Pub Date : 2023-04-24DOI: 10.1177/00323292231163690
Tom Malleson
This article introduces this special issue on the bicameral firm. It lays the groundwork by providing a brief overview of the democratic firm in its historical and political context. The article describes the main problems that large undemocratic corporations pose for society; it contrasts the main ways in which theorists and social movements have sought to democratize the firm—from voice-centric models (such as codetermination) to ownership-centric models (such as Employee Stock Ownership Plans and worker cooperatives); and it outlines the historical ebbs and flows of political movements for enhanced workplace democracy. It is within this context that it is fruitful to consider Isabelle Ferreras's powerful proposal for a bicameral firm. The article concludes by considering the real-world prospects for economic bicameralism and highlights a number of questions that Ferreras's proposal motivates us to consider—questions that are urgent and vital for anyone who cares about the future of democracy.
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Pub Date : 2023-04-18DOI: 10.1177/00323292231163700
M. Fleurbaey
Ferreras's bicameral governance proposal for the corporation contributes to a recent wave of interest in democratizing the workplace. In this article, I connect this to a related ongoing movement in favor of the stakeholder approach to corporate purpose. I argue that this connection sheds light on, and may provide remedies for, some issues with the bicameral proposal: first, the risk of gridlock between the two parties in the dual governance structure; second, the indeterminacy of good management when shareholder primacy is abandoned. But I also note that shareholder primacy emerged spontaneously from structural features of the economy, so that special protection for the “good” firms is warranted, and that other key limitations of a market economy cannot be alleviated fully by democratizing the firm.
{"title":"Workplace Democracy, the Bicameral Firm, and Stakeholder Theory","authors":"M. Fleurbaey","doi":"10.1177/00323292231163700","DOIUrl":"https://doi.org/10.1177/00323292231163700","url":null,"abstract":"Ferreras's bicameral governance proposal for the corporation contributes to a recent wave of interest in democratizing the workplace. In this article, I connect this to a related ongoing movement in favor of the stakeholder approach to corporate purpose. I argue that this connection sheds light on, and may provide remedies for, some issues with the bicameral proposal: first, the risk of gridlock between the two parties in the dual governance structure; second, the indeterminacy of good management when shareholder primacy is abandoned. But I also note that shareholder primacy emerged spontaneously from structural features of the economy, so that special protection for the “good” firms is warranted, and that other key limitations of a market economy cannot be alleviated fully by democratizing the firm.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2023-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42078415","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-04-17DOI: 10.1177/00323292231164281
R. Freeland
This essay examines the prospects for democratizing corporations in the context of US corporate law. US corporate law is “enabling”—it provides enormous latitude to design and alter the rules of corporate governance in almost any way participants see fit. This creates greater room for democratization than is often recognized; at least in principle, there is plenty of room to add employees or other constituencies to corporate boards. Yet board decisions are deeply constrained both by directors’ fiduciary duties and by the values and assumptions underlying US corporate law, all of which are strongly biased toward shareholder primacy. These create ongoing ideological and material barriers in both corporate law and supporting institutions that serve as strong obstacles to democratization.
{"title":"Prospects for Democratizing the Corporation in US Law","authors":"R. Freeland","doi":"10.1177/00323292231164281","DOIUrl":"https://doi.org/10.1177/00323292231164281","url":null,"abstract":"This essay examines the prospects for democratizing corporations in the context of US corporate law. US corporate law is “enabling”—it provides enormous latitude to design and alter the rules of corporate governance in almost any way participants see fit. This creates greater room for democratization than is often recognized; at least in principle, there is plenty of room to add employees or other constituencies to corporate boards. Yet board decisions are deeply constrained both by directors’ fiduciary duties and by the values and assumptions underlying US corporate law, all of which are strongly biased toward shareholder primacy. These create ongoing ideological and material barriers in both corporate law and supporting institutions that serve as strong obstacles to democratization.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2023-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41293625","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-04-10DOI: 10.1177/00323292231163705
S. Pek
Bicameral firms can generate societal benefits both directly, by granting representatives of labor investors voice in shaping firm decision-making, and more indirectly, by serving as a transition phase from capital investor–owned firms to worker cooperatives. However, there is room to augment these benefits by leveraging insights from research on cooperatives. This article draws lessons from three types of cooperatives—traditional worker cooperatives, multistakeholder cooperatives, and union cooperatives—to help refine Ferreras's proposal for bicameral firms. First, bicameral firms should offer labor investors more opportunities to participate in firm governance and hold their representatives to account. Second, they should create robust channels for other stakeholders to influence firm decision-making. Third, they should carefully delineate the role of labor unions vis-à-vis the Chamber of Representatives of the Labour Investors. These refinements will better position bicameral firms to achieve their direct benefits and facilitate subsequent transitions to worker cooperatives.
