History matters

Three months ago I took up a post as a research assistant in a business school. Nothing unusual—despite the fact of my uncommon academic background in this field of research. I am a historian who specialised in medieval times by writing my thesis about sociocultural dimensions of eating in and out in late medieval towns. As my new job was repeatedly subject to discussions among friends with academic or non-academic background, I carry out in this blog how a historian could contribute to the business research.

First of all, business is all but a main subject of today's historiography. The already ten year old lamentation of the German business historian Hartmut Berghoff who stated a de-economisation of the recent historiography was met with almost no responses. As an illustration you can look at the recent list of the 24 (!) introductory seminars at the history department of my home university: Neither attracts the freshmen with a catchphrase which is in any relation to "economy". Topics like the history of human bodies appear to be more in vogue—is it surprising that nobody apart of us historians is knowing what we are actually doing?

Instead of regretting the loss of any influence of a historian's voice on public debates, I demand that historiography should inquire the past with questions relevant to today's problems. From my point of view, I am convinced that no topic has such a demand of reflections as e.g. the apparently irresistible marketization of all spheres of our lives. But what could a historian contribute to such a discussion?

Ironically, straight the specific culture-based perspective which can be trained by studying such topics like the history of the transformation of the perception of human bodies. As long as the mainstream economics are regarding the economy as a separated "realm" in which rules and dynamics are considered like physical principles that tries to make our actions ex ante predictable like the falling of an apple from a tree due to the force of gravity; that long voices other than economists' are needed on the topic of economy.

In contrast to a purely economic approach, a historian's perspective embeds the economy in its sociocultural environment. Institutions as e.g. markets can be deciphered as social constructions and are persistently subject to change; their rules are characterised by mostly unrecognized norms and conventions. Regarding the behaviour of human beings on markets, you can go so far that a postulated rationality of human behaviour itself is a socially constructed concept which was invented by scholars during the times of Enlightenment.

That even mainstream economists turn away from the axiom of rational behaviour by reason of its limited empirical explanatory power is no surprise from a culturalistic point of view: The rational mode of thinking is only one empowering concept among others which all influence the behaviour of business men.

In this respect, however, I understand the work of scholars as contributors to the design of the concepts and institutions of our lives. The question in the middle for business researcher has to be: What is a “good” firm? As a historian I have not only some knowledge about the path dependencies of all conditions but also the consciousness about its alterability. I am happy to help working on it.

The first of May: Power, Legitimacy and Urgency

It’s the first of May and I am sitting in my office even though we have the day off. To get into my building I had to step over several union banners laying on the ground, ready to be taken to the official annual rally. I felt something like pride when I saw these committed people waiting to start announcing their demands. They could have just stayed at home and had a lazy morning, drinking coffee but they decided to put themselves out there. And I did feel a bit bad that I was ignoring this “Labor Day” and going to work but I am just not the rallying type. Apart from all the vandalism and violence that usually co-occurs on this day, I think it is good that workers use this day to say what they think they are entitled to. For at least one day a year it gives total legitimacy and power to the stakeholder employee and the “worker” in general. I think it is also a kind of celebration of the rights we do have here: Right of unions, freedom of association, right to strike, freedom of speech and so on.

 

When glancing over to Bangladesh, globally there is still an extremely long way to go. The claims workers have in Dhaka are not only legitimate but also very urgent. When a house is actually built on sand, shows obvious cracks, workers knowing about this danger but still going to work because they are worried to lose their job they are so dependent on, the disastrous absence of their power is evident. Yesterday the people of Dhaka went out on the street to demonstrate their anger. Demonstration and strike is their only means to counteract on their lack of power in hope to find leverage of their claims through other parties.

Looking out of the window I can see all the different concerns the people have. The concerns are not just about work, but about people living together as a society in general. Even though I don’t share all of the opinions and many demands are much too extreme for my taste, I want to go along. Here is my demonstration: People should take responsibility for what they do. Businesses should take responsibility for what they do. Not only power and urgency, but also legitimacy of claims should guide the way. Only by respecting and treating others as human beings and not as abstract figures in a long value chain can we work together to mutually create value for people.

Vanessa McSorley

Market-advocates demand state interventions: An ideological absurdity that is reality

End of July Mario Draghi, President of the European Central Bank (ECB) indicated quite vaguely the intervention that ECB will buy state bonds from crisis countries of the Eurozone. The stock market reacted promptly by increasing quotations. This is interesting because interventions from institutions close to the state normally are not what market-advocates (to which stock exchanges overall can be counted) put into a good mood.

But, since the sub-prime crises from 2008/09 and the following bail-out of many financial institutes by states all over the world, things have fundamentally have changed, one could mean. The state since was not only decent again, it was indispensable. The neo-liberal ideology of a pure self-regulating market solving (nearly) all economic problems and beyond as well as the ideology’s inherent state-critic was out of fashion suddenly. Draghi’s indication of a possible intervention by ECB shows that state related interventions today not only are accepted but even are demanded by market participants. If this is right or wrong or just a logical mechanism, is irrelevant. It is reality and that’s what’s relevant.

But how this new reality gets along with an ideology that sees things quite different? Already after the first shock of the sub-prime crisis the old apologists of the market ideology came back on stage. In their contributions in diverse newspapers, magazines and journals it was to read again what blessings a pure market-driven system would be able to perform, as long as there is no distortion through state interventions. In many contributions the new facts haven’t found any access to the thoughts of the authors. It seems that many want to preserve their ideology and its theoretical backgrounds as it is and defend it against the new realities. One of the latest of such market-purists seems to be the US presidential candidate of the Republicans Mitt Romney. Overall, he seems to believe that the less state intervention exist in the market-economy (taxes, regulations etc.) the better it performs. The state primarily handicaps economic freedom and is a threat in general. If things would be so easy we never had the sub-prime or other economic crises.

To stay ideologically fair, we can take a look to the ideologists on the other side of the continuum, the state-centrists. Indeed most of them learned at latest after the fall of the Berlin wall that a pure centrally planned economy does not lead to salvation and comprehensive well-being. But, there are still contemporaries who try to save as much as possible from this state-centric ideology by ignoring facts and reality. The latest example is the President of France, François Hollande, a Socialist. As soon as he was in power he reduces the retirement age back to 60 years although the public purse is nearly empty and the people’s life expectancy rises and rises.

Either market-purist or state-centrist both are ideologically conservative and therefore also structurally conservative: old and outdated structures (e.g. pension age 60 in France, the intention to prolong temporary tax reliefs for very wealthy citizens by Romney in the USA although also here the public purse is scarce) will be preserved with such bodies of thought. Ignored thereby is the reality. A reality in which capital investors demand state interventions. It is obvious: such realities need new and a more progressive and pragmatic political thinking and measures. It is very important to adapt the institutional structures to the new needs which are already here and recognizable in the daily life. Ideologies are principally ok as guidelines but they have to develop themselves by incorporating actual reality. The other way is fatal: to simply serve the ideological clients by trying to impose ideological purism in reality.

Claude Meier