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Corporate Power and Regulation

Paper Session

Sunday, Jan. 3, 2021 3:45 PM - 5:45 PM (EST)

Hosted By: Association for Evolutionary Economics
  • Chair: Lynne Chester, University of Sydney

Corporate Planning and Innovation in an Economic Reform Context: The Case of Alibaba

Ricardo Chi Sen Siu
,
University of Macau

Abstract

I follow the view of Robert Franklin Hoxie (1906) on historical method to examine the behavior and development path of corporations. I argue that in retrospect of the evolution of corporations around the world, their various performances and changes in business organization over time could be realistically reflected only by examining their business planning in the particular context of different societies, and their interactions throughout the development process of the related economies. In the real world, it is the social fabric instead of the automaticity of the market which shapes the power and organizational structure of corporations. Despite the high efficiency and large innovative capacity under corporate planning, they are mostly private and are not necessarily in line with social interests. To promote social contributions from the corporations, William Dugger (December 1987, 1654) indicates that the “growing private planning can be turned to public purpose only through an equal growth in public planning”.
To explicate these arguments, I scrutinize the evidences from the two-decade evolution of Alibaba to reveal the forces which set the ground for its progress to become a global e-commerce giant. I uncover that the incorporation of Alibaba in 1999 is indeed a living embodiment of an important phase in China’s economic reform. Besides, corporate power gained by Alibaba in the first two decades of the twentieth-first century actually signified the innovative industrial process undergoing in China, which would be further expanded alongside the country’s Belt and Road project. Although technological innovation and corporate planning largely explained the success of Alibaba as compared to other multinational e-commerce corporations like Amazon and eBay, its interplay with the unique context under the national plan as mapped out by the Chinese government clearly paved a different way for its successive changes.

The Modern Food Industry in the United States: A Case Study of Industrial Sabotage

Geoffrey E. Schneider
,
Bucknell University

Abstract

The food industry displays all the hallmarks of the ugly side of capitalism, manifesting numerous examples of what Thorstein Veblen (1919) termed “industrial sabotage.” Industrial food companies use misleading marketing and packaging to sell products laden with salt, sugar, fat and addictive flavorings. Industrial meat processers abuse workers and sell unsafe and unhealthy products. Industrial agriculture companies produce and use pesticides and herbicides that can be toxic to people and to the environment. The competition for profits promotes all of these unsavory attributes of the food industry. The paper argues that the solution to modern food industry problems lies along those lines suggested by Veblen, involving putting the productive people of society, especially farmers, back in charge of production, while empowering the common person. Local, organic agriculture organized along a non-capitalist basis—the Community Supported Agriculture model—can be scaled up. Technology can be designed and utilized in a manner that is less destructive to the environment. Government agencies with teeth and a series of targeted regulations can deliver on the promise of countervailing power suggested by John Kenneth Galbraith. This paper explores the dark side of the industrial food model, and suggest a set of alternatives to better address sustainability and meeting the needs of people, with the emphasis on providing healthy, sustainable food rather than profits for the vested interests.

Jockeying for Position, But Which Direction to Move To? Value Networks in Agtech

Wilfred Dolfsma
,
Wageningen University
Gohar Isakhanyan
,
Wageningen University
Sjaak Wolfert
,
Wageningen University

Abstract

"Firms know they need to invest in resources before they can expect to make a profit, and that the profit may not appear. In new or disrupted industry what resources will turn out to be key ones? In addition, how valuable a resource is, or even how to measure value might be unclear. An important resource will in many cases be information or data (Ozcan & Eisenhardt 2009), but which data, presented how, combined with what other data? As an industry emerges or is disrupted, a new market information system and the coherent set of institutions that constitutes it emerges with it (Anand & Peterson 2000).
We study the soon to be disrupted agrifood industry as it is at the verge of using information technology on a large scale. Precision farming and IT supported food processing and distribution is expected to help substantially increase production to feed the world, reduce environment pressures, reduce food waste, while at the same time improving its quality. Agriculture is turning increasingly hi-tech, agtech, and so traditional farmers, food processors and distributors must start to cooperate with parties that to them are very new and different players.
Using insights from (value) network analysis (ref) and social exchange theory (Dolfsma et al. 2009), we show how parties are seeking to find out how to shape collaboration between them. What are the players one needs to connect to, to obtain what resources (data)?"

Rising Corporate Power and Declining Labor Share in the Era of Chicago School Antitrust

Erdogan Bakir
,
Bucknell University
Megan Hays
,
Bucknell University
Janet Knoedler
,
Bucknell University

Abstract

It is well established in the findings of both mainstream and heterodox economics that the majority of American workers have seen stagnant or even declining real wages for four decades now, coinciding with the decline of the capital-labor accord. Typically, this phenomenon is attributed to the decline both in coverage and clout of private sector unions, outsourcing of relatively well-paid jobs in manufacturing, even federal policies toward taxes, minimum wages, and other safety net provisions.

Using Regulation and Rate Design to Control the Electric Utility Industry and Promote a Sustainable Future

Robert Loube
,
Rolka Loube Associates

Abstract

To address climate change, state governments have imposed regulations on electric utilities and adopted electric rate designs that promote the use of renewable resources. Resource portfolio standards require utilities to add renewable resources to their generation mix. Net metering rates require utilities to purchase electricity generated by their customers at the same price that electricity is sold. Utilities have countered that these policies have negative impacts on cost recovery and reliability. Cost recovery issues exist at the generation level because renewable generation reduces wholesale prices. Utilities claim that higher generation prices are required to retain generating units that provide network reliability. At the distribution level, cost recovery problems occur because renewables reduce total revenue without reducing distribution costs. Utilities also claim that these policies create subsidies for customers who own solar panels because those customers avoid paying for the distribution network that they use. The paper first reviews the trends in generation and the requirements of resource portfolio standards. Second, the paper discusses how the addition of renewable resources affects wholesale energy and capital markets, and how federal regulators and state governments have reacted to mitigate the impact of renewable resources on existing power plants. The third section compares the impact of alternative retail rate designs on solar investment and on distribution network cost recovery. It disputes the subsidy claims and provides an alternative recovery mechanism. The final section addresses the problems of reliability and cost recovery. It provides policy proposals that direct the electric utility industry along a path that promotes the use of renewable resources, battery storage and demand response measures and eliminates the current dependency on fossil fuels.
JEL Classifications
  • B5 - Current Heterodox Approaches
  • L5 - Regulation and Industrial Policy