Capitalist Firms Research Articles

The Nature of Labor’s Vulnerability to Exploitation

I identify a hitherto unrecognized contribution of labor to production stemming from an innate sense of psychological ownership of the fruits of one’s labor. This is rooted in the consciousness accompanying all human activities and is distinct from legal ownership. Consciousness is inalienable; it cannot be contracted on. Labor’s psychological ownership generates quasi-rents, which can be appropriated by capitalist firms with market power. Monopsony power, now empirically seen to be ubiquitous in labor markets, has more serious efficiency and equity consequences than recognized. In a neoclassical framework, I also show why labor is uniquely vulnerable to exploitation—reconciling it with Marxian views. If capitalist owners are taken to be unaware of their workers’ psychological ownership, this exploitation occurs even in competitive labor markets. JEL Classification: P12, J22, J3, J42, D41

Worker takeovers: a comparative analysis of employee buyouts, other worker-managed firms, and conventional firms in Uruguay

Abstract The economic crisis experienced by many developed countries over the past decade saw the emergence of the phenomenon of so-called recovered firms (RFs), or employee buyouts of failed capitalist firms (CFs). While it is obvious that one of the objectives sought by these workers is to keep their jobs, the subsequent performance of these firms is unclear. Are RFs more likely to fail than other worker managed firms (WMFs) or than CFs? Do RF workers get higher incomes than their peers in other WMFs or in CFs? This analysis is based on a linked employer–employee panel data set from Uruguayan social security administrative records. The main findings are that RFs survive longer than other WMFs or than CFs. However, RF workers receive incomes lower than those of their peers at other WMFs or at CFs. This income differential is explained partly by a brain drain process and specific human capital losses.

In Defense of Shirking in Capitalist Firms: Worker Resistance vs. Managerial Power

Shirking, the act of avoiding the demands of one’s job, is generally seen as unethical. Drawing on empirical evidence from the sociology of work, I develop a normative conception of shirking as a form of worker resistance against illegitimate managerial power. In doing so, I present a new approach to the political theory of the firm, which is more adversarial and agent-centered than available alternatives. It is more adversarial as it recognizes the political value of counterproductive and disruptive behavior in capitalist firms. It is more agent-centered because it theorizes the firm from the perspective of workers, asking what pro tanto reasons they have to shirk. I show that shirking under the structural domination of capitalism has diagnostic, agential, and epistemic values. The paper contributes to the wider methodological ambition to tailor political theorizing to the positionality of social actors by shifting attention from the institutional design of the firm to the methods of worker resistance.

Exit, Voice, or Both: Why Organizations Engage With Stakeholders

To shield stakeholders from exploitation, society increasingly expects organizations to engage with stakeholders. While exploitation of stakeholders is of great concern, economic literature points to the costly nature of stakeholder engagement vis-à-vis alternative mechanisms that protect stakeholders, such as competitive markets. When the costs of stakeholder engagement outweigh the benefits, why would organizations engage with stakeholders? Through an analysis of the cooperative enterprise and a comparison with its capitalist counterpart, we theorize two additional reasons why stakeholder engagement is beneficial. First, we explain how stakeholder engagement facilitates long-term organizational resilience and protection of stakeholders in times of crisis, and second, we show how engagement is a decisive ingredient in answering non-economic value requirements of stakeholders. To conclude, we contribute to the broader stakeholder engagement and cooperative literature by stressing that engagement practices, and particularly democratic governance arrangements, are subject to design principles that sometimes favor stakeholders in capitalist firms.

Black Feminists in the Third Sector: Here Is Why We Choose to use the term Solidarity Economy

Many countries in the Global North use the term “social economy”—also known as the third sector—to describe economies run by citizens rather than by state or business actors. Over the years, many Black feminist scholars that we have worked with also share the view that the concept of the “social economy” is limited to a European understanding. It fails to acknowledge those actors in the third sector who are excluded from interacting with the government or private sector. There is an assumption that the social economy is “socially inclined” and that it is a sector able to “interact” with the state and capitalist firms. What happens when certain groups of people cannot interact with the state or private sectors due to systemic exclusion? We argue that to transform literature on the social economy, we must use the term solidarity economy. Rejecting the sanitized language of the social economy, we use critical discourse and case study analyses to show the worldwide use of the term solidarity. Our work draws on theories of community economy intentional community to argue that the solidarity economy is a site of contestation and a way to push for social change.

