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Neither new, nor heterarchic. Inter-organizational networks throughout the history of the Dutch paper and board industry

Martha Emilie Ehrich

Niet nieuw, niet heterarchisch.

Interorganisatorische netwerken in de geschiedenis van de Nederlandse papier- en kartonindustrie

Proefschrift

ter verkrijging van de graad van doctor aan de Radboud Universiteit Nijmegen op gezag van de rector magnificus prof. dr. J.H.J.M. van Krieken, volgens besluit van het college van decanen in het openbaar te verdedigen op donderdag 1 oktober 2020 om 11.30 uur precies door

Martha Emilie Ehrich

geboren op 27 juli 1989 te Lüneburg, Duitsland

Promotor: Prof. dr. H. L. van Kranenburg

Copromotor: Dr. A. Wigger

Manuscriptcommissie: Prof. dr. R. ten Bos Dr. L. Horn, Roskilde Universiteit, Denemarken Prof. dr. D.K. Mügge, Universiteit van Amsterdam

Neither new, nor heterarchic.

Inter-organizational networks throughout the history of the Dutch paper and board industry

Doctoral Thesis

to obtain the degree of doctor from Radboud University Nijmegen on the authority of the Rector Magnificus prof. dr. J.H.J.M. van Krieken, according to the decision of the Council of Deans to be defended in public on Thursday, October 1, 2020 at 11.30 hours by

Martha Emilie Ehrich

born on July 27, 1989 in Lüneburg, Germany

Supervisor: Prof. dr. H. L. van Kranenburg Co-supervisor: Dr. A. Wigger

Members of the Manuscript Committee: Prof. dr. R. ten Bos Dr. L. Horn, Roskilde University, Denmark Prof. dr. D.K. Mügge, University of Amsterdam

RAGS make paper,

PAPER makes money,

MONEY makes banks,

BANKS make loans,

LOANS make beggars,

BEGGARS make RAGS.

- Author unknown, around eighteenth century

Cover design: own illustration Printing: paper jam || the people of the radical Amsterdam-based printing collective paper jam seek to perform an infrastructural task to support our revolutionary struggle || paperjamcollective.nl

This book is printed on 100% recycled paper

This thesis is no copyright material as I am against the commodification of knowledge; feel free to publish any quotation from it with or without (im)proper acknowledgement.

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To Vick - you know why

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Table of Contents

ACKNOWLEDGEMENTS I

LIST OF FIGURES II

LIST OF TABLES III

CHAPTER I – INTRODUCTION 1

1.1 The significance of state-industry and capital-labor relations for inter-organizational networks 8 1.2 The significance of technology as well as competition and cooperation for inter-organizational networks 17 1.3 Inter-organizational networks as historical geographies of concrete cases 27 1.4 Structure of the dissertation 33

CHAPTER II – METHODOLOGY 39

2.1 Dialectical network analysis 39 2.2 The historization of inter-organizational networks in the Dutch paper and board industry based on secondary literature analysis 44 2.2.1 First level: Theorization based on four phases of capitalism 47 2.2.2 Second level: The politico-economic context of the Netherlands 51 2.2.3 Third level: The Dutch PBI throughout time 55 2.3 Supplementing the historization of inter-organizational networks in the Dutch paper and board industry with primary qualitative data 57 2.3.1 Gaining access to the field 59

2.3.2 Semi-structured interviews 63 2.3.3 Participatory unstructured observation 67 2.3.4 Analysis technique: Diffractive reading 69 2.4 Analyzing the most recent case of inter-organizational networks in the Dutch paper and board industry based on primary quantitative data 71 2.4.1 Description of the dataset 74 2.4.2 Analysis technique: Visualizing network brokerage 79 2.5 Concluding remarks 84

CHAPTER III – HISTORICIZING INTER- ORGANIZATIONAL NETWORKS OF THE DUTCH PAPER AND BOARD INDUSTRY (1580 – 1980) 85

3.1 The rise of Dutch capitalism: Networked capital (1580- 1815) 87 3.1.1 Technology: Early paper making in the Northern Lowlands 89 3.1.2 State-industry relations: Growing capital networks 92 3.1.3 Competition and cooperation: Overcoming competition through fire insurances 100 3.1.4 Labor-capital relations: Revolts under state monopoly capitalism 106 3.1.5 The denouement of Dutch capitalism: Economic devastation under political isolation 112 3.2 Dutch monarchic liberalism: Building Industria through networks (1815-1914) 115 3.2.1 State-industry relations: Rise of gentlemanly capitalists and the Dutch PBI 119 3.2.2 Technology: A new paper production process and the subsequent search for innovative fibers 124

3.2.3 Competition and cooperation: Highly industrialized paper and board industries 128 3.2.4 Labor-capital relations: Modern labor exploitation on the rise 139 3.2.5 The denouement of monarchic liberalism: Industria – unsuccessful in boosting international competitiveness 143 3.3 Fordism: Networks fostering concentration and corporatization (1914-1980) 146 3.3.1 Interim war period 1914-1945 148 3.3.2 State-industry relations: Consolidation in the Dutch PBI 153 3.3.3 Competition and cooperation: Cartels in the Dutch PBI 156 3.3.4 Technology: Innovative waste paper usage in the Dutch PBI 164 3.3.5 Labor-capital relations: The rise and fall of unions 166 3.3.6 The denouement of Fordism: When endless growth still seemed possible 171 3.4 Concluding remarks 173

CHAPTER IV – THE DUTCH PAPER AND BOARD INDUSTRY’S INTER-ORGANIZATIONAL NETWORKS DURING POST-FORDISM (1980 UNTIL NOW) 178

4.1 State-industry relations: Industrial policy during post- Fordism 185 4.1.1 The effects of deregulation, re-regulation, privatization and flexibilization on the Dutch PBI in the 1980s 186 4.1.2 The effect of transnationalization, financialization and deindustrialization on the Dutch PBI during the 1990s 193 4.2 Competition and cooperation: Inter-organizational networks substitute cartels 196

4.2.1 The establishment of the KCPK and its coevolution with the NMa 200 4.2.2 The privatization of the KCPK and the formation of Bumaga 204 4.2.3 Local and national cooperation in light of global competition 208 4.3 Technology: Worldwide rising scales and the search for circular economies 217 4.3.1 Circular economy or economic versus ecological sustainability 220 4.4 Labor-capital relations: New forms of precarity and the managerial middle-class 224 4.4.1 The decreasing importance of unions despite the re-production of precarious working conditions 225 4.4.2 The rise of the managerial middle-class 231 4.4.3 Racialized economies during post-Fordism 236 4.5 Concluding remarks 243

CHAPTER V – POWER IN THE CURRENT INTER- ORGANIZATIONAL NETWORK OF THE DUTCH PAPER AND BOARD INDUSTRY 250

5.1 The KCPK network’s evolution 252 5.2 Rising power asymmetry: A few brokers dominating the KCPK network 260 5.3 Transnational corporations as powerful core-brokers 272 5.4 Concluding remarks 286

CHAPTER VI - CONCLUSION 292

6.1 Findings 296 6.1.1 State-industry relations 297

6.1.2 Labor-capital relations 300 6.1.3 Competition and cooperation 303 6.1.4 Technology 305 6.2 Discussion of findings for the future of the industry 308 6.3 Contribution to management network research 311 6.3.1 Network governance research 312 6.3.2 Innovation, trust and performance research 315 6.3.3 Longitudinal network research 316 6.4 Reflections on this research and suggestions for future research 318 6.5 In retrospect 322

APPENDICES 323

Appendix 1: Guideline for Semi-structured interviews 323 Appendix 2: Memo for Interviewee 5 / 24.03.16 325 Appendix 3: Memo of Circular Economy conference - 03.02.16 331 Appendix 4: Memo of Science meets Industry conference - 02.02.16 339 Appendix 5: List of companies of the Dutch PBI (2011- 2018) 348

REFERENCES 349

SUMMARY 411

SAMENVATTING (SUMMARY IN DUTCH) 413

ABOUT THE AUTHOR 416

Acknowledgements

This work would have never seen the light of day without my co-supervisor, Angela Wigger. Without your fierce spirit, deeply supportive involvement and endless encouragement this work would have ended up unfinished in a drawer. Thank you for being a great role model to me and surely others for what it means to stay political within and beyond academia. I also want to thank Hans van Kranenburg for staying on board of this research project enthusiastically and supportively throughout the entire time. In addition, I want to grant thanks to the Hogeschool Arnhem en Nijmegen for co-financing this project. Thank you Saoradh and Daniel for proof-reading this lengthy piece and for your honest friendship. Thank you Tjerk for sticking around and having my back at the hardest of times during this process. Thank you, Elise, Louise and Leander for listening over and over again and for reminding me that there is more to life than doing a PhD. Thank you Bootsmann, for without you these past years would have not made sense. At last, I want to thank Simon, who surely carried a big part of this work. You always sustain a life of bliss and ardency, I am grateful to be part of.

List of figures

Figure 1 Estimated share of raw material in Dutch paper production in the end of the 19th century Figure 2 Number of paper mills in the Netherlands during the 19th century Figure 3 Paper mills in the Netherlands in 1848 and in 1903 Figure 4 Production of paper and board in tones in the Netherlands, 1921-1952 Figure 5 Cartel agreements in the Netherlands, selected industries, 1962-1980 Figure 6 Evolution of the projects initiated within the KCPK network Figure 7 Share of type of participants in newly initiated projects per period Figure 8 Activity of Dutch paper mills in network projects Figure 9 Betweenness centralization in the KCPK network per period Figure 10 Absolute number of organizations and projects in the core of the KCPK network per period Figure 11 The KCPK network in 2003-2004 and in 2005-2006 Figure 12 The KCPK network in 2007-2008 and in 2009-2010 Figure 13 The KCPK network in 2011-2012 and in 2013-2016

List of tables

Table 1 Secondary literature sources on the political economy of the Netherlands, 16th century until now Table 2 Description of interviews and interview participants Table 3 Descriptive statistics of the dataset Table 4 Dutch foreign trade in millions of Guilders per year Table 5 Comparing regions for paper production in 16th, 17th and 18th century Netherlands Table 6 Comparing regions for paper production in 19th and early 20th century Netherlands Table 7 Share of the Dutch paper and board industry in different types of cartel agreements, in percentages, 1962 and 1980 Table 8 Comparing regions for paper production in 20th century Netherlands Table 9 Normalized betweenness centrality scores for most dominant brokers in KCPK network per period Table 10 Organizational history of all DPBI brokers since 1998 Table 11 Core-periphery scores per period (only DPBI organizations)

iii

Chapter I – Introduction

The Dutch paper and board industry (PBI) is an integral part of Dutch industrial history since the early 16th century. Nonetheless, it is seldomly researched in academia and not often covered in the Dutch media. Throughout its existence, the Dutch PBI faced numerous challenges, the most recent being the increase in digitalization since the early 1990s, which hit the industry hard. Digitalization led to a stark reduction in demand for newspaper and printing paper. At the same time, growing foreign competition from rising, large-scale paper production countries such as China, further threatened the profitability of Dutch paper and board making (e.g. Berg and Lingqvist, 2017). Yet, as products from paper and board are still needed in diverse areas of everyday life, such as paper tissues, paper money, cardboard boxes for shipping goods, printing paper or simply paper bags at the grocery store, the Dutch PBI managed to survive until to date. This, in itself, can be seen as a success story. Having managed the pressures of digitalization and foreign competition, the Dutch PBI currently consists of seventeen paper companies, which own a total of eighteen paper mills across the Netherlands (see Appendix 5) (VNP, 2018a). The industry is divided into three branches: Eight companies contribute to the paper branch, six to the packaging branch and three to the hygiene paper branch (VNP, 2018a). Within the 1

Chapter I – Introduction production of paper, one distinguishes different paper grades or types of paper. Paper can be coated or uncoated, heavy or light and it can differ in fiber content and brightness (Papier en Karton, 2018). In a similar way, packaging board varies greatly in weight, width and content depending on its further use, for example as egg boxes, big packaging containers or lightweight tissue packaging paper (Papier en Karton, 2018). Today’s paper and board as well as the structure of the industry looks very different compared to the early paper making industries in the Netherlands; yet it is still the same industry that survived since the 16th century. The Dutch paper and board industry evolved under the state monopoly capitalism of the Seven United Provinces from 1588 until 1795. Commonly extenuated as the ‘Golden Age’, this phase describes 17th century Dutch wealth creation through colonial exploitation (Arrighi, 2010, p. 153). During this time, the Dutch PBI became internationally famous for its superior product quality. This superior quality was achieved through distinctive production methods and the disposability of raw materials to Dutch paper makers, including cloth, water and wind (Barret, Ormsby & Lang, 2016). Soon after industrialization took off in several European countries around 1780, which entailed the mechanization of paper production in Britain, Belgium, Germany and France, the main ingredient of paper, cloth, was replaced by wood fiber in 1840 (Bouwens,

Chapter I – Introduction

2012, p. 194). As the new raw material was not at the disposal of the Netherlands and paper producers continued to hold on to traditional paper making procedures, foreign competitors surpassed Dutch paper production in terms of output and profit (Bouwens, 2012, p. 194). So, with the increasing competition the dominance of Dutch paper in Europe started to decline. Left behind with non-competitive, niche-focused paper products, the Dutch PBI faced its first severe crisis in the second half of the 18th century. Ever since, the Dutch PBI has been a struggling industry, nonetheless surviving as a specialized, small-scale, and innovative sector focused on higher quality paper and board production rather than mass production. Comparable to other manufacturing industries in the Netherlands, the history of the Dutch PBI is marked by a decline in production sites and machines, yet an increase in terms of production output. In 1740, the Dutch PBI was comprised of roughly 150 paper mills in the region of Veluwe, a forest area in central Netherlands, and 40 paper mills in the region of Zaanstreek, an industrial area in North-Holland, producing a total of 3.750 tons of paper annually (Bouwens, 2004, p. 23, p. 29). Almost three centuries later in 2015, twenty-three paper mills produced a total of 2.643.000 tons of paper annually in the Netherlands (VNP, 2015). To illustrate the industry’s century- long tradition, its most recent challenges, as well as its success,

Chapter I – Introduction the story of Parenco, one of the twenty-three remaining paper mills, is telling. Parenco is located in Renkum, which lies in the area of the Veluwe – a well-established paper production area since the early 16th century. The paper mill of Parenco, as it exists today, dates back to 1912, and was built on the ground of a former paper mill (Smurfit Kappa, 2018). In 2018, Parenco counted around two-hundred-seventy employees (van Ammelrooy, 2018; van Bokkum, 2019). As a meaningful local employer in Renkum, a small municipality with roughly 9.000 residents, the mill shaped the region not only economically, but also culturally. It even has its own link on the township’s official website. In the section Inwoners (residents), somewhere between a link for the local elections and for making an appointment with the township’s administration, you find a link called ‘Parenco’, illustrated with a drone-shot of the industrial site embedded in green nature and next to the Lower Rhine, which demarcates the mill’s bond with the township as well as its strategic logistic placement (Gemeente Renkum, 2019). With digitalization on the rise over the past three decades, the demand for news- and graphic paper decreased steadily. As a result, one of Parenco’s two paper machines had to be shut down in 2009 (Dybevig & Langfjæran, 2012). Its foreign owner at that time, Norske Skog, a Norwegian pulp and paper corporation, decided against investments to rebuild the idle graphic paper machine into a

Chapter I – Introduction packaging paper machine, even though this could have successfully positioned Parenco in the growing packaging sector (van Bokkum, 2019). Instead, Norske Skog put Parenco up for sale. In 2012, the Western European equity firm H2, which is based in the Netherlands, bought the struggling mill for only fifteen million euros (Europäischer Wirtschaftsdienst GmbH, 2012; H2 Equity Partners, 2019a). The mill’s organizational structure was made ‘lean’ by slimming down the staff-base as well as investing 100 million Euros into rebuilding the idle paper machine after all (van Bokkum, 2019). Soon the yearly production output reached 356.000 tons of packaging paper and Parenco became profitable again (van Bokkum, 2019). As a result of this growth in production, H2 managed to sell Parenco to Smurfit Kappa, an Irish corporation and one of the largest manufacturers of paper and board worldwide, for thirty times the original investment value, namely 460 million euros, only five years after buying the paper mill (H2 Equity Partners, 2019b). Overall, Parenco’s story is a textbook example of a successful equity investment: A high return on investment for H2 equity partners, a lucrative paper mill for Smurfit Kappa and the continuation of a century-long craft in a small city dependent on its large industry. Yet, Parenco’s story is also an exception to the long struggling and gradually declining Dutch PBI. In fact, the recent transnationalization of ownership structures and the

Chapter I – Introduction role of venture capital in commodifying companies that are being bought and sold on financial markets in search of short- term profits has led to a rapid decline in number of paper mills over the past thirty years in the Netherlands (Bouwens, 2012, p. 199, p. 205). Despite efforts of the industry’s lobbying organ, the Koninklijke Vereniging van Nederlandse Papier- en Kartonfabrieken (VNP), to re-stabilize the industry through spurring on inter- organizational cooperation to create innovative investment outlets, issues of insolvency due to stagnating or ceasing markets or the threat of being shut down by the parent corporation for the sake of reducing market competition remain crucial challenges for the Dutch PBI’s survival. As said, the overall decline in number of paper mills has been a longer standing reality for the Dutch PBI. In light of the fact, that the industry managed to survive four centuries of capitalist development, albeit in more marginal form, one central question guides this research. How did the Dutch PBI manage to stand up to politico-economic changes, including competitive pressures, technological changes, shifting industrial policy landscapes and labor-related concerns, since its establishment in the late 16th century? When consulting recent publications in the field of management more generally and the fields of business administration, corporate strategy and public administration more specifically, one stumbles upon a widely acknowledged concept for explaining industrial or

Chapter I – Introduction organizational performance and, thus, more or less explicitly, survival: inter-organizational networks. It seems that inter- organizational networks play a significant role in the successful navigation of companies and entire industries to deal with competitive pressures in terms of technological innovation, direct market competition, resource scarcity and industrial policies (see for example: Bell, 2005; Giuliani, 2013; Zaheer & Bell, 2005). In the majority of management research, inter- organizational networks are defined as a form of cooperation between two or more agents, which is determined by the nature and meaning of their relationships (Popp, MacKean, Casebeer, Milward & Lindstrom, 2014, p. 93). Such literature understands companies as relational entities, embedded in complex systems of interactions with stakeholders and sees inter-organizational networks as an effective and up to date form to deal with manifold externalities, increasing a(n) company’s or industry’s performance and, thus, chance of survival (see for example: Cap et al., 2019; Delgado-Márquez, Hurtado-Torres, Pedauga & Cordón-Pozo, 2018; Hackney, Desouza & Loebbecke, 2005; Li, de Zubielqui & O’Connor, 2015; Wegner & Koetz, 2016). In the following paragraphs, I review a selection of management literature on inter-organizational networks with respect to its advancements for exploring industrial development over time as well as its shortcomings. To do so, I create a novel interdisciplinary link between management

Chapter I – Introduction network research and political economy research. Grounded in this literature review of assessing such phenomena from a political economy perspective, this dissertation traces four crucial dimensions of inter-organizational networks to safeguard industrial survival over time, namely state-industry relations, capital-labor relations, technology, and competition and cooperation.

1.1 The significance of state-industry and capital-labor relations for inter-organizational networks Network research within and beyond the management discipline is booming in recent decades (Borgatti & Foster, 2003, p. 991). Numerous scholarly debates have been held on the origins and development of network research within social sciences and more specifically within management research. Within the latter discipline this network focus is assumed to be rooted in the institutionalization of network research(ers) in the 1980s, namely the establishment of the network organization the International Network for Social Network Analysis (INSNA) as well as annual conferences such as Sunbelt and journals such as Social Networks (see for example: Borgatti, Brass & Halgin, 2014; Borgatti & Foster, 2003; Borgatti, Mehra, Brass & Labianca, 2009). Scholars, who are primarily concerned with

Chapter I – Introduction

(business) organization(s), debate networks as a theoretical lens by drawing on theory of networks and network theory (Borgatti & Foster, 2003; Borgatti & Halgin, 2011; Borgatti et al., 2009; Brass, Galaskiewicz, Greve & Tsai, 2004; Grandori & Soda, 1995; Kilduff & Brass, 2010; Soda, Usai & Zaheer, 2004). Whereas network theory is about network consequences, theory of networks concerns network antecedents (Borgatti & Halgin, 2011, p. 1168). Thus, network theory deals with the outcomes of network cooperation, for example how the performance of companies increases by participating in inter-organizational networks. The theory of networks, on the other hand, deals with the preconditions by means of which inter-organizational networks are founded, for example the need for costly innovation, which drives two or more companies to participate in an inter- organizational network. Both theories share a common ground, namely the underlying definition of networks as

[…] a set of actors connected by a set of ties. The actors (often called “nodes”) can be persons, teams, organizations, concepts, etc. Ties connect pairs of actors and can be directed (i.e., potentially one- directional, as in giving advice to someone) or undirected (as in being physically proximate) and can be dichotomous (present or absent, as in whether two people are friends or not) or valued (measured on a scale, as in strength of friendship). A set of ties of a

Chapter I – Introduction

given type (such as friendship ties) constitutes a binary social relation, and each relation defines a different network (e.g., the friendship network is distinct from the advice network, although empirically they might be correlated). (Borgatti & Foster, 2003, p. 992)

This definition is also the basis of two further, influential theories in the field, namely Granovetter’s (1973, 1983) strength of weak ties (SWT) theory and Burt’s (2005, 2009) structural holes (SH) theory. While SWT theory is about the formation of ties between homophile (similar in characteristics) nodes and the novelty of information shared through such ties, SH theory concerns the structural position of a given node in a network, which determines the node’s access to novel information. SWT theory is foremost employed by management scholars to understand knowledge sharing and trust formation within and between organizations (Hansen, 1999; Michelfelder & Kratzer, 2013). SH theory, on the other hand, is used to understand the innovation potential of companies, their performance levels and strategic cooperation more generally (Collins-Dogrul, 2012; Everett & Valente, 2016; Obstfeld, 2005; Spiro, Acton & Butts, 2013). In addition, management scholars argue that the more central an actor is positioned, the more unique and rich information can flow through the central actor, making them more confident in task fulfilments as well as enabling them to pursue their goals more effectively (e.g. Chunlei, Rodan, Fruin

Chapter I – Introduction

& Xiaoyan, 2014; Granovetter, 1985; Uzzi, 1997; Vasudeva, Zaheer & Hernandez, 2013). Overall, management scholars working with network theory, theory of networks, SH or SWT theory distinguish network research as either testing the effects of network structure upon individual or organizational level outcomes or as testing the relationship between non-network variables and their effect on network structural outcomes (Borgatti & Halgin, 2011). Most of this management network research is empirically grounded and explores the interdependencies between inter-organizational networks and their surroundings. Hereby, the research foremost offers insights into the correlative relations between structural network variables and non-network variables (Ahuja, 2000; Baum, McEvily & Rowley, 2012; Burt, 2015; Krackhardt, Nohria & Eccles, 2003; Lazega, Mounier, Snijders & Tubaro, 2012; Lee, Park, Yoon & Park, 2010; Soda, Usai & Zaheer, 2004; Stam, 2010; van Liere, Koppius & Vervest, 2008). The empirical results are in turn utilized within conceptual studies to advance network theory and theory of networks by discussing concepts such as network evolution, network embeddedness and different ontological forms of networks, ultimately referring to a general change in various academic disciplines away from a static, atomistic point of view to a dynamic, relational one (Borgatti et al., 2014).

Chapter I – Introduction

Within this stream of research one can find a number of studies, which point to the relevancy of embeddedness of inter- organizational networks, thus to look beyond the business-level perspective by accounting for the social structure, stakeholder influences and larger market developments (see for example: Granovetter, 1985; Podolny, 2001; Rowley, 1997). This research commonly focusses on the institutional and structural embeddedness of inter-organizational network relations within wider sets of network relations (Hagedoorn & Frankort, 2008; Hsueh, Lin & Li, 2010; Huang & Provan, 2007; Johannisson, Ramírez-Pasillas & Karlsson, 2002; Lin, Fang, Fang & Tsai, 2009; Simsek, Lubatkin & Floyd, 2003; Thune, 2007, Weigl, Hartmann, Jahns & Darkow, 2008). In other words, the majority of this research understands inter-organizational networks as consisting of relations (ties) between agents embedded in a structure of further relations (ties) between agents (e.g. Gnyawali & Madhavan, 2001). Even though embeddedness literature is rooted in the relational view of social reality, studies in this field rarely consider the politico-economic embeddedness of inter- organizational networks between business organizations (Emirbayer & Goodwin, 1994). Yet, taking the relational view on inter-organizational networks seriously, demands to indeed research them as relational entities embedded within a wider politico-economic context of agents and structures.

Chapter I – Introduction

Making a similar argument, Davies (2011) critiques the lack in “mainstream” management network literature to account for the politico-economic embeddedness of network relations (p.9). To him the problem lies with the underlying presumption of such research that “[n]etworks are ‘self-organizing’ and the state, now just one governance actor among many, can steer them only ‘indirectly’ and ‘imperfectly’” (Davies, 2011, p.14). In other words, mainstream management network literature propagates a democratization of the existing social structure by emphasizing the recent development and rising importance of network cooperation. Davies (2011) terms this presumption the “transformation thesis” (p.9). This thesis has not only invaded the sphere of more mainstream accounts on network research, but also the work of more critical management network scholars, who similarly propagate that network cooperation is the materialization of the dominance of capital over state power in post-Fordist capitalism (Davies, 2011, p. 63-64). Both groups view the establishment of network cooperation more generally and inter-organizational networks more specifically as emblematic of the current phase of capitalism, namely post- Fordism, instead of capitalist relations of production more generally. Drawing on Davies’ critique and in light of the historical development of the long struggling, yet surviving Dutch PBI, I propose to look beyond inter-organizational network relations

Chapter I – Introduction to understand their relevancy for the survival of the Dutch PBI. I argue that inter-organizational networks are historically contingent and, thus, embedded in the wider politico-economic structure of capitalism and its dominant agents. Capitalism rests on both the social organization of production, that is the exploitation of commodified labor by those owning the means of production for the accumulation of surplus value, as well as reproduction of the means for human subsistence (Camfield, 2014, p. 14ff.). Capitalist relations of production describe the economic and social order we live in, namely “the accumulation and competition of capitals” (Banaji, 2010, p. 41). In turn, these social relations of (re-) production constitute social relations of power within capitalist societies. To understand inter-organizational networks as embedded in the wider politico-economic structure of capitalism, necessitates the acknowledgement of the relation between industry and state. Yet, in the majority of management network research the role of the state is chronically underestimated and needs to be taken much more seriously. In fact, one cannot think industry without the capitalist state, and the capitalist state without industry as their relationship runs deep in capitalism. In other words, in capitalism the state is always a capitalist state. Each capitalist phase is demarcated by a changing institutional setup of the state, which always reproduces capitalist relations of production (Poulantzas, 2000,

Chapter I – Introduction p.126). Each of these phases is heralded by specific “constellation[s] of legal, administrative and coercive state apparatuses to both legitimize and shield themselves from political and social contestation” (Bruff & Tansel, 2018, p. 7). Thus, research on inter-organizational networks has to consider the particular spatial-temporal relation between state and capitalist class fractions at different points in time. In contrast to the postulation of the transformation thesis as followed by mainstream as well as critical management network researchers, networks combine the hegemonic ambitions of the political, administrative and capitalist class fractions throughout all phases of capitalism (cf. Davies, 2011, p. 14). Based on this assessment, I argue that inter-organizational networks are state-industry projects, which involve multiple agents including the state in order to sustain national industries. Additionally, the state is “[…] an instrument of class domination”, “[…] an historically determined form of the organization of domination […]” (Hirsch, 1978, p. 57; Wigger & Buch-Hansen, 2013, p. 615). This said, the state mediates the conflicts between different capital fractions, while labor and social struggle are subjugated within these (Poulantzas, 2000, p. 125). Thus, one can also not think capitalist relations of production without class relations. As state institutions are agents in their own right, changes in the social structure due to condensed class conflicts do not directly lead to changing

Chapter I – Introduction institutional structures. Consequently, in times of increased class conflicts, the state relies not only on active or passive consent, but exerts coercion (Harvey, 2003, p. 36ff.). In essence, the state’s institutional setup conceals who is the dominating class(es) and who the dominated classes, due to framing itself as being representative of ‘the people’. Many Marxists have pointed to the antagonism between capital and labor as constitutive of capitalist social relations. Convincingly, Camfield (2014, 2017) breaks with the idea that class is the only constitutive dimension of the social relations of (re-) production, instead pointing out how gender, race, nation and (settler) colonialism simultaneously determine social relations of (re-) production. In fact, political and material hierarchies in terms of gender, race, and class are hidden behind the concept of a democratic state, which in tendency universalizes dominant capitalist interests as the interests of all. To conclude, both state-industry and capital-labor relations are essential to the formation and success of inter- organizational networks as means of industrial survival. Thus, to gain insight into inter-organizational networks within certain industries, an analysis of the changing nature of state-industry as well as capital-labor relations is indispensable. Since labor- capital relations do not only span the inter-organizational networks of capitalists, but also of labor unions and movements, as well as their intersections, the inclusion of literature on Dutch

Chapter I – Introduction colonialism (Brandon, 2011, 2015; Sutton, 2015; Wels, 1982), (radical) Dutch workers movements (van Daele, 2013; Visscher, 1939), and racism in the Netherlands (Wekker, 2016) is crucial for a thorough analyses of inter-organizational networks in the Dutch PBI throughout its historical existence in capitalism. The historical contingency and the temporal-spatial boundedness of inter-organizational networks, which never evolve and exist in isolation of their politico-economic context, asks for developing new avenues in management network research, drawing on the dimensions of state-industry and labor-capital relations as established in the field of political economy.

