Business and Society

A Critical Introduction

Kean Birch, Mark Peacock, Richard Wellen, Caroline Hossein, Sonya Scott, Alberto Salazar

• Publisher: Zed Books
• Year: 2017
• Print ISBN:
  9781783604494
• Edition: 1
• eBook ISBN:
  9781783604517
• Topic: Business
• Subtopic: Business General
• Index: Business

Corporations dominate our societies. They employ us, sell to us and influence how we think and who we vote for, while their economic interests dictate local, national and global agendas.

Written in clear and accessible terms, this much-needed textbook provides critical perspectives on all aspects of the relationship between business and society: from an historical analysis of the spread of capitalism as the foundation of the 'corporate' revolution in the late nineteenth century to the regulation, ethics and exclusionary implications of business in contemporary society. Furthermore, it examines how corporate power and capitalism might be resisted, outlining a range of alternatives, from the social economy through to new forms of open access or commons ownership.

1 | The emergence of capitalism in Western Europe

Mark Peacock

Introduction

Today our lives are dominated by capitalism as the economic organizing system for our societies and the global economy. However, capitalism has not always existed, which raises the questions of how, where and why capitalism emerged.

There are many approaches to explaining the development of capitalism. Mainstream approaches see the evolution of capitalism as a ‘natural’ process, whereby the apparently natural desire of human beings for wealth and money is allowed to flourish freely, something which results in the creation of capitalist markets as the main mechanism of economic exchange (see Wood 2002 for a critical analysis of these mainstream claims).

In the eighteenth century, Adam Smith (1776 [1976]: I.ii.1) wrote of a ‘propensity in human nature … to truck, barter, and exchange one thing for another’, by which he meant that, if left unhindered, humans would instinctively enter into market exchanges with one another. This has led some historians, like Henri Pirenne (1956), to look for the origins of capitalism in urban centres of trade in medieval Europe, in cities such as Florence, Venice and Milan. Mainstream approaches account for the absence of capitalism through the existence of restrictions or restraints on commerce imposed by rulers. Without these restrictions, according to mainstream approaches, capitalism would have developed earlier, but restrictions on commerce prevented its emergence.

Key thinker: Adam Smith

Adam Smith (1723–1790) was Professor of Moral Philosophy at the University of Glasgow. His most famous work, The Wealth of Nations (1776), is often used as a defence of capitalism which was emerging in Britain in the eighteenth century. The book includes the key notion that humans are, by nature, selfish, an idea which has had a lasting impact on economics as a discipline (see Chapter 11 of this volume). In his The Theory of Moral Sentiments (1759), however, Smith developed a more nuanced and sophisticated view of human nature and of the moral concerns which occupy human beings. In this book, Smith expressed the idea that humans are not merely selfish but are capable of sentiments such as sympathy of justice.

Mainstream approaches leave important questions unanswered which are addressed by alternative accounts of the development of capitalism. This chapter presents two such alternative accounts: one is a Marxist perspective, the other a Weberian one. They are non-mainstream because neither sees anything natural, let alone, inevitable, about the development of capitalism. Instead, both theories see capitalism unfolding only after major social upheavals.

Key discussion questions

•	What is feudalism?
•	What were the enclosures?
•	In capitalist society, workers are propertyless. What does this mean and what are the implications for workers’ freedom?
•	What significance does Protestant religious doctrine have in Max Weber’s accounts of the origins of modern capitalism?
•	What does Weber mean by economic traditionalism?
•	Name a key difference in Marx’s and Weber’s approaches to explain historical change.

Marxist approaches

Marxist perspectives draw on the work of the nineteenth-century thinker Karl Marx. They are characterized by the contention that social classes are the key agents of historical change because different social classes have conflicting or antagonistic interests. The conflict between classes gives rise to class struggle as a driving force in historical change. To understand the emergence of capitalism from a Marxist perspective, we must first understand feudalism in England, the country in which capitalism first developed. It is important to note that feudalism varied greatly at different times and places in Europe. What follows is a generalized account of feudalism in England which does not necessarily apply to other parts of Europe.

