There are two parts to this book. The first, consisting of four chapters, is titled “Doing Business.” The second, with three chapters, is titled “On the Market.” These parts are framed by an Introduction, “Merchant versus Citizen,” and a Conclusion, “Toward a Pluralist Political Economy.”
The context of the study is the observation that politics in our liberal, democratic, Western world is dominated by economics. Hence, the polarization of merchants and citizens. These characters are represented as having incompatible mindsets, the former calculating in terms of profit, the latter oriented to shared goods; the former individualist in the orientation to private good, the latter solidarist in the commitment to common goods. The challenge is to explore how there might be a different relationship between the economy and the polity, to replace the present situation of economy’s dominance. This is the principal thrust of part 2.
In the three chapters of part 2, Hoipkemier reviews three traditions of economic thought for their accounts of the relationship between the market-based economy and politics. Frederick Hayek is taken in chapter 5 as spokesman for the view that markets, if left to function without interference, can be relied upon to deliver a spontaneous order which redounds to the benefit of all. This view is associated with the “invisible hand” from Adam Smith, who noted the emergence of an order which appears as if it had been planned and intended, but which is not part of the intention of any agent. On this view, public benefit is best achieved when individuals are left free to pursue their private interests. The best arrangement of politics is not interfering, but providing the legal institutional supports of property rights, contracts, and a stable currency.
Chapter 6 draws on the work of Karl Polanyi and the tradition of moral economy. This approach attempts to combine an appreciation of the role of private interest and the common interests animating collaboration. Where the pursuit of private goods allows for no moral criticism, the common goods of politics are represented in the institutional order as designed to ensure that economic activity does indeed serve public interest.
The recovery of the civil economy tradition initiated by the eighteenth-century Italian thinker Antonio Genovesi is the focus of chapter 7. Contemporary representatives include Stefano Zamagni and Luigi Bruni, Roger Sugden and Adrian Pabst. This tradition refuses to interpret economic activity in terms of the individual’s pursuit of private interest; the market is not just the meeting place of buyers and sellers whose interests are opposed, but is always a place of solidarity and mutual assistance. The themes of gift, reciprocity, and public happiness belong to their analysis of economic activity.
No tradition is found to be evidently superior to the others but each can have its place. The range of forms of collaboration, for example, in supply chains varying in terms of geographical reach (local, national, global), complexity, and particularity of contribution (specialization of task, degree of dependency), means that in some cases the anonymous market will be the preferred model but in other cases the reciprocal relations explored by civil economists will be appropriate.
In the Conclusion we read that “the large goal of this book has been to recast the moral architecture of the business corporation and the market (and by implication, the political economies that they dominate) as transformative modes of common action” (229). What is achieved though is not a replacement of a Hayekian model with an institutionalist or civil economy model, but instead, the reader finds a pluralist approach advocated, and this comes as a surprise given the polarization of positions outlined in the first part of the book.
The two models of practical rationality, citizens pursuing common goods, and merchants pursuing private goods, are well illustrated in Hoipkemier’s distinction between the business firm and the corporation (27–28). The corporation arises from a legal act of registration, creating a fictional legal person, which is allowed to enter into contractual relations with other entities, to buy and sell (29). While it is spoken of as acting, it does not deliberate, or have interests of its own. Usually, the firm precedes the corporation, and continues to be a community of persons who collaborate for the sake of common goods. This reflection allows the author to challenge those accounts of business which define it in terms of maximizing shareholder value, but equally to refuse the resort to a stakeholder account. He writes of members of the firm, principally those who work together in it, whose goods and interests are shared (103). These interests are not reducible to the bottom line of revenue or market share or profit, but include the flourishing of the individuals and their teams and the relations between them.
In taking this common action/common good approach to the firm, Hoipkemier challenges the standard Chicago School interpretation of the firm as built on the contractual exchange relations between participants, so that the good of the firm is nothing other than the aggregate of individual, private, goods of those involved (23–27). This is the Hayekian model in action. And where Hayek et al. would deny the presence of any common interests, the author is at pains to explain how the Aristotelian model of practical rationality allows for the presence of common goods even in those arenas in which economists can only posit private goods. The author lists categories of common goods applicable to the firm, relying on two distinctions, first, between goods of excellence and goods of effectiveness, and second, between goods either intrinsic to or extrinsic to social relations (93–94). The resultant categories of common goods are property, power, practice, and product (95). These are helpfully illustrated with concrete examples.
Aristotle is relied upon for the account of politics. The Common Good (capitalized) is used to denote the distinctive goal of politics, but beyond noting that there are various conceptions or versions of it, the author does not propose an account (80). He acknowledges that Aristotle is concerned with common goods when distinguishing correct and defective constitutions. This reflects a concern not with ultimate ends but with conditions for a decent life. This is the stance adopted by the Catholic Church’s Second Vatican Council when it speaks of the political common good as “the set of conditions that more easily allow the fulfilment of individuals and groups.”
The polarization of Aristotelian practical rationality and that assumed by economic models is fundamental to the argument. But is the account faithful to Aristotle? According to the Philosopher, whoever acts, acts for some good, and whoever cooperates with others, acts for goods in common. Aristotle envisages a great range of cases, as is typical of his analogical approach. Why wouldn’t he include the minimal cooperation between competitors (whether in sport or in business) as sufficient to suppose there is some good in common, even where interests are opposed? These remarks are elaborated in my A Grammar of the Common Good (Continuum 2008), which Mark Hoipkemier kindly includes in his bibliography.