1.2 The significance of technology as well as competition and cooperation for inter- organizational networks According to a well-established review paper by Borgatti and Foster (2003), management network research can be subsumed into different themes, namely social capital, embeddedness, network organizations and organizational networks, board interlocks, joint ventures and inter-firm alliances, knowledge management, social cognition and group processes. To gain insights into the performance and survival of firms and entire industries over time, especially the stream on inter-firm alliances is of importance (Street & Cameron, 2007). Within alliance

Chapter I – Introduction research scholars explore why organizations join inter- organizational networks and how these networks increase the organization’s performance level (Borgatti & Foster, 2003, p. 997). In fact, the need for innovation and the possibility for open innovation are often researched as the main driver and outcome of inter-organizational network cooperation within alliance research (Chesbrough, 2003; Lee et al., 2010; Rothaermel & Hess, 2007). In other words, technological innovation is seen as a reason for organizations to start cooperating in a network, but also as its outcome. An important point made in alliance research is the possibility of increasing technological innovation within and beyond single firms in order to boost the respective firm’s or entire industry’s performance and thus survival (Ozman, 2009; Phelps, 2010; Powell, Koput & Smith-Doerr, 1996; Sammarra & Biggiero, 2008, Vanhaverbeke & Cloodt, 2006). Here, technological innovation is defined as a knowledge- intensive activity, building upon the identification, acquisition, assimilation, and combination of knowledge, allowing companies to enter new markets or erupt old ones, remain competitive and perform well (Cohen & Levinthal, 1990; Lee et al., 2010; Rosenkopf & Nerkar, 2001; Sorenson, Rivkin & Fleming, 2006). Drawing on the stream of alliance research within the wider field of management network research, it is established that technology more generally and technological innovation

Chapter I – Introduction more specifically are crucial to the survival of industries and often realized through inter-organizational network cooperation. Yet, I argue once more to look beyond the sole network perspective, instead understanding them as embedded in the wider politico-economic context. This view necessitates to not only understand technological innovation, for example process or product innovation, as having a direct effect on performance, production processes, working conditions, consumer demands and consumption levels, but that technology more generally and technological innovation more specifically are an interactive element within a wider set of inter-organizational network dimensions (cf. Williams & Edge, 1996, p. 867). Thus, to understand technology as the third meaningful dimension of inter-organizational networks during capitalism means to “allow the socio-economic patterns embedded in both the content of technologies and the processes of innovation to be exposed and analyzed” (Williams & Edge, 1996, p. 866). In capitalism, these socio-economic patterns describe the ongoing competition of capitalists for profit maximization on the basis of introducing ever more powerful and productive technology (Davis, Hirschl & Stack, 1997, p.4). Since “technology is produced amidst [these] conflicting social relations”, it needs to be understood as both a material artefact as well as a discursive practice, being shaped by and itself shaping politico-economic realities (Davis, Hirschl & Stack, 1997, p. 6; Fisher, 2010, p. 231). Thus,

Chapter I – Introduction technology constitutes the third meaningful dimension of inter- organizational networks as it is both an incentive for and outcome of inter-organizational networks, deeply embedded within the context of politico-economic restructurings, including competition and cooperation practices, labor composition and exploitation, public funding opportunities and industrial policies. In alignment with the centrality of the theme of technological innovation within alliance research, inter- organizational networks are assumed to be a breeding ground for open innovation, in particular. Scholars of this stream corroborate that innovation pursued and reached through network cooperation is much more open and innovative than through other forms of organization (Ahuja & Morris Lampert, 2001; Capaldo, 2007; Garcia & Calantone, 2002; Meeus, Oerlemans & Kenis, 2008; Obstfeld, 2005; Pittaway, Robertson, Munir, Denyer & Neely, 2004; Quintana-García & Benavides- Velasco, 2004; Schilling & Phelps, 2007; Soda & Bizzi, 2012). More specifically, inter-organizational networks enable organizations to combine internal and external resources, in order to “accelerate their internal innovation, and expand the markets for external use of innovation, respectively” (Chesbrough, 2006, p. 1). In fact, within alliance research open innovation is particularly linked to inter-organizational network cooperation by drawing on insights from transaction cost

Chapter I – Introduction economics and inquiring the correlation between companies’ network positions and performance level as well as innovation capacity (Ahuja, 2000; Newell & Swan, 2000; Powell, Koput & Smith-Doerr, 1996). The assumptions on open innovation made in alliance literature are primarily rooted in Powell’s (2003) differentiation of market, hierarchy and network. Here, networks are defined as “distinctive form(s) of coordinating economic activity”, depicting cooperative and heterarchic properties, which allow innovation to flourish (Powell, 2003, p. 301). Yet, these assumptions have been challenged by scholars predominantly located within the field of public administration. These contest Powell’s assumption that hierarchy is not a property of or incompatible with inter-organizational network cooperation (Jones, Hesterly & Borgatti, 1997; Klijn & Koppenjan, 2012; Powell, 2003; Provan & Kenis, 2008; Raab & Kenis, 2009; Torfing, 2005). In fact, Provan & Kenis (2009) argue, that inter- organizational networks can in fact exhibit governance modes, which resemble hierarchy or market structures. Therefore, these scholars do not only define networks as a distinct form of governance, but argue that inter-organizational networks themselves demand a form of governance. This perspective offers a new understanding of inter-organizational networks as both, a unique form of governance as well as a form of social

Chapter I – Introduction cooperation that requires governance (Beach & Keast, 2010; Dhanaraj & Parkhe, 2006; Kenis & Provan, 2006). To some extent, this critique has been picked up and acknowledged in business-related studies on inter-organizational networks – namely in the field of trust research (Hagedoorn, Cloodt & van Kranenburg, 2005; van Kranenburg & Ziggers, 2013). Scholars in this field indicate the importance of trust as a coordination principle, especially in decentralized (market) governed inter-organizational networks (Provan & Kenis, 2008). Trust, defined as “one party’s belief that its requirements will be fulfilled through future actions undertaken by the other party”, is said to diminish opportunistic behavior in inter-organizational cooperation (Zaheer & Venkatraman, 1995, p. 378, italics in original). Additionally, trust is assumed to be essential for knowledge sharing and, therefore, innovation potential (Chow & Chan, 2008). Also trust is an especially popular theme within alliance research. Based on transaction cost theory, scholars identify trust as a valuable source of competitive advantage as well as fundamental to the effective operation of inter- organizational networks (Ariño, de la Torre & Ring, 2005; Couchman & Fulop, 2009; Gudmundsson, Lechner & van Kranenburg, 2012; Hagedoorn, van Kranenburg & Osborn, 2003; Newell & Swan, 2000; Parkhe, 1998, 1999; Ryan, Giblin & Walshe, 2004).

Chapter I – Introduction

Nooteboom and Stam (2008) state that trust begins “where control ends, or control begins where trust ends”, hence that “trust and control are both complements and substitutes” (p. 202-203). This assumption aligns with Provan and Kenis’ (2008) identification of trust as explanatory for the establishment and sufficiency of a specific governance mode over others in inter-organizational networks (p. 237). In addition to viewing trust as the source or basis of inter-organizational cooperation, management scholars also view trust as its outcome (Grandori & Soda, 1995; Johanson & Mattsson, 1987). In correspondence, trust is seen to be “gradually develop[ing] as companies continue to partner” (Hagedoorn, Roijakkers & van Kranenburg, 2008, p. 84). McEvily, Perrone & Zaheer (2003) argue that “by influencing the status and reputation of certain actors, trust affects their positions within a social network and changes the shape and structure of the network itself” in order to emphasize the importance of viewing trust as an outcome of both, structural as well as agency-based antecedents (p. 93). In essence, management network scholars agree on the pivotal role of trust for the formation of inter-organizational networks, the performance of network cooperation, for example in terms of more efficient supply chain management, and the achievement of innovation objectives therein (Provan & Kenis, 2008, p. 238; Van de Ven & Ring, 2006, p. 145).

Chapter I – Introduction

Yet, when acknowledging the importance of trust to negotiate individual and common interests in inter- organizational networks, and when taking the critique, that inter- organizational networks are in need of governance seriously, one necessarily has to question the assumption that networks are a heterarchic form of organizing. Building forth on my first argument, namely that inter-organizational networks are historically contingent, current forms of inter-organizational networks represent a change in institutional structure not in social structure. This second argument draws on the distinction between the institutional structure of capitalist society and its underlying social structure (Davies, 2011, p. 131). The conflation of both is often utilized as a proof for a new, consensual, interdependent, shared-power era in first-wave industrialized countries as represented in research drawing on the transformation thesis (Davies, 2011, p. 9). Actually, the assumed heterarchical nature of inter-organizational networks, meaning that their members are equal in terms of power distribution, remains a utopia in a social structure that is grounded in capitalist relations of production. Inter-organizational networks in no way add up to a non-capitalist social structure, but instead are eroded by it. "[…] Networks cannot be conflated with capitalism, but nor do they exist outside it”; inter-organizational networks are embedded in capitalist relations of production and are, thus, not heterarchic (Davies, 2012, p. 373).

Chapter I – Introduction

To a certain extent, the non-heterarchic element of inter- organizational networks has been picked up by alliance research on competition. Both competition and cooperation are discussed as rudimentary forces of network alliances and, thus, inter-organizational networks within alliance research. A vast amount of alliance literature has focused on either reasoning that inter-organizational networks yield competitive advantages for firms or that these alliances are built on mutual cooperation (see for example: Gulati, Nohria & Zaheer, 2000; Rutten, Dorée & Halman, 2009). Only recently a niche developed within alliance literature, which focuses on the coexistence of competition and cooperation in inter-organizational networks, also called “coopetition” (Bengtsson & Kock, 2000; Dagnino & Padula, 2009; Peng & Bourne, 2009; Ritala & Ellonen, 2010). Coopetition describes the simultaneous existence of competitive and cooperative interactions in organizational settings. Thus, scholars employing the concept of coopetition, criticize the assumed dichotomy between cooperation and competition as well as establish a framework for grasping the complex reality of both forces co-existing within, for example, inter-organizational networks (cf. Dagnino & Padula, 2009). While raising awareness for the lack of a theoretical foundation for the concept of coopetition, alliance research scholars do not incorporate the politico-economic context in which the dynamics of

Chapter I – Introduction competition and cooperation, much less coopetition, play out (Dagnino & Padula, 2009; Gast, Filser, Gundolf & Kraus, 2015). Due to the lack of considering capitalist relations of (re-) production for the dynamics of competition and cooperation as well as coopetition, management network research rarely accounts for “[…] predatory multinational corporations that routinely swallow competitors and partners alike”, ultimately leading to a “further concentration and centralization of economic power” within network(ed) relations (Davies, 2011, p. 83). Seeing inter-organizational networks as embedded in such hostile circumstances demands a “critical conception of interdependence, recognizing that firms are imprisoned by competitive structures from which they cannot escape short of quitting the game” (Davies, 2011, p. 83). Thus, I argue that since inter-organizational networks exist within capitalist relations of production, in which cooperation and competition are interdependent forces, both these dimensions are relevant to researching inter-organizational networks as means of industry survival. In capitalism, competition and cooperation are two sides of the same coin, in so far as exchange-value is privileged in the capitalist mode of production over use-value, in turn making inter-organizational cooperation foremost an effort to decrease competition (e.g. Boaz, 2011). Since “competition disintegrates more than it unites, […] cooperation and mutual aid – the

Chapter I – Introduction antithesis to competition – are marginalized as organizing principles” (Wigger & Buch-Hansen, 2013, p. 608). In other words, cooperation always exists in a tensional relation to competition as capitalist accumulation regimes are anchored in competition to (re-) produce surplus value. As a result, inter- organizational networks take on new forms of institutionalized power-play between various capitalist class fractions throughout time. These class fractions compete with each other, while at the same time aligning their common interests to maintain the capitalist system. Consequently, the imbalance of configurations of inter-organizational network agents varies over time. They can exhibit forms of consensus and power-equality between agents, but this is not the norm. Thus, the fourth dimension meaningful to inter-organizational networks are the different forms of competition and cooperation, which dominate during different phases of capitalism.

1.3 Inter-organizational networks as historical geographies of concrete cases Social network analysis (SNA) is the most prominent method to research inter-organizational networks in management studies based on quantitative as well as qualitative data. The definition of networks as a set of nodes connected by a set of ties serves as a basis for the majority of social network analysis in

Chapter I – Introduction management research. Since studies of this field privilege statistical inferences and predictions over other methods for analyzing network cooperation “much of the methods-oriented and applied SNA research is implicitly more in tune with – for lack of a better word – positivism” (Buch-Hansen, 2014, p. 308). In fact, common SNA measures range from basic ones, like network density (the actual number of realized ties between nodes in relation to the highest potential number of ties in the network) and degree centrality (the number of ties each node has in the network), to quite sophisticated ones. The h-edge- cycle-A, for example, allows to measure the “interaction effect between network closure represented by the four cycle and network activity represented by the degree of the hub” or more simply, a certain form of brokerage in two-mode networks1 (Wang, Pattison & Robins, 2013, p. 216). Brokerage measures are generally more complex than centrality measures as they do not only consider the realized ties of a certain node With other nodes, but also the overall structure of the network in order to retrieve the relational network position of the node. For example, nodes can exhibit the same degree centrality, but a different betweenness centrality, as one of the nodes is connected to more unconnected others in the network than the

1 Two-mode networks are networks, in which nodes are dichotomous and connected through associative ties. In other words, actors and events as well as their associative ties constitute a given network. 28

Chapter I – Introduction other node. Consequently, scholars argue that knowledge can be withheld or controlled by network brokers, hence suggesting a certain form of power associated with brokerage network positions (Everett & Valente, 2016). In the field of business administration, the wide range of centrality measures is most commonly employed in research on innovation potential, company or team performance, or network outcomes. Based on the argument that the politico-economic context matters to a thorough understanding of inter- organizational networks, one can assume that networks change over time just like their context does. At first glance, SNA could serve as a viable route for researching inter-organizational networks as means of industrial survival over time. In fact, the often-cross-sectional designs of network research have been critiqued by scholars, who emphasize the importance of understanding network evolution in relation to network outcomes (Brass et al., 2004; Demirkan, Deeds & Demirkan, 2013; Doreian & Stokman, 1997; Snijders & Doreian, 2010, 2012). The core argument of these scholars is that network benefits are of temporal nature and that agency must be understood as an enduring action of actors modifying the network structure. To understand network outcomes from an evolutionary perspective, for example industrial survival, empirical research on the interrelation of agency and structure is pivotal (Gulati & Srivastava, 2014). In point of fact, “some

Chapter I – Introduction deliberate network modifying actions by network actors in the present may have consequences for network structure later. As a consequence, recognizing the impact of such agency on network structure is critical for appropriate causal inference” (Ahuja, Soda & Zaheer, 2012, p. 435). In a similar vein, authors argue that network change is due to internal and external pressures exerted upon actors through the network structure they find themselves in, also termed structural inertia (Emirbayer & Goodwin, 1994; Gulati & Gargiulo, 1999; Hannan & Freeman, 1984). In contrast to cross-sectional research designs, longitudinal social network research designs are defined to be more capable of explaining relational impacts on network outcomes through focusing on how and why inter- organizational networks develop and what kind of consequences these developments have for the corresponding organizations (Ahuja et al., 2012, p. 434). Notwithstanding, network evolution research is insufficiently assessed in management studies (Emirbayer & Goodwin, 1994, 1998). Network evolution research co-evolved alongside particular statistical advances, namely Simulation Investigation for Empirical Network Analysis (SIENA), a stochastic actor-oriented model for longitudinal network data, and relational event modelling (REM). As a result, network evolution research in management does not often account for the complexity of inter-organizational networks,

Chapter I – Introduction operationalizing variables in such a simplified way that crucial information for actually being able to draw meaningful inferences is left out (Parkhe, Wasserman & Ralston, 2006). The idea that networks cross “various types of borders (territorial, sectoral, organizational)” and that their “boundaries very often remain flexible and fluid” resonates with the definition of inter- organizational networks as historically contingent and temporally-spatially bounded phenomena (Raab & Kenis, 2009, p. 199). In fact, scholars argue that inquiring network evolution and outcomes on the whole network level helps to “explain the formation, development and functioning of effective networks, i.e. explore and test network theories” (Raab & Kenis, 2009, p. 205). As actors are often linked via various types of relationships, other scholars argue that even the whole network level remains a sole simplification of complex inter- organizational relationships (Amburgey, Al-Laham, Tzabbar & Aharonson, 2008; Bergenholtz & Waldstrøm, 2011; Brass et al., 2004; Mariotti & Delbridge, 2012; McEvily et al., 2003; Popp et al., 2014; van Duijn, van Busschbach & Snijders, 1999; Wiseman, Cuevas‐Rodríguez & Gomez‐Mejia, 2012). Overall, both cross-sectional and longitudinal research, which draws on whole network designs, remains limited to a pre-selection of nodes or ties. In other words, since information about all the relevant nodes and ties falling under this pre-selection often exceeds the means of a research project, the data collection

Chapter I – Introduction process is stopped at rather random points in time or, when lucky, once a saturation point of information is reached. Consequently, when taking the arguments for longitudinal and whole network research designs seriously, one needs to find new avenues for carrying out inter-organizational network research accordingly. When acknowledging that the existence of inter-organizational networks is not limited to the current phase of capitalism, but capitalist relations of production more generally, then one has to find appropriate methods to analyze the historically contingent embeddedness of inter- organizational networks in their politico-economic context to gain insight into their function(ing) in societies and industries alike. In fact, the historical contingency of inter-organizational networks suggests that they have existed as for(u)ms of cooperation for longer than our academic interest in them – also in the Dutch PBI. Against this backdrop, we need to find tools to be able to analyze them as historical geographies of concrete cases (Davies, 2011, p. 123). Overall, the above reviewed management network literature does not provide sufficient theoretical and methodological tools to account for the fact that inter- organizational networks exist within the context of capitalist relations of production more generally. In line with this critique, my research examines the historically contingent development of inter-organizational networks in the setting of the Dutch PBI.

Chapter I – Introduction

By contributing to a more critical approach towards studying inter-organizational networks in management research, my dissertation acknowledges inter-organizational networks (1) as historically contingent, (2) as always involving multiple agents including the state, and (3) as arenas of power asymmetry. By combining these insights, my dissertation aims to examine the role inter-organizational networks played, and will continue to play, for the survival of industries - in this case the Dutch PBI. Moreover, by identifying the four essential dimensions of inter- organizational networks, namely state-industry relations, labor- capital relations, technology, and cooperation and competition, my dissertation contributes to the theoretical and methodological advancement of studying inter-organizational networks in management research. In effect, my dissertation builds a unique, trans-disciplinary link between the fields of management and organization studies (MOS), critical management studies (CMS), historical network research (HNR), and critical political economy (CPE).

1.4 Structure of the dissertation In chapter one, I have introduced the Dutch paper and board industry as well as reviewed and built forth on the existent management literature on inter-organizational network research. Despite drawing on this field of study, I have also pointed to its

Chapter I – Introduction insufficiencies in thoroughly investigating inter-organizational networks as embedded in capitalist relations of production. In order to understand and decipher the roles inter-organizational networks play for the survival of the Dutch PBI throughout history, I have located my research approach within as well as beyond the management network research field. By having derived three characteristics of inter-organizational networks, I developed a theoretical framework, which sheds light on the importance of integrating four meaningful dimensions of inter- organizational networks into their analysis . In chapter two, I move on to develop the methodological basis for carrying out a so-called dialectical network analysis (DNA), guiding the reader through the different methods used for each of the empirical chapters. This is, first, the periodization of capitalism, based on secondary literature analysis and consisting of four phases of capitalism – the rise of Dutch capitalism (1580-1815), Dutch monarchic liberalism (1815-1914), Fordism (1914-1980), and post-Fordism (1980 until now). Secondly, I thoroughly explain the qualitative field work and analysis undertaken for enriching the information for the most current phase of capitalism, namely post-Fordism. Lastly, I guide the reader through the step-by-step process of gathering, visualizing and analyzing the quantitative network data used to investigate the most recent inter-organizational networks of the industry.

Chapter I – Introduction

In chapter three, I historicize the inter-organizational networks of the Dutch PBI during the first three phases of capitalism from 1580 until 1980, relying on histories written about the cooperative interaction between manifold agents within and beyond the Dutch PBI. I find that inter- organizational networks existed throughout all phases of capitalism within and beyond the Dutch PBI. Foremost serving the purpose of keeping the industry alive, changing relations of dominance amongst capitalist class fractions determined the overall direction, form and content of these inter-organizational networks, which contributed to the survival of the industry throughout all three phases. I find for all three phases that the state, itself also changing in terms of its statehood, played a crucial role in the negotiation of the power relations between class fractions. Also technological advancements on the national as well as international level in direct interaction with dynamics of competition and cooperation were crucial denominators of inter-organizational networks in all three phases. Similarly, the historization shows that labor-struggles were essential to the formation and maintenance of inter-organizational networks within the Dutch PBI as means of industrial survival. Chapter four is dedicated to analyzing the inter- organizational networks of the Dutch PBI during the most recent phase of capitalism, post-Fordism. Spanning from 1980 until now, I cover each of the four dimensions by drawing on

Chapter I – Introduction interview material, participatory observation, memos and internal industry documents, next to secondary literature. I find that the state has not retrenched from market intervention during post-Fordism, but that the forms of state-industry relations and their labels simply changed. Subsequently, also changes in the labor base due to post-Fordist state strategies greatly impacted the composition of inter-organizational networks within the Dutch PBI. Furthermore, the extent of competition determined cooperative interactions amongst companies of the Dutch PBI, all the while global competition was and continues to be dominated by the transnational capitalist class fraction. These developments supported the continuation of the profit paradigm, ultimately succumbing one of the major themes of inter-organizational networks, sustainability, to economic rather than ecological measures. Chapter four also provides the contextual basis for diving deeper into the post-Fordist materialization of inter-organizational networks in the Dutch PBI. In chapter five, I analyze the power dynamics within the current inter-organizational network of the Dutch PBI based on project data from 1989 until 2016 and network visualization techniques. The findings of this chapter tie in with the previous analyses of inter-organizational networks throughout different capitalist phases more generally and their materialization during post-Fordism more specifically. That is, the network resembles

Chapter I – Introduction an all too common form of inter-organizational networks in post-Fordism, serving as a non-heterarchic substitute for now illegalized cooperation practices amongst companies of the industry, such as cartels, as well as between companies and state agents, such as competition distorting (semi-) government installations. Additionally, the network is dominated by the transnational capitalist class fraction, which controls the form and content of the partially publicly funded innovation projects. At last, I conclude in chapter six that inter-organizational networks are neither new nor heterarchic. This conclusion – also the title of the dissertation – sums up the main three arguments of this research, namely that inter-organizational networks have existed throughout all four phases of capitalism, always involve multiple agents including the state, and are arenas of power asymmetry. The inter-organizational networks of the Dutch PBI exist(ed) as close cooperation between different paper companies as well as between those and state agents. Hence, they have always been and continue to be state-industry projects, negotiating the interests of dominant capitalist class fractions. The change in form and content of these inter-organizational networks corresponds with the different spatial-temporal contexts, in which the power relations between labor and capital materialize. Furthermore, the different degrees of power asymmetry these inter-organizational networks exhibit throughout different capitalist phases are also rooted in

Chapter I – Introduction technological innovation. Advancement such as the Hollander beater, a machine, which decomposed cloth at a much faster rate than the previously used hamerbak, changed the industrial landscape of the Netherlands fundamentally. Similarly, the introduction of steam-run paper machines drastically influenced the competitiveness of Dutch paper producers on an international scale. Accordingly, phases of increasing cooperation and competition determined the success of inter- organizational networks in securing the survival of the Dutch PBI throughout time. As a matter of fact, my analysis clearly shows that the inter-organizational networks at hand are neither new nor heterarchic. I end with reviewing these findings per dimension, by discussing the contribution of my research to practice as well as management network scholarship, and by reflecting critically on the research process as well as suggesting future research avenues. In retrospect I offer an abstract of the dissertation in the very end of the concluding chapter.

Chapter II – Methodology

In this chapter, I highlight the methodological approach used in my research, locating it within as well as beyond the management network literature by respectively outlining the methodological design and choices made for carrying out each of the three empirical research studies that follow. More precisely, after defining dialectical network analysis (DNA) as the higher-order method of this research and what dialectical in this context means, I guide the reader through each of the subordinate methods employed in this research. Including, first, a historization based on secondary literature analysis, second, semi-structured interviews and participatory observations, and third, a network visualization of quantitative data, I thoroughly discuss the what, why, how and sources of each of these methods.

2.1 Dialectical network analysis Before defining DNA, I would like to illuminate the underlying premises guiding this research. Following Alvesson & Deetz’ (2000) meaningful and thorough contribution to what it means to be “Doing Critical Management Research”, this dissertation draws on the understanding that “[…] in all research philosophical, theoretical and political assumptions and issues

Chapter II – Methodology are central” (p. 3). In turn, this necessitates an awareness and reflection on whose and which theories and values are reproduced through doing research (Alvesson & Deetz, 2000, p. 3). By situating my theoretical as well as methodological approaches within the critical realm of management research I postulate certain assumptions about realities and preclude others. Firstly, I speak of plural realities and not singular reality as this research follows the tenets of critical social philosophy. This school of thought is reflected in the primary ontological decision underlying this research, which “reject[s] the notion that there is a single, objective, real world” (Campbell & Wasco, 2000, p. 779). As a result, and secondly, the goal of this research becomes not the discovery of “the structure and function of [a] singular world”, but instead an understanding of “how we construct and interpret our realities” (Campbell & Wasco, 2000, p. 779). In other words, concepts and categories employed in this research, such as inter-organizational networks, are understood as “social constructions filled with history and political motives” and thus as material-discursive entities (Alvesson & Deetz, 2000, p. 5). By following these tenets of critical social philosophy, this research engages in critique rather than criticism. The bridging of more mainstream management network research theories with concepts from political economy and the subsequent theoretical embeddedness of inter-organizational networks as material reality and scientific discourse within the social realities of capitalist

Chapter II – Methodology relations of (re-) production allows for the actual subversion of taken for granted assumptions and truth claims about inter- organizational networks, offering alternatives for doing management network research in return (cf. Alvesson & Deetz, 2000, p. 8). By bringing together ‘the best of two worlds’, namely the “path-breaking materialist conception of history and powerful theory of the capitalist mode of production through the more expansive conceptions of social reality offered by anti-racist queer feminism”, this research, thus, follows a post-positivist epistemology (Camfield, 2014, p. 1). Situating my research approach within what Camfield (2014) terms “reconstructed historical materialism”, acknowledges that in classic Marxist accounts there “is a profound failure to comprehend patriarchal, racial, sexual and other forms of oppression that, along with class exploitation, constitute the interlocking matrices of social relations” (p.1, p. 9). The ontological and epistemological presumptions of doing critical management network research necessitate a methodology, which allows to research inter- organizational networks (1) as historically contingent, (2) as always involving multiple agents including the state, and (3) as arenas of power asymmetry. In sum, an empirical analysis of inter-organizational networks needs to account for the intersections of oppressive material-discursive realities.

Chapter II – Methodology

Dialectical network analysis offers such a critical methodology to gain insight into the roles and meaning of inter- organizational networks and their intersecting dimensions for the survival of the Dutch PBI throughout time. Benson (1977) describes DNA as a “critical-emancipatory stance towards organizational studies [and] active reconstruction of organizations” (p. 18). DNA, thus, highlights the importance of analyzing network relations contextually, focusing on contradictions and inconsistencies in their production as much as on possible regularities. In DNA the need to include meaningful contradictions between for example network agents, network structures and network outcomes, instead of focusing on sole correlations as done in SNA, is stressed. This reworking of contradictory elements in interaction with regularities is what makes DNA a dialectic methodology (cf. Alvesson & Deetz, 2000, p. 149; cf. Johnson & Duberley, 2000, p. 116-117). To emphasize the need for, but also enable the reworking of meaningful contradictions and regularities in the material- discursive unfolding of inter-organizational networks makes DNA a worthwhile contribution to critical management network research. In line herewith, DNA postulates that no two networks are the same. Treating them in a generalized way and searching for models, which represent them in a law-like fashion, leads to an exclusion of meaningful aspects, which do influence and constitute the network, its structure and its agents

Chapter II – Methodology in a dialectical fashion (Marsh & Smith, 2000, p.10). Furthermore, DNA is an inherently longitudinal method, which considers “how a network is produced, mechanisms through which it is maintained and its ongoing reproduction and reconstruction” (Davies, 2011, p. 126). Such a renewed focus allows grasping tendencies of heterarchic network structures to morph into hierarchy (or the other way around) as well as the surrounding politico-economic changes influencing such tendencies (Marsh & Smith, 2000, p.9). Even though DNA enables researchers to account for the capitalist social structure inter-organizational networks are embedded in, not a lot of studies have utilized this methodology on a practical level (Davies, 2011, p. 125 ff., Davies & Trounstine, 2009; Evans, 2001; Marsh & Smith, 2000, 2001). My research, thus, contributes to the advancement of DNA by suggesting (1) that the four dimensions of inter-organizational networks are essential to (the history of) the surviving Dutch PBI as embedded in different modes of capitalist (re-) production throughout timely and spatially fluid phases, and (2) that the contextual analysis of inter-organizational networks as historical geographies of concrete cases must include the convergence of multiple sources of data (qualitative and quantitative) as well as research methods such as, but not limited to secondary literature analysis, interviews, participatory observation, and network visualization techniques. Herewith, I

Chapter II – Methodology locate DNA within the practices of critical management research, allowing for an iterative exploration of theory, methodology and empirics. Iteratively going back and forth between theoretical and empirical input is the very actualization of the proposition that theory and praxis are always already entangled (Wigger & Horn, 2016, p. 50). The following sections allow a deeper insight into the material-discursive becoming of the Dutch PBI’s inter- organizational networks through a step-by-step explication of the research process. I first describe the method of historization based on secondary literature analysis as employed in chapter three. I then proceed with the specific methods of interviewing and participatory observation I used for chapter four, to finish with a thorough discussion of the quantitative dataset and its visualization as needed for chapter five.

2.2 The historization of inter-organizational networks in the Dutch paper and board industry based on secondary literature analysis Fundamental to any longitudinal analysis of networks in both mainstream and critical research is to understand present forms of networks as rooted in and in relation to their past

Chapter II – Methodology occurrences. While more mainstream management network research draws statistical inferences between datasets on past and present network cooperation, the critical approach of DNA guiding this research suggests to embed inter-organizational networks of the past and present within their politico-economic context. To do so, a historization of the respective inter- organizational networks and their four dimensions is indispensable. In line with the above discussed ontological and epistemological tenets, I do not follow the historical realist idea that history exists independently of the researcher as an “untold story” until discovered by the historian (Norman, 1991, p. 121), instead favoring a narrative construction of history “as a sequence of logically and chronologically related events organized by a coherent plot” (Rowlinson, Hassard & Decker, 2014, p. 254). This plot is the evolution of the Dutch PBI since its erection in around 1580 and its stories of success, survival and struggle in the form of the four inter-organizational network dimensions, state-industry relations, labor-capital relations, technology, and competition and cooperation. Overall, the historization was composed in multiple steps of creating a thorough timeline on three different levels of analysis, the level of the industry, the level of the politico-economic context of the Netherlands and the level of theorization. The amalgamation of all three levels into one plot and the subsequent theoretical

Chapter II – Methodology interpretation are indispensable for a thorough historical narrative (cf. Langley, 1999, p. 697). Historicizing organizations is an arduous endeavor in terms of access to reliable information and the richness of information available on the subject (Rowlinson, Hassard & Decker, 2014, p. 255). Generally, organization historians distinguish two paths of constructing historical narrations, either based on primary data collection mainly through archival research and sometimes through interviews or based on secondary data analysis, namely scientific literature written about the subject of interest (cf. Rowlinson, Hassard & Decker, 2014, p. 255). Due to time and cost limitations of this research project, I follow the second path of (re-) constructing the history of the Dutch PBI’s inter-organizational networks based on analyzing secondary literature published on the different dimensions meaningful to this research. In the following sections I will describe this secondary literature as divided into the three levels of analysis, namely the level of theorization, the level of the politico-economic context of the Netherlands, and the level of the Dutch PBI.