Performance of Private to Public MBOs: The Role of Venture Capital

Using a unique dataset, we examine financial performance, and venture capital involvement in 167 MBOs exiting through IPOs (MBO-IPOs) on the London Stock Exchange, during the period 1964-1997. VC backed MBOs seem to be more underpriced than MBOs without venture capital backing, based on average value-weighted returns. MBOs backed by highly reputable VCs tend to be older companies, and exit earlier than MBOs backed by less reputable VCs. The results contradict 'certification' and 'grandstanding' hypotheses supported by US data (Megginson and Weiss, 1991; and Gompers, 1996, respectively). We found no evidence of either significant underperformance, or that VC backed MBOs perform better than their non-VC backed counterparts in the long run. However, MBOs backed by highly reputable venture capital firms seem to be better long-term investments as compared to those backed by less prestigious venture capitalist firms. The results remain robust after using different methods to measure performance, and after controlling for sample selectivity bias.

Awkward Classes and India’s Rural Development

Marx’s model of capital and labour, dynamised by contradictions and the compulsion to accumulate, leaves deviations from the polar classes of capital and labour ignored, regarded as precapitalist outliers, or as headed for extinction. But the two considered here, petty commodity production (and trade and services) and merchant’s or commercial capital, persist widely. Here in tribute to the major contributions to political economy of Utsa Patnaik and Prabhat Patnaik, their structure and dynamics are discussed in general and in the contemporary Indian case. They are argued to be awkward both analytically and politically. Petty production overlaps with both wage labour and small capitalist firms; it reproduces and expands by multiplication, not accumulation; it does not mobilise in a politically coherent way. Commercial capital is in turn suffused with productive activity; it encompasses petty trade and accumulating enterprises which pursue a reactive opportunistic politics which preserves their independence. Further awkwardness results from the disjuncture between analytically useful categories and the policy concepts used by the state.

Diminishing Returns to Social Capitalist Firms and Their Employee Advocates: Evidence from WeChat

When employees act as advocates on their firms’ behalf, their personal social media networks provide a potentially powerful platform for social capitalistic companies to access a broad audience. Existing theories exploring employee advocacy and companies’ social capitalistic efforts essentially assume, however, that employees willingly act as a tertius iungens, linking firms with potential job-, information-, or product seekers from their social networks, and that employees’ contacts are interested or—at worst—neutral message recipients who respond to the information they want, and ignore the rest. However, a motivated information processing view, proffering information overload and audience preference for uniqueness, would predict audience disconnect from company efforts and possibly adverse relational effects for overly zealous employees. Reconciling these perspectives, we theorize that firms that push their employees to act as their advocates on social media will be rewarded, but will see diminishing returns in information diffusion and audience attention. We test and find support for our hypotheses on a unique data set of 3,050 company messages sent on two Chinese interior design companies’ combined 2,162 employees’ WeChat Moments with 200,240 readers. Both company and employee “push” efforts and message recipients’ “pull” (due, e.g., to the fear of missing out) do increase message diffusion, but there are diminishing returns for employees posting messages in terms of reader count and attention. These findings contribute to our understanding of the limits of utility for social capitalist firms leveraging their employees’ networks and the relational costs employee advocates experience in promoting their firms, and help to better define the boundaries between potential and activated social capital.

A Spiteful Campaign: Agriculture, Forests, and Administering the Environment in Imperial Singapore and Malaya

The Singapore Botanic Gardens, founded in 1859, was a center for the development of imperial botany where new flora was identified and other plants acclimatized. The ostensibly scientific orientation of the Gardens proved inadequate for the growing number of large capitalistic firms established in Malaya to cultivate cash crops, so the British government established two new bureaucracies—a Department of Forestry and a Department of Agriculture—that more explicitly catered to the demands of British industry in the region. This shift in policies prompted quarrels between bureaucrats and botanists, who shared a commitment to the imperial project but disagreed with environmental administration in British-controlled Southeast Asia. The debates proved significant, facilitating the expansion of plantation estates, massive deforestation, and a transformed natural environment as capitalistic investment began to override scientific knowledge, laying the groundwork for the environmental exploitation of the region throughout the twentieth century.

Representing Race in Graphs: W.E.B. Du Bois, Corporate Bureaucrats, and Visualization Strategies for Change

In this paper, I draw together W. E. B. Du Bois and corporate bureaucrats to compare the graphical representation of race across three distinct racial epochs: the Progressive, Civil Rights, and post-1980s neoliberal era. I illustrate how, through visual and rhetorical strategies, corporate bureaucrats extend a Du Boisian legacy in constructing popular knowledge of race and racism. I show how they do this by making whiteness visible through data visualizations and rhetorically bundling them to liberal American values of equal opportunity. In examining them as epistemic and semiotic objects, I argue that graphical representations of race compel the enactment of meaningful strategies seen to challenge racial inequalities in the workplace. Yet, insofar as these are employed to equate racism with the absence of equal opportunity in capitalist firms, I argue, they also mask whiteness and reproduce systemic racism. The graphical representation of race, in effect, reveals how the practices of knowledge production and processes of signification are entangled in everyday corporate bureaucracies. Thus, I suggest that we need to reject analytical binaries that pose a bounded distinction between “business” and “social justice” to extend research into the cultural production and productive enactment of racial materiality.