{"title":"Learning from Cooperatives to Strengthen Economic Bicameralism","authors":"S. Pek","doi":"10.1177/00323292231163705","DOIUrl":"https://doi.org/10.1177/00323292231163705","url":null,"abstract":"Bicameral firms can generate societal benefits both directly, by granting representatives of labor investors voice in shaping firm decision-making, and more indirectly, by serving as a transition phase from capital investor–owned firms to worker cooperatives. However, there is room to augment these benefits by leveraging insights from research on cooperatives. This article draws lessons from three types of cooperatives—traditional worker cooperatives, multistakeholder cooperatives, and union cooperatives—to help refine Ferreras's proposal for bicameral firms. First, bicameral firms should offer labor investors more opportunities to participate in firm governance and hold their representatives to account. Second, they should create robust channels for other stakeholders to influence firm decision-making. Third, they should carefully delineate the role of labor unions vis-à-vis the Chamber of Representatives of the Labour Investors. These refinements will better position bicameral firms to achieve their direct benefits and facilitate subsequent transitions to worker cooperatives.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2023-04-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45909399","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-04-02DOI: 10.1177/00323292231163689
D. Ellerman
This article comments on Isabelle Ferreras's “Democratizing the Corporation.” The focus is on the conceptual framing, which arguably contains a number of problems that are quite common on the left and are thus doubly deserving of commentary and explanation.
{"title":"Fallacies about Corporations: Comments on “Democratizing the Corporation”","authors":"D. Ellerman","doi":"10.1177/00323292231163689","DOIUrl":"https://doi.org/10.1177/00323292231163689","url":null,"abstract":"This article comments on Isabelle Ferreras's “Democratizing the Corporation.” The focus is on the conceptual framing, which arguably contains a number of problems that are quite common on the left and are thus doubly deserving of commentary and explanation.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2023-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46835518","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-02DOI: 10.1177/00323292221126801
Manolis Kalaitzake
This article argues for the utility in conceiving of two distinctive approaches to the structural power of finance—New Structural Power (NSP) and Traditional Structural Power (TSP). While both are crucial to political economy scholarship, this article highlights the intellectual trade-off that is inherent to the adoption of one perspective over the other, and it stresses the explanatory advantages of the TSP perspective specifically. First, it shows how the TSP framework can facilitate an understanding of when policymaker ideas do and do not matter in the exercise of structural power, retaining the concept of “automaticity” in structural power operations. Second, it demonstrates how each framework is custom-built to explain substantively different aspects of the policy process, with TSP research aimed at system-oriented limitation mechanisms and NSP research aimed at agent-oriented selection mechanisms. Third, it contends that TSP formulations must be embedded within a model of (contradictory) functional explanation, which is the best way to gain empirical traction on the most important macrostructural developments in contemporary finance-led capitalism. Methodologically, this implies an agenda of “explanation through commonalities” rather than the NSP-favored “explanation through variation.”