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2.2.1 First level: Theorization based on four phases of capitalism

The level of theorization is guided by a historical materialist conception of the changing capitalist relations of (re-) production. A critical analysis of network relations within capitalist societies has to account for the distinct, yet successive phases, which constitute capitalist history (Jessop, 1993, 2002; Jessop & Sum, 2006). More often referred to as modes of regulation, meaning the social conditions under which (re-) production is organized, these phases are the manner as well as the object of regulation (Hirsch, 1978, p.58; Jessop, 1994, p. 276). In essence, history succeeds through continuous discontinuity. In times of severe crisis, each mode of regulation struggles to serve as a supportive base to the respective accumulation regime. Retrospectively, one can identify meaningful conjunctures for the gradual succession of a particular mode of regulation by another one. Therefore, the historization of inter-organizational networks in the Dutch PBI is structured according to four phases of capitalism: The rise of Dutch capitalism (1580 – 1815), Dutch monarchic liberalism (1815 – 1914), Fordism (1914 – 1980), and post-Fordism (1980 – now). These four phases are fluid in their timely and spatial boundaries. Primarily, the periodization sketches out the specific Dutch and paper industrial context of this research and, hence,

Chapter II – Methodology remains non-generalizable (e.g. Duménil & Lévy, 2001). Nevertheless, it can serve as a viable reference point for further industry-specific research, which is dedicated to offer a critical account of network relations throughout capitalist history. The rise of capitalism in the Netherlands starts with the transition from the feudal to the capitalist mode of production, which was closely interlinked with the rise of Dutch colonial power during the 16th century and subsequent development of national, capital markets as well as secondary financial markets (Anievas & Nisancioglu, 2015, p. 180ff.). This co-called second rise of capitalism is rooted in the Dutch cycle of capital accumulation2, sketching out the ‘uniqueness’ of Dutch capitalism (1580 – 1815) (Arrighi, 2010; Brandon, 2011, 2015). This phase is furthermore paradigmatic of the non-linear transition from feudalism to capitalism, as feudally organized paper production in the Veluwe coexisted alongside more capitalistic organized paper production in the Zaanstreek (Federici, 2004, p. 62). Dutch monarchic liberalism (1815 – 1914) describes the second, distinct phase of capitalism in the Netherlands due to the re-instalment of a monarchic rule in 1813 (e.g. te Velde, 2008). Consequently, the emergence of the gentlemanly

2 In contrast to the first rise of capitalism, which is rooted in the Genoese strategy of externalizing protection costs for the accumulation of capital (Arrighi, 2010, p. 156). 48

Chapter II – Methodology capitalist class fraction in the first half of the 19th century and the rise of Dutch liberals in the second half of the 19th century have to be understood in direct relation to the Dutch monarchy under William I and II (Davids, 2006; Kuitenbrouwer & Schijf, 1998; Schrauwers, 2010). More specifically, concerning the Dutch PBI, this phase was marked by two major technological shifts in paper production, the shift from hand-made paper to mechanically produced paper and the change from cloth to cellulose fibers. With the beginning of the 19th century, Fordism (1914 – 1980) demarcates the third phase of Dutch capitalism, in which mass production technologies and Taylorist practices of organizing working procedures became predominant (Koch, 2004, p. 3-6). In the context of the Dutch PBI, this third phase is predominantly marked by the transition from virgin wood fiber to waste paper fiber in the 1950s. As the state took efforts to stimulate households’ paper recycling nation-wide, waste paper material became cheaply available in the Netherlands, relieving Dutch paper producers from costly imports of virgin wood pulp. During this time, the ‘visible hand’ of the state also played a major role in stimulating mergers, take-overs and the internationalization of Dutch industrial sectors (e.g. van Zanden, 2005). Furthermore, the ‘old boys network’, comprised of supervisory directors of big corporations and banks, started controlling the majority of Dutch industries (Horn &

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Vliegenthart, 2010, p. 63, p. 67). Ultimately, these network relations abetted the later dominance of the financial class fraction, which profited from the industrial declines and crises of the 1970s through private and public bank loans. Consequently, the following phase of Post-Fordism (1980 – now) is defined by the rise of finance-led accumulation patterns. In addition, the transnationalization of production and subsequent emergence of global value chains, deindustrialization, deregulation and neoliberal re-regulation, and labor market flexibilization all mark this fourth phase (e.g. Jessop, 1994; Jessop & Sum, 2006; Overbeek, Van Apeldoorn & Nölke, 2007). Often romanticized as a time of state retrenchment and free markets, post-Fordism actually involves new forms of state-led market intervention, for example in form of direct financial aid (e.g. Panitch & Konings, 2009). Concerning the Dutch PBI, the co-evolution of the industry’s network organization (KCPK) and the Netherlands Competition Authority (NMa) is a prime example for the development of post-Fordist cooperation between governmental authorities and companies of the Dutch PBI in a climate of hyper-competition.

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2.2.2 Second level: The politico-economic context of the Netherlands

On the second level of sketching a timeline to (re-) construct the history of the Dutch PBI’s inter-organizational networks I relied on literature covering at least one of the four dimensions of inter-organizational networks in the context of the Netherlands. Even though the four dimensions are clearly distinguishable, the majority of the literature overlaps multiple dimensions and thus cannot be assigned to only one of them. Nonetheless, as

Table 1 shows, the majority of secondary literature contributes to analyzing the first dimension of inter-organizational networks, separated into the themes of industrial policies, relations between different class fractions, changing statehood and colonialism. This literature to a great extent overlaps with the fourth dimension, cooperation and competition, as industrial policies and relations between class fractions greatly determine the conditions for cartels to sprout and cease as well as for corporatism to develop. Furthermore, a great host of secondary literature was analyzed concerning the second dimension of inter-organizational networks, divided into the themes of labor struggles, labor policies and unionism, working conditions, and racialized economies. Also here an overlap especially with literature on industrial policies and changing

Chapter II – Methodology statehood exists. Lastly, a denumerable number of secondary sources on technological innovations and industrial development as well as sustainability related issues comprises the reading for the third dimension of inter-organizational networks, namely technology. Overall, the information sourced from the secondary literature was assembled along a graphic timeline indicating meaningful events and periods, in direct relation to the timelines of the first and third level of analysis.

Table 1 Secondary literature sources on the political economy of the Netherlands, 16th century until now

State-industry relations Industrial Dankbaar & Velzing (2013), De Jong policies (2011); De Vries (2014), Delsen (2002); Hulsink & Schenk (1998); Koch (2004); Milieufocus (2008); Siraa (2016); Staatsblad (1997); Stellinga (2012), Van Damme (2006); Veenman, Liefferink & Arts (2009); Wolinetz (1989) Relations Adams (1994, 2005); Burrell (2002); between Davids (2006); De Jong, Jonker & Röell different class (2013); Everwijn (1912); Gelderblom & fractions Jonker (2004); Hirsch (1978); Horn & Vliegenthart (2010); Hulsink & Schenk (1998); Lachmann (2000); Schrauwers (2010, 2011a, 2011b); Siraa (2016); Sluyterman & Nieuwegracht (2004); Sluyterman & Wubs (2014), Van Zanden & Van Riel (2004) Changing Adams (1994); Brandon (2011, 2015); De statehood Vries & Van der Woude (1997); Federici

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(2004); Gibbs (1971); Hirsch (1978); Knippenberg & Pater (1990); Milanovi (2013); Te Velde (2008), Van Zanden (2005) Colonialism Anievas & Nisancioglu (2015); Arrighi (2010); Brandon (2011, 2015), De Jong (2011), De Vries & Van der Woude (1997); Gelderblom & Jonker (2004), Wels (1982)

Labor-capital relations Labor Becker (2001); Becker & Schwartz (2005); struggles, labor Bieler (2009); Bourrinet (2016); De Vries policies, and (2014); Dekker (1990); Delsen (2002); unionism Ebbinghaus & Visser (1999); Federici (2004); Hyma (1938); Kriesi (1989); Oorschot (2004); Remery, van Doorne- Huiskes & Schippers (2002); van Leeuwen (1997), Van Vree (2008); Visscher (1939) Working Industrial Safety & Hygiene News (ISHN) conditions (2017); Mokyr (1974); Nagel (1938) ; Oorschot (2004), Van Daele (2013); Visscher (1939) Racialized Prins (2002), Wekker (2001, 2016) economies

Technology Industrial Dankbaar & Velzing (2013); Davids development (2006); De Zeeuw (1978); Everwijn (1912); and Gibbs (1971); Mokyr (1974); Rijksoverheid technological (2014); Zeemeijer (2016) innovations Sustainability Ministerie van Infrastructuur en Milieu & Ministerie van Economische Zaken (2016); Nederland circulair! (2017)

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Competition and cooperation Cartels De Jong (1990); Drahos (1999, 2001), OECD (1999) Corporatism Becker (2005); De Jong, Jonker & Röell (2013); Horn & Vliegenthart (2010); Schrauwers (2011a, 2011b)

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2.2.3 Third level: The Dutch PBI throughout time

Research on the Dutch paper and board industry is rather scarce. Most of the contributions are concerned with technological innovation, ranging from sustainable production processes to environmentally friendly logistics (see for example: Laurijssen, Faaij & Worrell, 2012; van Veen-Groot, Nijkamp & van den Bergh, 2001). A few monographs and articles have been published on the subject of industrial cooperation for the sake of technological innovation within the industry (see for example: Bouwens, 2003, 2004, 2012; Chappin, 2008; Gibbs, 1971; Mokyr, 1974; Schot, 1998; van Lente, 1998; Veenman, Liefferink & Arts, 2009). The loss of the industry’s pioneering position in the 19th century and why it never returned to its old fame are themes, that are sometimes tangentially touched upon by these scholars. A great contribution in this regard has been the work of Bouwens (2003, 2004, 2012) and Bouwens & Dankers (2010, 2012, 2013, 2014, 2015). Their contributions focus on the industry’s endurance in the face of internationalization, cartelization and monopolization, tracing the industry’s increase in production output back to efficiency measures, mechanization and rising consumption, while at the same time acknowledging struggles caused by economic decline, market saturation and over-production. Cooperation and competition practices within the industry, the role of its lobbying organ the

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Koninklijke Vereniging van Nederlandse Papier- en Kartonfabrieken (VNP) since its erection in 1904, and the consequences of technological advancements within and beyond the Netherlands are themes addressed from a business-history perspective by these scholars. Especially, Bouwens’ (2004) book “Op papier gesteld: de geschiedenis van de Nederlandse papier- en kartonindustrie in de twintigste eeuw”, which is based on Bouwens’ PhD research on the same topic, takes a business- historian view at the evolution of the Dutch PBI from its early days in the 16th century until now. Even though it is by far the most comprehensive and detailed book on the Dutch PBI, the majority of the book is dedicated to the industry’s development from 1900 onwards. Additionally, the manifold contributions of Bouwens, and Bouwens and Dankers do not cover the existence and significance of inter-organizational networks for the survival of this particular industry. Thus, (re-) constructing a historical narrative about the inter-organizational networks of the Dutch PBI as embedded in the changing modes of regulation within capitalist development, enables new and meaningful insights in the politico-economic conditions of this industry’s survival over time. For this (re-) construction I also relied on the works of de Vries (1957), Kokke (1961), de Wit (1990), Voorn (1975), and Linssen (1988), which span fractional analyses of specific aspects concerning the Dutch PBI. These authors take a predominantly historical view, describing the evolution of specific companies,

Chapter II – Methodology the process of paper manufacturing or subsequent use of machines in meticulous detail.

2.3 Supplementing the historization of inter- organizational networks in the Dutch paper and board industry with primary qualitative data While the narrative history constructed in chapter three draws exclusively on information sourced from secondary literature analysis, the narrative history constructed in chapter four concerning the most recent phase of the Dutch PBI’s inter- organizational networks is substituted with information sourced from primary data based on semi-structured interviews and participatory observation. After explaining the setting, in which the qualitative data was collected, I will move on to discuss how I gained access to the field. In a final step, I thoroughly present the what, why, how and sources of both the methods used, namely semi-structured interviews and participatory observation. The collection of primary data (both qualitative and quantitative) was carried out in the setting of the Kenniscentrum Papier en Karton (KCPK), which is the knowledge and innovation hub of the Dutch PBI, established to carve out

Chapter II – Methodology sustainable future avenues for producing paper and board in the Netherlands. The KCPK, located in Arnhem and founded in 2004, is an independent daughter organization of the VNP, the industry’s lobby organization. Despite the Dutch PBI’s relatively small size compared to other industries in the Netherlands, the VNP was already founded in 1904 to represent the industry’s interests on the national level as well as nowadays on the European Union (EU) level towards the Confederation of European Paper Industries (CEPI). All Dutch paper and board companies are members of this lobby organization, which in the recent past outsourced certain functions to their independent daughter organizations, the KCPK as well as Human Factory (previously called VAPA). Human Factory was founded in 2014 and is based in Apeldoorn. Next to promoting the industry as a desirable employer for paper-interested job seekers, Human Factory specializes in the vocational education of young professionals at its own Middelbaar beroepsonderwijs School (secondary vocational education) (Human Factory, 2018). Additionally, Human Factory trains current employees of the Dutch PBI. The KCPK, on the other hand, builds the industry’s national knowledge infrastructure through generating, unlocking and spreading industry-relevant knowledge in three main areas: Fiber raw materials, technology and end-products (KCPK, 2018). Furthermore, the KCPK aims to build project- based as well as long-term inter-organizational network

Chapter II – Methodology cooperation within and beyond the Dutch PBI, in order to combat economic threats, such as raw material shortages or local shut-downs of papermills due to relocation strategies of transnational corporations. The KCPK’s aims illustrate the industry’s current survival techniques in a competitive, global market. As the KCPK states on their webpage, maintaining a broad network and organizing network activities with relevant organizations is one of their main premises in order to foster the industry’s performance and profitability (KCPK, 2018).

2.3.1 Gaining access to the field

The KCPK has been the anchor point of my research from the outset. Before I joined this research project, my at that time supervisor and promoter had established a relationship with the manager of the KCPK in order to cooperate together in a research project. As a result, the fieldwork started with a first meeting between employees of the KCPK and me in the first weeks of this research project. Since I lived only ten minutes biking away from the KCPK, I was able to engage with the employees on a regular basis for the first two years of the research. While visiting about once a month in the beginning, these visits were extended and peaked during a limited period at weekly visitations. On Mondays, I usually took part in the employees’ meeting, joined for lunch and sat at my assigned

Chapter II – Methodology desk, having had received my own login code for their server. I felt very welcomed by everyone in the team and throughout the three years of field work I was invited to summer and christmas parties, commonly held around a potluck and involving presents for every employee and me. Despite developing personal bonds, it was difficult for me to grasp the overall purpose of the KCPK and each employee’s daily routines. As they do project-based work, they often handle several projects every day. Additionally, these projects are rarely thematizing managerial topics, but mostly in-depth technological ones, dealing, for example, with chemical advances for treating fiber-materials or for altering the contamination of paper-based end products. My contact person at the KCPK worked for the fiber and raw material group; next to this group there are two more, one focusing on the theme of end-products and the other on the themes of production and energy. I was paired with a person from the fiber and raw material group as my research project was initially aimed at researching the performance of inter- organizational networks concerning (sustainable) innovation projects. Innovation as a theme is most prominent in the fiber and raw material group because this group is concerned with searching for alternative fibers to make Dutch paper and board production more sustainable in terms of competitiveness. Of course, all three groups are to a certain extent inter-linked in their efforts to increase the industry’s competitiveness through

Chapter II – Methodology innovation as, for example, the production and energy group is interested in re-using waste heat from the production process, which in turn is linked to the compounds of the product itself, hence its raw material. From its three-themed structure the KCPK derives a somewhat diverse constellation of employees concerning their educational backgrounds. The vast majority of the employees, always two to four allocated per themed group, are graduates or postgraduates in, for example, environmental engineering, sustainable development, civil engineering or technology and design related courses. They carry diverse national backgrounds, mostly coming from European countries, such as Poland, Greece, Spain or Turkey. What struck me as interesting is that the KCPK despite its three-themed structure depicts a certain organizational hierarchy. Even though the office structure was quite non- hierarchical in terms of shared office space and no visible differences in the office material (desk, chair, laptop) of every employee, the director of the KCPK and one of his long-time colleagues carry much more authority within the KCPK than the other, much younger employees from mostly non-Dutch backgrounds. Both these managers have been working in the Dutch PBI for the majority of their careers. The KCPK’s director was formerly employed by the Nederlandse Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek (TNO - Netherlands Organization for Applied Scientific Research) working on topics

Chapter II – Methodology concerned with the Dutch PBI. In 1998 he became the director of the newly founded KCPK. His long-time colleague, on the other hand, worked as an engineer on the production floor of several different paper mills until, in 1998, he was offered his current position at the KCPK as project coordinator. Both these managers’ insights differ substantially notwithstanding their decade-long careers in the Dutch PBI. Additionally, both their experiences are quite different to those of the younger employees, who often come straight from university, having had no prior experiences in the paper industry whatsoever. These differences could possibly serve as a stimulant for the (in)visible hierarchy of the KCPK. I, nevertheless, felt comfortable and welcomed every time I entered the KCPK offices. I mention this again because it should not be taken for granted. The fact that the younger employees and me took interest in each other’s lives, sharing stories about our hobbies, weekend activities and personal circumstances was of utmost importance to me. Coincidentally, a good friend of my best friend started working at the KCPK around the same time my research project started, too. By engaging with the employees of the KCPK not just on a professional level, but much more so on a personal one, I was able to look beyond the research project. Rather than meeting these people as ‘research subjects’ social science courses on

Chapter II – Methodology methodology trained me to see them as, I met them as companions.

2.3.2 Semi-structured interviews

In order to understand the role inter-organizational networks play for the survival of the Dutch PBI during its most recent phase of post-Fordism, I conducted semi-structured interviews with a total of seven interviewees (see Table 2). In both the table and the entire text, the interviewees are anonymized as the information disclosed by them is confidential. The allocation of information to a specific interviewee could result in negative repercussions for that person’s occupational integrity and career due to the respective company’s obligation of secrecy. For this reason, the interviewees listed in Table 2 are not labelled and cannot be traced back to the corresponding citations and references made in the text. Overall, I interviewed four managers from three different Dutch paper mills; one manager of a paper mill owned by a transnational corporation and three managers of two family owned paper mills, one being rather large scale also categorizing as a TNC and the other categorizing more as a small and medium-sized enterprise (SME). All of the interviewed managers as well as two of the three respondents of the KCPK look back on decades of working in the paper business more generally and the Dutch PBI more specifically.

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All interviews, except one, which took place rather spontaneously, were audio-recorded. On the non-recorded interview, I took field notes right afterwards, cross-checking the notes once more with the respondent at a later point in time (see Appendix 2).

Table 2 Description of interviews and interview participants

Working Length of experience Organization Position the in the interview industry Interviewee KCPK Employee Three years 3 hours (2 interviews) Interviewee KCPK Project Over twenty 2.5 hours (2 Manager years interviews) Interviewee TNC Sustainability Over fifty 1.5 hours Director years Interviewee Family-owned Managing unknown 0.5 hours SME Director Interviewee KCPK Managing Over thirty 2 hours Director years Interviewee Family-owned Operations About ten 2 hours (+ 2 TNC and years hour tour of Production the mill) Manager Interviewee Family-owned Managing About thirty 2 hours TNC Director years

Concerning the establishment of the interview contacts, I mostly relied on being recommended to the respondents by my contact person at the KCPK. Nonetheless, one interview contact developed a little differently than usual in research projects. For my summer holiday in 2016, I booked a lift via a known website to go from the Netherlands to Prague by car. Coincidentally, it turned out during the car ride that the driver is 64

Chapter II – Methodology an engineer at one of the Dutch paper mills, happy to get me in touch with his superiors for an interview and visitation of the mill. Until then I had struggled to convince managers from different paper mills to join an interview with me as my research had no direct, hands-on output for them, but would cost them time and effort. At least, these were the unsaid reasons I assumed had prevented contact beyond e-mails and small-talks at momentary encounters. Yet, through this ‘lifting’ coincidence I was forwarded to two managers, who invested around four hours of their time to show me around their paper mill and talk to me openly about their daily practices and cooperative efforts. By pointing to this coincidence, which took place during my field work, it becomes clear that research more often than not relies on making personal connections rather than entering a field as a scientist to work your way through interviewing participants and making observations. As far as the interview structure is concerned, I followed a semi-structured set-up, in order to leave space for aspects the interviewees felt were worthwhile to share (see Appendix 1). After introducing my research, I followed up with some biographical questions for the interviewees to explain their fields of expertise, their career within the national and international context of paper making and their ligation to the specific mill they work for during the time of the interview. As far as I can tell from the biographical information conveyed to me, the

Chapter II – Methodology managers I interviewed share rather similar career-paths. As studied engineers, they move(d) from paper mill to paper mill across the globe to work their way up the corporate ladder. These managers all come from Northern European countries, are male and between fifty and seventy years old, despite one junior manager, who was around thirty-five years old at the time of the interview. In case interviewees would mention networking efforts, inter-organizational cooperation or state involvement during this first phase of the interview already, I would pick up on these hints and ask them to elaborate on these themes further. Otherwise, the second phase was designated to learning more about the cooperation between mills and companies more generally and their involvement with the KCPK more specifically. Usually this phase already exceeded the time limit set by my respondents for the interview as they had many anecdotes and stories to tell from previous failed and successful cooperation projects, state involvement or competition-induced struggles to reach ever new technological innovations. If there was time left, I would ask the interviewees ‘What is a network for you’?. Even if the term had already come up during the interview, I would ask this question in order to understand whether or not such terminology is used or makes sense within their daily work context.

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2.3.3 Participatory unstructured observation

My fieldwork was further enriched by attending two industry- specific conferences, which I was invited to by the employees of the KCPK (see Appendix 3 and 4). They kept me updated about upcoming events and invited me for those that seemed relevant to my research. Both conferences I visited, ‘Science meets Industry’ and ‘Circular Economy’, took place in February 2016. ‘Science meets Industry’ was initiated by the KCPK to share relevant results from Bachelor, Master, PhD and corporate research with the companies of the Dutch PBI. It was foremost labelled as a networking event, designed for researchers and managers to meet each other and exchange information for possible future cooperation. Even though the spectrum of research presented there was quite wide, my research was easily singled out as focused on managerial topics rather than technological ones. I made the same experience of being somewhat uniquely misplaced at the ‘Circular Economy’ conference, when asked about my research. The fact that I was trying to understand the roles and function of inter- organizational networks in the industry triggered two kinds of reactions: Either indifference as this was not the scientific input people were looking for or a more cautious reaction of not wanting to talk about any cooperative projects whatsoever. Both is understandable. On the one hand side, managers, engineers

Chapter II – Methodology and project coordinators of the industry join these events to gain insights into the newest advancements in production processes or chemical procedures of paper contamination and compounding, in other words new ways of paper composition, and connect with the people that carry out such research projects. On the other hand, any cooperative projects led by these companies commonly underlies secrecy measures and cannot just be easily shared in such a setting. Both conferences nevertheless delivered meaningful insights into inter-organizational networking efforts within and beyond the Dutch PBI. I actively engaged in both events; at ‘Science meets Industry’ I gave a presentation about network governance and at ‘Circular Economy’ I conversed with employees of the industry, joined information stalls and discussed the future of the industry. Yet, both participatory observations were not structured according to pre-established categories. Keeping the main focus of my research, inter- organizational networks and the survival of the Dutch PBI, in the back of my head, I engaged with people on manifold topics, such as how they experience the event, for which reasons they attend, what they expect out of this conference, and if they feel personally comfortable in such settings (Tharenou, Donohue & Cooper, 2007, p. 134-135). As a result, my field notes contain both presented facts on the industry as well as personal descriptions about the discourses on inter-organizational

Chapter II – Methodology networks and the informal conversations I had with employees of the industry (Tharenou, Donohue & Cooper, 2007, p. 135).

2.3.4 Analysis technique: Diffractive reading

For the analysis of the qualitative material I treated the notes I took, the words I transcribed from the interviews, my personal memos and the literature I read as an assemblage. The concept of assemblage can be found in new materialist methodologies, which understand field work practices and outcomes as deeply entangled (Barad, 2007, p. 229 ff.; Mazzei, 2013, p. 735). Following this stream of new materialist methodology, I mapped connectives between the readings, the interviews, the notes and broader research experiences in an iterative way. This process is called diffractive reading and describes “[…] a methodological practice of reading ‘insights through one another’” (Mazzei, 2014, p. 265). In other words, neither of these sources led the analysis, but all together formed the research performance at hand. By re-listening to the interviews and re-reading my field notes at different points in time during the research process, the plot of the historization and the storylines disclosed in my research writings were re-assembled (e.g. Barad, 2007, p. 239). Underlying this post-coding qualitative method, is an understanding of interview data and fieldnotes as “an enactment

Chapter II – Methodology among researcher-data-participants-theory-analysis” (Mazzei, 2013, p. 732). Consequently, interviews do not represent (the experiences of) individual interviewees and field notes do not represent the facts of an event. Instead, all qualitative data is treated iteratively as a whole, forming an assemblage, an amalgamation of stories or as Mazzei (2013) puts it “an agentic clash on the surface with data”, ultimately forming a transversal research performance (p. 739). Hence, my research performance was not a linear process; it was (and continuous to be as I write) an entangled becoming, trying to engage with the irreducible complexity through an iterative way of marking differences, which connect. Therefore, I integrate quotes and information from the interviews, my informal talks with the employees of the KCPK and my experiences at industry-wide conferences through the creation of a storyline, of finding connectives within the materializations of the Dutch PBI’s inter-organizational networks.

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2.4 Analyzing the most recent case of inter- organizational networks in the Dutch paper and board industry based on primary quantitative data In chapter five, I analyze the current inter-organizational network of the Dutch PBI through network visualization techniques based on a project dataset of the KCPK. Already early on, the employees of the KCPK granted me access to their project data server. According to them, this project data includes more or less organized, relevant information on all the finished and ongoing projects the KCPK was and is involved in. When the KCPK was privatized in 2004, current and future projects were divided into three main areas under the general topic of sustainability: (P1) fiber and raw material, (P2) production and energy, and (P3) end products (KCPK, 2017). In line with their field of expertise, each of the eight employees at the KCPK is allocated to one of the three different research themes. In all three themes, there are three stages to the project management: setting up the project, supervising the project, and disseminating the knowledge outcome amongst (non-) participants of the Dutch PBI (KCPK, 1998). The initiation of projects relies foremost on the personal network each employee is able to build and maintain throughout their employment (Appendix 3, lines 216-219). Since the

Chapter II – Methodology industry is rather small with a low turnover rate of employees in managing positions, good personal relations are essential to the successful functioning of the KCPK. Employees need to attend international and national paper-sector conferences to introduce themselves to the managers of the Dutch paper mills or maintain their already established relationships with them (Appendix 3, lines 216-219). In order to initiate projects that are relevant to the Dutch PBI, it is pivotal for the employees to listen carefully to the day-to-day as well as long-term struggles and projects of the paper mill managers. At the same time, the employees need to be informed about prospective enactments of national and EC-level rules for sustainability, waste and energy related matters (Interviewee 2, 00:13:15 ff.). Balancing the short-term needs of Dutch paper mill managers on the one hand side and the future requirements for costly, sustainable innovations due to new regulations, is the main challenge for the employees of the KCPK in terms of setting up inter-organizational projects. Once a potential project seems to attract the interest of different Dutch PBI agents, the KCPK starts to secure the funding via state subsidies, as well as financing from the participating companies (Interviewee 2, 00:02:52). Public funding for these inter-organizational projects is allocated via the current executive agency of the Ministry of Economic Affairs, Rijksdienst voor Ondernemend Nederland (RVO)

Chapter II – Methodology

(previously SenterNovem and Agentschap NL)3. Due to the extensive knowledge that is required to successfully apply for such funding, the companies of the Dutch PBI are to a certain extent dependent on cooperating with the KCPK, if they want to initiate or participate in state-funded innovation projects (Interviewee 2, 00:06:15 ff.). At the same time, the KCPK depends on the participation of Dutch PBI companies and their willingness to fund the remaining seventy percent of a given research project. In times of economic downturn or survival, such costs can by far exceed the financial funds available to the potential participants, in turn making the set-up phase of projects quite cumbersome for KCPK’s employees. Once the funding for a project is secured and the participants found, a contract is signed by all participating organizations, commonly structured as follows (amongst other points): consortium partners, consortium agreements, goal and organization of the project, finances of the project, confidentiality agreements, rights to project results, liabilities, duration and ending of the project (retrieved from confidential

3 In 2004 the agencies Nederlandse Organisatie voor Energie en Milieu (Novem) and Senter fused into SenterNovem, the executive agency of the Ministry of Economic Affairs between 2004 and 2010 (Tweede Kamer der Staten-Generaal, 2004). In 2010, SenterNovem fused with Octrooicentrum Nederland and Economische Voorlichtingsdienst (EVD) to form the new executive agency of the Ministry of Economic Affairs, Agentschap NL. Since 2014 Agentschap NL is fused with Dienst Regelingen, now called Rijksdienst voor Ondernemend Nederland (Rijksoverheid, 2014). 73

Chapter II – Methodology internal documents of the KCPK’s project data base). After such contracts are signed, the task of the employee in charge of the respective project at the KCPK is to supervise the progress of the project by visiting or calling the participants on a regular basis as well as informing them about the overall progress (Interviewee 2, 00:13:15). To what extent the project partners share the knowledge gained amongst themselves and with third parties is agreed upon in the contract under confidentiality agreements (also retrieved from confidential internal documents of the KCPK’s project data base). In these contracts, information about the project’s content or participants that is not to be shared with third parties is marked as confidential. In most cases, only two years after a project ended information is allowed to be shared with third parties. Often, the (final) project reports are limited to the participants; only in a few cases, public reports are issued by the KCPK or other research institutes.

2.4.1 Description of the dataset

The raw data, which I created the final dataset from, consists of information found in the KCPK’s electronic archive on inter-organizational projects between 1998 and 2016. These projects either cover process- or product innovation themes, include at least two organizations from various sectors (such as the Dutch PBI, state organizations, research organizations or

Chapter II – Methodology organizations from other industrial sectors in the Netherlands as well as abroad), and commonly last a few months up to a few years. The themes of the projects are usually clearly defined and rather narrow, as this allows for an efficient and result-oriented working procedure for all parties involved. Exemplary, a project would cover a pilot study for testing refining technologies, which enable high-quality solutions for the use of hemi-cellulose in the production process of paper. More generally, the majority of projects revolve around the development and testing of production processes enabling a biobased economy in the future, namely the replacement of fossil fuels by biomass. In the archive of the KCPK, the information for each project is thematically organized into different folders, namely preparation phase, contracts, meetings, reports, subsidies, correspondence and finances. The raw data consists of a total of 102 project folders, of which only 48 contain at least basic information on the starting and end date of the project as well as its participants. I was given the opportunity to supplement the missing information by sourcing it from the physical archive of the KCPK. This physical archive is situated on the 1st floor of the office space and I was rather taken aback once I was shown its dimensions. A windowless four by four meter room, stacked from floor to ceiling with half-broken boxes stuffed with folders and loose papers on projects. Despite the fact of having only about half a square meter of radius to move in, none

Chapter II – Methodology of the archived data was sorted or organized. There was no indication where to find information on projects of a specific time period, much less where to find specific information on the projects’ duration and participants. My contact person at the KCPK agreed, that finding something in this archive would require to sort it first, which would take months, if not years of full-time archival work. This work would have by far exceeded the means of my research project. Therefore, I constructed the final dataset based on the 48 projects I found the relevant information on within the digital archive of the KCPK. The selection of data due to its availability and completeness is a common practice in archival research, in which one necessarily chooses, highlights, neglects, distorts and creates information (cf. Ferguson, 2011, p. 33). The final dataset, thus, includes information on 48 projects and consists of a total of 344 participating organizations, of which 38 organizations belong to the Dutch PBI. On average, each project includes nine participating organizations with a range of 36. The employees of the KCPK label these projects, spanning from 1998 to 2016, as formalized, contracted cooperative ventures aimed at process or product innovation (Interviewee 1, 00:08:16 ff.). Due to a signed confidentiality agreement between the KCPK and me, the projects are re-labelled into PRx and the organizations into ORGx; consequently, no names or labels are mentioned in the data outputs and text (see Table 3).

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I divided the entire time span of the project data from 1998 until 2016 into sets of two years, while the first and last period span a total of three years. Therefore, each of the resulting eight periods contains a manageable amount of information for its later visualization. Dividing the entire time span into sets of one or three years instead, would have expanded or condensed the data and subsequent visualization, containing either too little or too much information per graph. Furthermore, I classified all participating organizations conforming to their legal status as either participants belonging to the Dutch PBI, participants belonging to state organizations, participants belonging to research organizations, or participants belonging to other industries. For this classification, I triangulated information from Orbis and LexisNexis, two databases, which store up-to-date information on private and public companies as well as research organizations.

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Table 3 Descriptive statistics of the dataset

Number of Number of Number of Number of Total Total participants participants participants participants number number of belonging belonging to belonging to belonging to of participants to the state research other projects Dutch PBI organizations organizations industries

1998-2000 1 13 3 2 4 4 2001-2002 4 43 19 4 4 16 2003-2004 6 83 28 3 12 40 2005-2006 11 116 29 1 34 52 2007-2008 9 116 23 1 40 52 2009-2010 5 107 12 1 44 50 2011-2012 7 94 14 1 21 58 2013-2016 9 110 15 4 21 70

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The network resulting from this dataset is a two-mode network as it consists of events (projects) and agents (participants). In fact, for this two-mode network a tie depicts the participation of an agents in a project. Therefore, ties are not established between agents themselves, until recalculated into a one-mode network4. Furthermore, the ties in this network are directed as only agents participate in events, not the other way around. If recalculated into a one-mode network of agents, who participate together in a project, the network consists of undirected ties instead.

