ABSTRACT
In Maxine Berg’s recent book, Josef Steindl has argued that his explanation of the stagnationist tendency of the first one-third of the twentieth century could not be straightforwardly applied to that of the last one-third because of the rise in the power of labour and the growth of international competition (Steindl 1990). He also argued that “The development and persistence of oligopolistic market structures over a long time cannot have been without effect on the internal structure, organisation and management of firms”, which had in turn led to a greater emphasis on market control and a weakening of the incentive to invest. I shall below examine some aspects of the dynamic interactions between these features of the system. I shall conclude that the rise to dominance of the transnational organisation of production within the modern giant firm over the past twenty to thirty years has at one and the same time created an intense international competition for jobs and eroded the disciplines of international competition in the product market by internalising the processes and impact of international trade. Josef Steindl is being too modest: his explanation of the stagnationist tendency of the first third of the twentieth century remains highly applicable today, because firms have reorganised in the face of the dual threat that he described. In the light of this conclusion I shall outline an appropriate policy response.
