SA wrote:
> I didn't say it was the purpose of the incorporation laws. It was the
> effect of incorporation.
==================
Never asserted that was the issue, but the last thing I'm interested in is misimputing intent....
It's a commonplace that the law is forward looking; I'll simply assert that the changes in the law were, to a not insignificant extent, the result of firms and sectors realizing gains from vertical integration and the law became a barrier as KM himself, along with others of his time, recognized.
>
>> The proliferation of vertically integrated firms -and one could rather
>> easily make the case that that is what KM was referring to when he
>> used the term social capital and directly associated producers
>
> No, Marx clearly isn't referring to vertical integration. He's talking
> about the form of ownership. By "social capital" and "associated
> producers" he means that the means of production are no longer owned by
> individuals but by a corporation made up of a collectivity of
> individuals.
======================
Well, it's hard for me to believe that the guy who practically invented inter-industry analysis [Vol. II] --ok, with a big nod to Quesnay-- didn't notice the transformations in the division of labor :-). For me, it's damned near impossible to talk about property laws without talking about what drove those changes, so nice clean demarcations of reference don't work for me. I don't see a zero-sum game between your claim and mine.
Recognition of vertical integration is in Smith and Ricardo [indeed one can find it in Ibn Khaldun's work] as well as the work of Andrew Ure. Why else would there be a recognition of increasing returns in Vol. I and the whole bit on "concentration and centralization" in Vol I? If one takes KM's earlier work coming up with an explanatory structure for the forces and relations of production with even a minimal level of seriousness* and, if one follows him on that score, one can easily make the case that the forms of ownership changed due to the spread of vertically integrated firms and sectors by the 1860's.
The problem is that the quote you select below is culled from notes written by KM in the 1860's, not very long after the laws I sent to the list were written. Indeed, that is largely why I sent them, although my apologies for not noting the reasons; given how long I've hung out on the list, I'd thought it was kind of obvious. Sorry.
Here's the context:
>
> http://www.marxists.org/archive/marx/works/1894-c3/ch27.htm
>
> III. Formation of stock companies. Thereby:
>
> 1) An enormous expansion of the scale of production and of enterprises,
> that was impossible for individual capitals. At the same time,
> enterprises that were formerly government enterprises, become public.
===============
Clearly a recogntion of vertical integration at the firm and sectoral levels
>
> 2) The capital, which in itself rests on a social mode of production and
> presupposes a social concentration of means of production and
> labour-power, is here directly endowed with the form of social capital
> (capital of directly associated individuals) as distinct from private
> capital, and its undertakings assume the form of social undertakings as
> distinct from private undertakings. It is the abolition of capital as
> private property within the framework of capitalist production itself.
===================
Except, again, the law prior to 1844 and after 1844 and 1856 didn't foreground the social/private distinction; it was about the reconfiguration of what kinds of rights/duties and privileges the state would delegate moving forward; a principal-agent problem. So while it's definitely the case that the organizational potentials made possible by the separation of ownership and control caught like wildfire somewhen around 1890 it doesn't change the fact that those laws were what made it possible, at least in the UK**
> I'm too lazy to look for a reference right now, but until the very end
> of the 19th century only a small minority of manufacturing firms were
> corporations in the US and UK. The corporate form was still limited
> mostly to railroads, trade, shipping, finance, etc. Vertical integration
> in mfg was accomplished through pools, trusts and cartels.
=================
Ok, and that was social capital too***
>
>> If property is a form of governance, then the issue of the
>> corporate/democratic problem is of greater relevance than the
>> social/private issue.
>
> What do you mean by the corporate/democratic problem?
>
> SA
=================
That the very terminology that is part of the contemporary folklore of capitalism utterly misdescribes the state/market nexus and that battering away at the public/private distinction regarding corporate governance is one big arterial for getting more people to have more serious doubts about the viability of capitalism. It's trivially true that the corporation is a creature of the state; why do putatively democratic states create utterly undemocratic institutions? This, it seems to me and I've brought this up in the past on the list between summer-fall 1999 and 9/11/01 when the narrative terrain shifted immensely, is where leftists have much to discuss with neopopulists and liberals in the wake of the Enron to WaMu meltdown. A Gramscian war of position if ever there was one :-)
Ian
--------------------------------
* See Martin Sklar's "The Corporate Reconstruction of American Capitalism" for a great problematizing of the forces/relations argument and "the Chandler Thesis"; also the works of William Lazonick
**/*** The Roy book I mentioned earlier is really good on the issue with respect to the US case as is Barbara Fried's "The Progressive Assault on Laissez Faire". Also see Benjamin Barber's short, entertaining rant on corporations in "Strong emocracy"
"Industrializing English Law: Entrepreneurship and Business Organization 1720-1844" by Ron Harris is great on the UK story
On vertical integration see: http://www.uni-graz.at/christian.lager/papers/circular%20production%20and%20vertical%20integration.pdf [short]
Any of the works of Luigi Pasinetti and Heinz Kurz and Neri Salvadori's "Theory of Production