2.4.2 Analysis technique: Visualizing network brokerage

Questions guiding the analysis of the project data were ‘Do the inter-organizational networks of the Dutch PBI portray more heterarchic or hierarchic structures at different points in time?’ and ‘Are these (un)equal power relations changing or maintained over time?’. In order to trace the changes within the network structure and power relations between its agents I measured the betweenness centrality of single agents in Ucinet (Borgatti, Everett & Freeman, 2002); and in order to portray these changes in a clear and illustrative way to the reader, I made use of the

4 For a more detailed discussion on calculating one- into two-mode networks please read Agneessens, F. & Everett, M.G. (2013). Special Issue on Advances in Two-mode Social Networks. Social Networks, 35(2), pp.145- 278. 79

Chapter II – Methodology network visualization technique in Visone. The following sections will discuss the betweenness centrality measure as well as the network visualization technique. First of all, I constructed the dataset in a way that would allow viewing the dynamism of the power relations throughout time and in accordance with prior research on network evolution (Ahuja et al., 2012; Gulati, 1995; Gulati & Gargiulo, 1999; Knoben, Oerlemans & Rutten, 2006). Power is understood as nodal relations (in this case relations between companies) according to the nodes’ structural position within a given inter-organizational network at a certain point in time. In other words, network evolution means to understand power as changes in the network structure. By acknowledging network dynamics, the inter-organizational network is not understood as developing from scratch during artificially conceptualized moments in time. In other words, the inter-organizational network of the Dutch PBI is not a star-like network structure at tx and then develops into a fully connected network structure at tx+1. The acclaimed network structures are neither independent of nor dependent on time, but instead dependent on the marking and, therefore, the making of time (Dolphijn & van der Tuin, 2012, p. 66). Therefore, I constructed the dataset as consisting of latent ties, instead of past and present ties (Ferriani, Fonti & Corrado, 2013; Kenis & Knoke, 2002; Mariotti & Delbridge, 2012; Westphal, Seidel & Stewart, 2001). In this way,

Chapter II – Methodology

I account for the always already existent potential for change. It is the latency of ties that is congenial to the ever-present, yet not necessarily actualized inter-organizational cooperation. In more technical terms, the dataset is cumulative; I separated the data into eight periods, each entailing their own periodic information and all the information of the former periods. In terms of the power relations of agents in a network, I follow the conceptualizations of power by Allen (2009) and Sharp et al. (2000) who understand power as a dynamic relation rather than a static resource (Allen, 2009, p. 206; Sharp et al., 2000, p. 25).

“Power relations, in topological terms, are not so much located in space or extended across it, as compose the spaces of which they are a part. On this account, spatiality itself is imbued with power; proximity, distance and reach are inseparable from the practices of power which define them.” (Allen, 2009, p. 206)

Translated into network research, this means that power is not something given within a network, such as a certain trait of an agent, id est their social capital, but power itself is constitutive of the network. In other words, the power relations between the network agents are expressed in their structural network position in relation to each other. Thus, in the empirical analysis

Chapter II – Methodology at hand, power is assessed as the relational positions agents occupy within the evolving network. Betweenness centrality is a centrality measure, which calculates the relative position of an agent in a network. More precisely, it measures “how often a given node falls along the shortest path between two other nodes” (Borgatti, Everett & Johnson, 2013, p. 174). In the case of the network at hand, the betweenness centrality measure indicates how often an organization connects two other organizations through the shortest path by participating in (a) network project(s). This measure allows a ranking of the so-called brokers of the network. Due to the relatively small size of the network and user friendliness of the program, I calculated the measure in Ucinet, a software package for analyzing social network data (Borgatti, Everett & Freeman, 2002). The choice to visualize the network power dynamics over time was informed by the accessibility of visual network data for the reader in comparison to providing summary statistics in meaningful tables and subsequent text. In fact, network visualization is discussed as both an alternative route to depict network statistics, but also as a unique way to gain additional insights (Moody, McFarland & Bender-deMoll, 2005). While most recent advances in network visualization even allow for creating so-called network “movies”, this research draws on techniques to visualize network power relations in single graphs.

Chapter II – Methodology

These single graphs, when interpreted in succession, provide researcher and reader alike with a more tangible understanding of how power relations shift and/or substantiate over time between network agents. Through choosing different colors, shapes and labels, the researcher can highlight particular statistical information, which is in tune with the pursued analysis. For example, by increasing the size of a node from graph to graph based on its recurrent and increasing brokerage position, this information is ‘moved to the foreground’, while other information, such as the overall centralization of the network, remains hidden. As a result, network visualization is a technique to make meaningful information on network statistics more readily available to the reader, while allowing for the mathematically correct calculation of the respective measures. The visualizations in this research are ‘drawn’ in Visone, a software tool developed by a long-term cooperation of researchers to enable the cost-free visualization of network data for students, teachers and practitioners (Visone.info, 2019). Even though Ucinet also has a software extension for network visualization, I decided to work with Visone as this tool offers a broader range of customized options for collocating graphs. In fact, Visone allows for the adjustment of graphs to both the betweenness centrality of agents and the core-periphery structure of the network.

Chapter II – Methodology

2.5 Concluding remarks The above outlined methods determining the creation and analysis of my research data are well-integrated into the wider methodology of dialectical network analysis I follow. The iterative research process and combination of insights from secondary literature analysis, semi-structured interviews, participatory unstructured observations and quantitative project network data, allows for a thorough historization of the inter- organizational networks in the Dutch PBI throughout capitalism, as the following chapters show.

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980)

Chapter III – Historicizing inter- organizational networks of the Dutch paper and board industry (1580 – 1980)

In this chapter, I assess the different forms and roles of inter- organizational networks in the Dutch PBI since the emergence of capitalism around 1580 in the Netherlands. The industry prospered during the so-called Dutch ‘Golden Age’ in the 17th century and became known internationally for its high-quality paper. Production expanded in this phase and generated high returns on investments. From the end of the 18th century onwards, when industrialization processes accelerated in other European countries, raw material for paper production became scarce, and the Dutch PBI steadily declined. However, the industry managed to stand up to competitive pressures and technological change after all, and survived four centuries of capitalist development, albeit in a more marginal form. The survival of the PBI in the Netherlands is remarkable. Contrary to the textile, shipbuilding, fishing and even wood-processing industries, the paper and board industry is barely mentioned in the literature on the Dutch political economy (Brandon, 2011, 2015; De Jong, 2011; De Jong, Jonker & Röell, 2013; de Zeeuw, 1978; Kuitenbrouwer & Schijf, 1998; Lachmann, 2000).

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980)

When tracing the importance of the four dimensions of inter-organizational networks, that is state-industry relations, technology, competition and cooperation, and labor-capital relations throughout the first three phases of capitalism, namely Dutch capitalism (1580-1815), monarchic liberalism (1815- 1914), and Fordism (1914-1980), it becomes apparent that inter- organizational networks played a pivotal role in keeping the Dutch PBI lucrative throughout time. In fact, inter- organizational networks, no matter in which spatial-temporal setting during capitalism, helped to negotiate different capitalist class fractions’ interests, including industrial interests, against the backdrop of constant competition, fluctuating resource availability, financial crises and the search for ever new profitable investment outlets. To this end, the sections on each phase entail descriptive and analytical passages on the four dimensions within which different class fractions were able to negotiate and install their interests as general interests on a (supra-) national level as well as within the Dutch PBI. I will discuss the four dimensions in different orders per phase to work out the meaningful aspects of inter-organizational networks in the Dutch PBI for each phase respectively. Lastly, each of the sub-chapters ends with a section on the denouement of the respective phase, in which I summarize the findings and point to additional elements, which herald the transition from

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) one phase to the next. I end the chapter with a conclusion on each phase.

3.1 The rise of Dutch capitalism: Networked capital (1580-1815) The story of [the transition from feudalism to capitalism] consists of a real dialectical unity, in which the stalled fragments of capitalist development in one country formed the elements of its further development in the next. (Brandon, 2011, p. 142)

The Dutch PBI emerged in the phase of Dutch state building around 1580. Soon after, it was the most reputable paper industry in Europe and beyond. The first Dutch paper mill was erected in Dordrecht in 1586 by Hans van Aelst, an economic and religious refugee from Antwerp (Linssen, 1988, p. 14). From then onwards, paper mills started spreading throughout the Northern Lowlands (now the Netherlands). The initial rise in paper demand was driven by the establishment of book printing in the second half of the 15th century and comparably high rates of literacy throughout the Northern Lowlands at that time (Bouwens, 2004, p. 21). With the fall of Antwerp in 1585 and the subsequent independence of the Seven United Provinces from the Habsburg Empire in 1588, two very distinct regions became central to Dutch paper production: The Zaanstreek and

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) the Veluwe (Bouwens, 2004, p. 21). As the following historization shows, in the Veluwe, more and more peasants gradually shifted their second income stream (their first one being subsistence farming as well as selling over-produce at local markets) to paper production as local demands for paper products continued growing. Yet, the Zaanstreek developed into the main industrial region, also for paper making, as it attracted extensive capital investments from the merchant-capitalist class fraction, soon constituting a dense capital network. Additional inter-organizational networks enabled Zaansian paper producers to implement technological advances, sharing the risks and liabilities of the expanding paper production. Furthermore, close networks between the state authorities and the merchant-capitalist class fraction ensured the containment of rising workers’ revolts. How the regional developments in the Veluwe and the Zaanstreek were intertwined and the main politico-economic structures as well as the crucial agents hindering and fostering the development of Dutch papermaking are discussed for each dimension of inter-organizational networks in the following sections.

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980)

3.1.1 Technology: Early paper making in the Northern Lowlands

In the first half of the 17th century, the paper making process was similar across all Dutch paper mills and comparable to production processes abroad. Paper making involved decomposing cloth, which was labor intensive and required special knowledge and training (Voorn, 1975, p. 17-19). First, the lompen (cloth) were sorted, then soaked in vast amounts of water and decomposed into fibers using heavy wood-pounders with nails (Bouwens, 2004, p. 22). The so-called schepper (shoveller) shoveled the resulting pulp into a large container and formed it into a sheet of paper, using copper wire and a sieve (Bouwens, 2004, p. 22). Thereafter, the so-called koetser (finisher) dried the paper sheets by bedding them in between felt, pressing the amounted stack and hanging it up (Bouwens, 2004, p. 22). To make the resulting paper product into printable paper, it was soaked in animal-based glue and flattened out afterwards (Voorn, 1975, p. 34). Depending on the degree of flattening mixed with further coatings, the paper reached a higher quality as it became more durable (Voorn, 1975, p. 34). Dutch paper makers produced different paper qualities. While resources in the Veluwe were scarce and paper producers had to travel far across the countryside to collect lompen, machinery and other necessities for production, paper

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) producers in the Zaanstreek profited from being embedded in a network of other industries as well as the Amsterdam trade market and the nearby harbor infrastructure (de Wit, 1990, p. 9). For example, blue shirts, which were popular in the fishery and shipping industries at that time, were the basis for the famous Zaansian blue paper (de Vries, 1957, p. 15). Additional famous Zaansian paper products, which were known for their brightness, were based on other high-quality textiles traded at the Amsterdam market (de Vries, 1957, p. 52). Despite the cheap availability and easy accessibility of necessary resources, such as fishery nets, cordage and textiles to Zaansian paper makers, they faced one crucial problem, namely the absence of clean water. It was a continuous effort to innovate the provision of cleaner water, often in the form of cooperation amongst multiple paper makers (de Wit, 1990, p. 13). In contrast, Veluwian paper makers had access to clean water and, thus, produced higher quality paper products than the Zaansian paper makers in terms of low paper contamination (de Vries, 1957, p. 13). Also energy usage for production varied greatly throughout the regions and determined production capacity: Mills could be wind-, water-, horsepower- or tidal- driven (de Wit, 1990, p. 8). The producers in the Zaanstreek suffered from the irregularity of wind energy to run the hamerbak (wood-pounder) and, thus, exhibited a lower production capacity than in the Veluwe, where mostly watermills were installed (de Vries, 1957, p. 16).

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980)

One particular technological innovation turned the tide between the two core regions of paper production in the Netherlands, as it enabled a three times faster decomposition of cloth into pulp (de Vries, 1957, p. 16). In 1680, a Zaansian paper maker, who remained anonymous, invented the Hollander, a machine to beat cloth in order to retrieve its fibers (de Vries, 1957, p. 16). In the preceding decade, several paper makers of the Zaanstreek had already used metal blades to decompose cloth and had tried to either request a patent for their invention or to keep others from receiving such a patent (Stichting Papiergeschiedenes Zaanstreek de Hollander, n.d.). The later Hollander beater was composed of several bronze blades (as the previously used metal blades stained the paper with rust), which rotated on a wooden or metal base (Stichting Papiergeschiedenes Zaanstreek de Hollander, n.d.). This invention spread throughout the Zaanstreek rather quickly, whereas in the Veluwe, paper producers continued to use the less efficient wood-pounder of stamp mills (de Wit, 1990, p. 9). Even though the resulting quality of paper was much lower than that produced by a wood-pounder in terms of strength and contaminants, the production facilities in Zaanstreek expanded rapidly and soon exceeded Veluwian production scales by far (de Vries, 1957, p. 51). By the end of the 17th century, it was the Zaansian paper makers, who symbolized the Dutch paper

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) nijverheid (zealousness) for which the United Provinces gained worldwide fame (de Vries, 1957, p. 16, p. 50).

3.1.2 State-industry relations: Growing capital networks

State-industry relations were especially relevant for the Zaansian paper production. The entrepreneurial Zaanstreek capitalists belonged to a group of wealthy Baptists, who built a network of trade connections and financial relations (Bouwens, 2004, p. 27). This network of wealthy merchant families also held strong ties with the most powerful of Staten-generaals (state generals), Raadspensionarissen (grand pensionaries) and Stadhouders (governors) (Brandon, 2011, p. 120-123, p. 131, p. 138; Lachmann, 2000, p. 162). Throughout the 17th and 18th centuries, the Dutch Republic was “a federal state with strong features of bourgeois self-government” (Brandon, 2015, p. 6). The establishment of the first Dutch nation state was driven by unifying nationalistic themes, such as land and growth, “[…] based in the [proclaimed] superior virtue and corresponding economic wealth of the Dutch people” (Sutton, 2015, p. 130). The Amsterdam-Holland merchants were the main agents behind this nationalistic project; they were either in charge of political offices, like in positions of so-called regenten (patricians), or made sure that their interests were heard in the manifold council meetings conducted by individuals often representing

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) the government, corporate bodies and commercial entities all at once (Sutton, 2015, p. 22). The rise of the Dutch Republic to global hegemonic status was, thus, “a multi-dimensional network of individuals and the institutions in which they wielded power, dynamically creating and recreating themselves and attempting to project their authority and views […]” (Sutton, 2015, p. 23). Additionally, the merchant-capitalist class fraction fostered and legitimized the national identity through expanding their colonial activities. The use of Dutch quality paper was essential for this nationalist project of identity building and colonial exploitation (e.g. Sutton, 2015). Throughout this time, the merchant-capitalist class evolved as a crucial purchaser of Dutch paper, printing maps, books and propaganda material to ‘inform’ the Dutch public about the(ir) colonial venture (Dekker, 1990, p. 368). This propagandistic material entailed “[mills] as symbols of modernity and ingenuity, but also as solitary stalwarts in the landscape working for profit in the community by grinding grain, milling paper, or pumping water” (Sutton, 2015, p. 53). The profit-seeking merchant-capitalist class had great interest in displaying the nexus between national industrial growth and colonial trade5 in this propaganda material.

5 For lack of a better term I use ‘colonial trade’ as a description of the relations between conquering and conquered populations, in which the conquered populations are “forced to engage in structurally dependent 93

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980)

In turn, the growing commission for propaganda material directly benefited national paper producers. The Dutch PBI is, thus, closely intertwined with Dutch colonialism and early capitalism, the two latter being inter-related forces themselves (Anievas & Nisancioglu, 2015, Selwyn, 2013). The expansion of the Zaanstreek needs to be understood alongside two further aspects: The introduction of secondary markets and subsequent institutionalization of colonial activities. Initially, secondary financial markets were established for the Vereenigde Oost-Indische Compagnie (The Dutch East India Company – VOC) and other rederijen (shipping companies) to buy and sell bonds and shares (Gelderblom & Jonker, 2004, p. 643). Through issuing transferable shares, liquid capital became easily available, also for investing into Dutch paper production. In the beginning, the rederijen comprised a narrow circle of financiers, commonly connected through family bonds and often holding shares of several different companies simultaneously, including shares of paper mills (Davids, 2006, p. 560). Through a rigid system called contracten van correspondentie (contracts of correspondence), a range of economic activities, whether in terms of national industrial or colonial trade activities, were monopolized and cartelized (Adams, 1994, p. 516). In fact, “all governmental and state-chartered corporate

relationship[s] with the [conquering populations] by engaging in unfair and exploitative trade relations” (Kieh & Wong, 2014, p. 16, italics added). 94

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) spoils in Holland [were divided] among families through a system of rotating offices that generally excluded families outside the oligarchy” (Lachmann, 2000, p. 164). Through such a cartel-like division of the market, the merchant-capitalist oligarchy and state authorities were able to steer and control the majority of national and international economic activities. Additionally, this nexus of powerful elites made sure that property-rights and tax systems were organized in a way that would operate at the cost of everyone else except them. Public debt, for example, which underpinned the Dutch naval and military power, “formed both a secure outlet for capital investment and a source for state-demand” (Brandon, 2011, p. 116). Strictly following the principle of over-taxation, the burden was carried by the urban proletarian class instead of the capital- owners, or as Marx (1867) describes the Dutch tax system:

Overtaxation is not an incident, but rather a principle. In Holland, therefore, where this system was first inaugurated, the great patriot, DeWitt, has in his ‘Maxims’ extolled it as the best system for making the wage labor er submissive, frugal, industrious, and overburdened with labor. (para. 18)

Essentially, the organization of the politico-economic realm was dominated by inter-organizational networks in the form of institutionalized overlaps between political and entrepreneurial- merchant functions as well as dense family bonds, giving the

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) early Dutch state project its title of “state monopoly capitalism” (Arrighi, 2010, p. 181). Consequently, the emergence and expansion of state monopoly capitalism during that time was not solely based on national industrial production, but also driven by colonial exploitative practices, which had been facilitated and legitimized through state-sponsored corporate bodies like the VOC. Not mentioned often enough,

the record of Dutch brutality in enslaving the indigenous peoples (literally and metaphorically) or in depriving them of their means of livelihood, and in using violence to break their resistance to the policies of the Company, matched or even surpassed the already abysmal standards established by the crusading Iberians throughout the extra-European world. (Arrighi, 2010, p. 159)

It is through such means that, in the 17th and early 18th century, the Dutch merchant-oligarchy, located in Holland as the political and economic decision center of the Netherlands, expanded internationally by first controlling foreign trade routes and then the majority of the world trade market (Arrighi, 2010, p. 160). Hence, both local industry investments and colonial investments were of vital importance for the accumulation of wealth during the so-called Dutch ‘Golden Age’ (Brandon, 2011, p. 114). As can be seen in Table 4, inland products comprised

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) the main part of (re-) export, followed by European goods and lastly by colonial goods (de Vries & van der Woude, 1997, p. 130). Not until the end of the 18th century did colonial goods start outnumbering the (re-) export of inland and European products. Hence, state monopoly capitalism depended on the unique ensemble of national industrial activities and colonial exploitation (e.g. Selwyn, 2013). In essence, a deep interconnection between national production and colonial trafficking in the Dutch Republic existed, contesting the common historical depiction of the Dutch Republic as a merchant-capitalist nation focusing solely on trade and commerce (Brandon, 2011, p. 114).

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980)

Table 4 Dutch foreign trade in millions of Guilders per year ca. ca. ca. 1650 1720 1770 Europe, over sea 105 73 72 Southern Netherlands and Export Germany, over land 10 10 20 to Outside Europe 5 7 8 Total 120 90 100

European goods (re- 49 26 29 Export export) consisted Colonial goods (re-export) 11 22 40 of Inland products 60 42 31

Europe, over sea 120 78 95 Southern Netherlands and Import Germany, over land 5 6 10 from Outside Europe 15 24 38 Total 140 108 143 Source: De Vries & Van der Woude, 1997, p. 130

To sum up, paper production in the Zaanstreek more specifically and national industries more generally need to be understood against the backdrop of colonial exploitation. Not only did Zaansian paper producers rely on second-order trading materials such as cloth and fabric entering through the Amsterdam trade market, but more importantly, this as well as other national industries served as profitable investment outlets

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) for the merchant-capitalist class (Brandon, 2011, p. 114; de Vries, 1957, p. 15). Contracts of correspondence were pivotal to ensure that the merchant-capitalists’ fortunes, made through colonial exploitation, remained in the hands of a few families once they were reinvested (Lachmann, 2000, p. 164). Also Zaansian paper mills were owned and managed by (share-) capital holders, who re-invested their profits from slave trade and colonial exploitation, under the premise that their shares would remain in the family for generations (Bouwens, 2004, p. 28). This nexus of colonial and national industrial capital was enabled by the close networks between the merchant-capitalist class fraction, mainly Baptist entrepreneurs, and political authorities. And it is precisely these cartel-like network structures, which are characteristic of state monopoly capitalism. Nicely summed up by Sutton (2015), the afore-mentioned printed propaganda materials are “artifacts of the dynamic networks and actions of government officials, merchants, and publishers within a complex social structure where visuality complements history, positivism and rationalization, and the concomitant rise of the Dutch nation-state and its capitalistic economy” (p. 5). The nationalist project of forming the Dutch state was based on the relentless expansion of the merchant- capitalist class fraction’s profits through investing into colonial and national-industrial activities. The colonial trade - national industry symbiosis of the United Provinces was determined by

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) a capital network, which consisted of the merchant-capitalist oligarchy passing on their capital over generations and rigidly within their family bonds, herewith solidifying their hegemonic power for decades.

3.1.3 Competition and cooperation: Overcoming competition through fire insurances

Zaansian paper makers were foremost entrepreneurs, who engendered capitalist logics of accumulating and reinvesting capital in order to expand their market shares with a view on ever-increasing profits. During the late 17th century, these paper makers were able to maintain their dominant market position by exporting their products to Spain, Portugal, England, Austria, Sweden, Poland and Russia (Bouwens, 2004, p. 31). Simultaneously, they invested into foreign paper production, mainly in France (Bouwens, 2004, p. 31). In conjunction with these investments, the expertise and machinery of Dutch paper production, for example the Hollander, was introduced to production sites abroad (de Vries, 1957, p. 34). Consequently, the first half of the 18th century was marked by the wide-spread replication of paper grades common to Dutch paper production by foreign competitors, leading as far as falsifying Dutch watermarks and copying unique recipes for paper making (Bouwens, 2012, p. 194). In addition, a range of European states

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) took protective measures to nurture their national paper industries during the 18th century. The Dutch state, in contrast, lacked a centralized, political authority to provide protective legislation for its national industries; additionally, the dominant class fraction of merchant-capitalists pushed for liberal trade policies (Findlay & O’Rourke, 2007, p. 395). As a result, Dutch industries, including paper manufacturing, were exposed to increased competition, which in turn accelerated the growing density and scale of cartel structures (Bouwens, 2004, p. 32). As a result, the Protestant paper mill owners in the Zaanstreek ‘shared’ rising financial risks of investments through establishing partenrederijen (shareholder companies) (Bouwens, 2012, p. 193). Partenrederijen were copied from similar organizational forms in the shipping industry and divided the ownership of paper mills into parten (shares). These legal entities held shareholders responsible for proportionate investments into machinery and stock, the payment of losses and eligibility for profits (Gelderblom & Jonker, 2004, p. 645). In the context of Zaansian paper mills, these shares were fragmented across a limited network of families (Davids, 2006, p. 560). Basically, such forms of sharing risks were only able to secure the stability and longevity of paper mills to a certain extent (de Vries, 1957, p. 121). Zaansian paper production remained a risky business due to expensive machinery, high labor costs, and large scales of production; at that time the scale of production in the

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Zaanstreek amounted to double the production of a mill in the Veluwe (de Vries, 1957, p. 310). This fact shall not be mistaken for a generally larger production output in the Zaanstreek than the Veluwe, as mill numbers in the Veluwe still surpassed those of the Zaanstreek by far during the 18th century (Bouwens, 2004, p. 23). To raise their competitiveness towards Veluwian paper production, Zaansian paper makers decided to complement their partenrederijen with so-called ‘fire insurances’ worth up to 240.00 Guilders for its members in 1775 (de Vries, 1957, p. 121). More so than insuring against possible fire damages and loss of production, these paper makers’ contracts were similar to the aforementioned contracts of correspondence, in that they intended to stifle competition among Zaansian paper producers (Davids, 2006, p. 562). In these contracts, the Zaansian paper makers determined the quantity and quality of production and the sales conditions of paper products (Bouwens, 2004, p. 29; de Vries, 1957, p. 121). The mill managers’ adherence to the verbal, but nevertheless contractually binding agreements made Within these ‘fire insurances’ was controlled through regular inspections of the associated mills (Bouwens, 2004, p. 349; Davids, 2006, p. 564). Hence, the label ‘fire insurances’ was a mere camouflage-tactic as these agreements were outright cartel structures (de Vries, 1957, p. 121).

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Such practices amongst Zaansian paper producers exemplify the capitalist paradox of, on the one hand, the need for continued accumulation of capital through competition, and, on the other, capitalists seeking to avoid competition, either through cartels or economic concentration (Wigger & Buch- Hansen, 2013, p. 607-609). Zaansian paper mills were owned by a network of family-bound shareholders, which led to severe concentration regarding ownership. National competition, in combination with high investment risks, posed a meaningful threat, even in light of rising demand for paper products. Zaansian paper makers were also threatened by international competitors and decreasing prices for paper products due to growing international supply, mainly from France, England and Germany (de Vries, 1957, p. 34-35). During the 18th century, the paper makers’ contracts were only one form of cartelization to countervail competitive pressures and stay competitive at the same time. The major Dutch paper producers cooperated in further cartels to seek sectoral regulations on product criteria, market share allocations and price determination (Bouwens, 2004, p. 33-38; de Vries, 1957, p. 22). Especially, the cooperative practice amongst Zaansian paper makers to ‘collectively’ buy paper mills in order to then shut them down and, thus, reduce local competition, illustrates the paradoxical nature of the capitalist competition regime (Bouwens, 2004, p. 33).

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The Zaansian cooperation practices to erode competition stand in stark contrast to the hinterland paper production in the Veluwe, where financial and cooperative ties between the numerous, smaller paper producers were rare (Kokke, 1961, p. 13-15). The business of lending money and interest-bearing usury, common amongst the Zaansian paper makers, was frowned upon as unchristian by the pre-dominantly Catholic farmers in the Veluwe (Weber, 2005, p. 6). The different branches of Christianity practiced at that time in the Unites Provinces were quite influential on the daily practices and work ethics of the paper millers. While Catholic believers under no circumstances engaged in businesses of lending money, usury or banking, this was a common activity amongst Zaansian paper makers and bankers, also referred to as Lombardiers (Hyma, 1938, p. 327). In contrast, in the Southern regions of the United Provinces, including the Veluwe, peasants’ “[…] attitude toward capitalism was the old-fashioned Christian attitude which admonished each person to acquire no more worldly possessions than were absolutely necessary” (Hyma, 1938, p. 327). As a consequence, the Veluwian paper mills were auxiliary ventures next to farming. The peasants had to rent the land and property, including the mills, from the local nobles and pay tax to the stadthouderate (province) for usage of water and other resources (Kokke, 1961, p. 12). The family and relatives living and working on the actual farming grounds carried these costs

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(Kokke, 1961, p. 12). Their mills were centered on local markets and peasants specialized in producing certain, locally demanded paper products, quite independent of the paper trade at the Amsterdam stock market (Kokke, 1961, p. 15). Throughout most of the 17th century, the Veluwian famers did not compete in the production of paper because the demand outreached the supply of paper produced in the region. As cooperation was family-bound in the Veluwe, family members supported each other in repairing machinery or lending labor power when needed. Even though Veluwian paper grades were highly demanded, in times of lowered sales- numbers Veluwian paper makers were to halt their production (Kokke, 1961, p. 13). This constant state of precarity was further fueled by the land-ownership structure and unavailability of financial capital (Kokke, 1961, p. 10). Consequently, the majority of Veluwian paper mills had a rather short lifespan (Bouwens, 2004, p. 23). Only a limited number of Veluwian paper mills are still known at present under their original family names, such as Orges, Pannekoek, Van Delden, Schut, Sanders and Berends (Bouwens, 2004, p. 27; Kokke, 1961, p. 8). To conclude, paper makers in the Veluwe were commonly subjugated to feudally organized land-payments and demand-driven production scales, cooperating in terms of lending machinery and labor power. In contrast, Zaansian paper makers cooperated in close-knit state-industry networks, which

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) were inaccessible to peasant paper makers from the Veluwe. Zaansian networks were outright cartels, intended to foster the Zaanstreek paper industry. Furthermore, these forms of networked capital provided a link between a few, rich Zaansian paper makers and the merchant-capitalist class. The latter tolerated these cartels as they themselves sought to expand and increase their profits from colonial and national-industrial investments. Nonetheless, as the next section demonstrates, laborers continued to pose a meaningful threat to the profitability of national-industrial investment outlets for the merchant-capitalist class fraction.

