquisitive individualist to be the source of his or her own unwanted economic marginalization. The individualist’s embrace of a livelihood strategy based on the celebration of rights and the illusion of freedom—being free to choose—has placed him or her at the mercy of the capitalist firm equally committed to possessive individualism. The capitalist firm must be transformed into a public trust. However, this will not be sufficient. Improved livelihoods will also require that the possessive individual be reimagined.

Management as a Universal Technique

This chapter talks about Reinaldo Scarpetta who argued that managers were the men called to tackle the wide-ranging problems of postwar societies. Managerial knowledge had come into the world a creature of the modern corporation, shaped to its requirements, but it now stood as a universal technique, its applications limitless. Government itself, Scarpetta declared, was simply “people managing public affairs.” Scarpetta's portrait of his own time occluded a long history of businessmen and economists comparing the capitalist firm to the state, management to government. His claims resembled those that Latin American economists made for themselves and dramatized the professional competition that economists came to face from managers who taught and studied in the same university programs. The postwar attempt to form a new economics profession produced an increasingly self-conscious generation of businessmen who rejected economists' account of them as narrowly self-interested masters of the shop floor and the corner office.

Market analysis beyond market fetishism

This article responds to Peck’s call for a heterodox economic analysis of markets that is sensitive to their sociality and spatiality with Polanyi’s work as a starting point. It is argued that while Polanyi’s concept of the socially embedded economy offers a useful heuristic for apprehending the social foundations of economic activity, his analysis exhibits ‘market fetishism’ – a tendency to treat markets as things in and of themselves, without a proper appreciation of their inherently social foundations – and that this is reflected in broader scholarly discourses with respect to markets. Thus, it is argued, we need to augment Polanyi’s framework with other heterodox economic insights. The article outlines a four-step approach to ‘de-fetishizing’ markets. First, the article foregrounds the specifically capitalist nature of the global economy, and the ‘unique system of market dependence’ to which capitalist social relations give rise. Second, it is argued that de-fetishizing markets requires that an agent-centred approach be adopted. Rather than viewing markets as ‘things’ it is argued that they are most usefully understood as the interactions between agents, the most significant of which, within the contemporary global economy, is the large capitalist firm. Third, the interaction between such agents is structured by pervasive frameworks of rules. Fourth, it is argued that markets are inherently spatial phenomena. They are spatially constituted and contribute to the production of space.

Perceiving Competitiveness under the Restructuring Process of Globalization

Currently, it is becoming progressively clearer within the international scientific community that there is no narrow economic reasoning which could lead to an evolutionary conception of globalization. Under such circumstances, the contemporary globalization crisis emerges as a new center of research for all the converging socio-economic sciences.The current article proposes a new analytical architecture to approach the current dynamics of globalization, by trying to comprehend the underlying evolutionary socio-economic process and by placing the living capitalist firm as a central concept in this analytical framework. In particular, it conceptualizes the capitalistic enterprise as an open living systemunder a constant synthesis of Stra.Tech.Man terms (the interconnection between Strategy, Technology and Management). It studies business as an agent of action which both creates and is created by the socio-economic environment within a continuously systemic process, while perceiving all the sectoral and cross-sectoral dynamics as dialectic agents of the globalizing evolution.Finally, we propose perceiving competitiveness as synthesis of business dynamics, socio-economic spaces and sectoral structures in global level, and draw the conclusion that it is analytically useful and fruitful to understand competitiveness as an organic-strategic process.