The Political Economy of Cooperation in Business

As public debate on the power of big tech firms intensifies, more and more politicians from around the world have sought to place limits on that power in order to reduce economic barriers to entry, increase wages, lower prices, and increase privacy protections. Similar debates have extended to other sectors including healthcare and agriculture, indicating that a fundamental reexamination is underway of the rules required to ensure a “fair market” and of the place of today’s corporate mastodons in the global political economy.
The issue of anti-trust—and the broader question of business-government relations both in the U.S. and abroad—has long fascinated social scientists, and business historians have produced a vast literature on the origins and development of anti-trust rules, both formal and informal, and their effects on how businesses, both big and small, interact with each other. This panel aims to enhance our understanding of why anti-trust laws and business-corporation policies have evolved by examining three key junctures in that evolution.
First, Jesse Tarbert presents a case study of the American Construction Council— a noteworthy example of 1920s “associationalism” that aimed to provide a means for pursuing counter-cyclical economic policy through “self-regulation” of the construction industry. This study offers a critique of persistent generalizations about Herbert Hoover's associational activities, and contends that associationalism was not an ideological attempt to curb government regulation but a rhetorical strategy to overcome political resistance. Second, Jamieson Myles explores the unlikely interactions and interdependencies between government agencies and trade and cooperative marketing associations, which had been deemed monopolistic business organizations. This paper documents two cases where institutional reforms, largely motivated by foreign practices and deployed by the government to improve the structure and provision of credit, depended directly on the existence of trade associations and farmer cooperatives. Not only did these business organizations contribute to the emergence of an administrative state to further their own interests, but also these state administrators were dependent on private organizations to reach specific economic policy goals. Finally, Laura Phillips Sawyer examines the origins of U.S. v. Alcoa (1945), which established U.S. extraterritorial jurisdiction in antitrust and vastly expanded the reach of anti-monopolization law. It shows how American academics and policymakers were linked to an international liberal-progressive movement and they intended to shape how international firms could organize by imposing a specific interpretation of anti-trust law in foreign markets in the name of ensuring a competitive market at home.
All three papers examine the question of business coordination (and the limits thereto) in the United States during the interwar era—a formative period in the development of global capitalism and a time when attitudes towards business-government relations were more ambiguous than they appear today. Overall, the papers all show that the admissibility—or inadmissibility—of business cooperation is not always defined by the political mood, or by ideological attitudes to state intervention, but rather that it is contingent upon the opportunities that business coordination offers both individuals and the economy as a whole. As such, they offer original insights into present-day debates on the role of business in society.