3.1.4 Labor-capital relations: Revolts under state monopoly capitalism

In the Dutch Republic of 1588, cities gained influence in the government through obtaining seats in the States of Holland and the States General. As a consequence, cities soon started to not only compete for political influence on these national levels, but also for economic wealth (Dekker, 1990, p. 389). The cities’ new plethora was to maintain public order and acquire skilled workers for their industries (Dekker, 1990, p. 392). And the fact that the Dutch Republic represented a “new alliance between the bourgeoisie and the nobility” helped to safeguard the existing class relations (Federici, 2004, p. 49). Soon, the pressing

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) class struggles were effectively confronted through illegalizing and prosecuting previously successful forms of labor revolts (Federici, 2004, p. 49). At that time, the majority of laborers originated from Flanders and France. They were commonly referred to as knecht (servant) and highly influenced by foreign cultures of workers’ upheavals (van Vree, 2008, p. 169). These knechten organized to fight against income inequity, hazardous working conditions and other work-related issues. If conflicts became more structural and could not be solved, the knechten commonly refused to work and even left the town altogether to find work elsewhere, called uitgang (Dekker, 1990, p. 391; Visscher, 1939, p. 7). As uitgang was one of the most drastic forms of labor upheavals during the 15th and 16th century, cities were quick to enact new laws, which obliged laborers to possess a paper stating that their previous work contract was terminated under mutual consensus (Dekker, 1990, p. 392). Workers’ abilities to leave unjust working conditions were eliminated, if they wanted to be employed again in other cities of the United Provinces. Additionally, employers started forming inter-organizational networks, in which they comprised lists of so-called blackballed workers, who had left their job in irregular ways (Dekker, 1990, p. 392). These inter- organizational networks, just as the ‘fire insurances’, were producer cartels with manifold functions. Not only did they enable technological progress and stifled inter-organizational

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) competition, but they also enabled the merchant-capitalist class to maintain labor ‘peace’ and curb labor radicalism. As the division between capital and labor power was taking on the forms of modern capitalism, laborers found new ways of organizing. From 1600 onwards, laborers’ meetings became a vital part of the proletarian social life outside of work, in which they discussed important issues and supported each other (Dekker, 1990). As an immediate response, city states enacted laws, under which such meetings were limited to twelve times a year or banned all together from taking place in certain areas or settings (Dekker, 1990, p. 393). In response to this, court vergadering (court meetings) became a viable practice to informally solve conflicts between employers and workers (Dekker, 1990, p. 393). Even though city-states illegalized these practices, employers and workers continued to solve their disputes via such trials. Commonly, the party judged guilty had to pay a fine (Dekker, 1990, p. 394). In turn, such “fines were sometimes immediately used to buy drinks for all those in attendance, and in other cases they were donated to the city's poor fund” (Dekker, 1990, p. 394). For the employers and laborers, these court meetings portrayed a much more viable, fair form of conflict negotiation than the legalized options of official law courts and guilds committees. By the early 18th century, proletarianization was on the rise and most of the described practices of labor organization

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) became limited to the growing city-states, particularly regions like the Zaanstreek. Industrial clustering was of utmost importance in the Zaanstreek region, employing roughly sixty percent of the male labor force in the Netherlands (Bouwens, 2004, p. 26). Most of the laborer in Zeeland and Holland were working in the fishing and trading fleet, employed by the VOC, Dutch West India Company (WIC) or navy. All three had bad reputations for belated payments and poor working conditions, with respect to workers’ safety and insurance (Dekker, 1990, p. 406). The working conditions and organizing situations of sailors and industrial workers cannot be compared. Sailors often stayed in their jobs for only a few years before settling down in the colonies (Dekker, 1990, p. 406). Industrial workers, on the other hand, were increasingly forced to not only stay within their profession, but also within the same country or city due to the aforementioned decree of employers’ appraisal. To subtend the often-conflicting relationships with their direct supervisor as well as the owner of the production facility, paper mill workers (usually around twenty-five laborers per paper mill) started organizing themselves (Bouwens, 2004, p. 28). The provincial government labelled such organizing as complots, observed them carefully, and ultimately managed to efficiently suppress them (van Vree, 2008, p. 170). As “the government could rely on a loyal standing army [to maintain] public order” workers’ organizations were rarely influential,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) except in the textile industry (Dekker, 1990, p. 387; van Vree, 2008, p. 169). Not surprisingly, the government was highly selective with respect to the forms of industrial organizing it tolerated or even supported and which ones it illegalized. While employers’ cartel structures and inter-organizational organizing to list ‘unruly’ workers, amongst others, were welcomed by state officials, various forms of workers’ organizations were illegalized as soon as they gained popularity. Solidarity between workers was essential to oppose political authorities and the owners of production alike. Protests of the 18th century were driven by a code of honor amongst the workers, which demeaned anyone who continued to attend their work during a strike (Dekker, 1990, p. 395). Additionally, protests and related fights between workers and employers were to happen in public, never in the private space of a house or a workshop (Dekker, 1990, p. 396). The situation of organized labor was very different in the countryside. While the agrarian sectors near the industrialized regions of Holland (including Friesland and later Groningen) were already commercialized, peasants throughout the regions of Gelderland, Drenthe and Overijssel were not part of the urban communities of workers. The Veluwian paper production as an industrial side stream of feudally organized agriculture was

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) based in patriarchal6 family structures (Kokke, 1961, p. 12). The male so-called ‘head of the family’ organized production, determined every family members’ involvement and duties, and actively engaged in the production process. Usually between four and six people worked at these mills, of which one third were children (de Wit, 1990, p. 15). They received little to no payment. Overall, in the Veluwe the division of capital and labor was manifest in the rent payments towards the land-owning nobles and the dependence of peasants on urban merchants to sell their end-products (Brandon, 2011, p. 123).

6 Patriarchy, being a pivotal organizing principle for and under capitalism, was, of course, also common in the more industrialized and commercialized regions of the Netherlands (for further exploration see Adams (1994, 2005) and Hartsock (1983, p. 291-293). The patriarchal custom of passing on family capital and ownership through arranged marriages was closely related to the system of Contracts of Correspondence. This is how, for example, Van Gelder en Zonen was established: “[…] Pieter Smidt van Gelder decided to become a manufacturer early on in his life. He started working for Maarten Jansz Schouten, the only associate of the company Maarten Schouten & Co. and since 1774 the owner of the paper mill ‘De Eendragt’ te Wormer. On 30st November 1783, Pieter Smidt van Gelder was matrimonially arranged to marry the only daughter of his employer Dieuwertje Schouten. A year later, his father in law made him shareholder of the company. The accession of Pieter Smidt van Gelder into the managing board of Schouten & Co. was the starting point for the well-known family firm van Gelder (en Zonen), which was passed on for generations” (Sanders, 1995, p. 280, own translation). 111

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3.1.5 The denouement of Dutch capitalism: Economic devastation under political isolation

The analyzed differences between the Zaansian and Veluwian paper production concerning each of the four dimensions during Dutch capitalism are striking (see Table 5). Regional differences in the organizing of employers and laborers, the different politico-economic circumstances and industrial embeddedness of each region, and lastly the differences in resource availability and pre-industrial innovation of the Zaanstreek and the Veluwe beautifully illustrate the transitional and not linear character of the succession from feudalism to capitalism. In the words of Federici (2004), “[t]he concept of ‘transition’ then, helps us to think of a prolonged process of change and of societies in which capitalist accumulation coexisted with political formations not yet predominantly capitalistic” (p. 62, italics added). Consequently, feudally organized paper production in the Veluwe coexisted alongside more capitalistic organized paper production in the Zaanstreek.

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Table 5 Comparing regions for paper production in 16th, 17th and 18th century Netherlands Zaanstreek Veluwe - close proximity to - cloth available at resources further distance and - clean water scarcity higher prices - discontinuity of wind- - clean water and wind- powered mills powered mills Technology - cost-intensive - hand-made paper innovations production based on - implementation of traditional hamerbak Hollander to raise efficiency

- networks of merchant- - side-stream earning for capitalist class fraction peasants State- and state authorities - tax payments to local industry - close ties between authorities relations colonial and national industries

- contracts of - independent of other correspondence industries and trade - cartel structures markets Competition - focus on local demand at rural markets and - no usury or lending cooperation money - local support between families

- rising proletarianization - patriarchal family Labor- - workers’ organizations structures capital and strikes - no workers’ relations organization

Ultimately, the phase of economic growth in the Dutch Republic, which reached its zenith in the 1650s, was followed by a general decline in labor power, prices, production and profit.

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Starting in 1670, decreasing Dutch colonial power and economic stagnation took its toll on both paper regions, the Zaanstreek and the Veluwe. These struggles were interlinked with the four Anglo-Dutch wars and

[…] the seventeenth century crisis, which reduced prices of staple exports and demand for luxury goods [and dragged] the other sectors of Dutch production down. As a result, Dutch élites withdrew into ‘extra- economic’ strategies and investment in politically constituted property such as public office. (Brandon, 2011, p. 135)

Many wealthy merchant families, constituting the majority of capital investors, no longer saw national industrial investments as secure and viable outlets. Instead they started investing into foreign financial markets (Brandon, 2011, p. 134, p. 139). The rule of William III van Oranje, the king of Ireland, England and the United Provinces, added to the economic devastation and political isolation of the United Provinces at that time. As he granted the Royal Charter in 1694 to the Bank of England, the central role of Amsterdam as the world capital city quickly diminished (De Jong, 2011, p. 51). In 1702, William III van Oranje died and left behind a financially exhausted Dutch

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Republic, the world trade center having shifted to London (Anievas & Nisancioglu, 2015, p. 196-198, p. 261-262). The flight of capital, monetary destabilization and the inability to compensate for these developments through emergency taxation measures intensified under Napoleon’s rule from 1795 to 1813 (van Zanden & van Riel, 2004, p. 52-53). International trade diminished vastly and the Dutch paper industry shrunk alongside other national industries. While resource prices rose, prices of paper products declined. Lastly, the ban on importing lompen and high taxation on the national usage of lompen led to the shutdown of a vast number of paper mills in the Veluwe as well as the Zaanstreek (Bouwens, 2004, p. 35). In the following phase of monarchic liberalism, these circumstances demanded new forms of inter-organizational networks to bolster and re-structure Dutch papermaking.

3.2 Dutch monarchic liberalism: Building Industria through networks (1815-1914) In the course of centralization, a whole host of individual capitals disappear, absorbed by others, while yet others fuse together by merger or consolidation. The centralization of capital is

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therefore a violent form of competition. (Aglietta, 2000, p. 219)

During the beginning of the 19th century, the Dutch PBI suffered from industrial stagnation due to the introduction and rapid spreading of steam-powered mills for chemically produced paper all over Europe and Northern America (de Wit, 1990, p. 20-23). This powerful innovation was too capital intensive during the early and mid-19th century to be implemented efficiently in the Netherlands. Machines had to run continuously in order to be profitable. Dutch paper market outlets could not accommodate such a rising scale of production (de Wit, 1990, p. 24). Dutch paper producers had a strong interest in cooperating closely with the government to establish national subsidiaries for paper mills and the legalization of cartels, ultimately aiming to restructure and centralize the Dutch PBI (de Vries, 1957, p. 172- 173; de Wit, 1990, p. 25). These demands were met by state authorities with political agendas of enacting favorable policies or even nationalizing parts of the industry (de Vries, 1957, p. 175). Hence, inter-organizational networks in terms of close ties with state authorities as well as amongst the paper industrialists themselves were pivotal to successfully meet the challenges of the early and mid-19th century. From 1840 onwards, close cooperation between the monarch and the industrialist class fraction ensured foreign capital investment interests in Dutch industries and, thus,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) growing industrialization. Inter-organizational networks (in the form of cartels) were just as pivotal to re-establishing international competitive advantages as were other forms of inter-organizational networks between, for example, the industrialists and the monarchy to secure national subsidiaries (de Vries, 1957, p. 285). The new monarchy was efficiently co- opted by and itself co-opting the changing patrician and merchant-capitalist class fractions. This interaction enabled the corporatization of the Dutch PBI under the unique construction of networked capital at that time. As a result, the way was paved for the gentlemanly capitalists to build their very own Industria (e.g. Schrauwers, 2010). More generally, these industrial developments took place in a politico-economic environment, which I refer to as monarchic liberalism (Martins, 2013, p. 148; Milanovi, 2013). In this capitalist phase, from 1815 until 1914, the Netherlands underwent a state-orchestrated liberalization under the rule of the monarchs. The networks of merchant regent families of the so-called ‘Golden Age’, which controlled capital accumulation in the initial phase of corporate colonialism, continued to profit under the reign of William I of the Netherlands (de Vries, 1957, p. 175). Synchronous to the liberal revolution of 1840, the emergence of managerial science and technocracy, and the reign of William II, the growing class fraction of gentlemanly capitalists gradually replaced the merchant-capitalist class

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) fraction (Davids, 2006; Kuitenbrouwer & Schijf, 1998, Schrauwers, 2010). Thus, gentlemanly capitalists were a new tier: They emerged out of the patrician (regenten) families and the merchant-capitalist class fraction to form a “close-knit elite network [.] – the Industrialist Great Club – [and] built its majestic home, Industria, on the former site of the world’s first stock exchange” (Schrauwers, 2010, p. 754, p. 777, hyphens added). The gentlemanly capitalists managed to use the mid-19th century conjuncture of the succession from William I to William II and the economic crisis to change the power dynamics amongst the dominant class fractions. They formed the modern corporation, namely “interlocks that transformed nominally independent corporations into coordinated networks” (Schrauwers, 2010, p. 755). National industries were saved from subordination to monarchic power and merchant-class interests by subjecting “the financial service sector, trade, and national industrial production” to the newly dominant class fraction: The gentlemanly capitalists (Schrauwers, 2010, p. 745). Essentially still resting on a dense network of families (just like their patrician and merchant-capitalist predecessors), the gentlemanly capitalists steered the nationalist project and accumulated capital by “[…] usurping the role of the Merchant King himself in fostering the industrial development of the Netherlands and in ultimately ruling the Dutch state” (Schrauwers, 2010, p. 778).

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19th century Dutch liberalism designates a historically specific conjuncture of a hierarchical order of class fractions, which fostered corporate governmentality as the driving force behind the establishment of the modern Dutch nation state, the restructuring of its national and colonial industries and the renewal of its economy (Foucault, Davidson & Burchell, 2008; Schrauwers, 2010, p. 754, Schrauwers, 2011b, p. 77). Accordingly, Dutch monarchic liberalism was an “[…] apologia of individualistic capitalism [and] freedom in restraint” (te Velde, 2008, p. 67). Therefore, the Dutch liberalists of the second half of the 19th century and their constitutional demands have to be viewed in direct relation to the co-optation of Dutch monarchy under William I and II.

3.2.1 State-industry relations: Rise of gentlemanly capitalists and the Dutch PBI

During William I’s main politico-economic focus, namely the pursuit of wealth creation through expanding colonial trade, the Northern Netherlands7 was marked by industrial stagnation in the first half of the 19th century. William I, also called the

7 From 1815 until 1839 the United Kingdom of the Netherlands consisted of the former United Provinces (Northern Netherlands), Belgium and Luxembourg (Southern Netherlands). With the declaration of independence of Belgium and Luxembourg in 1839, the Kingdom was split and the present- day borders of the Netherlands were declared legal. 119

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‘merchant-king’, granted extensive attention towards restructuring the commerce sector, favoring the Northern merchant class fraction’s interests, despite this fraction’s declining dominance (Schrauwers, 2011a, p. 375). Additionally, the degenerating importance of the Amsterdam stock market for world trade and the bankruptcy of the VOC in 1799 with its subsequent marginalization of Dutch colonial hegemony, did not lessen William I’s interest in colonial trade, but spurred it on. Subsequently, national industries were barely promoted and the general economic infrastructure of the country could not catch up with industrialization processes abroad (de Wit, 1990, p. 24). In alignment with his concerns for commerce, William I followed strategies of “corporate governmentality”, namely the delegation of sovereignty to chartered corporations in the beginning of the 19th century in the Netherlands (Schrauwers, 2011a, p. 376-377). Instead of simply extending absolutist state repression, William I sought to connect with various class fractions, ensuring a new order of the national economy, while at the same time shaping workers subjectivities under a newly transformed management science (Schrauwers, 2011a). Concerning national industries, William I installed the ‘Funds for Industry’, which distributed subsidies to “[…] lend support to especially those sectors of the national industry that can not [sic] be provided with adequate protection without raising tariffs

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) to such levels that these could have a disadvantageous influence on commerce” (as cited in van Zanden & van Riel, 2004, p. 94). Concerning the restructuring of colonial exploitation, he established new commercial companies that replaced the bankrupted VOC, such as the Nederlandsche Handel-Maatschappij (The Netherlands Trading Society – NHM) (e.g. Schrauwers, 2011a). By shareholding in these corporations, William I and the Northern merchant class earned up to thirty-nine million florins per year (Bourrinet, 2016, p. 16). While the label for Dutch colonial exploitation changed, its forces and results were similar to those of the first phase of Dutch capitalism, generating “‘indigenous’ revolts against forced labor and starvation” (Bourrinet, 2016, p. 16). These were directed against institutions such as the ‘culture system’, which determined certain amounts of colonial production for export, while pocketing the total revenue for the NHM and, thus, William I and the Northern merchant class (Schrauwers, 2011a, p. 384). The vast majority of this capitalist slavery money was re-invested into financial speculation rather than national industrial developments, in turn manifesting the general trend of national industrial stagnation that marked the first half of 19th century Netherlands. Already during the reign of William II, but especially from the liberal revolution of 1840 onwards, government authorities implemented free-trade policies (de Vries, 1957, p. 295-296). At the same time, the gentlemanly capitalist class

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) fraction became more successful in implementing their particular interests as general interests at the level of the state. Their successes were due to newly developing forms of inter- organizational cooperation, such as the establishment of the chamber of commerce in 1843. “Founded by the municipality in Zaandam [it] brought together representatives from different trades and industries […] to pressure government authorities to take measures for improving the Zaanstreek’s infrastructure” (Davids, 2006, p. 574). The government started investing public money into building a national infrastructure and revolutionizing “transport, communications, and capital markets [in order to lower] the costs that entrepreneurs had to [sic] make to compete on international markets” (van Zanden & van Riel, 2004, p. 218). As many more examples show, the interests of the gentlemanly capitalist class fraction and the liberals in parliament aligned well. In 1869, for example, the government abolished the tax on newsprint to cause a boom in paper demand and thereby combat the paper industry’s slow growth and stagnating investments (Pfann & van Kranenburg, 2003, p. 63). This strategy yielded an immediate effect on investors’ interests in the Dutch PBI. Additionally, the inaccessibility of high-quality Dutch lompen outside of the Netherlands due to a national decree on restricting the export thereof and the apparent lack of industrialization within the Dutch PBI led foreign financiers to seek profitable chances for

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) investment (de Groot, 2001, p. 288). Soon these developments stimulated four Belgian bankers and paper makers to found the Koninklijke Nederlandse Papierfabriek (KNP) (de Groot, 2001, p. 288). Other state strategies also fostered investors’ interests in Dutch industries. The restructuring of the monetary system was a long-awaited project, driven by the interests of the financial class fraction to allow for an “[…] efficient mediation by brokers and cashiers, [so that] almost everyone with surplus money or a (temporary) shortage could participate on this market” (van Zanden & van Riel, 2004, p. 213). Part of these financial reforms was a restructuring of the first national bank’s management, the Nederlandsche Bank (DNB). Already founded in 1814, William I had forced the bank to support government expenditures for centuries, hereby greatly diminishing the financial class fraction’s trust in this organization (van Zanden & van Riel, 2004, p. 163). Nevertheless, the bank’s reorganization, the restructuring of the monetary system more generally, and the continuing growth of secondary financial markets, yielded a rise in national stock and foreign security investments and assured continuous investments into national industries by the gentlemanly capitalist as well as the financial class fractions (van Zanden & van Riel, 2004, p. 213). The above delineations illustrate the ability of the gentlemanly capitalist class fraction to establish joint forces, first with the monarchs and later with the liberals in parliament, to

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) restructure national industries through state policies and interventions. Consequently, state-industry relations during Dutch monarchic liberalism are not marked by laissez-faire strategies and little-to-no protection for national industries, but by networked capital amongst the dominant class fractions as shown in the case of the Dutch PBI.

3.2.2 Technology: A new paper production process and the subsequent search for innovative fibers

The phase of monarchic liberalism is marked by two major changes within the paper industry: The shift from hand-made paper to mechanically produced paper and the change from cloth to cellulose fibers. In the beginning of the 19th century, the blueprint for a machine that mechanically produced paper was created. The inventor, Nicholas-Louis Robert, and “his master, Francois Didot, grew impatient with the irascibility and ill temper of the workers, and it was this constant wrangling and discord, […] that gave Robert the impetus to devise a papermaking machine” (Hunter, 1978, p. 343). The Fourdrinier brothers, all engineers, perfected Robert’s machine soon after it was patented in 1798. The machine turned vegetable fibers, which are wetted beforehand, into a web of dry paper by passing them over a large number of rollers, removing the water through suction and drainage (Hunter, 1978, p. 367-368). The matted

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) and intertwined fibers are called a felt, which was further dried by being pressed through steam-heated cylinders. Essentially, the machine solely imitated the production process of hand- made paper. By means of mechanization it became possible to produce paper of endless length, the only restriction being the width of the machine that would determine the width of the paper. Even “a child” was able to operate such a machine; there was no longer any need for experts (or, as Robert would have called them, irascible and ill-tempered workers), who would know the detailed and demanding production process of hand- made paper (Hunter, 1978, p. 347). Soon the blueprints for the machine were introduced in Britain, Russia and the United States of America, where they were perfected by engineers and put to use by solvent paper makers to make production more profitable. Shortly after the introduction of the papermaking machine across different countries as well as in the Netherlands, a search for less costly and more durable fibers began, as the mechanization allowed for the exploitation of new raw material (Hunter, 1978, p. 375). From 1800 onwards, the Dutch government eagerly promoted the nation-wide formation of different sectoral commissions, which were intended to spread relevant knowledge and information about production techniques and promote inter-organizational cooperation (Knippenberg & Pater, 1990, p. 101). The search for new, more

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) efficient raw materials was taken up by, amongst others, Beerta, a sub-division of the Genootschap ter bevordering der Nijverheid te Onderdendam (Society for the Advancement of Industry in Onderdendam), which was an association and cartel-like structure founded in 1837 by the here(n)boeren (gentlemanly farmers) as well as state officials, merchants and industrialists (Groninger Archieven, 2015). Gentlemanly farmers, in opposition to peasant farmers, were an elite of land-owners, originating in the middle ages, who engaged in more commercialized agricultural ventures and held local political offices (Nagel, 1938; Philips, 1977). The commission Beerta researched the processing possibilities of straw in order to make the Dollardpolder8 straw production more profitable for farmers (Bouwens, 2004, p. 64). As soon as primarily straw-board, but also straw-paper production became technically feasible, its implementation served as a new outlet for capital investment (Bouwens, 2004, p. 64). In the end of the 19th century, the share of straw (including esparto and old paper) in Dutch paper production increased, while the use of cloth as a raw material steadily decreased (see Figure 1). From 1880 onwards, also wood fiber became a viable supplement next to cloth and straw. Due to a few disadvantages in wood fiber-based paper products and the little, national availability of wood fiber, this raw material did

8 Dollard is a region in the federal state of Groningen 126

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) not play a crucial role for Dutch paper production until much later in the 20th century (de Wit, 1990, p. 46). Research on and implementation of alternative raw materials were limited to capital-strong paper companies such as Van Gelder Zonen and KNP. In 1883, Van Gelder Zonen te Wormer switched entirely to wood fiber and in 1884 KNP established their first cellulose-based paper mill (de Wit, 1990, p. 48-50). Ultimately, both the mechanization of paper production as well as the use of innovative raw materials were only possible through inter-organizational networks, which enabled the gentlemanly capitalist class fraction to concentrate their financial resources in order to keep up with international developments. Additionally, the successful cooperation amongst the gentlemanly capitalist class fraction and the two monarchs, William I and II, as well as the post-1848 networked relations with the liberal parliament, enabled the (re-) production of favorable inter-organizational competition structures at the expense of smaller scale, hand-made paper producers in the Netherlands.

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Figure 1 Estimated share of raw material in Dutch paper production in the end of the 19th century

100 90 80 70 60 50

40 PERCENTAGE 30 20 10 0 1870 1880 1895 YEAR

cloth wood fibre straw, esparto, old paper

Source: Own calculation based on de Wit, 1990, p. 50-54

3.2.3 Competition and cooperation: Highly industrialized paper and board industries

International competitive pressures grew immensely for the Dutch PBI due to the rise of mechanical paper production in the United Kingdom, France, Germany and Scandinavia from 1780 onwards (de Wit, 1990, p. 24). The industry’s international competitors produced large quantities of paper at ever-lower prices, having coal-fueled steam machines fully implemented and wood fiber readily available. Due to high costs of adapting papermaking machines and a mentality that favored hand-made paper production processes as well as hand-made paper 128

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) products, the Netherlands with its small and medium-sized paper millers stayed far behind its international competitors (de Wit, 1957, p. 356). Also on the national level, the competitiveness of Zaansian paper production decreased immensely around that time (de Wit, 1990, p. 19). Smaller Veluwian paper mills had always outnumbered the larger Zaansian ones. This gap increased steadily over time, even though both regions show decreasing numbers of paper mills (see Figure 2). While in the early 19th century Zaansian paper production output was double as high as the Veluwian one, these roles were reversed by 1854 (de Wit, 1990, p. 19). The reasons for the immense decline in the number of Zaansian as well as Veluwian paper mills during the 19th century are threefold. First, the combination of high protectionism abroad and low protectionism in the Netherlands had for too long favored the interests of the merchant capitalist class fraction (Brandon, 2011, p. 141). In fact, during the end of the 18th century, protectionism was a general trend throughout Europe to safeguard national industries, virtually closing down previously main consumer markets for Dutch paper producers (de Vries, 1957, p. 285). In addition, with only small success to convey their interests on a national level, Dutch paper producers continued to suffer from low import-taxes for paper, which played into the hands of Dutch paper traders as well as foreign paper producers (de Wit, 1990, p. 20). Second, the uniqueness

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) of Dutch paper regarding its durability and whiteness became outdated as soon as chemical paper strengthening and brightening techniques were implemented in other paper producing countries (de Wit, 1990, p. 21). Third, the most pressing issue, which led to the decline of the Dutch PBI, was the costliness of implementing steam-run paper machines (de Vries, 1957, p. 235).

Figure 2 Number of paper mills in the Netherlands during the 19th century

250

200

150

100 NUMBERMILLSOF 50

0 1819 1839 1852 1869 1898 YEAR

Gelderland Noord-Holland total Source: Own calculation based on De Vries, 1957, p. 276; De Wit, 1990, p. 19

To counter these developments, the implementation of the first paper machine in the Netherlands was a networked effort between William I and one of the biggest Zaansian paper producers of that time, Van Gelder Schouten & C. (de Wit, 130

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1990, p. 25). Their joint goal was to revive the Zaansian paper production and its (inter-) national competitiveness. Subsequently, van Gelder bought the paper mill Het Fortuin te Zaandijk in 1837 and the minister for industry advised to order a steam-run paper machine through the Rotterdamse Stoomboot Maatschappij (The Rotterdam Steamship Company – RSM), established and partially owned by William I (de Wit, 1990, p. 25). A series of difficulties led to the economic failing of this networked effort, namely the belated delivery and malfunctioning of the machine as well as the costliness of personnel able to operate such machines (de Wit, 1990, p. 25). When William I granted van Gelder the first license to install a steam-run paper machine, he did not tax him the effective amount of six percent on the import of the machine, but demanded the machine to be fueled with turf instead of coal. Overtly, the reason for William I’s demand were complaints of neighboring white paper producers, who were scared that coal fumes would decrease the whiteness of their paper; covertly, the independence of Belgium ripped William I’s kingdom of its coal resources, leaving only the much costlier and less economic exploitation of turf in Dutch territory (de Wit, 1990, p. 26). Consequently, the king had a big interest in Dutch industries using nationally exploited turf rather than foreign coal. Yet, being turf-fueled increased the machine’s economic inefficiency to an unaffordable extent (de Wit, 1990, p. 25). Despite the fact

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) that this first adaption of a steam-run paper machine for Dutch production failed, other paper producers followed. They, too, failed (de Wit, 1990, p. 27). By 1870 the implementation of steam-run paper machines finally took grip in the Dutch PBI; yet only capital- strong companies were able to successfully switch from hand- made to mechanical paper production (Davids, 2006, p. 557). Still machines needed to run at full capacity to be profitable and the production output still exceeded paper demand by far. Thus, the two big paper producers of that time, VGZ and KNP, once more turned to the government for support. This time with the intention to force a nationwide switch from hand-made to mechanically produced paper. To do so, VGZ and KNP filed a complaint with the Ministry of Home Affairs in 1879, against the cartel structures of the smaller paper producers (Bouwens, 2004, p. 47). This cartel structure, called Marten Orges, was an association of the remaining thirty producers of hand-made paper, mainly located throughout the Veluwe, to agree on selling and buying prices (Bouwens, 2004, p. 46). Shortly after the establishment of this association, the hand-made paper producers successfully put pressures on national and colonial governments regarding paper import prices (de Wit, 1990, p. 37). As a matter of fact, in 1848, the Ministry of Home Affairs advised all governmental organizations to only make use of handmade paper to boost the industry; in 1879 the national

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) printing press even renewed this agreement in direct cooperation with the association Marten Orges (de Wit, 1990, p. 37). Thirty years later, the complaint of VGZ and KNP led the Minister for Home Affairs to denounce Marten Orges as a form of unauthorized collusion, demanding from all governmental organizations to only make use of mechanically produced paper. Thus, KNP and VGZ succeeded in imposing the exclusive use of mechanically produced paper by the state, including the national printing press. In doing so, all other paper mill owners were forced to either borrow money to mechanize their production or shut down. By 1890, the association Marten Orges was suspended and all Dutch paper mills had either mechanized (except van Houtum, Tzn Renkum and Schut) or shut down their production (Bos, 1982, p. 55; Bouwens, 2004, p. 47). Around the same time, about twenty straw-based paper production sites opened throughout the region of Groningen (Hopster, 1992). While some of these were speculative investment outlets for entrepreneurial industrialists, others were cooperatives of farmers, who were eager to countervail the growing hostility of market pressure and low-cost selling arrangements for their overproduction of straw (Bouwens, 2004, p. 61). Even though the first of these cooperatives was not successful in surviving the competitive market-environment of this newly emerging industry, other cooperatives were soon able

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) to keep up with the speculative branch due to different reasons. For one, state-initiated land reclamation for agricultural usage and the rising pressures amongst farmers to utilize artificial fertilizers pushed the continuing overproduction of straw (Bouwens, 2004, p. 65). Secondly, world-wide demand for straw-board kept growing, while the Dutch straw-board industry remained inimitable (Bouwens, 2004, p. 65). Lastly, the legal organization of these cooperatives secured the availability of raw materials, based on the company shares held by each farmer (Bouwens, 2004, p. 65). In turn, rising straw prices or shortages in raw materials had little to no impact on the cooperatives and their production output. Understandably, these cooperatives had very different market strategies and interests to those of the speculative companies, who aimed at lowering straw prices to reach higher profit margins. Thus, mutual cooperation between these two camps to strengthen the strawboard industry’s international competitive advantages during crises-ridden years was unthinkable (Bouwens, 2004, p. 67). Even though a few cooperative attempts had been made during the Dutch strawboard industry’s hundred-year history (1870-1970), these never achieved any viable success. The development of straw-board production as well as the implementation of wood fiber for paper production by KNP and VGZ led to a profit explosion in the Dutch PBI in the end of the 19th century (Bouwens, 2012, p. 194). With the exception

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) of cooperatives in the strawboard sector, the overall effects of industrialization were similar across all Dutch industries and industries abroad. Growing large-scale corporations brought small and medium size enterprises to their knees throughout different sectors. The decline of hand-made paper production, first in the Zaanstreek and later also the Veluwe, and rise of steam-run paper mills as well as strawboard paper production are apparent in Figure 3. In 1848, Zaansian paper production was still at the forefront in terms of production output. By 1903, both Zaansian and Veluwian paper mills had decreased in number, while the strawboard production in the region of Groningen continued booming and the paper production in the region of Maastricht remained intact. Already in 1869, the three paper mills in the region of Maastricht produced six times as much white paper as all twenty-one paper mills in the region of Apeldoorn together (de Wit, 1990, p. 58). These regional competitive forces of the 19th century Dutch paper production were strongly influenced by the “fundamental transition in energy base and shift in industrial structure” in the Zaanstreek, including a drastic decline in the number of industrial windmills (Davids, 2006, p. 550). As a response to the economic downturn of the Zaanstreek, the re-distributional policies, and the rather low protectionism, the gentlemanly capitalist class fraction strengthened their national paper cartels to secure ownership

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) and profits (van Riel & Zanden, 2004, p. 147). These cartel structures were a landmark of “[t]he specific structure of Dutch industry with its strong position of the family firms, the lack of raw materials and the absence of a heavy industry determin[ing] the way collusive practices appeared in order to limit risk and uncertainty for the entrepreneur” (Dankers & Bouwens, 2004, p. 13). Even though KNP and VGZ successfully denunciated the hand-made paper producers’ cartel, they continued to rely on family and inter-organizational networks, to not only achieve success and stability for their companies, but follow their aim to centralize the entire Dutch PBI (Dankers & Bouwens, 2004, p. 11). Even though the legal form of family firms as rederijen was slowly replaced by converting such partnerships into non-listed limited companies, the Dutch PBI and, more generally, the Dutch economy remained highly nepotistic in terms of ownership and managerial structures (Davids, 2006, p. 562). This nepotism manifested in the dominance of entrepreneurial dynasties by the end of the 19th century (Davids, 2006, p. 566; Schrauwers, 2010, p. 776-778). A prime example, the Dutch PBI “was dominated by Van Gelder & Zon [VGZ], a 100 percent family owned business which produced nearly half of the total Dutch output, and KNP in Maastricht, […] owned and managed by a group of Dutch and Belgian families” (Dankers & Bouwens, 2004, p. 15).