{"title":"Structural Power without the Structure: A Class-Centered Challenge to New Structural Power Formulations","authors":"Manolis Kalaitzake","doi":"10.1177/00323292221126801","DOIUrl":"https://doi.org/10.1177/00323292221126801","url":null,"abstract":"This article argues for the utility in conceiving of two distinctive approaches to the structural power of finance—New Structural Power (NSP) and Traditional Structural Power (TSP). While both are crucial to political economy scholarship, this article highlights the intellectual trade-off that is inherent to the adoption of one perspective over the other, and it stresses the explanatory advantages of the TSP perspective specifically. First, it shows how the TSP framework can facilitate an understanding of when policymaker ideas do and do not matter in the exercise of structural power, retaining the concept of “automaticity” in structural power operations. Second, it demonstrates how each framework is custom-built to explain substantively different aspects of the policy process, with TSP research aimed at system-oriented limitation mechanisms and NSP research aimed at agent-oriented selection mechanisms. Third, it contends that TSP formulations must be embedded within a model of (contradictory) functional explanation, which is the best way to gain empirical traction on the most important macrostructural developments in contemporary finance-led capitalism. Methodologically, this implies an agenda of “explanation through commonalities” rather than the NSP-favored “explanation through variation.”","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2022-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48741789","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-02DOI: 10.1177/00323292221125565
E. Massoc
Since the 2008 financial crisis, Europe's largest banks have largely remained unchallenged. Is this because of the structural power banks continue to hold over states? This article challenges the view that states are sheer hostages of banks’ capacity to provide credit to the real economy—the conventional definition of structural power. Instead, it sheds light on the geo-economic dimension of banks’ power: key public officials conceive the position of “their own” banks in global financial markets as a crucial dimension of state power. State priority toward banking thus results from political choices as to what structurally matters most for the state. Based on a discourse analysis of parliamentary debates in France, Germany, and Spain, as well as on a comparative analysis of the implementation of a special tax on banks, this article shows that power dynamics within states largely shape political priorities toward banking at both domestic and international levels.
{"title":"Banks’ Structural Power and States’ Choices on What Structurally Matters: The Geo-Economic Foundations of State Priority toward Banking in France, Germany, and Spain","authors":"E. Massoc","doi":"10.1177/00323292221125565","DOIUrl":"https://doi.org/10.1177/00323292221125565","url":null,"abstract":"Since the 2008 financial crisis, Europe's largest banks have largely remained unchallenged. Is this because of the structural power banks continue to hold over states? This article challenges the view that states are sheer hostages of banks’ capacity to provide credit to the real economy—the conventional definition of structural power. Instead, it sheds light on the geo-economic dimension of banks’ power: key public officials conceive the position of “their own” banks in global financial markets as a crucial dimension of state power. State priority toward banking thus results from political choices as to what structurally matters most for the state. Based on a discourse analysis of parliamentary debates in France, Germany, and Spain, as well as on a comparative analysis of the implementation of a special tax on banks, this article shows that power dynamics within states largely shape political priorities toward banking at both domestic and international levels.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2022-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44733116","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-18DOI: 10.1177/00323292221126262
Benjamin Braun
The power of finance vis-à-vis the nonfinancial sector is changing. Macroeconomic developments and financial innovations have reduced financial actors’ exit options, thus diminishing exit-based structural power. At the same time, shareholdings have become more concentrated in the hands of large asset managers, thus increasing control-based power. This article documents these trends, before examining whether asset managers wield their power and why, despite being universal shareholders, they have not steered corporate behavior toward decarbonization. Rather than assuming orderly, good-faith interactions between shareholders and managers, this article argues that in the United States today, political considerations govern the use of control-based power. Asset managers’ corporate governance policies are subservient to the—increasingly inconsistent—goals of maximizing assets under management while avoiding regulatory backlash. Unlike exit-based power, control-based power is constrained by being highly visible and, therefore, easily politicized.
