Proposal preview

In Search of European Capitalism

The session will explore a set of proposals put forward by Franco Amatori regarding European capitalism. The central hypothesis is that European capitalism has four pillars (contractual cooperation between firms, hegemony of family firms, state intervention, and strength of the workers’ movement); but that in the second half of the twentieth century, these four pillars have been submerged by three significant waves (Americanization, European integration, and globalization). The profound crisis of 2008 has pushed the clock back a bit and the original characteristics re-emerged, showing that they are not ephemeral. This is a powerful yet controversial hypothesis in order to understand the long-term development of European capitalism, including its current search for a new lease of life after the Euro-crisis and Brexit. The arguments in its favour can be put forcefully. At the same time, these arguments can be countered on the grounds of the great diversity of European experiences, as well as the similarities with non-European models of capitalism. The session will offer the opportunity to present and discuss the Amatori’s hypothesis, through a series of papers assessing and commenting the four pillars and three waves, as well as discussion with the audience.

Organizer(s)

  • Youssef Cassis European University Institute youssef.cassis@eui.eu Italy
  • Franco Amatori Bocconi University franco.amatori@unibocconi.it Italy

Session members

  • Franco Amatori, Bocconi University
  • Grace Ballor, UCLA
  • Andrea Colli, Bocconi University
  • Valentina Fava, Institute of Contemporary History,Czech Academy of Sciences
  • Daniela Felisini, University of Rome 2
  • Eric Godelier, Ecole Polytechnique
  • Harold James, Princeton University
  • Stefano Musso, University of Turin
  • Neil Rollings, University of Glasgow

Discussant(s)

  • Youssef Cassis European University Institute, Florence youssef.cassis@eui.eu

Papers

Panel abstract

The session will explore a set of proposals put forward by Franco Amatori regarding European capitalism. The central hypothesis is that European capitalism has four pillars (contractual cooperation between firms, hegemony of family firms, state intervention, and strength of the workers’ movement); but that in the second half of the twentieth century, these four pillars have been submerged by three significant waves (Americanization, European integration, and globalization). The profound crisis of 2008 has pushed the clock back a bit and the original characteristics re-emerged, showing that they are not ephemeral. This is a powerful yet controversial hypothesis in order to understand the long-term development of European capitalism, including its current search for a new lease of life after the Euro-crisis and Brexit. The session will offer the opportunity to present and discuss this hypothesis, with the papers assessing and commenting the four pillars and three waves.

1st half

Amatori WEHC

The State and European Capitalism: State-Owned Enterprise and State Aids

Neil Rollings

The state is clearly one of the key actors in any form of capitalism. The nation-state in Europe has a long history but is recognisable in its modern form from the nineteenth century with the unification of Italy and Germany. Its heyday is commonly associated with the period after the Second World War through to the 1970s with the advent of the Keynesian welfare state. Although the size of government since then has not changed markedly its functions are conventionally regarded as having changed with the rise of neoliberalism and the growing emphasis on the market economy. This paper explores these developments and considers how common that experience was through the lens of attitudes to direct state intervention in the form of state-owned enterprise, state aids and privatisation. In particular, it will explore the impact of European integration and the extent to which Britain fits this continental European story.

The state is clearly one of the key actors in any form of capitalism. The nation-state in Europe has a long history but is recognisable in its modern form from the nineteenth century with the unification of Italy and Germany. Its heyday is commonly associated with the period after the Second World War through to the 1970s with the advent of the Keynesian welfare state. Although the size of government since then has not changed markedly its functions are conventionally regarded as having changed with the rise of neoliberalism and the growing emphasis on the market economy. This paper explores these developments and considers how common that experience was through the lens of attitudes to direct state intervention in the form of state-owned enterprise, state aids and privatisation. In particular, it will explore the impact of European integration and the extent to which Britain fits this continental European story.