Key thinker: Karl Marx

Karl Marx (1818–1883) was a German activist and one of the most influential thinkers of the modern world. He spent much of his life in British exile, having been expelled from his native Germany, and his ideas were fundamental to the formation of the international communist movement. His three-volume work Das Kapital provides a monumental diagnosis of the capitalist mode of production.

Definition: Feudalism

Feudalism was a political-economic system which dominated Europe during the medieval period. In a feudal society, peasants made up the largest part of the popu-lation and they were obliged to work on the land of their lords. Some features of feudalism still exist, e.g. monarchies, aristocracies and laws of land ownership.

In feudal society, the majority of the population were peasants who lived on a lord’s manor. The lord possessed the title to land and peasants were required to work for the lord. The land cultivated for the lord’s use was called the demesne which could be one continuous tract of land or be divided into fields (strips). Peasants lived in cottages located in a hamlet or village located on the demesne. They, too, had access to land, in the form of strips – fewer in number and perhaps of lesser quality than the lord’s – which they cultivated for their subsistence needs. Most peasants were unfree (villeins or serfs); their serf status came with various obligations to the lord which we associate with serfdom. Serfdom defines the relationship between the two central classes in feudal society: landlords and peasants.

Serfs had to work on the lord’s land for a certain number of days per week. The number of days varied from manor to manor and was fixed by custom. These labour services were sometimes commuted into money payments, but whichever form they took, these obligations were a source of enrichment for the lord. Lords appropriated wealth from serfs, with as much as half the value of a peasant family’s annual harvest going to the lord (Postan 1971: 603). Although they were subject to the lord’s impositions, peasants did enjoy customary rights, for example, they could use common land to graze their animals (Neeson 1993).

Not all peasants were serfs. Some were free: like serfs, free peasants possessed land but were not subject to the levies of the lord. Whether free or serfs, peasants who did not own sufficient land to subsist on their own produce worked as wage labourers either on the lord’s demesne or for wealthier peasants, who themselves had holdings of land. Perhaps half of peasants had to supplement their own cultivation through wage labour, especially when feudal obligations were commuted from labour services to money payments, for monetary payments to lords presupposed that peasants acquired money, either through selling their agricultural produce or their labour time in exchange for cash (Postan 1971).

The contentious relationship between lords and peasants gave rise to class conflict about the appropriation of the peasants’ product – who got how much. Those peasants who possessed enough land could attain a high degree of self-sufficiency; they were neither dependent on their lord for survival, nor did they have to work for wages because they produced most of the goods (mainly food) that they consumed. Lords were parasitic; their exactions contributed nothing to agricultural output. Lords’ interventions in peasants’ lives were thinly disguised attempts to appropriate as much as they could from peasants. Some peasants fled from one lord to seek tenancy with another, although such attempts were not technically legal because they were not legally free to relocate. Unsurprisingly, medieval history is punctuated by episodes of p...

Table of contents

• Cover
• About the book
• Title page
• Copyright
• Contents
• Tables and figures
• Acknowledgements
• A note on authorship
• Introduction: a critical introduction to business and society
• 1 | The emergence of capitalism in Western Europe
• 2 | The spread of capitalism
• 3 | The corporate revolution
• 4 | Corporate governance
• 5 | Corporate responsibility
• 6 | Corporate power
• 7 | Global economy and varieties of capitalism
• 8 | Global governance
• 9 | Global environmental change
• 10 | Markets and economic order
• 11 | Economics, capitalism and business: the orthodoxy
• 12 | Political economy and critiques of capitalism: heterodox perspectives
• 13 | Business, regulation and policy
• 14 | Ethics and business
• 15 | Business and social exclusion
• 16 | Resistance and alternatives to corporate capitalism
• 17 | Social economy
• 18 | Rethinking ownership: the market vs. the commons
• Index