{"title":"Exit, Control, and Politics: Structural Power and Corporate Governance under Asset Manager Capitalism","authors":"Benjamin Braun","doi":"10.1177/00323292221126262","DOIUrl":"https://doi.org/10.1177/00323292221126262","url":null,"abstract":"The power of finance vis-à-vis the nonfinancial sector is changing. Macroeconomic developments and financial innovations have reduced financial actors’ exit options, thus diminishing exit-based structural power. At the same time, shareholdings have become more concentrated in the hands of large asset managers, thus increasing control-based power. This article documents these trends, before examining whether asset managers wield their power and why, despite being universal shareholders, they have not steered corporate behavior toward decarbonization. Rather than assuming orderly, good-faith interactions between shareholders and managers, this article argues that in the United States today, political considerations govern the use of control-based power. Asset managers’ corporate governance policies are subservient to the—increasingly inconsistent—goals of maximizing assets under management while avoiding regulatory backlash. Unlike exit-based power, control-based power is constrained by being highly visible and, therefore, easily politicized.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2022-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41879097","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-28DOI: 10.1177/00323292221125567
Florence Dafe, Lena Rethel
This article examines the structural power of domestic finance in developing and emerging economies (DEEs) in the context of a shift toward increasingly activist financial development planning and financial sector reform. Focusing on efforts to create large, internationally competitive banks in Malaysia and Nigeria dating to the late 1990s and early 2000s, it highlights that banks have not played their envisaged role in financing structural transformation via industrial growth and economic development. Nonetheless, (large) banks in DEEs have attained considerable structural power over financial policy, supporting their ability to shape growth and investment strategies. Therefore, the article proposes a revised model of the structural power of finance, recognizing its contingent nature. States pursue various forms of financialization both as a substitute to, or in conjunction with, industrial policy. Financialized development strategies enhance the structural power of large banks in DEEs, notwithstanding their limited role in meeting the investment/development imperative.
{"title":"Domestic Bank Reform and the Contingent Nature of the Structural Power of Finance in Emerging Markets","authors":"Florence Dafe, Lena Rethel","doi":"10.1177/00323292221125567","DOIUrl":"https://doi.org/10.1177/00323292221125567","url":null,"abstract":"This article examines the structural power of domestic finance in developing and emerging economies (DEEs) in the context of a shift toward increasingly activist financial development planning and financial sector reform. Focusing on efforts to create large, internationally competitive banks in Malaysia and Nigeria dating to the late 1990s and early 2000s, it highlights that banks have not played their envisaged role in financing structural transformation via industrial growth and economic development. Nonetheless, (large) banks in DEEs have attained considerable structural power over financial policy, supporting their ability to shape growth and investment strategies. Therefore, the article proposes a revised model of the structural power of finance, recognizing its contingent nature. States pursue various forms of financialization both as a substitute to, or in conjunction with, industrial policy. Financialized development strategies enhance the structural power of large banks in DEEs, notwithstanding their limited role in meeting the investment/development imperative.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2022-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46793322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-25DOI: 10.1177/00323292221125563
Florence Dafe, S. Hager, Natalya Naqvi, Leon Wansleben
How do we theorize and analyze the structural power of finance when global capitalism itself undergoes constant and profound structural transformation? The literature continues to assume that the source of financial structural power is its unique ability to provide credit to the real economy, playing a crucial role in meeting the investment imperative. But recent research documents that most financial market activities no longer facilitate productive investment and can even be a drag on economic development. If the financial sector's primary role is not to support productive investments, then on what basis does it continue to hold structural power? The contributions to this special issue engage with how decades of financialization have transformed the basis of structural power toward alternative functions that have gone unnoticed in the existing literature. These include household and real estate lending that fuels consumption-led growth, concentration and expansion of financial institutions as tools of geo-economic strategy, financing current account deficits that facilitate global imbalances, and wealth preservation that bolsters inequality.
{"title":"Introduction: The Structural Power of Finance Meets Financialization","authors":"Florence Dafe, S. Hager, Natalya Naqvi, Leon Wansleben","doi":"10.1177/00323292221125563","DOIUrl":"https://doi.org/10.1177/00323292221125563","url":null,"abstract":"How do we theorize and analyze the structural power of finance when global capitalism itself undergoes constant and profound structural transformation? The literature continues to assume that the source of financial structural power is its unique ability to provide credit to the real economy, playing a crucial role in meeting the investment imperative. But recent research documents that most financial market activities no longer facilitate productive investment and can even be a drag on economic development. If the financial sector's primary role is not to support productive investments, then on what basis does it continue to hold structural power? The contributions to this special issue engage with how decades of financialization have transformed the basis of structural power toward alternative functions that have gone unnoticed in the existing literature. These include household and real estate lending that fuels consumption-led growth, concentration and expansion of financial institutions as tools of geo-economic strategy, financing current account deficits that facilitate global imbalances, and wealth preservation that bolsters inequality.","PeriodicalId":47847,"journal":{"name":"Politics & Society","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2022-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44044682","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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