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980)

Figure 3 Paper mills in the Netherlands in 1848 and in 1903

Source: Own mapping based on Everwijn, 1912, p. VI-VII

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In 1904, the government, in cooperation with the remainder of smaller companies (around thirty-nine paper mills besides VGZ and KNP), founded the Koninklijke Vereniging van Nederlandse Papier en Kartonfabrieken (VNP), a lobby-organization for “exchang[ing] information about the market of raw materials, tariffs and production capacity elsewhere” (Dankers & Bouwens, 2004, p. 15). The establishment of the VNP fitted the fashion of “corporate governmentality” and was embedded in the “complex set of interlocked corporations [, which] extended royal power into civil society, into the financial service sector, trade, and national industrial production” (Schrauwers, 2010, p. 754). VGZ and KNP had no interest in joining this association. They had their own agreements for lowering the costs of their paper production. Also without the two biggest players of the industry joining, the VNP was successful in institutionalizing lower price arrangements for raw materials, such as straw, by furthering the exploitation of peasants. Essentially, while the smaller companies cooperated to dictate the prices on raw materials, the two biggest industry players continued to follow their monopolizing market strategies (Dankers & Bouwens, 2004, p. 15). Both these networks of intra-industry and state-industry cooperation furthered the gentlemanly capitalist class fraction’s wealth by securing the continuation of colonial and local labor exploitation.

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3.2.4 Labor-capital relations: Modern labor exploitation on the rise

Comparably late, namely from 1820 onwards, the modern proletariat was created in the Netherlands through gradually annexing and disclaiming the common land (Federici, 2004, p. 28). Led by provincial generals on behalf of the monarch, the annexation concerned the common land located in rural areas of the hinterland (all regions of Northern Netherlands except Holland), which was rented by peasants from local nobles and landowners (van Zanden & van Riel, 2004, p. 130). Removing the rights from peasants to use the common land enabled different measures of control for the government. First, it allowed for the creation of a proletarian class, which no longer owned their means of production, but instead was subjected to the exploitative wage-system of providing labor directly for money (Federici, 2004, p. 29). Second, the government gained an overview of the different landmarks to build infrastructures, which allowed for the intensified exploitation of natural and labor resources. Third, through privatizing the land, the government ensured its commodification (rise in monetary value) and, thus, the commercialization of agricultural production (Federici, 2004, p. 29). The disembodiment and destruction of the common land through harsh capitalist installations was pursued at the cost of brutally breaking the

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) resistance of the keuters (common land peasants) (van Zanden & van Riel, 2004, p. 130-133). As the number of industrial employees doubled between 1860 and 1890 to a total of 600.000, the previously pre- industrialized labor-capital relations were supplemented by waves of unionization from 1870 onwards (Dankers & Bouwens, 2004, p. 8-11; van Zanden & van Riel, 2004, p. 251- 252). Unions as well as more radical forms of workers’ organization were an active response to the hegemonic powers at play. In fact, state initiatives dismantled labor security and rationalized the wage system in order to stimulate the investment interests of the gentlemanly capitalist class fraction (e.g. van Zanden & van Riel, 2004). The emergence of the lumpen proletariat went hand in hand with the abolition of a law in 1869, which forbade labor union organizations all together (van Zanden, 2005, p. 70). The abolition was driven by the dominant capitalist class fractions fearing the formation of uncontrollable workers’ upheavals, similar to the ones they could witness abroad (van Zanden, 2005, p. 70). Despite the successive spread of collective working agreements across national sectors, information about nationwide working conditions, wage scales and differences, as well as the employment market more generally remained scarce and inaccessible to the majority of the proletariat (Bourrinet, 2016, p. 16; Knippenberg & Pater, 1990, p. 125. The daily exploitation under harsh labor conditions,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) namely twelve-hour working days as well as sudden unemployment and subsequent lack of payment in times of energy or raw material shortages, added to the difficulty for workers to organize themselves against the network of the gentlemanly capitalist class fraction and state officials (de Vries, 1957, p. 331). The state-driven industrialization of both agriculture and local industries intensified the already precarious circumstances of peasants. A prime example, the rising speculative businesses of entrepreneurial factory owners and pressure from the members of the VNP compelled the straw sector’s peasants to sell their over-produced straw at ever-lower prices (Bouwens, 2004, p. 168). The peasants responded by founding cooperatives to heighten the prices of their surplus produce. Yet, growing market pressures introduced by further capital investments into the straw branch – the speculative companies were successful in attracting capital investments into ever more straw mills – transformed the cooperatives into a selling arrangement dominated by the highest-bidding commissioners and ultimately led to their bankruptcy (Bouwens, 2004, p. 170). Another problem feeding into the resistance of workers in the Dutch PBI and the Dutch economy more generally was that, from the formation of the Workers’ League of Holland in 1871 onwards, Dutch unionism resembled the institutionalized fight for the right to work, instead of a structural resistance to

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) labor exploitation in industrialized capitalism. Therefore, independent anti-war, anti-work and anti-colonial associations started forming around young collectives mostly based on Marxist and anarchist idea(l)s, such as the Mokers group in 1904 (van Daele, 2013). Herman J. Schuurman was an important figure in the rebellious youth wing of the Dutch libertarian movement, who edited, together with other comrades, de Moker magazine and organized nation-wide meetings under the umbrella idea of abolishing work.

This social system, capitalism, is based on the act of work; it formed a class of people, that have to work – and a class of people, that don’t work. The workers are forced to work, because if not, they will have to starve. “Because,” the owner teach us, “he who doesn’t work, will not eat,” and they claim that their calculating and gathering of profits is also work. (Schuurman, 1924, italics in original)

Possible links between these anti-capitalist and anti-militarist workers’ organizations and the workers of the Dutch PBI as well as other national industries remain undocumented due to extensive state repression, aimed at marginalizing such organizations until their defeat. Overall, both monarchs (William I and II) as well as the later liberal parliament were clearly opposed to assisting workers’ rights and their struggles. Always a target of the networks of the dominant class fractions,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) such as the chamber of commerce, “reasonable” demands of workers were commonly rejected (Davids, 2006, p. 574). In a similar fashion, the legalization of unions in 1869 was solely a strategic move to prevent the emergence of more structural workers’ upheavals.

3.2.5 The denouement of monarchic liberalism: Industria – unsuccessful in boosting international competitiveness

The gradual replacement of the merchant oligarchy by the gentlemanly capitalists, representing the interests of the industrial elite and their close-knit family networks, drove the nationalist project between 1815 and 1914. A close relation with the monarchs and later with the liberal parliament was essential for the gentlemanly capitalists to succeed in making Dutch industries profitable investment outlets, especially in light of the slowly decreasing importance of the Zaanstreek in relation to the up-and-coming regions of Groningen and Maastricht for Dutch paper and board production (see Table 6). Subsequently, few family firms grew to dominate Dutch industries and national markets. VGZ, for example, owned “production units at several sites, which were together producing more than half of the total Dutch output of paper” (Dankers & Bouwens, 2004, p. 10). Such concentration was driven by the gentlemanly capitalists investing their capital into ever more production sites in order

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) to maximize industrialized paper production and subsequent profits. First, industrialized paper production demarcated large, integrated paper producers on the one hand from small-scale, handmade paper producers on the other hand. With the networked efforts between the two big paper companies, VGZ and KNP, and state officials this picture changed and a new law forced all Dutch paper producers to switch from handmade paper production to industrialized paper production. Soon the majority of small and medium sized companies was brought to their knees by the growing dominance of large-scale corporations and their close network cooperation with the monarchs. The latter enacted the legal basis, on which the needed labor power was created; by taking away the right to the common land thousands of peasants were forced to sell their labor power on the industrial market.

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Table 6 Comparing regions for paper production in 19th and early 20th century Netherlands Zaanstreek / Maastricht Veluwe Groningen - steam-run paper machines - continuing hand-made paper - innovative use of straw as - production of ‘endless’ paper production using cloth and based raw material - usage of wood fibers on traditional hamerbak - board production only (no Technology - after 1890 either shut down or paper) bought out

- network between gentlemanly - little to no relations with state or - support in searching for State-industry capitalists and monarchs, later local authorities innovative raw materials by relations with liberal cabinet state-organization (Beerta)

- stark concentration of industry - cartel-structures to maintain - stark competition between Competition and - (institutionalized) cartel hand-made Dutch paper tradition gentlemanly farmers and cooperation structures (Marten Orges) strawboard cooperatives

- rising proletarianization - state-driven industrialization of - proletarian laborers work - illegalized unionization agriculture for gentlemanly farmers Labor-capital - formation of anti-war, anti- - switched to mainly proletarian - self-employment in straw relations work and anti-colonial workers’ laborers, similar to Zaanstreek board cooperatives associations region

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To sum up, during monarchic liberalism the interests of powerful class fractions aligned in a way, which changed the characteristics of the Dutch PBI drastically, away from peasant- based, handmade, small-scale paper manufacturers to the dominance of a large-scale, corporate paper industry. Yet, the networks within and between the dominant class fractions only enabled the continuity of national industries, not their catching up with the industrialization levels of neighboring countries. Thus, building Industria remained without success in terms of boosting the Dutch PBI’s international competitiveness.

3.3 Fordism: Networks fostering concentration and corporatization (1914-1980) The whole ‘mode of regulation’ was organized under the dominance of big monopolies, closely linked to the state, and allowed capitalism to expand in a relatively balanced, steady way. (Thomas, 2005, para. 15)

The Fordist accumulation regime constitutes the third phase of capitalism in the Netherlands and beyond from 1914 until 1980. Fordism is an accumulation regime with a distinct mode of regulation and set of technical and social relations of (re-) production, originating in the early 20th century US-American politico-economic context (Jessop & Sum, 2006, p. 59). The

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) following section offers conceptual definitions of the main Fordist characteristics before diving into the Fordist specificities of the four dimensions of inter-organizational networks in the Dutch PBI between 1914 and 1980. Fordism, as an ideal-type accumulation regime, involves a nationally based circuit of capital rooted in mass production and mass consumption (Jessop & Sum, 2006, p. 59).

“Fordism’s virtuous circle involves rising productivity based on economies of scale in mass production, rising incomes linked to productivity, increased mass demand due to rising wages, increased profits based on full utilization of capacity, increased investment in improved mass production equipment and techniques, and a further rise in productivity” (Jessop & Sum, 2006, p. 59-60).

To understand the Fordist mode of regulation one has to consider its institutional and organizational base, namely the involvement of state agents, class fractions and labor-capital relations in the circuit of capital. First of all, the Fordist state can be characterized as a Keynesian inspired welfare state, which secures capital-intensive investments in mass production and fosters R&D ventures while at the same time ensuring mass consumption through safeguarding a minimum prosperity of the lower and middle classes (Jessop & Sum, 2006, p. 62). To do so, labor policies involve the recognition of unions for wage

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) bargaining, minimum wage legislations and the development of welfare programs to ensure high consumption levels for the unemployed (Jessop & Sum, 2006, p. 61). Exemplary Fordist organizations either base their rising scales of productivity on trusts and cartel structures or on horizontally integrated corporations (Jessop & Sum, 2006, p. 61). In Fordism, surplus profit is foremost based on returns of investment, as higher productivity lasts only “until the innovation(s) become standard practice” (Jessop & Sum, 2006, p. 61). The expansion of corporate enterprises thus relies on the availability of private capital and reinvestment of profits (Jessop & Sum, 2006, p. 62). In Fordism, consumer credits, secured by central banks, are fundamental to increase purchasing power of middle and lower classes, and are in turn hedged through “state credit policies […] aimed at aggregate demand and full employment” (Jessop & Sum, 2006, p. 62). Furthermore, the interdependence of mass production and mass consumption manifests through the rising importance of commercial capital, being ever-present in the form of mass advertising, mass retailing, mass credit, and mass media (Beniger, 1986, p. 330, p. 331, p. 347, p. 356).

3.3.1 Interim war period 1914-1945

The transition from the phase of Dutch monarchic liberalism to Fordism in the Netherlands was a gradual process,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) which followed the political and economic uncertainties of the interim war period from 1914-1945. World Wars I and II affected the Dutch economy heavily, including its paper industry. Phases of economic booms and downturns appeared at ever-shorter intervals from 1914 onwards, as reflected in the production output of the Dutch PBI (see Figure 4). On the one hand, Dutch paper production depended on imported raw materials, and was, thus, strongly affected by the unstable political climate between its European trading partners. On the other hand, the export possibilities for Dutch paper rose with the shutdown of production facilities in Germany, France and Great Britain during World War I (Bouwens, 2004, p. 73). Even though the Dutch paper and board industry quadrupled its profits during this time, the first half of the 1920s was marked by a decreasing demand for paper and a thorough shortage of coal throughout Europe, which also took its toll on the industry (Bouwens, 2004, p. 73). Before the economic crisis started in 1929, bringing prices for paper products to a record low, the Dutch PBI experienced a short revival in the second half of the 1920s. Nevertheless, by the 1930s the industry tried to countervail immense losses caused by the Great Depression through forming cartel agreements, such as inter-organizational negotiations on raw material prices (Bouwens, 2004, p. 80). Also the Dutch government reacted to the volatilities and capitalist crises, banning the export of required raw material from 1930

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) onwards (Dankbaar & Velzing, 2013, p. 6). As a consequence, the Dutch PBI did recover to some extent from the economic devastation of the late 1920s and 1930s.

Figure 4 Production of paper and board in tones in the Netherlands, 1921-1952

400

350

300

250

200

TONNES 150

100

1921 1923 1929 1931 1933 1935 1939 1940 1941 1942 1943 1945 1946 1947 1948 1949 1951 1952 1925 1927 1937 1938 1944 1950 YEAR

Source: Own illustration based on Bouwens, 2004, p. 77, p. 87, p. 115

With the beginning of World War II, the industry once more faced the industrial and political uncertainties of wartime. Under German occupation, the paper industry, amongst many other Dutch industries, was fully annexed, solely serving German demand for paper (Bouwens, 2004, p. 85). A shortage of resources, including machinery, raw material and fossil fuels, led to an immense decrease in Dutch paper production output

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) and sites, and thus to a concentration of industrial activity. Many workers, who lost their jobs as a result of stand-stills or even shut-downs were recruited for the program of Arbeitseinsatz, a German program to forcefully relocate industrial experts from occupied territory to support German production (Bouwens, 2004, p. 87). Most of Dutch paper production either served the propaganda-program of Nazi-Germany or was heavily regulated as to prohibit the production of, for example, specific newspapers, magazines, advertisements and office materials (Bouwens, 2004, p. 88). After a few months of war-activity within the occupied Dutch territory, the Dutch PBI comprised only fifty companies, producing 350,000 tons of paper and board; by September 1944, the entire Dutch paper production had come to a standstill (Bouwens, 2004, p. 100). After the end of World War II, many European states started regulating market forces and implementing wide-ranging social welfare programs as an effective strategy to guarantee rising productivity and full employment (van Zanden, 2005, p. 128). The phase of Fordism in the Netherlands is characterized by a state, which propels industrial development through creating large-scale national industrial champions. In 1948 the Central Bank of the Netherlands was nationalized and the national organization of employers and employees called The Stichting van de Arbeid was involved in the implementation of the guided wage policy (van Zanden, 2005, p. 129). Efforts of

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) governmental restructuring to coordinate the productivity of the Dutch economy included the regulation of industrial usage of resources and price fixing strategies, which made the 1950s a booming decade for the paper industry (Bouwens 2004, p. 57- 61). Accordingly, between 1950 and 1960 the Dutch PBI produced up to 1.5 million tons of paper and board annually (Bouwens, 2004, p. 129). Soon machine numbers increased by thirty-five percent, comprising a total of one-hundred-seventy machines in use (Bouwens, 2004, p. 131). Examples of state regulation are the restructuring of the board sector and the organization of state-industry cooperation through, for example, the VNP and the state organization Noordelijke Ontwikkelingsmaatschappij (NOM) (Bouwens, 2004, p. 240, p. 249). Such inter-organizational networks between state authorities and the industry as well as amongst paper companies themselves played pivotal roles in the revitalization of the Dutch PBI during Fordism (Bouwens, 2003, p. 7). In the following passages, I provide a detailed analysis of each of the four dimensions of inter-organizational networks in the Dutch PBI during Fordism.

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3.3.2 State-industry relations: Consolidation in the Dutch PBI

Before 1950, the main industrial region of the Netherlands, Zaanstreek, which had ceased in relevancy for the Dutch PBI, was to a large extent closed for ‘outside’ investment capital (Davids, 2006, p. 567). The reliance of the industrialist class fraction on capital from within its (family) networks was soon replaced by finance capital from banks. This was partially due to the newly established ‘old boys network’, comprised of the supervisory directors of big corporations as well as banks, which dominated Dutch industries throughout the entire phase of Fordism (Horn & Vliegtenhardt, 2010, p. 63, 67). This phase, starting after World War II, reinvigorated European markets through redefining industrial and bank policies (e.g. Monnet, 2012). From then on, the Ministry of Economic Affairs saw mergers “[…] as the most plausible way for improving efficiency, optimizing added value and stimulating effective corporate management in weak and vulnerable industries” (Bouwens & Dankers, 2013, p. 1118). As a consequence, banks started issuing long-term loans to industrial agents for mergers and acquisitions and this incommensurable trend progressed from vertical integration to growing numbers of take-overs. In the case of the Dutch PBI, the state played a major role in supporting concentration from 1960 onwards. Originally,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) the Dutch state had supported merger negotiations between the two paper companies KNP and VGZ. These were stopped as both companies were simultaneously negotiating with the North American companies Crown Zellerbach and MacMillan Bloedel to secure joint investments into production facilities and plants (Bouwens, 2012, p. 198). Another factor, which influenced the stopping of merger negotiations between KNP and VGZ, was the fusion of Bührmann (originating in 1866 as a paper trading company) and Tetterode (a graphic trading company) in 1963 (Bouwens, 2004, p. 161). Following this mega-merger, Bührmann-Tetterode (BT) took over numerous other companies in various related sectors such as graphical machinery, stationary and envelopes, book-shops, publishing houses, and the toy-industry, paying the majority of these takeovers in cash, as was common in the 1960s when corporations still expanded through accumulated capital based on past profits (Brouwer & Steijn, 1976, p. 62-63, 72). As a response to the growing importance of international shared capital investments and mergers as well as the growing pressures from low cost production in so-called third-wave industrialized countries, the Dutch state was eager to restructure national sectors into concentrated industries (Langdon, 1981, p. 768). During this time, BT as well as KNP “took advantage of [the] complex restructuring process of the national board industry and with the support of the government acquired the lion’s share

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) of the solid board producers” (Bouwens, 2012, p. 201). Gradually, joint ventures between KNP and BT started, leading to a growing concentration of the Dutch PBI by 1970. To cope with the growing concentration, VGZ was forced into liquidation, which led to its bankruptcy after a request for financial support was denied by the Dutch state in 1981 (Bouwens, 2012, p. 201). Interestingly, already in 1975 the government agency Investerings- en Ontwikkelingsmaatschappij voor Noord-Nederland (NOM) had set up a joint venture with BT and KNP, named Kappa, a comparably big paper industrial plant for Dutch standards at that time. NOM held forty-nine percent of the shares of this new plant, which enabled Kappa to increase its production capacity by sixty percent (Bouwens, 2004, p. 249; Brouwer & Steijn, 1976, p. 80). A total of one-hundred-fifteen million guilders of public money were invested into this state- industry joint venture (Brouwer & Steijn, 1976, p. 80). In the context of the Netherlands, sector-restructuring strategies included the implementation of specific organizations under public law, which were independent advisory organizations, comprised of industrial experts. The best-known example of outsourcing state-led restructuring programs to industrial experts is the Nederlandse Herstructureringsmaatschappij (NEHEM), founded in 1972 and designed after the British Industrial Reconstruction Corporation (IRC) (Langdon, 1981, p. 768; van Zanden, 2005, p. 141). Herewith, the Dutch

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) government actively served the interests of the industrialist and managerial class fractions in order to rehabilitate industries, that focused on national demand, were internationally depreciated and outright shrinking. This is also the case for the Dutch PBI, which had declined by twenty percent in its overall production capacity from 1967 to 1976 (Bouwens, 2004, p. 178). Concurrently, the composition of transnational corporations in the Dutch PBI changed from large, vertically integrated corporations like BT (NL), KNP (NL), MacMillan (CAN) and Crown Zellerbach (USA) in the 1960s, who mainly participated in joint ventures, to corporations following strategies of diversification and acquisition like Feldmühle (GER), CCA (USA), Reed (UK), BPB (UK) and Enso Gutzeit (FIN) in the 1970s (Bouwens, 2003, p. 10). Thus, this shift in corporate strategies went alongside sector-restructuring state strategies, effectuating growing concentration in the Dutch PBI from 1950 to 1970.

3.3.3 Competition and cooperation: Cartels in the Dutch PBI

At the turn of the 20th century, the importance of prior forms of network cooperation, namely mutual insurance contracts or rederijen, decreased as the majority of industrial companies turned to commercial insurance companies instead (Davids, 2006, p.

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569). This does not mean though that network cooperation as a whole lost its importance for Dutch industries. On the contrary, previous forms of cartel structures were simply replaced by new forms of cartels, ultimately remaining the most important form of inter-organizational cooperation during the 20th century in the Netherlands and abroad. Also for the Dutch PBI, the importance of network cooperation in form of cartels and business interest associations remained pivotal. A prime example, the VNP grew to flourish by the 1930s, fostering “[a]greements on prices, sales and production [to reduce] competition and provide[.] stability for the members” (Bouwens, 2012, p. 195). These new forms of inter- organizational network cooperation and commercialized insurance slowly loosened the ties amongst members of the big Industria (either linked through family bonds or previous cartel structures) and established new ones with members of the growing finance and service sectors (Davids, 2006, p. 570-571). These new networks depict early materializations of the intersecting of the industrialist and the financial class fraction as industrial agents started relying less on internally accumulated capital and intra-industry network insurances, instead relying on commercial insurances and, thus, the banking sector. Until the end of the 1960s, employment rates in manufacturing grew, strategies of horizontal concentration and internal expansion (meaning to increase business operations and

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) growth without using resources external to the business, such as advertising and marketing9) were installed to increase scales of production, and only few mergers and acquisitions took place (Bouwens, 2004, p. 186-188). Even though the consumption of paper increased prior to the 1960s, the dependence of heavy industries on importing resources, in combination with the growth in mass production, posed a major challenge to the industry. These developments already forecasted the crises of the mid-1960s and 1970s, when markets were saturated. In addition, international competition reached a new peak, as Scandinavian countries were eager to produce paper in bulk by commodifying forests and natural resources (Bouwens, 2012, p. 197-198). Organized under the famous SCAN-cartels, which were already founded in the 1930s, Nordic paper and pulp production as well as trade became even more cartelized (Jensen-Eriksen, 2017, p. 4-5). Herewith, the SCAN-cartels posed a rising threat for Dutch paper producers in terms of access to raw material and the securing of consumer markets (e.g. Jensen-Eriksen, 2017). Also growing European integration through trade policies and the abolition of tariffs threatened the international standing of the Dutch PBI as it enhanced its exposure to international competition. Additional factors for the

9 No author [Def. 1]. (n.d.). Business Dictionary. In Business Dictionary. Retrieved August 13, 2019, from http://www.businessdictionary.com/definition/internal-expansion.html). 158

Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) decreasing international competitiveness of the Dutch PBI were the high operation costs for heavy industries since labor costs, lingering overcapacity and ecological standards were higher in the Netherlands than elsewhere in Europe (Bouwens, 2004, p. 188). As a means of absorbing these high costs business strategies were formulated after US-American and British examples; vertical integration and large corporations became the norm for Dutch business within and beyond the Dutch PBI (Bouwens, 2003, p. 10). With growing concentration and increasing pressure from the tin and plastics sectors, the smaller companies of the Dutch PBI gradually disappeared, while transnational corporations (TNCs) started rising (Bouwens, 2003, p. 11). Throughout the 1970s, the Dutch PBI faced three main challenges, namely the pivotal importance of finding alternatives to the dependence on costly imported raw material (wood fiber), the exploration of new markets due to overproduction caused by rising speed and scale of the production process, and the increase in energy and oil prices (Bouwens, 2012, p. 198). Despite these challenges, businessmen, consultants, bankers and politicians assessed the industry’s worth, agreeing that the Dutch PBI had a right to existence (Bouwens, 2004, p. 204). Consequently, the Ministry for Economic Affairs invested heavily in the revitalization of the industry by encouraging industrial concentration in form of M&As and by financially

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) supporting the VNP, so the Dutch PBI could rise to all three challenges (Bouwens & Dankers, 2007, p. 18). Also crisis cartels, which were tolerated at EU-level and state-co-orchestrated on national level, became of crucial importance to European industries more generally, and the Dutch PBI more specifically (Buch-Hansen & Wigger, 2011, p. 96). In the case of the Dutch PBI, crisis cartels helped organize state-industry projects on energy cost reduction as well as on supporting the independence of the Dutch PBI from raw material imports (Bouwens, 2004, p. 132, p. 199). By means of crisis cartels and state subsidies, which were tolerated by the EU Commission as “rescu[ing] industrial sectors in despair”, waste paper had become the most important resource of Dutch paper production in 1970, by far replacing pulp usage (Buch-Hansen & Wigger, 2010, p. 30; Jensen-Eriksen, 2011, p. 200; van Veen- Groot et al., 2001, p. 31). This increase in use of waste paper secured the import-independence of the Dutch PBI alongside desirable improvements in terms of ecological pollution. Also as means to maintain profitable prices, secure markets and restrict supply, cartel strategies continued to be of importance to the Dutch PBI. In fact, rising EU-level pressures for implementing anti-cartel laws more forcefully within the Netherlands were downplayed or outright ignored by the cabinet and the Netherlands continued to be considered a “cartel paradise” throughout the 1980s (Bouwens & Dankers, 2014, p. 59). Next

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) to the politically encouraged M&As, cartel practices continued to blossom, ultimately helping the Dutch PBI to achieve its booming phase of the 1980s (Sluyterman, 2013, p. 214-219). Even before the installation and exemption of the 1970s crisis cartels, cartel agreements had characterized Dutch industrial activities for decades. Cartels exist as different forms of inter-organizational cooperation and not always in opposition to competition (Fear, 2006, p. 1, 3). Inter-organizational cooperation in the form of cartel agreements were a vital part of Dutch business culture before and after the official enactment of competition laws in 1956 (Tweede Kamer der Staten-Generaal, 1965). Exemplary, Figure 5 depicts the number of cartel agreements for specific industries, including the Dutch PBI, between 1962 and 1980. While certainly not amongst the most cartelized industries in the Netherlands throughout those years, the Dutch PBI does nevertheless remain comparably steady in its numbers of cartel agreements compared to other industries, ranging between a maximum of about thirty- five in 1965 to a minimum of eighteen in 1980 (pink line with squares). Cartels were often not prosecuted in the Netherlands because potential economic damages had to be proven prior to starting investigations on collusive practices (Siraa, 2016, p. 77). The burden of proof, thus, lied with the accuser and not the accused, which implies that Dutch competition law still carried protectionist features at that time. Table 7 shows the share of

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) the Dutch PBI in different forms of cartels and gentlemen’s’ agreements in the Netherlands between 1962 and 1980. For example, the first value of 3.3 indicates, that of all quota agreements in the Netherlands in 1962, 3.3 percent of those were made Within the Dutch PBI. In line with the national prosecution guidelines for cartel practices, the shares of rebate and exclusive trade, quota, and price-fixing cartel agreements increased between 1960 and 1980 for the Dutch PBI, while the shares for allocation and condition cartel agreements decreased (see Table 7). Additionally, the increase of the former resonates with the decrease in numbers of Dutch paper producers and overall drop in production figures for the first time since World War II (Bouwens, 2012, p. 199). At that time, the Dutch PBI was confronted with high production costs and again, rising international competition. As soon as “the economic crisis was increasingly perceived as a crisis of the embedded liberalism compromise”, supra-national anti-cartel legislation intensified (Buch-Hansen & Wigger, 2010, p. 32). In light of the numbers above, it is not surprising that between 1970 and 1990 around forty percent of all cartel prosecution procedures of the European Commission were related to Dutch markets (De Jong, 1990, p. 245). In turn, this explains the overall decrease in the total number of cartel agreements in the Dutch PBI since 1962.

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Figure 5 Cartel agreements in the Netherlands, selected industries, 1962-

1980

NUMBER OF AGREEMENTS

YEAR Note. Values are in absolute numbers. Adapted from “The invisible handshake. Cartelization in the Netherlands, 1930-2000,” by Bouwens & Dankers, 2007, European Business History Association, Geneva, p.13. Copyright 2007 by the Utrecht University.

Table 7 Share of the Dutch paper and board industry in different types of cartel agreements, in percentages, 1962 and 1980 Type of cartel agreement rebate price- and Year quota allocation condition fixing exclusive trade 1962 3.3 18.2 42.4 3.0 16.7 1980 5.8 10.5 47.4 5.2 13.2

Note. Values are percentage. Adapted from “The invisible handshake. Cartelization in the Netherlands, 1930-2000,” by Bouwens & Dankers, 2007, European Business History Association, Geneva, p.16. Copyright 2007 by the Utrecht University.

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3.3.4 Technology: Innovative waste paper usage in the Dutch PBI

The ‘discovery’ of waste paper as a viable, profitable substitute for virgin wood fiber depicted a general trend in European paper production from the 1950s onwards (Bouwens, 2004, p. 132). In the specific context of the Dutch PBI, it led to new industrial policies, the restructuring of waste management and the adaption of innovative technology. Industrial policies ranged from financial subsidies for using waste paper in the cardboard and paper production to financial subsidies for warehouses. This latter state policy was called the EXPOVA agreement, which allowed paper producers to store waste paper in times of excess, and to use or sell it in times of shortage (McKinney, 1994, p. 14). The overall priority of the Dutch PBI as well as of the industrial policies of that time was to always have this new, pivotal resource readily available. Therefore, the Rijksbureau stimulated the public collection of waste paper through different programs, including the Jeugd Actie Papier Inzameling (JAPI), which prompted children to collect waste paper in exchange for toys or recycling subsidies for voluntary organizations and local governments (Bouwens, 2004, p. 112). From the 1950s onwards, the use of waste paper in the Dutch paper and board production rose substantially. By 1992, the paper producers in the Netherlands utilized up to seventy percent of possible waste

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) paper and recovered around fifty-five percent of all waste paper (McKinney, 1994, p. 11). The continuous efforts to optimize waste paper management through industrial policies and the subsequent stimuli for paper consumers were accompanied by the adaption of suitable technology. In order to achieve high levels of waste paper usability, the production of cardboard rather than high quality paper became essential to the Dutch PBI (Bouwens, 2004, p. 133). Accordingly, waste paper preparation systems as well as parts of the paper machinery were adapted to the challenges posed by this new raw material. While “a wastepaper line of the 50s […] would have the basic components of the ‘state of the art’ plant today”, recovered fibers did indeed demand a different treatment during the paper and board production processes (McKinney, 1994, p. 49-50). Still being built after the original Fourdrinier example, a part was added to the paper machine, in which the recovered paper is “mix[ed] with water and chemicals, in combination with heating” to turn it into loose fibers (Marsidi, 2008, p. 25). In a subsequent step the “pulp mass is [..] screened to remove unwanted materials such as plastic, glass[, ink] and sand” (Marsidi, 2008, p. 25). To this day, pulp from waste paper remains less pure than virgin wood fiber pulp despite all efforts to further innovate the recovery process. Nevertheless, the introduction of waste paper in the Dutch paper production cycle not only relaxed its

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) dependence on importing virgin wood fibers and raw material logs, but also served as a viable investment outlet. These technological innovations certainly yielded profit and growth for the capital-owners of the Dutch PBI, but they were not necessarily improving the situation of its laborers.