(Re)Creating "Society in Silico": Surveillance Capitalism, Simulations and Subjectivity in the Cambridge Analytica Data Scandal

This article provides a different angle to understand the Cambridge Analytica (CA) data scandal. It focuses on the role of models and simulations in the big data campaigning tools CA allegedly used, and their epistemological and ontological potential to produce and reproduce voters' digital doubles that would first colonise and eventually replace the analogue selves they were related to. By integrating and revising Zuboff's surveillance capitalism framework with Debord's classic theory of the Spectacle, the article argues that the dystopian simulations played as real life experiments by surveillance capitalist firms such as CA have the ultimate goal of replacing analogue humanity with digital humanity – the two kinds are ontologically different albeit dialectically related. The predictive models that these simulations produce are only as good as the capacity of the digital doubles in the simulations to shape the behaviour of analogue selves in line with the simulations' parameters and goals.

No separate spheres: the contingent reproduction of living labor in Southern Africa

Social Reproduction Theory (SRT) rejects the classical political economy distinction between productive and unproductive labor, the latter defined as all labor that does not produce surplus-value. Rather, much non-commodified labor, particularly that done in the domestic sphere, is not unproductive but necessary since it produces labor-power. Hence, SRT has proposed an alternative distinction: productive versus reproductive spheres of labor. This article argues that this opposition too is analytically and politically misleading. Capital is concerned with profit, not with the reproduction of the living labor within which labor-power is always embedded. It is the everyday struggles of living labor that determines its reproduction. These take place not just in the kin-based sphere of the family but in overlapping, shifting places and processes, including struggles for better wages and working conditions in capitalist firms. This paper uses two different contexts in southern Africa to make this argument: an influential debate over how to understand changes in apartheid in South Africa in the 1970s; and a sugar-cane plantation in Mozambique where interdependent contradictions of class, gender and race defined a social division of labor that systematically compromised the reproduction of living labor.

Subterranean Properties: India's Political Ecology of Coal, 1870–1975

AbstractScholars have long been attentive to the relationship between legal regimes and agrarian dispossession in the resource frontiers of the postcolonial world. The analytical problem of identifying how private firms use legal regimes to take control of land—whether for mining, plantations, or Special Economic Zones—now animates a new body of research seeking the historical antecedents for contemporary land grabs. In the case of colonial South Asia, existing scholarship has often tended to suggest that the law precedes processes of capital accumulation, and that colonial capital operated within the confines of definable, even if legally plural, institutional regimes, such as property rights and commercial law. This perspective suggests, if only implicitly, that capitalist firms prefer to work within formal frameworks of legality. In this article, I outline a different understanding of the place of law in colonial South Asia, which follows the formation of property law for coal at the end of the nineteenth century. I argue that the discursive framing of coal's status as property emerged out of, rather than preceded, social and ecological displacements caused by a coal commodity boom after 1894. Reconstructing conflicts over coal-bearing agrarian land through civil court records and mining company property deeds, I demonstrate how the absence of coal property within the colonial legal archive was reassembled through a recursive conception of legality. This genealogy of law recovers the historical context for contemporary struggles over mining claims in India's coal region today.

A Note on Stackelberg Mixed Triopoly Games with State-Owned, Labor-Managed and Capitalist Firms

This paper investigates three sequential-move games with a capitalist firm, a labor-managed firm and a state-owned firm. The first game is as follows. In stage one, the capitalist firm chooses its output level. In stage two, the other firms choose their output levels simultaneously and independently. In stage three, the market opens and each firm sells its entire output. The structures of the second and third games are nearly identical and differ only in order in which the firms choose output levels in the first two stages. The paper discusses the equilibrium outcomes of the three sequential-move games.

Advancing the Theory of Cooperative Organization: Interrogating the Developing Country Perspectives

This paper attempts to theorize producers’ cooperatives as an organizational form in the context of developing countries, by using Williamson’s approach of comparative economic organizations. The idea of composite efficiency has been introduced here, by bringing in the notion of distributional efficiency. Detailed theorization of different types of organizations following the market-hierarchy continuum has been attempted. Institutional factors behind longevity, stability of cooperatives and logic behind coexistence of cooperatives along with hierarchical capitalist firms, by focusing on the Indian handloom weaving sector, have been theoretically established.

