Societal behaviour is shaped by the structures that limit and incentivise behaviour; this is one of the cornerstones of our political approach. However, structures are neither static nor did they arise from nothingness, but are constructed and influenced by us. We have shown multiple times that politicians are often not aware of how these structural forces are at work, and, therefore, many attempts to create a mode of lasting development failed (visit here for our institutional work). Among those forces, invisible to laymen, is a categorisation of capitalist value propositions: micro-, meso- and macro-level capitalism. During our studies, we discovered this categorisation and developed a foundational introduction to a very interesting case, meso-level capitalism.
Essentially, the three levels indicate the focus of systems and participants in capitalism. Micro-level capitalism posits that actors within the system solely focus on their personal profit with the intention of gaining relative power within society. Macro-level capitalism is more geared towards state success, meaning that actors within the system tie capitalist behaviour to a context of the state. Meso-level capitalism, however, emerges when actors within the system focus on the development of corporations. They are often neither individual nor state actors in character by their own entities, with, again, the relative goal of profit maximisation. While all capitalist systems include micro-level capitalism, only varying in degree, the main distinction between economic structures is whether the actors within that structure are more focused on the gain of states or corporations. In this article, we explore this meso-level in more detail.
What Is Meso-Level Capitalism?
Every action needs a goal. Not only is the goal the driver of behaviour, but also the designer. In other words, goals shape what we do as much as how we do it. Of course, coupled with a purpose, these two dimensions of behaviour are further deepened. So ideally, every action is informed by a purpose and a goal. Capitalism is built on the perpetual goal of increasing relative strength in terms of economic power, compared to others in the system; that is, the overarching goal that holds true for all levels of capitalism. The purpose of reaching that goal is to increase the social distance to others in the system to create a perceived importance of one’s being. Although faulty, the logic is simple: “If I have more possibilities in life than others, I am better. That means I am worthier”. This logic is, to varying degrees, present in all capitalist systems. There is always the individual component of micro-level comparison of people within the system. In some contexts, this is more important, while in others, it is less intense; nonetheless, it exists in all capitalist systems.
Meso-level capitalism is an extension of this logic. The individual is limited in what it can influence directly. The corporation, however, is a semi-independent entity that enables the massive amplification of the effectiveness of capitalist behaviour. It is semi-independent because a corporation is always shaped by the goals and ideas of its founders and later of its managers, although the founders’ influence remains the main factor. Corporations have only one primary goal, which is profit maximisation. Their purpose is to enable the primary actors within the corporation to increase their social distance from others.
Compared to the individual and the state levels, where the individual and state also have different goals, duties and preferences outside of the capitalist context, the corporation only has one goal, and this goal is based on the individual’s goal. Even the purpose is borrowed from the individual. That makes the corporation a highly effective entity. Meso-level capitalism, therefore, is a design variant of forms of capitalism in which the individual and the state focus primarily on the development of corporations. It is a system that applies to North America, for example. For comparative reasons, macro-level capitalisms structure economic conduct not around the gain of the corporation as an exponentially amplified vehicle for individual gain, but on the development of state goals. In such a context, the economic activity is merely an instrument but not the goal.
Advantages Of Meso-Level Capitalism
With the primary focus on the corporation, the economic gains for the whole economic system increase. There are two reasons for that. First, the corporation has only one goal and is an emotionless and normativity-lacking entity. It is not concerned with other goals; at least not to a considerable degree. This creates positive effects for individuals and the state. The corporation in itself cannot translate the profits into meaningful results because it is not an organic entity. The derived value from the corporation emerges when the individuals in the corporation or the state use the profits, products and services to create meaningful action. Some of the wealth remains in the corporation, but only with the purpose of creating more profits in the long term.
Secondly, the corporation is dependent on both the individual and the state. While the individual and the state are interdependent, the corporation needs both to function. This makes it truly only a mechanical extension and not an independent actor. The advantage is that it can serve as a vehicle for societal development because it enables innovation and creative production of goods and services that can be scaled nationally and internationally. As the corporation needs consumers, the individuals within the corporation seek to satisfy existing demand and create new demand with innovations. This is the primary reason why economic development in the past fifty years has been so accelerated. An individual with a product idea needs the corporation to proliferate it at scale; otherwise, the innovation never, or at least very unlikely, translates into a societally tangible result.
Disadvantages Of Meso-Level Capitalism
On the other hand, there are some disadvantages that come with meso-level capitalism, the focus on the corporation as the primary economic actor. These disadvantages arise from the mechanical nature of the corporation. As it borrows its goal and purpose from the individual, its societal value is limited to the normativity of its individual founders and managers. How the generated wealth of the corporation is distributed, reinvested and used in the societal context depends on the willingness of the individual within it. If they decide to fully focus on personal gain, the corporation creates social imbalances without a normative purpose. Of course, the state can and should regulate this, but because the corporation and the respective people within it have different goals, a conflict of interest arises between the state and the corporation. The state, if it wants to profit from the mechanical effects of the corporation, needs to make concessions that lower societal gain. Over time, this creates power imbalances that lead to increasing ineffectiveness of policymaking and, even worse, goal displacement.
Secondly, as the corporation has only one goal without a normative footing, which is profit maximisation, it will naturally always find ways to develop its mode of profit maximation. Often, this happens without regard for the normative goals of the state. There are, unfortunately, ample examples of this. Worker exploitation and synthesising production to reduce costs and increase profit margins are two of the methods. This has negative effects on society in terms of collective action towards national goals, public health and social coherence. Further, corporations also try to influence demand. Where demand is exhausted, or partially even non-existent, corporations invest in influencing the consumer to increase their demand, or they partner with other corporations that do that for them. Social media, for example, is mostly free; not because the corporation has societal benefits in mind, but because the profit lies in the increased consumption of the users due to distorted demand perception.
Use And Value Of The Concept
In this short introduction to this new concept, we have seen that the design of economic systems is very important. As we expand our work on this concept, we will also closely look at the origins and examples of meso-level capitalism in more detail. Also, we will focus on macro-level capitalism and put it into perspective with meso- and micro-level capitalism to better understand the dynamics of these structural concepts. As to why this categorisation is useful and valuable, it needs to be stressed that it helps us to understand the interactive role of an economy within a political system. How the economic focus is built determines how this system is shaping the political and societal course of action. On the international plane, it helps us to understand economic differences, as well as financial market developments and their integration. For example, even from the above, we can better understand why some financial markets are exponentially larger than other financial markets of states of a comparable strength.
It also helps us to better predict future developments through economic integration and dynamics. Our track record shows that we have been able to predict many developments and events in politics many years before they take place. To do that, we use concepts similar to this one. In this case, we can and will use this categorisation to give accurate forecasts on macroeconomic developments and financial markets integration; of course, coupled with other approaches in our toolkit. However, this is to underline the practical value of such theoretical concepts in terms of policymaking.
