Why We Need to Rethink the Idea of Corporations

Abstract

Adam Smith referred to the ‘invisible hand’ where individual agency within the market wonderfully produces a set of relations, exchanges and capacity for prosperity. Smith’s ‘invisible hand’ is at times interpreted as being confined to the actions of individual entrepreneurs and corporations, thus reducing the importance of economic agency that comes from the state, labor and consumers.

Neo-liberal thinkers imagined the market to be a democratic arena in which individuals acted in ways that were part of the immutable laws of nature. A market is a system aided only by prices to efficiently co-ordinate demand and supply.

But to talk of the market as a singular phenomenon is to obscure market activity that is diverse and also divided in its nature. Part of the market is the real economy related to production and building things, another is the activity of financial services and unearned income. Parts of the market are also non-monetized like voluntary labor, child rearing and so on.