An Attempt to Reshape Capitalism’s Image

John Stuart Mill claimed to be a disciple of both Jeremy Bentham and David Ricardo. This was a strange proclamation because each man advocated a competing theory of value; Bentham’s utilitarianism laid the foundation for the utility theory of value and Ricardo developed the labor theory of value. Mill’s goal in attempting to unify these theories of value was to provide a solution for the growing class conflict that plagued capitalism. Class conflict arose as feudalism was phased out and industrial capitalism replaced merchant capitalism as the dominant economic system. The Corn Laws symbolized this competition between classes. Capitalists were against the Corn Laws because the subsequent tariffs would lower their rate of profit. Landowners supported the Corn Laws because they increased the rent on land. Even Karl Marx held spoke out against the Corn Laws on behalf of the working class. Capitalism fostered persistent antagonism between classes as each struggled to gain or maintain power; no class was immune from this contest. Class conflict was therefore ubiquitous in capitalist society and generated widespread scrutiny and debate over capitalism. Jeremy Bentham and David Ricardo took opposing sides in this debate. Bentham was initially supported it but died a reformist. Class conflict was resolvable but not under the current form of capitalism. Ricardo’s labor theory of value promoted the view that class division occurred naturally in a capitalist society. And since capitalism was the best possible economic system, class division was a necessary evil and could not be remedied. Both Ricardo and Bentham acknowledged that class conflict was inherent in capitalism but each treated it differently. In claiming to be a disciple of both men, Mill hoped to show that capitalism could exist alongside social harmony. His goal was to change the nature of capitalism. [excerpt

A different capitalism? : Guanxi-capitalism and the importance of family in modern China

The emergence of Capitalism is said to always lead to extreme changes in the structure of a society. This view implies that Capitalism is a universal and unique concept that needs an explicit institutional framework and should not discriminate between a German or US Capitalism. In contrast, this work argues that the ‘ideal type’ of Capitalism in a Weberian sense does not exist. It will be demonstrated that Capitalism is not a concept that shapes a uniform institutional framework within every society, constructing a specific economic system. Rather, depending on the institutional environment - family structures in particular - different forms of Capitalism arise. To exemplify this, the networking (Guanxi) Capitalism of contemporary China will be presented, where social institutions known from the past were reinforced for successful development. It will be argued that especially the change, destruction and creation of family and kinship structures are key factors that determined the further development and success of the Chinese economy and the type of Capitalism arising there. In contrast to Weber, it will be argued that Capitalism not necessarily leads to a process of destruction of traditional structures and to large-scale enterprises under rational, bureaucratic management, without leaving space for socio-cultural structures like family businesses. The flexible global production increasingly favours small business production over larger corporations. Small Chinese family firms are able to respond to rapidly changing market conditions and motivate maximum efforts for modest pay. The structure of the Chinese family proved to be very persistent over time and to be able to accommodate diverse economic and political environments while maintaining its core identity. This implies that Chinese Capitalism may be an entirely new economic system, based on Guanxi and the family

Debating the restructuring of French capitalism and Anglo-Saxon institutional investors: trojan horses or sleeping partners?

Recent studies of French capitalism have unearthed how the French model has evolved into a more market-oriented capitalism, with considerably less direct state intervention. In the wake of the end of 'protected' restructuring between (roughly) 1983 and 1996, when the state's preponderant role was able to direct the adjustment process to a considerable degree, there has been a progressive dismantling of the protective cocoon behind which elites restructured the French economy. This article considers a range of scholarship analysing the nature of contemporary French capitalism. Focusing particularly on corporate governance and financial market internationalization, it argues that assertions of 'Anglo-Saxon' transformation should be treated with caution. It also identifies a need to establish the relative importance of 'statist' elements of the French model, asking whether they constitute a distinct variety of capitalism. It concludes that future research needs to focus on the impacts of changes in the ownership structure of French firms, and trace the causal mechanisms by which French capitalism is transformed, affording due weight to the different (national, regional, global) levels of analysis. Only then can firmer conclusions be drawn about the character of the complex institutional ensemble that is the French model of capitalism

Book review: the new capitalist manifesto: building a disruptively better business

Nick Taylor finds the New Capitalist Manifesto’s constant positioning of “old” capitalism against “new” capitalism wholly unconvincing, despite the wealth of examples of well-meaning multi-national firms

Minsky's Analysis of Financial Capitalism

In this paper, the authors discuss Minsky's analysis of the evolution of one variety of capitalism-financial capitalism-which developed at the end of the nineteenth century and was the dominant form of capitalism in the developed countries after World War II. Minsky's approach, like those of Schumpeter and Veblen, emphasized the importance of market power in this stage of capitalism. According to Minksy, modern capitalism requires expensive and long-lived capital assets, which, in turn, necessitate financing of positions in these assets as well as market power in order to gain access to financial markets. It is the relation between finance and investment that creates instability in the modern capitalist economy. Financial capitalism emerged from World War II with an array of new institutions that made it stronger than ever before. As the economy evolved, it moved from this more successful form of financial capitalism to the fragile form of capitalism that exists today.

"Minsky's Analysis of Financial Capitalism"

In this paper, the authors discuss Minsky's analysis of the evolution of one variety of capitalism--financial capitalism--which developed at the end of the nineteenth century and was the dominant form of capitalism in the developed countries after World War II. Minsky's approach, like those of Schumpeter and Veblen, emphasized the importance of market power in this stage of capitalism. According to Minsky, modern capitalism requires expensive and long-lived capital assets, which, in turn, necessitate financing of positions in these assets as well as market power in order to gain access to financial markets. It is the relation between finance and investment that creates instability in the modern capitalist economy. Financial capitalism emerged from World War II with an array of new institutions that made it stronger than ever before. As the economy evolved, it moved from this more successful form of financial capitalism to the fragile form of capitalism that exists today.

Visible seeds of socialism and metamorphoses of capitalism: socialism after Rosdolsky

Roman Rosdolsky suggests a method to deal with the transition towards socialism that integrates three issues: 1) the identification of dynamic features of capitalism; 2) the systematization of metamorphoses of capitalism; 3) the evaluation of how these metamorphoses reshape the elaboration of alternatives to capitalism. This evaluation is a precondition for the visualization, within the complex dynamics of capitalism, of seeds of a new society Ð institutions born out of political struggles and of emancipatory features of key social processes. These institutions reshape the nature of the metamorphoses of capitalism Ð and the possibility of establishing socialism and democracy.metamorphoses of capitalism; technology and finance; socialism and democracy.

Domestic Outsourcing, Rent Seeking, and Increasing Inequality

An increasing share of the economy is organized around financial capitalism, where, in contrast to the past, capital market actors actively assert and manage their claims on wealth creation and distribution. These new actors challenge prior assumptions of managerial capitalism about the goals and governance of firms. The focus on shareholder value is credited with increasing firm efficiency and shareholder returns. This lecture analyzes the changes in organizational behavior and value extraction under financial capitalism