Global, but proudly local. Family businesses in Europe

Paloma Fernández Pérez and Andrea Colli

This paper addresses the issue of European family firms from two different points of view. The first concerns the common characteristics of European large family firms as a permanent feature of European capitalism. Family firms are indeed one of the basic components of the general notion of European capitalism, both as a form of ownership (even if one comes to large firms) and as a way to manage the business activity (that is a peculiar form of management characterized by some specific and well identifiable characteristics. Besides their long term resilience, the article will address common aspects as industrial specialization, forms of ownership, management of industrial relations, management of the succession process and training of new generation, propensity to managerialization, prevalence of flat organizational structures, relationship with the State and bureaucracy. Given this European peculiarity, and in order to understand better the singularity of the European model, a comparison will...

This paper addresses the issue of European family firms from two different points of view. The first concerns the common characteristics of European large family firms as a permanent feature of European capitalism. Family firms are indeed one of the basic components of the general notion of European capitalism, both as a form of ownership (even if one comes to large firms) and as a way to manage the business activity (that is a peculiar form of management characterized by some specific and well identifiable characteristics. Besides their long term resilience, the article will address common aspects as industrial specialization, forms of ownership, management of industrial relations, management of the succession process and training of new generation, propensity to managerialization, prevalence of flat organizational structures, relationship with the State and bureaucracy. Given this European peculiarity, and in order to understand better the singularity of the European model, a comparison will be drawn between the case of European family firms and of non-European, largely looking at the similarities and differences with other family business models, as for instance the Asian (South Korea, Indonesia, and of course Japan) and the US one. Besides their structural characteristics, the paper will deal also with the outcomes of the persistence of family ownership on the strategies of European family firms. Is the fact that family ownership is a relevant trait in Europe even among the large firms shaping the way in which these companies behaved and behave, for instance in terms of internationalization? Has the family nature influenced their perspectives and strategies of growth? Which is, in other words, the relationship between European family firms, and globalization? Is the local dimension prevailing over the global one? The second part of the article will focus, instead on the issues of resilience and transformation. Some of the characteristics of the European family firms clearly have origins, and rationale, very far back in time. One example is their management style in terms of industrial relation, frequently leaning towards paternalistic practices typical of the pre-industrial, and even of the first industrialization, period. However, and particularly in front of the globalization process (and also notwithstanding the persistence of strong national patterns), a large part of European family firms have reacted proactively, in terms of internal dynamics and also internationalization strategies.

Workers’ Movement

Stefano Mussso

The essay assesses the role of the European workers’ movement in shaping European capitalism as far as it differs from the United States. The starting point is a brief review of the most significant contributions in the debate about American exceptionalism in reference to the labour movement. The historical European experiences - with special focus on Spain, France, Italy, Germany, United Kingdom, and Sweden - compared to the United States, are analysed according to the following points. Relationship between parties and unions; economic and political action; local or nation-wide activity; craft unionism and general unionism including unskilled workers; territorial, inter-sectorial organization versus single professional sectors; participation, social dialogue, confrontation, the role of the State, labour law, labour market regulation, labour intermediation, bargaining structure, union strength, social spending. Despite the differences amongst European countries, a common feature of European unionism is workers’ mobilization to gain political power in order to achieve...

The essay assesses the role of the European workers’ movement in shaping European capitalism as far as it differs from the United States. The starting point is a brief review of the most significant contributions in the debate about American exceptionalism in reference to the labour movement. The historical European experiences - with special focus on Spain, France, Italy, Germany, United Kingdom, and Sweden - compared to the United States, are analysed according to the following points. Relationship between parties and unions; economic and political action; local or nation-wide activity; craft unionism and general unionism including unskilled workers; territorial, inter-sectorial organization versus single professional sectors; participation, social dialogue, confrontation, the role of the State, labour law, labour market regulation, labour intermediation, bargaining structure, union strength, social spending. Despite the differences amongst European countries, a common feature of European unionism is workers’ mobilization to gain political power in order to achieve social justice.