Cooperative Entrepreneurship Model for Sustainable Development

The main objective of this research is to contribute to the economic literature on cooperative entrepreneurship as a model for sustainable development, taking into account the special alignment of the cooperative principles (ICA) with the UN Sustainable Development Goals (SDGs). It offers new empirical evidence from Spain, based on Stakeholder Theory, about the differences between cooperatives (Coops) and Capitalist Firms (CFs) in relation to the distribution of economic value between the different stakeholders. For this purpose, panel data was analysed using the Correlated Random Effects approach. The results reveal that cooperative firms generate value for some of the stakeholders analysed, specifically for their partners and creditors, but no significant differences have been found with CFs in terms of workers and the state. In both cases, it can be inferred that the period analysed has influenced the results, since it has been found that, first, cooperatives adjust wages downward rather than dismiss workers during a recession, which is in line with previous research, and second, that their tax contribution to the state is lower because they are subject to a more favourable tax system in Spain.

Law and Corporate Malfeasance in Neoliberal India

Critical sociolegal scholars highlight how the law favors powerful actors in handling the socioenvironmental devastation affecting marginalized populations. What receives scant attention is how the neoliberalization of the world economy has further enabled powerful capitalist firms to shape the legal path in their own favor and to the detriment of the marginalized. Union Carbide’s 1984 Bhopal catastrophe killed 25,000, injured 600,000, and left prolonged consequences. This paper advances our understanding of the political economy of law by analyzing the handling of death and devastation in Bhopal. Drawing data from 60 interviews with Bhopal victim activists and archives, it advances the argument that the law mirrors the interests of the neoliberal actors of capital. Findings suggest that the law has not only proved unable to safeguard the weakest elements of Bhopal society, but also the pursuit of legal solutions under neoliberalism is incapable of addressing the long-term harms affecting marginalized Bhopalis.

Capitalism in China: The Case for International Solidarity

There is controversy in the UK labour movement over China. Arguments range from assertions that China remains a socialist state albeit in the primary stages to support for China on the grounds that a strong China is a counterbalance to US-led economic imperialism and military adventures. Putting the controversy aside, this article instead makes the case for the solidarity with Chinese workers and citizens on the receiving end of capitalist exploitation and state repression in the hinterlands and heartlands of this emerging global power. We equate resistance in China to resistance to authoritarianism in general, whether in the form of right-wing populism or one-party rule. Capitalist labour relations exist in China. Their reintroduction was a cornerstone of paramount leader Deng Xiaoping’s neoliberal strategy allowing a minority to get rich first. Which they did: the share of income earned by the top 10 percent of the population went from 27 percent in 1978 to 41 percent in 2015. In the same period, the share of the bottom 50 percent dropped from 50 percent to 27 percent1. China’s adoption of capitalism has lifted millions of people out of absolute poverty. But the cost of this transformation in terms of environmental degradation and social inequality must be a core concern of the international labour and trade union movement. Neoliberal globalisation teaches us that solidarity is not a national undertaking as capital and ideology cross borders with ease in search of new markets and opportunities for accumulation. We need to do the same. For example, trade unionists and activists everywhere can learn from the extraordinary strike wave in China’s auto parts industry in 2010 that generated wage rises of 20-30 percent. The global rise of populist authoritarianism and its nationalist ideologies renders global resistance even more important. In China, authoritarian rule has taken on an altogether more dangerous shade under Xi Jinping’s leadership as labour activists, feminists, minorities and human rights defenders and others have found to their cost2. Labour stat In China, capitalist labour relations are governed by laws that look reasonable on paper and indeed appear to buck the global neo-liberal trend of labour market deregulation. But they are widely ignored. The absence of core trade union rights such as freedom of association and the right to collective bargaining backed up by protection of the right to strike are collective rights denied to the Chinese working class. The notional right to strike was deleted from the Constitution of China in 1982 at precisely the time when China embarked on her journey from a command economy to a market economy. Nevertheless, it is not the case that capitalist labour relations in China allow predatory capitalists and their agents to operate at will. Labour scholars from different disciplines and perspectives such as Ching Kwan Lee, Pun Ngai, Chang Kai and Chris Chan acknowledge that the activism of the Chinese working class, including a reserve army of ruralurban migrants that numbers up to 250 million, has been central to a gradual tempering of capitalist exploitation in China. Capitalist exploitation has been institutionalised. A watershed moment in this process was the passing of three important labour-related laws in 2008 that most commentators agree were a response to rising levels of strikes and labour protests. The Labour Contract Law, the Labour Disputes Mediation and Arbitration Law and the Employment Promotion Law were testament to both the universalisation of capitalist labour relations in China; and Chinese Communist Party’s concern that the militancy and social unrest could develop into a threat to its one-party rule. In other words, the 2008 laws were an outcome of the growing capacity of a dramatically expanding working class to get its voice heard. The only legal trade union in China, the state-controlled All-China Federation of Trade Unions (ACFTU), has failed to make its presence felt in capitalist firms and remains largely restricted to its traditional role as a welfare arm of the state in what is left of a restructured state sector i.e. good on picnics and birthdays for model workers; absent on collective bargaining and organising. Little wonder then that workers often take matters into their own...

