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Substantive Outline
For the last fifty years, corporations have become key actors in a fundamentally transformed, financialized political economy. As increasingly every segment of economic production is subjected to the logics of asset trading, the boundaries between public and private value creation have become blurry. While the territorially unbounded access to investment has unleashed unprecedented market innovation, the new global competition for capital has deeply impacted firm leaders’ as well as governments’ strategic planning options around investment into growth, employment, supply chains, development and services. Under the pressure of delivering value on fast-moving markets, the discretional and operational spaces for both corporate boards and political leaders have shrunk and moved closer together. The idea of a ‘mixed economy’, which surfaced in the 1930s around the opposed direction choices between socialism and capitalism and which, after World War II, came to characterize the tailored interaction between democratically legitimized, public industrial policy and private corporate actors from the 1950s onwards into the late 1970s, today has given way to an ‘integrated market economy’ (“IME”). This is a fragile, institutionally complex arrangement in which territorial, political governments pursue economic and monetary policies both in order to secure and sustain electoral support and to expand competitive investment environments for global financial resources. Given the significant entwinement of public and private financing, service provision and governance, ‘states’ and ‘markets’ follow respond to similar demands. With that, as between market-based contracting and governmental ‘intervention,’ the former often enough puts the latter into a position to react, not to act, whether we think of how big tech reshapes the actual societal environment of democratic deliberation and participation, how investor-pension funds co-regulate old-age security for entire generations, or the role played by the car industry in shaping governmental energy and industrial policy.
Constellation of Crisis
In the face of today’s crisis constellation as a result of climate change, an autocratic shift in democracies around the world, deepening socio-economic inequality, xeno- and homophobia and high inflation, the ‘captains’ of the state and corporate ships today are together and separately facing the same challenges. Meanwhile, the political economy of the IME is in a state of permanent instability while it politically depends on volatile and unpredictable constituencies. Decades of privatization and deregulation have eroded the conditions on which politically stable and institutionalized democratic deliberation depend. As a result, the normative and institutional claim to authority to govern the actual practice of market freedoms, to safeguard the protection of rights and to carefully navigate policies and logistics of redistribution has become a matter of contestation and deep political division, as the financialization of political and economic spaces has upset institutional hierarchies. Today’s crisis management, including that under the label of ‘ESG’ (environmental – social – governance) is an agenda without a clear agent. As the conditions of political representation and legitimacy continue to shift, crisis responses are contested before they even get started.
The key actors in this landscape include:
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Governments, including newly emerging, specialized departments as well as hybridized, combined ministries, such as, for example, the Canadian federal ministry for Innovation, Science and Industry or the German federal ministry for Economic Affairs and Climate Action.
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Corporations, which comprises a vast range of very small to medium to mega corporations with hundreds of thousands of employees and staggering revenues. These service a highly differentiated local and global economy, which in turn results in numerous new public-private interactions. The distinction between financial and non-financial organizations can serve as a rudimentary divider but today no longer captures the actual function played by corporations in the IME.
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While banks and institutional investors are the typical key players in directing financial resources towards specific goals, including the range of climate change mitigation (CCM) actions such as decarbonization, sustainable forestry or fishery, non-financial corporations – in a large-scale shift described by the Financial Times journalist Rana Foroohar ‘from makers to takers’ – have themselves become immersed in the financialized economy through their products, value chains, employment savings plans, customers and ratings. And as any citizen’s involvement in the financialized economy has moved from choice to inevitable necessity, banks have further propelled the financial inclusion and indebtedness of individuals and households, with significant discriminatory impact on marginalized and excluded communities. Furthermore, corporations, institutional investors and asset managers are central actors in shaping the direction not only of financial markets but of corporate control and corporate governance structures.
The Summer Academy brings together lawyers, business and management experts, supply chain and human rights scholars, climate change scholars, anthropologists and political scientists. The task for the 2023 Academy is to generate a multidimensional problem assessment and develop a series of recommendations around the role of financial and non-financial organizations in today’s crisis constellation. This task will be approached through the collaboration among 5 groups of Academy Fellows working under the mentorship of Academy Faculty members. While prospective Fellows are invited to state their preference for one of the working groups in their application, the final allocation will be done by discretion of the Academy Faculty.