The Integration Process and European Firms, 1950–2000

Daniela Felisini

The paper investigates how European businesses have interacted with the new framework created by the process of integration, its system of values and institutions in the years 1950-2000. Rules and policies are key elements through which the interactions among different institutions, economic cultures and interests are captured and legitimized, so they could be considered tangible and powerful element of Europeanization. Considering the increasing fields of action of EEC/EU, it has been adopted a precise focus on the two central, somehow dichotomous spheres, of competition policy and industrial policy, their interactions and changes over time. The reactions and adaptive strategies of European businesses - illustrated through some concise cases - have been considered as a useful proxy to reflect upon the destiny of the "pillars", in particular of two of them, the practices of contractual cooperation and the multifaceted role of the State, facing the "wave" of European integration/Europeanization.

The paper investigates how European businesses have interacted with the new framework created by the process of integration, its system of values and institutions in the years 1950-2000. Rules and policies are key elements through which the interactions among different institutions, economic cultures and interests are captured and legitimized, so they could be considered tangible and powerful element of Europeanization. Considering the increasing fields of action of EEC/EU, it has been adopted a precise focus on the two central, somehow dichotomous spheres, of competition policy and industrial policy, their interactions and changes over time. The reactions and adaptive strategies of European businesses - illustrated through some concise cases - have been considered as a useful proxy to reflect upon the destiny of the "pillars", in particular of two of them, the practices of contractual cooperation and the multifaceted role of the State, facing the "wave" of European integration/Europeanization.

2nd half

Central Eastern Europe and European Capitalism

Valentina Fava and Aksana Yarashynskaya

The chapter follows the historical trajectories of three main countries of Central Eastern Europe (Hungary, Poland and Czechoslovakia), searching for traces of the “common denominators” that define European capitalism. Based on the most recent scholarship, the paper demonstrates that the four pillars of European capitalism - contractual cooperation, firms of limited size, State intervention in the economy and a workers’ movement willing to change society - appear and disappear for most part of the long 20th century history of CEE. The paper will also underline that Europeanization and globalization invested CEE after 1989 simultaneously, while that Americanization and Europeanization (business and managerial culture) hit the area well before 1989. In this perspective, the paper argues that, on the long run, in the enlarged Europe, differences in the societal responses to capitalism can be expressed in terms of degree but not of substance.

The chapter follows the historical trajectories of three main countries of Central Eastern Europe (Hungary, Poland and Czechoslovakia), searching for traces of the “common denominators” that define European capitalism. Based on the most recent scholarship, the paper demonstrates that the four pillars of European capitalism - contractual cooperation, firms of limited size, State intervention in the economy and a workers’ movement willing to change society - appear and disappear for most part of the long 20th century history of CEE. The paper will also underline that Europeanization and globalization invested CEE after 1989 simultaneously, while that Americanization and Europeanization (business and managerial culture) hit the area well before 1989. In this perspective, the paper argues that, on the long run, in the enlarged Europe, differences in the societal responses to capitalism can be expressed in terms of degree but not of substance.

The European Company: Historicizing Corporate Identity in an Integrating Region and Globalizing World, 1960-2005

Grace Ballor

This paper analyzes two concurrent shifts in the orientation of European companies in the wake of postwar Americanization, regional integration, and globalization. First, when faced with intensifying foreign competition in the 1970s and 80s, many big European businesses restructured their operations around a new regional market for production and sales. Second, in search of political support, large firms pivoted away from domestic national governments, whose power was in decline in the postwar period, and found allies within the increasingly powerful political apparatus of the European Community in Brussels. In turn, the European Commission made reciprocal efforts to cultivate ‘regional champions’ through the Statute for a European Company, which encouraged corporate multi-nationalization in the region. Ultimately, this paper demonstrates that in response to global competition and in the context of European integration, a majority of large corporations from Europe became ‘European,’ in both their market orientation and in their relationship with...

