The hierarchical market economy (HME) category for Latin American political economies represents the most recent and successful extension of the varieties of capitalism (VoC) framework (Schneider 2009; Schneider & Soskice 2009; Friel 2011). It claims that the region should be understood as one characterised by the hierarchical coordination of economic activity by transnational corporations (TNCs) and economic grupos within a liberal regulatory environment. Two problems with this position will be presented in this paper. (1) First, it fails to adequately capture the determinants of firm behaviour by marginalising the global interconnectedness of production and exchange networks. Second, in privileging the agency of firms it obscures the struggles of workers within and against these structures and the unstable forms of capitalism that this produces.
Via this critique, the first section of this paper develops a critical perspective on the global commodity chain (GCC) and global production network (GPN) approaches (Gereffi & Korzeniewicz 1994; Dicken 2011). On one hand, it will be argued that the GCC/GPN framework contributes significantly to going beyond the HME category by offering an interpretation of firms' behaviour that adequately considers the impact of their transnational relations. On the other hand, it will be argued that going beneath the HME category requires a more substantive engagement with those actors often neglected or marginalised by 'firm-centrism' (Selwyn 2012). Working-class conflict must be incorporated into the analysis of specific sectors and their transnational production networks, for workers' political interests and the conflicts that arise around them produce unstable forms of capitalism that tend to be reified in firm-centric accounts of both the HME and orthodox GCC and GPN literatures.
In order to concretise this theoretical critique, the second section of the article will examine Argentina's automobile industry during its most rapid period of development in the 1960s and 1970s, focusing on the city of Cordoba. This case addresses three important aspects of the theoretical argument: the sector is an example of a hierarchically ordered and 'failed' experience of economic development that HME scholars emphasise; it has always been highly dependent upon the global firms and technology on which GCC/GPN concentrate; and it was an important arena of worker militancy (see also Bailey & Shibata in this special issue on contestation). TNC investment decisions were induced by both national policy incentives and imperatives derived from their structural position in the global economy. Workers then mobilised to contest these decisions, particularly over new production processes and forms of managerial discipline. This combination of global competitive pressures and the conflicts they induced left the automobile industry in Cordoba fragmented and internationally uncompetitive, but also as a site for the emergence of potential alternatives to this particular form of industrial capitalism.
Going beyond and beneath: A critique of the HME category
The rise of the varieties of capitalism (VoC) approach in the last ten years has successfully countered the prominent notion of global capitalist convergence. Since Hall and Soskice (2001) launched the approach as a coherent set of theoretical and empirical propositions, studies reinforcing the claims of continued divergence in Western capitalist countries have proliferated. Complex matrices of domestic institutions are shown to form part of an iterative process whereby corporate strategies are shaped in response to the opportunities arising from particular regulatory environments. Such corporate strategies are then claimed to reinforce and reproduce distinctive forms of capitalism (Hall & Soskice 2001: 14-17; Schneider & Soskice 2009: 33). The importance ascribed to the state in constructing these institutional environments offers an antidote to efforts to minimise its economic role, but for advocates of this approach the most significant economic actor in maintaining divergence is the firm. The positive reception received by this framework has encouraged its extension beyond the original focus on the Anglo-Saxon liberal market economy (LME) and the continental European coordinated market economy (CME). The most successful of these extensions has been Ben Ross Schneider's categorisation of the Latin American hierarchical market economy (HME). As such, the HME category--and the VoC approach on which it is based--is the key point of reference for this article's critical engagement with comparative capitalisms (CC) research, although other perspectives will also be briefly discussed.
In defining the HME it is argued that, unlike in LMEs and CMEs, firm strategies and relations in Latin America are coordinated primarily by hierarchy as a default preference (Schneider 2009: 18). The prominence of TNCs and large diversified business grupos means that hierarchy is built into inter-firm relations and the corporate governance structures of Latin American enterprises. These entities are the key conduits for access to capital, technology and markets, and so can continually reproduce the hierarchical relationships that sustain them. Hierarchy also facilitates the weakening of broad-based labour movements and the consolidation of asymmetric bargaining. This tendency then reproduces low levels of investment in skills and training and the informal, low-skilled character of the HME (Schneider 2009: 5-13; Schneider & Soskice 2009: 33-41). The HME is then posited as an inefficient form of socioeconomic organisation that hinders economic development, reproduced by hierarchical economic relations and the predominantly liberal institutional environment. (2)
The approach, however, has been strongly critiqued as ahistorical, methodologically nationalist, and firm-centric (Ebenau 2012: 211-216). First, it is argued that in limiting change to a narrow path-dependency model, HME over-emphasises historical continuity. It is a static 'snapshot' of Latin America that is projected as both cause and consequence of the present predicament. Radical changes in the region throughout the 20th century and long-run historical processes are not adequately incorporated into the framework, leaving little analysis of the 'default to hierarchy' as contested social practice. Secondly, an emphasis on national institutions reinforces this stability, for it conceals the effect of institutional changes at both a sub- and transnational level. Instead, it is argued that the national level, whilst still important, is but one element of the 'multiscalar' environment upon which an understanding of capitalist diversity must rest. The HME appears as a self-contained and self-explanatory model, in which actors and institutions within the relatively closed national political economy reproduce and reinforce the contemporary form. Finally, it is argued that by focusing primarily upon the constitutive power of firms, the state and labour are reduced to little more than bystanders in the face of corporate strategy.
Whilst the reincorporation of the state is important, this article will focus on extending this critique of firm-centrism to better understand the activity of firms and the constitutive role of labour. First, even on its own terms, HME fails to adequately explain the role of firms in constructing and reproducing hierarchy. The notion that hierarchy is a 'default preference' for powerful actors conceals the important determinants of agency that make this so. Whilst proponents of HME do acknowledge the global nature of TNCs, firm behaviour remains determined by the prevailing national institutional context. Decisions to relocate investment in technology and skills are seen primarily as being intended to reproduce hierarchy, rather than being linked to strategies responding to global competition. Secondly, whilst the TNCs and the grupos upon which HME proponents focus are undeniably powerful actors, they are not alone. For example, Schneider (2009: 1-2) argues that he moves away from traditional academic concerns on Latin America by incorporating labour relations and worker training. Yet in the HME category there is...