3.3.5 Labor-capital relations: The rise and fall of unions

Trade unionism in the Netherlands achieved its first nationwide success in 1914 with a collective agreement on the eight-hour working day, the illegalization of child labor and different regulations on working conditions (van Damme & Peters, 1994, p. 19; van Leeuwen, 1997, p. 767). From now on, most sectors, including the Dutch PBI, switched from a two-shift to a three- shift system, partially releasing workers of their harsh working conditions (van Damme & Peters, 1994, p. 24). Also, the trade unions’ wage bargaining of the 20th century originates in these early success of workers’ organizations. “The late industrialization and the parallel movement of pillarization produced a rather complex structure of the trade unions, characterized by strong national federations and, at times, fierce competition between the socialist and confessional trade unions” (van Zanden, 2005, p. 70). This led to a weakening of the communist unions, in comparison to the right wing, conservative and socialist unions, which remained strongly

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) represented in the pillarization. Even though unions were partially re-appropriated by the corporate economy from 1919 onwards and taking seats in the High Council of Labor, maintaining ever-closer ties with affiliated political parties, they continued to pose a liable threat to the dominant class fractions. Hence, new forms of employers’ network cooperation developed, directly targeting workers’ liberation movements. A prime example, the chamber of commerce – the formal network cooperation of the industrialist class fraction at that time – was renewed into the Zaansche Werkgevers Vereeniging (Zaanstreek employer association). Herewith, employers tried to “combat the workers more effectively, and especially […] prevent firms in different branches of industry from being played off against each other” (Davids, 2006, p. 575). To do so they copied the organizational structure of the workers’ unions, spanning a multitude of sectors and regions. In 1919, the year the Zaanstreek employer association was founded, it counted fourteen companies from nine different branches; in 1920 its membership numbers had increased to seventy-eight, and in 1922 to one-hundred, by this time spanning the entire Netherlands (Davids, 2006, p. 575). One result of the growing dominance of the Zaanstreek employer association was, for example, that unemployment insurance became state controlled comparably late, namely not until the German occupation in 1943 (Ebbinghaus & Visser, 1999, p. 139). Another direct result

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) from the increase in dominance of the employers’ network organization was that strikes decreased substantially from the 1930s onwards. In addition to joining the Zaanstreek employer association, employers of the Dutch PBI also associated against the state and workers by joining the already in 1904 founded lobbying organ VNP (van Damme & Peters, 1994, p. 20). The strong organization of employers on the first half of the 19th century throughout the majority of sectors in the Netherlands peaked in the exclusion of the communist-led Eenheidsvakcentrale (the umbrella organization of the communist trade unions) from the centralized wage negotiations, which concomitantly ended the most bitter conflicts in the cotton industry that had criticized the re-appropriation of unionism by the corporate system and the unions’ inability to truly represent the proletariat (van Zanden, 2005, p. 78). From the 1950s onwards, the rise of Fordism in Western industrialized economies generally and in the Netherlands more specifically, demarcated a change in labor-capital relations during Fordism. Fordism describes the “parallel restructuring of both the technological and organizational basis of the production process and the lifestyle of the wage earners” (Koch, 2004, p. 3). Rooted in early slavery exploitation practices, Taylorist mass production of organizing working procedures as well as controlling the workers alongside the assembly line are also pivotal strategies in Fordism (e.g. Cooke, 2003). In Fordist

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) times, profits were highly dependent on consumer demands; thus, high and growing wages are essential to write off fixed capital quickly (Koch, 2004, p. 4). In effect, workers were able to afford what they produced for the first time in capitalist history (Göttfert, 2012, p. 21). Additionally, relative wage costs rose strongly due to, amongst other factors, the introduction of the five-day work week (van Zanden, 2005, p. 133). Exemplary of the rising consumption levels at that time, also Dutch paper consumption increased from one million tones to three million tones between 1961 and 1990 (van Veen-Groot et al., 2001, p. 30). Especially a steep rise in everyday products such as toilet paper and napkins can be noted for that period of rising purchasing power of the working class (van Damme & Peters, 1994, p. 23). Especially the state played an important role in securing the Fordist regime of accumulation, “[…] foster[ing] growth and productivity agreements between employers’ organizations and trade unions by promoting capital accumulation through public infrastructure spending and permissive credit and monetary policies” (Koch, 2004, p. 4). Accordingly, the interests of the socialists and conservatives, their corresponding unions and the industrialist class fraction aligned well during that time. Embedded in the Fordist accumulation regime and industry- wide restructuring processes, unionism rose again. Even though “wage bargaining remained a highly centralized process”,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) collective workers agreements (CAOs) continued spreading during the 1950s as trade unions were strengthening their positions through mutual cooperation (van Zanden, 2005, p. 76). As a result, also in the Dutch PBI the first CAO was signed in 1950 (van Damme & Peters, 1994, p. 19). Nevertheless, a substantial number of workers felt their interest was not represented in the cooperation between workers’ unions and the industrial class fraction, and thus organized so-called wildcat strikes, which essentially did not yield the desired results on a structural level (van Zanden, 2005, p. 78). Throughout the 1960s, rising labor productivity came to determine wages, which soon ceased in excessively high wage levels. First, these developments seemed to support the workers’ consuming behavior and, thus, helped maintain the Fordist accumulation regime. Soon, the crises of the 1970s in combination with the comparably high wage levels in the Netherlands, led to a rapid decline in employment rates and, hence, lower labor productivity and union membership. Concurrently, with the decline of heavy industries, the service industry grew and the demand for two kinds of laborers increased: Highly educated ones, demanded in government employment, business services and health care, as well as unskilled workers, demanded in sectors such as leisure and catering (van Zanden, 2005, p. 82). These developments mark the beginning of a changing labor market structure in the

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Netherlands, which is dominated by upper and higher education personnel in the successive accumulation regime of post- Fordism.

3.3.6 The denouement of Fordism: When endless growth still seemed possible

Overall, the so-called ‘golden years’ of capitalism (1950 until the oil crisis in 1973) were not a single homogenous period of growth, but rather marked by different shifts in the macro- economic development of the Netherlands as well as changing dominance of class fractions’ interests. In fact, the developments in the Netherlands during Fordism depict a continuous discontinuity. The industrialist class fraction and political authorities overlapped in their interest to reinvigorate Dutch industrial sectors after World War II. Thus, during the 1950s, state-led sector restructuring yielded substantial profits. These rising profits and the rapid industrialization of the 1950s in turn yielded overproduction in the 1960s (van Zanden, 2005, p. 136). In this time, the state shifted its strategies towards corporatization as M&As were seen as viable routes to cut production costs and deal with overproduction (see Table 8). Consequently, economies of scale, rising wages and increased international competition did not lead to a general cool-down of industries, but to ever more capital investment,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) which in turn made exports grew substantially (van Zanden, 2005, p. 136). Only when wages began to outgrow productivity and inflation accelerated in the end of the 1960s, the economy grew to be “overheated” in the 1970s (van Zanden, 2005, p. 136). Scholars agree to some extent that Fordist regulation gradually erodes from this point onwards. Reasons for this are “various economic and social crises, increasing competitions on the international and global level, far-reaching technological innovations and sometimes drastic revisions in economic and social policies” (Koch, 2004, p. 16). As will be shown in the following chapter, the Dutch PBI underwent post-Fordist restructuring processes accordingly. Marked by financialization, flexibilization and internalization, the Post-Fordist accumulation regime promotes a supposedly new form of cooperation: Inter- organizational networks.

Table 8 Comparing regions for paper production in 20th century Netherlands Zaanstreek / Maastricht / Veluwe - industrialized production Technology - waste-paper becomes pivotal resource

- substantial state subsidies, also in form of joint ventures State- - state-led sector restructurings and corporatization efforts industry - little to no prosecution of cartel practices relations - state support of consolidation strategies and M&As

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- internationalization and further concentration of Competition Dutch PBI - ceasing importance of manufacturing industries and for Dutch economy cooperation - cartel-paradise

- strong employers’ associations (e.g. chamber of Labor-capital commerce) - weakening of (communist) workers’ organizations relations through pillarization - rise of Taylorist working procedures

3.4 Concluding remarks As the historization shows, inter-organizational networks and its manifold dimensions were crucial for the survival of the Dutch PBI from 1580 until 1980. In fact, throughout all three phases different forms of inter-organizational networks foster the endurance of the industry, in terms of adapting to technological change, in appeasing or condensing labor revolts, in negotiating competitive dynamics through establishing intra-industrial as well as state-industry cooperation and lastly in representing the interests of the main industrial players towards (supra-) national institutions. During the rise of Dutch capitalism, the Dutch PBI emerged as two different centers of papermaking, the Veluwe and the Zannstreek. Diverting in the production process as much as the output, also the inter-organizational networks supporting Dutch paper making business within these two regions differed immensely. Whereas Veluwian paper

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) production were family businesses, relying on local markets and resources to secure the profitability of their paper making side- stream, Zaansian paper makers were foremost investors of family-bound money made through colonial exploitation. Closely linked with the dominant capitalist class fractions, in particular the merchant class fraction, who controlled the majority of political offices, Zaansian paper makers tried to negotiate their interests on a national level in order to secure the profitability of their paper mills. They organized themselves in inter-organizational networks, so-called fire insurances, which were outright cartel structures. Herewith, Zaansian paper makers tried to decrease national competition by agreeing on competition-stiffening aspects such as sales prices, raw material prices and the allocation of consumer markets. It is also these close ties between Zaansian paper makers, which allowed for costly, technological innovations to be developed and implemented as well as the keeping in check of laborers through establishing early forms of certificates of employability. While the first capitalist phase of inter-organizational networks in the Dutch PBI was strongly shaped by the overall rising economic power of the Netherlands through its colonial industries, the phase of Dutch monarchic liberalism exhibits new forms of inter-organizational networks adapted to the decline of Dutch economic power and increasing competition with its industrialized neighbor countries. In fact, the rise of

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) industrialization in England, France, Belgium and Germany quickly diminished the success story of Dutch paper making on many different levels. For one, the continuation of liberal market policies in terms of low protectionism continued favoring the interest of the shrinking trade market as well as of the merchant capitalist class fraction. With the rise of a new capitalist class fraction, the gentlemanly capitalists, ever stronger cartelization developed within and beyond the Dutch PBI to counterweigh the growing market insecurities due to foreign resource dependence and heightened international competition. Despite these well-organized cartel structures between the Great Industrialists, adoption of technological innovations, such as stream-run paper machines, remained slow and costly. With the abdication of William I and the liberal revolution in 1840, free- trade policies were extended even further, sincerely threatening the existence of the Dutch PBI. Notwithstanding the bad stand of the Dutch PBI also attracted foreign investors, trying to gain cheap foothold in the industry before it would rise again in profitability. Ultimately, the growth of secondary financial markets and foreign investments into national industries contributed to the ability of the gentlemanly capitalists to slowly adapt to international standards of industrialization, hereby forming new meaningful regions of paper making in Groningen and Maastricht. At the same time, Veluwian paper makers were forced by a newly enacted law, negotiated through networked

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) efforts between the two biggest producers of paper, KNP and VGZ, and state officials, to industrialize their production or shut it down. Inter-organizational networks in terms of competition and cooperation practices as well as labor-capital relations constituted the most fundamental changes in the industry, away from peasant-based, hand-made paper production to an industrialized, large-scale, corporate industry. After a phase of economic downturn and insecurities during the First and Second World Wars, the historization shows that during Fordism inter-organizational networks change their forms and roles once more. State support, which varied greatly over time, is reformulated in this phase, heralding state-led restructuring and concentration as solutions for reinvigorating national industries. Inter-organizational networks between industry and state took the forms of active state support for mergers and acquisitions, which quickly led to the almost complete internationalization of the Dutch PBI in terms of ownership. Later in the 1970s, the state even actively supported the formation of crisis cartels to secure the profitability of national industries. Inter-organizational networks within the Dutch PBI developed accordingly, making cartel structures one of the most important form of cooperation within the industry. Through such close cooperation, the no- longer Dutch owned paper mills were able to develop and implement the usage of waste paper as raw material. Herewith,

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Chapter III – Historicizing inter-organizational networks of the Dutch paper and board industry (1580 – 1980) their international competitiveness rose as resource dependence from Scandinavian large-scale pulp and paper manufacturing countries decreased. The search for alternative fibers and other technological innovations was thoroughly promoted by the state through financial aid and organizational support. With the introduction of Fordist working structures and strengthening of inter-organizational networks of the industrialist class fraction, illustrated for example in the rise of the chamber of commerce, labor unions gradually weakened. The above conclusions showcase the importance of inter-organizational networks, the role of the state and labor struggles as well as cooperative and competitive structures and technological innovations, for the survival of an industry that is often not paid due attention. Yet, the importance of inter- organizational networks for the survival of the Dutch PBI does not end here. The economic crisis of the 1970s and subsequent impairment of the Fordist accumulation regime give reason to expect that the inter-organizational networks of the Dutch PBI change their form, content and role in all four dimensions once more during the next phase of capitalism.

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In this chapter, I analyze the Dutch PBI’s inter-organizational networks during post-Fordism on the basis of the four dimensions, namely competition and cooperation, technology, capital-labor relations, and state-industry relations. Post- Fordism an accumulation regime with a distinct mode of regulation and set of technical and social relations of production, originates in the political economic conjunctures of the 1970s (Jessop, 1993, p. 8). The post-Fordist accumulation regime manifested itself in the Netherlands from 1980 onwards (Koch, 2004, p. 16). The transition from the Fordist to the post-Fordist accumulation regime is not linear and coherent, but rather irregular, contextual, and diverting across countries. Nevertheless, conceptual definitions of the main post-Fordist characteristics are essential for understanding the changes within the inter-organizational networks of the Dutch PBI since 1980. The main characteristics of post-Fordism are labor- market flexibilization, deregulation and neoliberal re-regulation, transnationalization of production and global value chains, the rise of finance-led accumulation patterns and deindustrialization (Jessop, 1994; Jessop & Sum, 2006; Overbeek, Van Apeldoorn 178

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& Nölke, 2007). During Fordism, many industries still focused on standardized mass-production, which resulted in saturated consumer markets in the 1970s in the Western industrialized world (Jessop, 1994, p. 258). Under post-Fordism, this focus changed in accordance with the rise of cheaper production capacities in newly emerging markets, such as China (Jessop, 1994, p. 258). Product specialization and the flexibilization of commodity production, thus, became essential for manufacturing industries to compete on the increasingly globalized market. Consequently, post-Fordist manufacturing operations are based on flexible machines and market-driven, specialized niche products to ensure profitability (Jessop, 2002, p. 98). Also labor is gradually being flexibilized in post-Fordism. Rooted in national and supra-national labor policies, labor is subordinated to market competitive forces and labor markets reoriented towards the supply-side (Jessop, 2002, p. 210; Wigger 2015, p. 123-124). Labor policies, which foster “‘flexi-waged, flexi-time, hire-and-fire, and outsourced jobs through self- employed or subcontracted labor, multiskilling of core workers enjoying job rotation, job enrichment and teamwork”, internationalization of managers’ and technocrats’ career-paths, rising dominance of temporary labor-contracts, the individualization and erosion of working-class communities, and the weakening of organized labor, are part of a wider program of deregulation and neo-liberal re-regulation in the post-Fordist

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) accumulation regime (Jessop, 2002, p. 98, 109). The deregulation of the public sector involves its privatization through selling state shares and listing state-run industries, such as the railway industry, the health sector, the energy sector and telecommunication sector, on stock markets. Due to these developments, the state is assumed to be retrenching during post-Fordism, leaving previously public as well as private sectors to compete under free market principles without state intervention. At the same time, post-Fordism is marked by neoliberal re-regulation, which is geared towards the promotion of the competition regime (Buch-Hansen & Wigger, 2010). Especially the deregulation of financial systems is guided by and itself intensifies finance-led accumulation (e.g. Krippner, 2005). Through its deregulation “finance became once more detached from the real economy and liquid capital gained a new transnational mobility and hence exit power” (van Apeldoorn & Horn, 2007, p. 83). Productive capital situated within traditional manufacturing industries becomes dependent upon finance capital (mostly banks and offshore capital) to sustain its production processes. Financialization, thus, describes “a pattern of accumulation in which profits accrue primarily through […] the provision (and transfer) of liquid capital in expectation of future interest, dividends, or capital gains” and no longer through the previously dominant forms of

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) accumulation, namely trade and commodity production (Krippner, 2005, p. 174-175). Concomitantly, finance and productive capital are transnationalized during post-Fordism (Bratsis, 2014, p. 116). The loosening of barriers for capital movement and the spatial decentralization of production ownership gives rise to transnational corporations (TNCs) (Bonanno et al., 1994; Bratsis, 2014; Van Apeldoorn & Horn, 2007; Wigger, 2015; Wigger & Buch-Hansen, 2013). TNCs thrive under the minimization of tax liabilities and the removal of trade and investment barriers, as the resultant transnationalization of production processes allows for the maximization of their global profits (Overbeek, 1993, p. 259; Wigger, 2015, p. 122). The dynamic interplay between large European and US-American TNCs on the global (financial) market excels competitive forces and, in return, yields the continuation of deregulation of cross- border transactions in the interest of capital agents (Buch- Hansen & Wigger, 2010, p. 33). As a result of these processes, the concept of TNCs has outdated the formerly employed concept of multinational corporations (MNCs), as the majority of large-scale corporations since the 1990s operate across national regimes, while at the same time being embedded in the societal, political and economic frameworks of the countries they operate in (Bélanger & Edwards, 2006, p. 29). TNCs exhibit resources in comparison to other agents, such as state and labor,

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) which allow them to “mobilize around political projects”, while at the same time being “subject to different governmental policies” (Bélanger & Edwards, 2006, p. 29). Furthermore, recent research has shown that TNCs’ operations and structures changed under rising globalization in post-Fordism as previously still centralized functions are now internationally dispersed, such as R&D and design (Lundan & Mirza, 2011, p. 31). The shift in global profitability from productive to financial capital and the growing reliance of industrial manufacturing companies on liquid capital is essential for the ongoing process of deindustrialization, which marks so-called ‘advanced economies’ in post-Fordism. The rising dominance of specialization, continuous innovation, economies of scope and rapid responsiveness to consumer markets accelerates the dominance of TNCs and rise of the service sector, while manufacturing industries are relocated to China and other newly industrialized countries (Jessop, 1994, p. 252ff., 2002, p. 99; Wigger, 2015, p. 118). Deindustrialization becomes apparent through the “significant decline in the share of manufacturing in GDP” as well as a “fall in the share of manufacturing in employment” in first-wave industrialized countries (Tregenna, 2011, p. 5). Deindustrialization intensifies under as well as unleashed a “decrease in union membership, diminished working class political influence[,] the creation of a new, more

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) precarious work force[, and] the erosion of labor market security” (Varga, 2013, p. 443). Therefore, deindustrialization goes hand in hand with national industrial policies of labor market flexibilization, which undermine labor’s possibility to organize strongly against (transnational) capital in post-Fordism. The transition to post-Fordism and subsequent changes in the mode of regulation conditioned the macro-structural context in which inter-organizational networks of the Dutch PBI evolved since 1980. To complete the historization of inter- organizational networks in the Dutch PBI with a focus on their post-Fordist form(ation)s, I combine findings from my field work, namely semi-structured interviews, participatory observation, informal conversations and memos with an analysis of secondary literature. In the first section, I turn my attention to the role of the state during post-Fordism. In contrast to many scholarly contributions on neoliberalism, I debunk the thesis of state retrenchment during post-Fordism and reveal that industrial policy has not disappeared during post-Fordism but instead remains crucial to the development of inter- organizational networks in the Dutch PBI. In other words, state- industry cooperation continues despite the propagation of state retrenchment. In section two, I analyze the dimensions of competition and cooperation by providing the reader with a historization of the Kenniscentrum Papier en Karton (KCPK) network during the rising (supra-) national prosecution of

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) collusive practice since the early 1980s. I find that the post- Fordist competition regime led to an industrial policy in the Netherlands, which prompted state-led financing for R&D cooperation in the Dutch PBI to counter the negative effects of rising competition. Accordingly, the KCPK serves as the industry’s knowledge and innovation hub to increase inter- organizational cooperation on the local and national level in order to raise companies’ competitiveness on the global level. In section three, the dimension of technology is paid due attention, embedding the KCPK projects into the wider program of a ‘circular economy’. I find that, technological innovations predominantly follows the prerogatives of economic sustainability, namely profit and growth, instead of ecological sustainability. In the fourth section on labor-capital relations, I focus on the managerial middle class and the continuation of a racialized economy during post-Fordism. In this dimension I expose the rise of new forms of precarity as well as its demographic and geographic relocation despite the neoliberal propaganda of better working conditions and rising wealth for all. To conclude, Post-Fordism yields both negative and positive consequences for the viability of the Dutch PBI. As the following analysis shows, the formations of inter-organizational networks in all four dimensions are pivotal to successfully manage the survival of the Dutch PBI during post-Fordism.

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4.1 State-industry relations: Industrial policy during post-Fordism A variety of scholars argues that the transition to post-Fordism is accompanied by a gradual disembeddedness of markets from states (Altvater, 2009; Altvater & Mahnkopf, 1997; Helleiner, 1996; Hutton, 2008; Lacher, 1999). According to them, the past decades are demarcated by laissez faire state strategies, hereby allowing finance capital to control national market developments as well as the global economy. In this section on state-industry relations, I argue that the state-retrenchment- thesis follows the “key tenets of neoliberal ideology” by concluding that recent politico-economic developments, such as flexibilization, deindustrialization and financialization, are foremost results of a ‘silent’ state (Panitch & Konings, 2009, p. 68). I show the opposite, namely that state involvement and industrial policy continue during post-Fordism, albeit in other forms and with different content, thereby playing a fundamental role in the development of inter-organizational networks of the Dutch PBI. Through analyzing the changing mode of regulation from 1980 onwards I account for the way in which post-Fordist characteristics manifest themselves within (in-) direct market engagements of state authorities in the Netherlands.

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4.1.1 The effects of deregulation, re-regulation, privatization and flexibilization on the Dutch PBI in the 1980s

The Dutch PBI exhibited overall growth during the 1980s concerning profits, production and investments. Among the leading industries in Northern Europe, the number of high- capacity production machinery tripled within a period of eleven years, on average allowing for an investment of twelve percent working capital for meeting operational expenses and short- term debt obligations (Bouwens, 2012, p. 202). Three main factors contributed to the industry’s growth at that time: new strategies of capital investment, reduced costs for raw materials (including energy), and decreasing labor costs. I will discuss each one of them at length with a focus on the involvement of the state. First, already during the 1960s and 1970s the Dutch government-initiated programs to foster foreign direct investment (FDI) in the national paper industry (Bouwens, 2003, p. 7-8). Even though no complete figures on FDI in the Dutch PBI are available for that period, other traceable indicators, such as rising numbers of mergers and acquisitions (M&As), the dominance of new investment strategies, and increasing profit margins, reveal that the industrial policy of that time worked successfully in terms of industrial development

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(Bouwens, 2003, p. 9). A prime example, the Ministry of Economic Affairs supported inquiry of US-American companies into possible sites for plants as well as possible labor supply and provided “investment subsidies, grants, accelerated depreciation schemes and fiscal stimuli” (Bouwens, 2003, p. 9). With the rise in FDI in the 1980s, foreign investors gradually implemented new forms of industrial investment strategies, such as expansion, diversification and the elimination of competitors, allowing corporations to expand their already strong market positions (Bouwens, 2003, p. 11). By the 1990s, strategies of horizontal concentration and forward and backward integration became dominant tools to reach even more low-cost market bases (Bouwens, 2003, p. 19). Profit margins, thus, rose steadily as, for example, forward and backward vertical integration, namely the control of suppliers, distributors or wholesalers, secured viable market outlets for Dutch paper producers (Bouwens, 2003, p. 19). During this time of corporatization and consolidation, foreign investors were foremost interested in expanding production output of Dutch paper mills by following economies of scale (Bouwens, 2003, p. 13). Subsequent bulk production was even extended into strategies of product differentiation and specializations in niche-markets at that time (Bouwens, 2003, p. 13, p. 20). These trends in investment strategies were deeply entangled with the changing politico-economic environment of

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European integration at that time. In 1987, the Single European Act came into effect, removing investment and production barriers in the member states as well as harmonizing the respective national regulations of such in order to stimulate competition (e.g. Watkins, 2005). Around the same time in the Netherlands, the center-right Lubbers I cabinet (1982-1986) implemented policies aimed at deregulation, privatization and decentralization, which reduced barriers for labor, services, trade and capital (especially financial capital). The policies of the Lubbers I cabinet marked the final break with the cabinets of the 1970s, which followed state-aid strategies, using public tax money to re-vitalize struggling national sectors. In line with the Single European Act, the Lubbers I cabinet propagated the motto “more market, less government” (“meer markt, minder overhead”), herewith legitimizing its strategies of deregulation, neoliberal re-regulation and privatization (den Hertog, 2003, p. 47; Patel & Weisbrode, 2013, p. 141; van Damme, 2006, p. 8). This statement did however not result in reduced state involvement, but rather in a changed form of state involvement. Instead of corporatist tendencies in the form of close cooperation between trade unions, business associations and government, which marked Dutch post-war industrial policy, the Dutch government focused on a market-led recovery of national industries by “bringing wage, energy and environmental costs under control, improving the operation of labor markets,

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) simplifying regulations and stimulating investment” from 1980 onwards (Wolinetz, 1989, p. 90). These favorable changes furthered the attraction of the Netherlands as a viable outlet for foreign investors. Through increased shareholding in the Dutch PBI West-European, Scandinavian, Finnish and North- American corporations pursued consolidation strategies in order to strengthen their European market positions (Bouwens, 2003, p. 20). In effect, the Dutch PBI was no longer ‘Dutch’ in terms of ownership and capital networks extended beyond the Netherlands. Furthermore, the fact that austerity measures, especially in form of thorough curtailments of the welfare state, were strongly critiqued by labor unions was no longer relevant to the Dutch government, who had the support of employer associations on their side (Wolinetz, 1989, p. 79). Actually, the Dutch government established a legal context, which helped to protect the interests of corporate shareholders instead of a wider set of stakeholders, including workers and consumers (Horn & Vliegenthart, 2010, p. 60-63). Especially, the vermarkting (sell- out) of businesses and marketing strategies by the state played into the hands of the financial class fraction and succumbed businesses to the volatility of the same. In the case of the Dutch PBI, the increase in foreign industrial investment, commonly took place in form of M&As, also referred to as brown-field investments. The new center-right cabinet considered economic

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) concentration in form of M&As a suitable economic strategy to distribute economic risks, profit from economies of scale and combat illegal forms of collaboration, such as cartels and other collusive practices, which were no longer tolerated and seen as a major crime against consumer-welfare (Bouwens & Dankers, 2014, p. 68). In the context of the Dutch PBI more specifically, M&As were also considered a solution to the periodic issue of over-production, which haunted the industry. The cyclical sensitivity of the industry stands in stark interaction with its capital intensity (Bouwens, 20103, p. 14). Investments into production facilities are comparably high for the Dutch PBI, but necessary for the expansion of production under rising demand (Bouwens, 20103, p. 14). Unable to co-ordinate their investments with precision, “[d]ifferent companies tended to invest at the same time, causing a discontinuous growth of production capacity, during which periods of over-capacity occurred” (Bouwens, 20103, p. 14). Therefore, buying production capacity rather than building it became the guiding investment principle of the 1980s, herewith allowing for the maximization of profits by circumventing the industry’s cyclical character. Also the efforts of de- and re-regulation under the Lubbers I cabinet had a positive effect on the Dutch PBI’s profit growth during the 1980s. The deregulation of the public sector

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) involved its privatization through selling state shares and listing state-run industries, such as the railway industry, the health sector, the energy sector and telecommunication sector on stock markets. The privatization of large parts of the energy sector, for example, ensured extensive reductions in energy costs for national industries (Stellinga, 2012, p. 29). As a result of the energy sector’s privatization the number of power plants increased considerably. In turn, this caused a reduction in energy costs of about fifty percent for the Dutch PBI, substantially contributing to the industry’s profit growth in the 1980s (Bouwens, 2003, p. 19). Governmental re-regulation, on the other hand, targeted the establishment of new forms of cooperation between state agents, industrial companies and research institutes to accommodate the “complex character of innovation-processes” (Siraa, 2016, p. 65). A prime example, the state took up an important role by financially supporting the VNP – the national lobbying organ of the Dutch PBI – to “initiate several projects to reduce energy costs, increase the use of waste paper and decrease the output of ecologically undesirable pollution” in the Dutch PBI (Bouwens 2004, p. 199). These projects yielded further cooperation with the Nederlandse Organisatie voor Toegepast-Natuurwetenschappelijk Onderzoek (TNO), which is a sectoral organization under public law. The cooperation between the TNO and the VNP entailed the development of less risky and costly methods than were

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) previously available for treating recovered paper (Bouwens, 2004, p. 133). Another essential factor for the Dutch PBI’s profit growth during the 1980s was the reduction in labor costs, which aligns with the more general trend of flexibilization in the post- Fordist mode of regulation. In the case of the Netherlands, two ministerial reports of 1979 and 1980 outed Dutch industrial sectors as backwards oriented and poorly performing. As these reports had alarmed the public, the Lubbers I deregulation committee, namely top government officials, ‘independent experts’10 and board members of TNCs, was able to implement de-regulative labor policies, including labor flexibilization and wage restraints (den Hertog, 2003, p. 48). Officially, the cabinet’s goal in restructuring governmental activity through decreasing bureaucracy and improving efficiency was to lower public expenditure and rise national market competitiveness as both was said to stimulate entrepreneurial activities (Hulsink & Schenk, 1998, p. 246). In fact, the enacted Major Operations Program entailed (1) deregulation to “further market liberalization and competition”, (2) de-nationalization to

10 I put the term independent experts in quotation marks as it usually defines “a person with special or superior skill or knowledge in a particular area” (Merriam Webster Inc., 1996). Expertism is not only used to invalidate non- scientific knowledge, but experts’ knowledge does indeed dependent on their personal convictions, socialisation and source of salary. For further critical discussions on expertism see for example Boje, Gephart, & Thatchenkery, 1995, p. 187-189. 192

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“economize on the state budget and to strengthen the market sector”, and (3) privatization to “trim[.] the welfare state and establish[.] a smaller and more effective public sector” (Hulsink & Schenk, 1998, p. 245-246).