This paper analyzes two concurrent shifts in the orientation of European companies in the wake of postwar Americanization, regional integration, and globalization. First, when faced with intensifying foreign competition in the 1970s and 80s, many big European businesses restructured their operations around a new regional market for production and sales. Second, in search of political support, large firms pivoted away from domestic national governments, whose power was in decline in the postwar period, and found allies within the increasingly powerful political apparatus of the European Community in Brussels. In turn, the European Commission made reciprocal efforts to cultivate ‘regional champions’ through the Statute for a European Company, which encouraged corporate multi-nationalization in the region. Ultimately, this paper demonstrates that in response to global competition and in the context of European integration, a majority of large corporations from Europe became ‘European,’ in both their market orientation and in their relationship with Brussels and were subsequently rewarded with profitability and regulatory privilege.

Is Business European, or National?

Harold James

The paper treats in turn a number of decisive limitations to the possibility realizing a genuinely European enterprise: differences in legal traditions, contrasting approaches to labor law, the financial framework of activity, different social settings, differing national images, and different state policies that shape the fiscal and regulatory environments and often distort (intentionally) the framework for competition. Analysts should stop thinking of the corporate form of enterprise - as opposed to the fact of entrepreneurship – as a natural and inevitable response to market logic, and should view it instead as the result of a malleable concatenation of legal peculiarities that create a possibility for great collective dynamism but also for many perverse incentives. Companies are pushed to internationalize by the fiscal framework, and that requires adopting different corporate forms in different jurisdictions: because the corporation is still primarily a concept that is entirely rooted in national law, subject to...

The paper treats in turn a number of decisive limitations to the possibility realizing a genuinely European enterprise: differences in legal traditions, contrasting approaches to labor law, the financial framework of activity, different social settings, differing national images, and different state policies that shape the fiscal and regulatory environments and often distort (intentionally) the framework for competition. Analysts should stop thinking of the corporate form of enterprise - as opposed to the fact of entrepreneurship – as a natural and inevitable response to market logic, and should view it instead as the result of a malleable concatenation of legal peculiarities that create a possibility for great collective dynamism but also for many perverse incentives. Companies are pushed to internationalize by the fiscal framework, and that requires adopting different corporate forms in different jurisdictions: because the corporation is still primarily a concept that is entirely rooted in national law, subject to national legislation and guided by national political proclivities. There is thus a continual tension between markets, which are increasingly cosmopolitan and universal, and corporate existence.

European Corporate Cultures: towards common Values, Representations, Behaviours, Principles and Rules of organizing business?

Eric Godelier

Until the 1990s, few historians were really interested in the concept of "Culture". Since the late 1990s, indirectly, however, the concept has reappeared via the work on different types of capitalism and the Americanization of Europe, and notably, the study of types of organizations. This raises the question of local and special, or "indigenous" management. Behind this question, one of the key challenges is to move towards a better definition of the existence of different models of management and capitalism Beyond these varieties of forms, there are long-term recurrences in the representations, practices and behaviors of certain individual or collective actors that populate and animate companies. The purpose of this article is to describe and evaluate if the concept of “Culture” could be useful to understand the development of a specific model of Capitalism in Europe.

Until the 1990s, few historians were really interested in the concept of "Culture". Since the late 1990s, indirectly, however, the concept has reappeared via the work on different types of capitalism and the Americanization of Europe, and notably, the study of types of organizations. This raises the question of local and special, or "indigenous" management. Behind this question, one of the key challenges is to move towards a better definition of the existence of different models of management and capitalism Beyond these varieties of forms, there are long-term recurrences in the representations, practices and behaviors of certain individual or collective actors that populate and animate companies. The purpose of this article is to describe and evaluate if the concept of “Culture” could be useful to understand the development of a specific model of Capitalism in Europe.