Horkheimer in his book ‘The Eclipse of Reason’ (1947), where ‘reason’ would be synonymous to ‘madness’ of the 20th century societies that he observed, points out how the political constitution expressed in the concrete principles of objective reason (justice, equality, happiness, democracy and property), was reduced to an instrument of increasing productivity. In particular, language, meaning and thinking have been reduced to the level of industrial processes: ‘every sentence that is not equivalent to an operation in that apparatus appears to the layman just as meaningless as it is held to be by contemporary semanticists who imply that the purely symbolic and operational, that is, the purely senseless sentence, makes sense’. The concepts emptied of substance could be used synonymously to advocate oppression.
Horkheimer further examines ‘the tendency of liberalism to tilt over into fascism’ – while the later operate via anti-semitism, analysed by Adorno and Horkheimer in ‘The Dialectic of Enlightenment’ (1944), the first relies on consumerism and productivity.
What about the ‘right to be lazy’? Under Communism, this is the most forbidden act – ‘those who won’t work, won’t eat’. Horkheimer did not explicitly deal with Marxism and did not write about Stalinism, however conclusion that can be drawn based on his work is that an aftermath of a revolution or an accomplishment of social dislocatory practices would be expected to bring an even further acceleration of relations of production embedded in technology.
Critical Theory, originated in the works of Adorno, Marcuse, Horkheimer, Benjamin and Habermas can provide an important methodological tool for analysis of the social aspects of business practices. Importantly, the tradition of critical theory distances itself from the ‘political’ questions of power and domination that are central topics for Marxism and poststructuralism. Rather, critical theorists focus their analyses on the wide range of social issues and problematics. These have been, in particular, mass culture and consumerism, fascism and anti-semitism, market and economy, social institutions and technology, reason and morality.
In his ‘Structure of Scientific Revolutions’ (1962) Kuhn describes a model of science that is based on cognitive consensus and, at the same time, is subject to an ‘overabundance of paradigms’. Finance teaches us how to place investments with minimal risks and maximal returns and there is a diversity ways to do this. However there is also a ‘consensus’ over its key principles are that 1) companies will not generally take risks unless they are compensated with higher returns; 2) time and money relationship is important – any given amount today will not be same tomorrow; 3) cash flows are key for businesses not profits; 4) business decisions are evaluated according to impact on cash flow change; 5) profitable business ideas are very hard to find and they erode very quickly; 6) markets are quick and prices are adjusted instantaneously – e.g. it’s impossible to beat the market because it will adjust to any kind of information; 7) firm ownership and mangement are to be separated; 8) taxes provide strong disincentives to business decisions; 9) risks are not equal – some are diversifiable some are not; 10) ethical dilemmas are present everywhere in finance. While economics is a social science that could be modelled using the Kuhnian ‘paradigm shift’ perspective, finance could be hardly seen as a ‘disciplinary matrix’. As some say, financial management is an art, not a science.
Social finance has been proposed as an approach that delivers both economic and non-financial returns. For example, Kramer and Porter from Harvard University in their work advocate a business perspective that would blur profit and non-profit boundary and prioritising ‘societal needs’ not just narrow economic needs. This is to be achieved via pursuing business models based on a concept of ‘shared value’, where solving social problems would be a key criteria for firms in advancing their activities (http://hbr.org/2011/01/the-big-idea-creating-shared-value).
The plot of an American science fiction-horror film ‘They Live’ (1988) directed by John Carpenter is centered around a dystopian idea of a society run by an alien elite that is making use of the human drives of consumerism and greed. An unemployed person discovers a pair of sunglasses that suddenly allow his to see the terrible truth: the financial elite are actually disguised aliens.
The key aspect brough in by the film is that of social exclusion. Enemployment is usually represented in abundant statistical terms, but how does it feel to be an unemployed for months? In UK, a person is classed as unemployed if s/he is not only out of work, but also actively looking for work and available to start work within a fortnight. In suburbs of large industrial cities you would find economies of small shops and other small businesses that provide temporary/unstable employment opportunities. Here, for example, employment would be expected to be closely interwoven with relations of familiarity, community histories, ethnic and religious group identities.
Employers expect job candidates who are staying out of work for long periods of time to show that they have been involved in voluntary or temporary jobs. Further, arguments have been made in favour of incentives used to encourage businesses to hire, train and re-impower long-term unemployed. One of the UK employers who is pursuing such policy is The Wise Group based in Glasgow that describes itself as a ‘social enterprise’.
In his 2011 article in the Guardian Will Straw, Associate Director at the Institute for Public Policy Research, quotes the Edelman Trust Barometer survey that sampled more than 5,000 ‘informed publics’ aged 25-64 from 23 countries. The survey has founded that the British respondents, second only to Germans, would want their businesses to ‘create shareholder value in a way that aligns with society’s interests’.
In Straw’s view with the support of public policy, a move away from the narrow shareholder form of capitalism can be made. This would include such initiatives as greater economic regulation, improvements to competition policy to prevent large monopolies and incentives against investor short-termism.
The 2012 results from the Edelman Trust Barometer indicate that trust in businesses in the UK has declined from 44% in 2011 to 38%. The question asked has been ‘How much do you trust business to do what is right?’
In his paper ‘Re-imagining the Corporation’ Professor at the University of Michigan Gerald F. Davis argues that the current problems of increasing inequality, decreased mobility, and greater economic insecurity in the United States are in large part the product of the collapse of the traditional American corporation.
The decline of the vertically integrated American corporate structures, Davis argues, belongs to the success of the shareholder capitalism movement in the US, which effectively reduced the corporation from an institution to a ‘nexus of contracts’. The dominance of finance has come at the expense of the corporation. The contemporary corporate forms are ill-equipped to provide long-term employment, opportunities for economic advancement, and benefits such as healthcare and retirement security.
The ‘Occupy movement’ that started in 2011 has projected the corporations as its main adversaries. Davies, however, believes exactly the opposite, that ‘the grievances represented by the Occupy movement – increased inequality, decreased mobility, uncertain employment, and an unduly powerful financial class – result from the collapse of the corporation and the triumph of a finance-centered ideology’.
The main objective of this blog is to provide reviews and comments on the latest events in the sphere of global shareholding business and shareholder activism from the point of view of social research. In doing this, the blog will not share the often used by companies and entrepreneurs rhethoric of ‘corporate social responsibility’. At the same time, this blog will also not be strictly speaking ‘political’, e.g. its aim is not to directly contest the existing socio-political and legal arrangements of corporate governance, but is rather to provide a research perspective from a broad scope of social values (social inclusion and equality, diversity, economic opportunity, democratic representation, human rights, family, environment, health and safety and others).