Jo, Tae-Hee. 2016. “A Heterodox Theory of the Business Enterprise.” MPRA Working Paper 72426. [Download the paper]
Note: This paper is an early draft of the chapter to be published in the Routledge Handbook of Heterodox Economics, edited by Tae-Hee Jo, Lynne Chester, and Carlo D’Ippoliti, 2017.
Abstract: The business enterprise directs and controls the social provisioning process. Enterprise decisions on price, investment, output and employment, in particular, directly affect the material basis of society as well as the material standard of living of working class households. The understanding the structure of and changes in the capitalist capitalists system thus requires a theory of the business enterprise that offers relevant and convincing explanations of business decisions and actions embedded in the wider social context. Such a theory must replace the mainstream-neoclassical theory of the firm, which is not only theoretically incoherent but also practically irrelevant since it confines itself to the hypothetical market structure and individual optimizing behavior. With this rationale this chapter attempts to build a heterodox theory of the business enterprises incorporating contributions made by various theoretical traditions in heterodox economics.
Dr. Tae-Hee Jo 