Capitalism in China: The Case for International Solidarity

There is controversy in the UK labour movement over China. Arguments range from assertions that China remains a socialist state albeit in the primary stages to support for China on the grounds that a strong China is a counterbalance to US-led economic imperialism and military adventures. Putting the controversy aside, this article instead makes the case for the solidarity with Chinese workers and citizens on the receiving end of capitalist exploitation and state repression in the hinterlands and heartlands of this emerging global power. We equate resistance in China to resistance to authoritarianism in general, whether in the form of right-wing populism or one-party rule. Capitalist labour relations exist in China. Their reintroduction was a cornerstone of paramount leader Deng Xiaoping’s neoliberal strategy allowing a minority to get rich first. Which they did: the share of income earned by the top 10 percent of the population went from 27 percent in 1978 to 41 percent in 2015. In the same period, the share of the bottom 50 percent dropped from 50 percent to 27 percent1. China’s adoption of capitalism has lifted millions of people out of absolute poverty. But the cost of this transformation in terms of environmental degradation and social inequality must be a core concern of the international labour and trade union movement. Neoliberal globalisation teaches us that solidarity is not a national undertaking as capital and ideology cross borders with ease in search of new markets and opportunities for accumulation. We need to do the same. For example, trade unionists and activists everywhere can learn from the extraordinary strike wave in China’s auto parts industry in 2010 that generated wage rises of 20-30 percent. The global rise of populist authoritarianism and its nationalist ideologies renders global resistance even more important. In China, authoritarian rule has taken on an altogether more dangerous shade under Xi Jinping’s leadership as labour activists, feminists, minorities and human rights defenders and others have found to their cost2. Labour stat In China, capitalist labour relations are governed by laws that look reasonable on paper and indeed appear to buck the global neo-liberal trend of labour market deregulation. But they are widely ignored. The absence of core trade union rights such as freedom of association and the right to collective bargaining backed up by protection of the right to strike are collective rights denied to the Chinese working class. The notional right to strike was deleted from the Constitution of China in 1982 at precisely the time when China embarked on her journey from a command economy to a market economy. Nevertheless, it is not the case that capitalist labour relations in China allow predatory capitalists and their agents to operate at will. Labour scholars from different disciplines and perspectives such as Ching Kwan Lee, Pun Ngai, Chang Kai and Chris Chan acknowledge that the activism of the Chinese working class, including a reserve army of ruralurban migrants that numbers up to 250 million, has been central to a gradual tempering of capitalist exploitation in China. Capitalist exploitation has been institutionalised. A watershed moment in this process was the passing of three important labour-related laws in 2008 that most commentators agree were a response to rising levels of strikes and labour protests. The Labour Contract Law, the Labour Disputes Mediation and Arbitration Law and the Employment Promotion Law were testament to both the universalisation of capitalist labour relations in China; and Chinese Communist Party’s concern that the militancy and social unrest could develop into a threat to its one-party rule. In other words, the 2008 laws were an outcome of the growing capacity of a dramatically expanding working class to get its voice heard. The only legal trade union in China, the state-controlled All-China Federation of Trade Unions (ACFTU), has failed to make its presence felt in capitalist firms and remains largely restricted to its traditional role as a welfare arm of the state in what is left of a restructured state sector i.e. good on picnics and birthdays for model workers; absent on collective bargaining and organising. Little wonder then that workers often take matters into their own...

Semi-Proletarianization in a Dual Economy: The Case of China

This paper proposes a model to explain the wage increase for migrant workers in China since the mid-2000s. First, the model consists of a capitalist sector and a non-capitalist sector. Second, households are semi-proletarianized because they participate in both family farming and wage production. Third, capitalist firms determine the wage level in order to extract labor. The paper demonstrates that semi-proletarianization is one of the three stages of the long-term dynamics of a dual economy like China. In so doing, it provides an alternative to the Lewis turning point literature. JEL Classification: B51, O53, E24