ABSTRACT
This chapter will expand upon some of Frederic Lee’s theoretical contributions to heterodox microeconomic theory, particularly as they have concerned the social construction of the modern business enterprise, its relation to the markets in which it operates, and ultimately to society as a whole. As Lee noted, “the theoretical significance of the going enterprise is that it is the organizational mechanism by which the capitalist class gains ongoing access to the statemonetized social provisioning process” (2013, 468). With this essential understanding of the business enterprise in mind, it will be argued that (1) certain technological and legal relationships can be identified as generic to the modern business enterprise, (2) the occupational hierarchy that results from these relationships creates conflicting methods of valuation, and (3) these conflicts are mitigated through the evolution of governance norms both within and between business enterprises. The research behind this analysis, compiled in Dean (2013), was done in the spirit of Lee’s methodological position of grounded theory, and includes an historical examination of the US software industry in the twentieth century. This method maintains the empirical relevance and realism of the model in addition to offering illustrative cases of the model’s application (see Lee 2002). Hence, the following will present a theoretical narrative that synthesizes and augments previous theoretical work in heterodox economics while remaining grounded in the particular industry under study. This chapter is organized as follows. First, a general discussion of Lee’s social surplus approach is delineated, with connections drawn to additional ideas from the heterodox economics literature. This provides the foundation for the analysis of the business enterprise that follows. Next, the two essential components of the modern business enterprise-the going plant and the going business-are analyzed, along with illustrations drawn from the historical development of the US software industry. Reference to this industry is limited to the period beginning in the 1950s and ending in the 1990s for the sake of brevity, and because it is in this period that the institutions forming the business enterprise in software were initially constructed. The concluding section summarizes
and draws the arguments herein back to the theoretical contributions of Frederic Lee.