4.1.2 The effect of transnationalization, financialization and deindustrialization on the Dutch PBI during the 1990s

The industrial upswing of the 1980s was the basis for legitimizing the intensification of post-Fordist modes of regulation during the 1990s under the coalition of Social Democrats and Christian Democrats, that is the Lubbers III cabinet (1989-1994). In 1990, the chairman of the earlier Lubbers I deregulation committee was appointed secretary- general of the Department of Economic Affairs, heralding neoliberal re-regulation as political priority (den Hertog, 2003, p. 52). In alignment with the European market integration, the Ministry of Economic Affairs redistributed governmental spending in favor of overall deregulation, increased labor market flexibility, and intensified competition policies. Shortly after, in 1994, the Ministry implemented a new project called Market Operation, Deregulation and Quality of Legislation, which was not just aimed at legislative deregulation in favor of businesses,

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) but gave businesses an actual right to a say in the re-regulation of, for example, environmental laws (Milieufocus, 2008). These developments were closely intertwined with the transnationalization of finance and productive capital during post-Fordism (e.g. Bratsis, 2014, p. 116). De-regulation of cross- border transactions in the interest of these capital agents increased further as large European and US-American TNCs started dominating the global (financial) market (Buch-Hansen & Wigger, 2010, p. 33). This rise of TNCs represents the emergence of the transnational capital class fraction, consisting of “four main fractions: TNC executives, globalizing bureaucrats, globalizing politicians and professionals, and consumerist elites, including merchants and media” (Carroll & Carson, 2015, p. 71; Sklair, 1997, p. 521). TNCs “have become dominant forces in the transfer of capital, production, and technology in the global political economy”, shaping industries, such as the Dutch PBI, during post-Fordism (Overbeek & van der Pijl, 1993, p. 260). By 1990, more than forty percent of the industry were foreign owned and four of the top ten corporations in Europe continued to acquire production units in the Netherlands (Bouwens, 2012, p. 204). “[C]ozy relationships between government, big business, labor [as in pillarized unions] and the financial community” benefitted the emergence of mega-mergers, such as KNP and Bührmann- Tetterode in 1993, and accelerated the process of

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) transnationalization of ownership and production processes (Hulsink & Schenk, 1998, p. 244). Executives of vastly growing Dutch-based transnationals, such as Phillips, Unilever, AkzoNobel, Heineken and Royal Dutch Shell were actively involved in Dutch policy making through chairing industrial policy advisory committees and, thus, constituted an increasingly powerful transnational class fraction (Sluyterman & Nieuwegracht, 2004; Sluyterman & Wubs, 2014). They would suggest the implementation of business-friendly projects such as the technolease scheme, which allowed for “indirect state subsidy amounts” to enable big transnationals to financially exploit their “undepreciated know-how” at little financial risk (Hulsink & Schenk, 1998, p. 244). By the end of the 1990s, a small number of transnational corporations, namely Stora-Enso, Norske Skog, Kappa Packaging and SAPPI, who all belonged to the top 10 TNCs of Europe at that time, held a market share of up to eighty-five percent in the Dutch PBI (Bouwens, 2012, p. 204, 205). From 2000 onwards, the Dutch PBI shrunk in size and profit as shareholders followed asset-stripping strategies to seek short-term profitability by purchasing plants and closing them down respectively. The disengagement of international investment capital from the Dutch PBI and ultimate moving of industrial activities abroad, namely the process of deindustrialization, left only four out of twenty-seven

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) companies of the Dutch PBI Dutch owned at that time (Bouwens, 2003, p. 10). Even though the industry survived by staying located within the national borders of the Netherlands to a certain extent, deindustrialization remains the industry’s number one threat until today. To “manag[e] the process of internationalization […] in the hope of minimizing its harmful domestic repercussions and/or of securing maximum benefit to its own home-based transnational firms and banks” is the main goal of post-Fordist industrial policy and industry associations alike (Jessop & Sum, 2006, p. 108). Thus, efforts of the Dutch government and the VNP to revitalize national industries by convincing foreign investment to stay in the Netherlands through promoting and improving the national conditions for manufacturing paper and board, remains fundamental to the surviving Dutch PBI (Interviewee 3, 00:24:35).

4.2 Competition and cooperation: Inter- organizational networks substitute cartels The historical conjuncture of the rising dominance of the post- Fordist accumulation regime in the Netherlands was guided by the neoliberal insurgence of the competition regime. Entailing the prohibition of cartels and the intensified enforcement of competition laws, the establishment of the Netherlands Competition Authority (NMa) in 1998 resembles the full-blown

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) arrival of the post-Fordist competition regime in the Dutch political economy. The prosecution of cartels was basically nonexistent during the early 1980s, which is why the Dutch economy was often referred to as a cartel heaven (e.g. Bouwens & Dankers, 2014). With rising international commotion around manifold Dutch cartel-cases a lengthy build-up of European Commission (EC) level pressures on Dutch national cartel prosecution began (Bouwens & Dankers, 2014, p. 59, Drahos, 1999, p. 24). These pressures were grounded in the installation of a highly permissive regime towards economic concentration at European Community level in 1990 (e.g. Wigger & Buch- Hansen, 2014). Even though early revisions of the Dutch competition policies in the beginning of the 1990s led to the registry of hundreds of cartels at the Ministry of Economic Affairs, the national adaption of competition regulations was rather slow. It was not until 1994, that the Netherlands fully adopted EC cartel laws by enacting a new generic prohibition of merger control, price and market cartels as well as competition- hindering market domination abuse (Drahos, 1999, p. 24). Nevertheless, hundreds of cartels continued to exist illegally, ultimately leading to a significant degree of market concentration in the Dutch PBI in the second half of the 1990s (Bouwens & Dankers, 2010, p. 769-770). As a result, the legacy of the Netherlands as a cartel-paradise continued and the

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) industrial dominance of large incorporated manufacturing operations grew further (Bouwens & Dankers, 2010, p.770). By 1998 the Competition Act, namely “[…] a series of anti-trust measures [and] a full-fledged framework of merger control provisions”, was implemented and, subsequently, the Netherlands Competition Authority (NMa) was founded under the Ministry for Economic Affairs (Hulsink & Schenk, 1998, p. 248). With the more stringent application of competition laws, notably by the prosecution of collusive behavior in the form of price fixing and market sharing, the closure of the Dutch cartel paradise was nearing. Active prosecution of cartels sincerely threatened Dutch industries’ competitive advantages in a globalized market as collusive practices had been a common and tolerated form of inter-organizational cooperation in Dutch industries. In 1998, the at that time State Secretary for Economic Affairs van Rooy commented on the adaption of EC cartel regulation as follows: “[…] competition policy had to find a balance between combating cartels, on the one hand, and stimulating productive forms of cooperation, on the other” (as cited in Drahos, 2001, p. 371). In fact, the intensification of the competition regime and subsequent rise in prosecution of cartels generated an industrial policy whereby R&D type of cooperation sponsored by the state became more prominent. In fact, competition policy in the Netherlands during post-Fordism was always also industrial policy. It is in this

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) context that the KCPK emerged to facilitate inter-organizational cooperation within the Dutch PBI. The prosecution of cartels as well as the intensification of merger legislation posed genuine threats to the industrial activities and economic performance of the Dutch PBI. Thus, the KCPK stresses the difference between cooperative projects for technological innovation amongst companies of the Dutch PBI and cartel practices, which are legally banned on national and EC-level (Science meets Industry conference, memo, Appendix 4, line 94 ff.). Due to the intensification of anti-collusive legislations, the establishment of the KCPK as the Dutch PBI’s hub for inter-organizational cooperation and its partial funding by state authorities was more than convenient for the declining industry. In the following sections, I discuss the legislative, regulative and cooperative industrial policies, which supported the establishment and evolution of the KCPK under intensified cartel regulation from the late 1990s until 2016. An awareness of Dutch cartel legislation and, more specifically, the establishment of the NMa is essential for understanding why the KCPK was initiated and evolved into the network hub it is today. In the case of the Dutch PBI, illegalized yet widespread practices of inter-organizational cooperation, like cartels, were substituted by network project cooperation to foster knowledge sharing as well as product and process innovation. It is through these ways that inter-organizational networks changed their

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) form and content to safeguard industrial survival in post- Fordism.

4.2.1 The establishment of the KCPK and its coevolution with the NMa

The KCPK was established in 1998. Until that point, the companies of the Dutch PBI occasionally cooperated in innovation projects with the TNO and the Wageningen University & Research (WUR) under the lead of Arie Hooijmeijer (Interviewee 5, memo, Appendix 2, line 22). This close cooperation between publicly financed organizations like the TNO and WUR, on the one side, and private companies, on the other side, laid the foundation for the KCPK to emerge. After extensive discussions between Arie Hooijmeijer and the board members of the VNP it was decided that the Dutch PBI was in need of a knowledge center (Interviewee 5, memo, Appendix 2, line 47). In 1998, all three organizations (VNP, TNO, WUR) signed an agreement to finance the operations of the KCPK and its projects to one third (Interviewee 5, memo, Appendix 2, line 47). This funding agreement was part of further long-term agreements signed between the VNP and the Ministry for Economic Affairs during the 1990s (Chappin, Hekkert, Meeus & Vermeulen, 2008, p. 1467).

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Through the establishment of the KCPK inter- organizational cooperation continued despite the rising suspicion towards collusive practices (Bouwens & Dankers, 2010, p. 770). The incentive behind initiating the KCPK was to facilitate innovation projects between companies of the Dutch PBI in order to provide joint knowledge outcomes under optimal use of resources. The KCPK did not and still does not provide its own laboratory for carrying out research (Interviewee 5, memo, Appendix 2, line 90 ff.). Instead, the KCPK manages research projects by distributing different research tasks to the actual mills or R&D centers of the participating companies. Herewith, the KCPK does not compare to research institutes for paper production innovation in other countries such as Germany, France and Norway. These are, in contrast, privatized, corporate entities, which provide contracted services to paying customers. If, for example, a paper company in Germany wishes to test a prototype for a more efficient use of fibers, but has no internal R&D laboratory or means to run these tests within the actual mill, they pay the respective research institute, in this case the Papiertechnische Stiftung, to run the tests for them. A similar organizational construction was discussed for the KCPK in the early 2000s, namely to subordinate it to the WUR to become a mere research institute. According to an interview participant, the KCPK could have lost its main role in securing national and supra-national funding for inter-organizational research projects

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) in the Dutch PBI, if sub-ordinated to the WUR (Interviewee 5, memo, Appendix 2, line 52 ff.). By maintaining the original organizational structure of the KCPK, the continuity of single- company and inter-organizational research projects, which were to foremost serve the profitability of the Dutch PBI, was enabled. During post-Fordism, public procurement strategies, like the one financing the KCPK, were common industrial policies of state regulation in the Netherlands. State authorities followed a reactive, non-transparent form of financially supporting inter-organizational cooperation through the KCPK. Public money was not allocated to industrial projects following a clear strategy, but following the all-to-one-third funding agreement of the KCPK, which did not entail a threshold for a maximum amount of funding (Interviewee 5, memo, Appendix 2, line 24). Thus, the KCPK first generated funding from the companies of the Dutch PBI, and then requested the TNO and WUR to match this amount (Interviewee 5, memo, Appendix 2, line 25). Only then the money was allocated to either one of the two project streams of the KCPK (Interviewee 5, memo, Appendix 2, line 26). As a consequence of these extensive funding possibilities, the number of employees had grown from an initial twelve to thirty by 2001, and costs of preserving the KCPK as an independent organization rose further.

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Organizations like the KCPK were potentially liable to fall in the category of competition distorting (semi-) government organizations, according to EU competition rules (OECD, 1999, p. 22). The fact that the KCPK was established as a knowledge center for R&D projects, but did not and still does not feature its own R&D laboratory, could have potentially made it into a case of “[u]nfair competition from entities related to the government” (OECD, 1999, p. 25). Yet, the NMa was not able to prosecute unfair competition practices, if conflicts of interest arose with its superordinate, the Ministry of Economic Affairs (Konings, van Cayseele & Warzynski, 2001, p. 3). Due to its lack of independence, the NMa was not able to provide unobstructed prosecution of collusive practices. To be able to do so in the future, it needed to become an independent governing body (Drahos, 2001, p. 381). Until that happened, it was “most important”, as the Director General of the NMa was paraphrased in a 1999 OECD report on the role of competition policy in the Netherlands, “[…] that NMa be, and appear to be, independent in its decision-making. [To avoid] bureaucratic disputes and embarrassments, […] it will be focusing now on cases it can uphold against a challenge in court” (OECD, 1999, p. 22). Thus, it was a sole matter of time until the NMa was to become independent, possibly investigating inter-organizational projects facilitated by the KCPK as competition distorting (semi-) government organizations (OECD, 1999, p. 25).

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The termination of the all-to-one-third funding agreement of the KCPK in 2004 was well timed, since the coming independence of the NMa in 2005 was foreseeable by policymakers and industrial agents alike – also for the Dutch PBI. Already from the late 1990s onwards, Arie Hooimeijer maintained close contact with the senior policy advisor and project manager of the Ministry of Economic Affairs (Interviewee 5, memo, Appendix 2, line 33). Through such close state-industry-relations important legislative changes, like the NMa’s independence, were sure to be considered in the substantive restructuring of the KCPK. First, a continuous flow of state funding was secured until the all-to-one-third funding agreement of the KCPK ended in 2004. Second, the VNP’s board of directors had sufficient time to restructure the legal status of the KCPK in line with EC-level and national competition rules as well as their interest to keep the industry profitable through fostering inter-organizational cooperation.

4.2.2 The privatization of the KCPK and the formation of Bumaga

In 2004, the board of directors of the VNP, which at that time was comprised of one third of all Dutch paper companies’ executive managers, decided to privatize the KCPK via a membership format (Interviewee 5, memo, Appendix 2, line 65).

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Hereby, the KCPK could continue serving the interests of the Dutch PBI, while at the same time not falling into the category of a competition distorting (semi-) government organizations. The privatization of the KCPK implied that thirty percent of all approved project costs were financed through a new state- subsidy system (Interviewee 5, informal conversation). The remaining seventy percent of project costs were paid by the respective organizations participating in the project (Interviewee 5, informal conversation). This new legal construction of the KCPK aligned with statutes for industrial project subsidies, which had been passed already in 1996 and allowed different ministries, including the Ministry of Economic Affairs, to allocate subsidies to industrial innovation projects that were in line with national guidelines for competitiveness as well as ecological standards (Staatsblad, 1997). The new legal structure of the KCPK was not unique. Similar public procurement-based R&D structures were replacing all sorts of public-private- partnerships in the Netherlands from 2000 onwards. This switch in post-Fordist industrial policy was legitimized by claiming “recognized public interest in certain kinds of advances” (Martin & Scott, 2000, p. 440). Consequently, recent public procurement strategies are often argued to be taking the public’s interest into consideration, when it comes to industrial innovation. Actually, public procurement strategies serve as a tool to allocate public money to companies with a minimum of monitoring and

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) bureaucratic administration as in the example of the KCPK (Nelson, 1982, p. 461). Thus, in post-Fordism industrial policy switched from state support in form of co-funding the KCPK until 2004 to state support under the disguise of public interests, like the current state-subsidy system. As a non-profit organization the KCPK does not qualify for those national and EU funds, which are exclusively available to for-profit entities, such as SMEs or corporate businesses. In 2004, the KCPK, thus, established a subsidiary, Bumaga BV, which runs under the accounting template of an industrial, for- profit company. Bumaga and the KCPK list the same, eight employees on their websites (Bumaga, 2017; KCPK, 2017). The offices of the KCPK and Bumaga are both registered at the same address. Even though legally Bumaga is a private company and the KCPK is a foundation, the function and aim of both organizations concerning the Dutch PBI are very similar, if not identical. On the webpage of Bumaga is stated that the company focusses on product and process innovations through “[…] project management, project support, government support, financial support, market explorations, market introductions and patents and licenses for new technologies” (Bumaga, 2017). Similarly, the KCPK aims at generating funding for the purposes of innovation, longevity and capital growth for (companies of) the Dutch PBI (KCPK, 2017). The different national and EU- level funding options, which are available to manufacturing

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) industries, require different kinds of applicants. Some are only applicable to cooperative innovation projects between corporate entities and others only to innovation projects that also involve non-corporate entities, such as research institutes or foundations like the KCPK. Consequently, it is beneficial to the aim of the KCPK to apply for funding as either a foundation or a private company. Accordingly, the KCPK is more often involved in process innovation projects and Bumaga more often in product innovation projects. The above explications show, how cooperation changed under the post-Fordist competition regime in the case of the Dutch PBI. The rising suspicion and actual prosecution of collusive practices through the NMa placed pressures on manufacturing industries, especially on already struggling ones, like the Dutch PBI. In light of the changing relations of production, the competition regime, rising transnationalization of ownership and the continuing deindustrialization in post- Fordism, new forms of inter-organizational cooperation as well as industrial policies, which allow the state to allocate public money to industrial projects, were founded. In essence, newly established network organizations, like the KCPK and Bumaga, are a response to meet the challenges manufacturing industries face in post-Fordism. As the following section shows, inter- organizational cooperation in face of global competition also

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) continues outside the reach of network organizations like the KCPK.

4.2.3 Local and national cooperation in light of global competition

Current forms of cooperative and competitive practices for the Dutch PBI exist on several levels: the local, the national and the global level. Locally, cooperation between Dutch paper mills themselves and between Dutch paper mills and other industrial sites takes place regularly and partially in secret. Examples cover a vast spectrum of different forms of cooperation. They range from harmless lending of machinery to secret cooperative endeavors, in which companies abuse their powerful positions through imposing vertical constraints on suppliers’ sales prices. For example, one interviewee admitted to have participated in a joint project with direct competitors for innovating end- products: “And we did this together with three packaging companies. [Interviewee whispers] I never told that... I've never told it, but... that we were doing this… And the project didn't work.” (Interviewee 3, 00:20:32). He goes on explaining that practices of jointly forcing suppliers to lower their prices are also common in the industry: “It is very important to do this [join forces] because then you can also put pressure on suppliers, if let's say company A and I said to supplier B, we want this, then

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) supplier B is doing this, because otherwise we say we throw you out” (Interviewee 3, 00:22:03). Less harmful and competition stifling practices are those of lending machinery or expertise in case of emergencies between mills, like depicted in this conversation during an interview:

Respondent A: Even the same thing with a pump, if we don’t have it in storage, you go: hey, do you have it? Sure.

Respondent B: We help each other if we can.

Respondent A: It’s exactly how I told you, cooperation is in the culture here. It’s like, ‘What do you have?’, if your neighbor gets in trouble. Even as a competitor, you want to have the same thing, when you’re in trouble. If you say, it’s the last reserve pump you have, you say, if ours breaks, we take it back. Its fine, you still give it.

(Interviewees 6 & 7, 01:42:47 - 01:43:27)

Nevertheless, also these ‘harmless’ practices are often secret as some of these mills belong to globally competing TNCs and their CEOs would not approve of such cooperation (Interviewee 3, 00:18:25). Interestingly enough, all these forms of cooperation are based on individual relationships. Interviewees pointed to the importance of trust and respect for the success of project cooperation (Interviewee 2, 00:10:10;

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Interviewee 4, 00:10:26). One interviewee went on to explain how manifold cooperation projects at his mill are not based on contracts, but solely on personal trust and respect (Interviewee 4, 00:11:01). The other interviewee described how trust enables relationships to last longer than the actual project duration and how trusting, personal relationships allow the sharing of information outside of project agreements (Interviewee 2, 00:10:10). Essential to these trusting and often personal relationships is that many of the employees of Dutch paper mills, especially in historically grown paper manufacturing regions such as Gelderland (overlapping with the once famous paper region of the Veluwe), have been working in this industry and partially the same mill for over forty years. The low turnover rate, also in case of white-collar workers, is essential for these every-day forms of local cooperation. As one manager mentioned in an interview, he knows each and everyone in the Dutch PBI and in order to prevent cartel structures and personal cooperation, the whole industry personnel would have to be replaced as most of them maintain special, personal bonds (Interviewee 3, 00:21:30). So even though CEOs officially do not encourage inter-organizational cooperation based on personal relations, “the cozy part [is] still there” (Interviewee 3, 00:18:25). At times, these personal relations can affect official, inter-organizational cooperation in innovation projects negatively, as “the click” determines whom to choose as a

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) partner for specific projects and whom not to choose (Interviewee 3, 01:06:30, Interviewee 4, 00:12:31). Despite these personal preference for cooperation partners, if “the boss imposes on you to cooperate with someone, you just do it” (Interviewee 3, 01:06:45). Hence, the existence of personal relations between paper mill employees, especially white-collar ones, is pivotal for short-term solutions of manufacturing emergencies or abuse of powerful market positions, yet, can be detrimental to top-down initiated, inter-organizational cooperation in form of innovation projects. Inter-organizational cooperation on the national level is often more formalized than on the local one. Examples are the public swimming pool Coldenhove, which gets the waste heat of the paper mill Coldenhove as well as other projects, in which paper mills and other organizations try to make use of the mill’s waste heat with the support of the provincial governments (Provincie Gelderland, 2010; Zwembad Coldenhove, 2017). Another example is a shared waste water treatment plant, which is currently a subsidiary of three paper mills in Gelderland (Mayr-Melnhof Eerbeek BV, DS Smith Paper De Hoop Mill, and Coldenhove Papier BV); its foundation was supported by the Surface Water Pollution Act in 1970 (Industriewater Eerbeek, 2013). Also the establishment of regional innovation parks to raise the efficiency in energy and water resource exploitation is exemplary of inter-organizational cooperation on

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) the national level (Zeemeijer, 2016). In line herewith, government authorities and the VNP held the Target Group Negotiations to positively influence the competitive environment of the Dutch PBI by measures ranging from the implementation of severe “anti-pollution standards to the subsidizing of cost-intensive restructuring programs” (Bouwens, 2012, p. 206; Chappin et al., 2008, p. 1467). With direct support of the state the VNP focused on developing and improving energy saving technologies, on finding new raw material sources, and on intensifying their relations with supply chain organizations to attract international investments (Bouwens, 2012, p. 205). Additionally, the Ministry of Economic Affairs and the VNP jointly signed a long-term agreement on three major industry topics: sustainability (energy reduction), process and product innovation, and networking to build vital connections with other national and international industries as well as manifold stakeholders, including municipalities, research facilities and NGOs (e.g. Bouwens & Dankers, 2014, p. 59). In alignment with such installations, the character and future vision of the Dutch PBI was re-defined into prioritizing energy-saving innovations to stay competitive (e.g. VNP, 2017). Another example for a state-industry joint venture is the agreement between the government and a particular paper mill in the Netherlands to receive low-price timber. This timber was originally produced under governmental lead to manufacture

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) klompen (traditional Dutch shoes) in the beginning of the 20th century. When the market for klompen decreased drastically, the government was looking “for an industrial application for this forest and [.] made a joint venture with this mill” in the early 1970s (Interviewees 6 & 7, 00:25:36). An interview participant explained that this joint venture still runs today (Interviewees 6 & 7, 00:25:36). Overall, inter-organizational cooperative practices on the national level are in line with industrial policies, which include state-industry agreements to spur a surge of technological innovation in order to increase the international competitiveness of the Dutch PBI. Hence, the importance of cooperation on the national level did not decrease during post- Fordism. Competition, on the other hand, notably declined on the national level and mostly takes place on the global level for the Dutch PBI. Both, the unchanged importance of cooperation as well as the decline of competition on the national level are effects of the industry’s transnationalization and subsequent deindustrialization during post-Fordism. The transnationalization of capital, materializing in, amongst others, the mega-mergers of the 1990s, led to the domination of foreign TNCs above SMEs and family-owned domestic production units (Bouwens, 2012, p. 204). Due to this development, market shares of specific paper branches in the Netherlands are highly concentrated. In branches such as light-

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) weight coated paper and newsprint manufacturing, the five largest producers covered a market share of up to eighty-five percent in the early 2000s (Bouwens, 2012, p. 205). By 2005, the remaining twenty-seven paper mills in the Netherlands were owned by seventeen companies, of which sixteen belong to TNCs; in 2016, the number of paper mills further decreased to twenty-one. The challenges arising from the transnationalization of production and ownership, namely the decreasing number of Dutch paper mills, actually reinforce the importance of the industry’s national identity. This is why the national aspect of paper manufacturing is still relevant, despite the fact that the industry is almost entirely transnationalized in terms of ownership. Industrial strategies of the VNP are geared towards developing, stressing and strengthening a national identity to convince investment capital for paper manufacturing to stay within the spatial borders of the Dutch state. This also became visible in the continuous reference to the Dutch PBI in the conversations I had with employees of the industry, at the conferences I visited and on the websites of the industry’s organizations (Circular Economy conference, memo, Appendix 3, line 84, 90-91, 170; Interviewee 1, 00:40:12, 01:44:01; Interviewee 2, 01:22:42, 01:37:57; VNP, 2019). The emphasis of the national identity of paper making and the continuing importance of cooperation on the national level are only viable in post-Fordist times of heightened competition because close

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) to none of the remaining paper mills in the Netherlands are direct competitors in terms of consumer markets. In fact, Dutch paper mills foremost compete with foreign paper mills of the same or other TNCs for market segments (Interviewee 2, 01:24:46, 01:46:07). This is a common problem associated with the rise of TNCs in the global economy, as “[…] TNCs can deploy influence over their subsidiaries in ways less available to domestic firms, notably through ‘coercive comparisons’ between sites in different countries (Mueller and Purcell, 1992)” (Bélanger & Edwards, 2006, p. 28). One of the managers interviewed for this research indirectly referred to this dilemma and described a recent case of market consolidation in the Dutch PBI, in which foreign investors bought paper mills in the Netherlands as well as in new-growth markets, to subsequently shut down the less profitable production site and decrease competition.

They bought [mills] to take production from the market; they didn’t close down the mills they bought, they closed down the ones, which were less profitable. So they invested 768 million euros to get more profitable, and to get the market cleaned out. That was their only purpose. (Interviewee 3, 02:04:49)

Such forms of intra-organizational competition, namely that Dutch mills often compete with foreign production sites of their main shareholding TNC, which focus on similar consumer

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) markets, are infused by financialization (Interviewees 6 & 7, 00:52:11). Liquid capital follows the harsh market carvings of asset stripping strategies, private equitization and debt-led risk investments (e.g. Harvey, 2007, p. 161). These trends represent a big threat to the Dutch PBI as it “get[‘s] eaten up by the world around [and] by bigger countries, [leaving] rising productivity [as] the only way to survive: faster, more, cheaper” (Interviewee 3, 00:11:44, 00:38:34). This interviewee, who belongs to the older managerial generation of the Dutch PBI, goes on to describe the current phases of capitalism as “absolute crazy”, “extreme” and the source of “all the shit [sic] in the world”, explaining that no one cares about the mills anymore, except as sources of short-term profit maximization (Interviewee 3, 00:24:03 ff., 00:40:48 ff.). Spurred by the threats of relocating production sites to new-growth markets in Asia and South- America, the decrease of paper mill numbers in the Netherlands went alongside the rise of niche-focused production (Jäger & Springler, 2015, p. 117; Jessop, 2002, p. 99; Jonker‐Hoffrén, 2013, p. 276). To conclude, the number one challenge for the Dutch PBI during post-Fordism is to keep foreign investment located within the Netherlands. The answer of the dying Dutch PBI to the threat of global competition under intensified anti-cartel legislation remains similar to what it has always been: inter- organizational cooperation on the local and national level. To

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) not be busted by national and supra-national anti-collusion bodies, the legitimate label for cooperation in post-Fordism is ‘inter-organizational network’. Inter-organizational networks, aimed at innovation, connect national paper producers with (inter-) national research centers, relevant government organizations, other national sectors of suppliers and buyers, and international paper producers. These inter-organizational networks are necessary replacements for cartels in the Dutch PBI and balance the contradictory dynamics of competition- based cooperation. In times of anti-cartel legislation and European integration, new industrial policies serve the purpose of justifying such inter-organizational networks. Overall, inter- organizational cooperation remains an essential aspect to industrial survival in post-Fordism.

4.3 Technology: Worldwide rising scales and the search for circular economies During post-Fordism, technological innovation foremost concerned the drastic increase in speed and scale of paper making machinery. In the Netherlands, the total number of paper and board machines decreased by eleven between 1993 and 2002 (Bouwens, 2004, p. 303). Yet, when looking at the available numbers in more detail, twenty machines were shut down because they each produced less than fifty thousand tons

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) of paper per year, and nine machines were newly established, each producing more than fifty thousand tons of paper per year (Bouwens, 2004, p. 303). The rising speed and scale of paper machines was essential for the Dutch PBI to maintain its relative market position as number eight out of all ninety CEPI paper production states worldwide, measured in total amount of output between 1993 and 2002 (Bouwens, 2004, p. 300). Worldwide smaller-scale paper machines were shut down in order to compensate for the implementation of large-scale ones; the in Belgium located and 2003 established largest European paper machine produces four-hundred tons of paper annually (Bouwens, 2004, p. 304). In addition to technological innovation in terms of increasing the speed and scale of machinery, the search for new raw material and energy sources became fundamental to the survival of the Dutch PBI. The newly emerging paper producers in several South-East-Asian countries, who enjoy cheaper access to raw materials and energy sources, quickly started to dominate the global paper market. In turn, gaining independence from importing raw materials continued to be essential for the profitability of the Dutch PBI (Bouwens, 2004, p. 304, p. 306). As a result, not only the already well-established development of paper recycling, but topics such as efficient energy usage (and, thus, energy reduction) as well as the re-usage of primary waste streams through integral chain management and resource circulatory became the number one

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) targets of state-industry cooperation in terms of technological development during post-Fordism in the Netherlands (Circular economy conference, memo, Appendix 3, line 39, 93, 160). Strategies such as integral chain management and resource circularity demand cooperation between suppliers, buyers, state agents, research facilities and end-consumers. In the last two decades ideas of finding cooperation partners to develop cradle-to-cradle systems and entire chains for re-using residuals replaced former foci on service innovation and customer care (Interviewee 4, 00:05:04). “[Y]ou just can’t do innovation alone” became a widely proclaimed principle in the Dutch PBI (Interviewee 3, 00:19:18). At the same time, rising suspicion towards collusive practices as well as competition-led market structures undermine cooperation for technological innovation in so far as it is guided by the credo: “The first one who will build it, gets the profit” (Interviewee 7, 01:32:54). Consequently, cooperative endeavors for the sake of technological innovation are caught between pressures of legitimation on the one side and the need for cooperation on the other (e.g. Sveiby, Gripenberg & Segercrantz, 2012). It is in this context that the KCPK’s focus on sustainability evolved as a solution to the complexity of cooperation for technological innovation in post-Fordism.

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4.3.1 Circular economy or economic versus ecological sustainability

The focus of the KCPK on ‘sustainable innovation’ is embedded in a wider agenda on energy transition of the European Union as well as the Netherlands. A multiple sector spanning national program for energy transition was developed by the Ministry of Economic Affairs as part of The Fourth Dutch National Environmental Policy Plan (NMP4) in the beginning of 2000 (Pöyry, 2014). Even though the Dutch PBI is “bio-based”, meaning that it is relatively sustainable as it uses renewable and recyclable raw material (Interviewee 4, 00:07:52), it is one of the largest consumers of fossil fuel in Europe (Levi, Vass, Mandova & Gouy, 2020). The overall goal of the NMP4 is a decrease in energy usage by fifty percent in 2020 as well as a transition to a low-carbon energy usage (Pöyry, 2014). Part of this policy plan is the Dutch program ‘circular economy’, initiated by the Ministry of Infrastructure and Environment in cooperation with the Ministry of Economic Affairs in 2016 (e.g. Ministerie van Infrastructuur en Milieu & Ministerie van Economische Zaken, 2016). The circular economy program seeks to align industrial production cycles with resource circularity as found in natural ecosystem by fostering close cooperation between government agents and representatives from Science, NGOs and Business

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(The Ministry of Infrastructure and the Environment & the Ministry of Economic Affairs, 2016). Circular economy, indeed, describes the minimization of using “the environment as a sink for residuals [and] – perhaps more importantly – […] virgin materials for economic activity” (Andersen, 2007, p. 133). The business-friendly adaption of this buzzword in the Netherlands and elsewhere follows a contrary logic. As stated in the circular economy program of the Netherlands,

“[t]he circular economy also presents our country with plenty of (economic) opportunities. Innovation creates opportunities for existing businesses, for newcomers (start-ups), and for science. […] The circular economy can thus make a significant contribution to the future earning capacity of the Netherlands and Europe. The Netherlands has a good starting position to capitalise on these opportunities. […] the Rabobank has estimated that a circular economy can lead to extra growth in GDP ranging from 1.5 billion euros (in a business-as-usual scenario) to 8.4 billion euros (in the most circular economic scenario).” (The Ministry of Infrastructure and the Environment & the Ministry of Economic Affairs, 2016, p. 10-11).

Discourses on circular economy and sustainability within and beyond the Dutch PBI are predominantly guided by principles 221

Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) of profitability and non-fiscal economic advantages, which are to be realized through the ample application of new business models, new forms of labor exploitation, and efficient resource access as well as usage (European Commission, 2012; Ghisellini, Cialani & Ulgiati, 2016; Lieder & Rashid, 2016). This is not surprising, since industrial policies continue to follow the basic capitalist principles of growth and profit in post-Fordism (Fisher, 2010; Jackson, 2009; Smith, 2016). The circular economy program is based on the idea “[…] that virtually any social problem is subject to a technical and technological fix”, ultimately succumbing ecological sustainability to economic sustainability (Fisher, 2010, p. 232). Current environmental programs are, thus, tools to legitimately allocate public money to innovation projects, which ease the way for industries to stay competitive while implementing a minimum of national as well as supra-national ecological standards. Concretely, the Dutch practice of guiding national industries towards the sole reliance on renewable energy and bio-based raw material is an instrument to keep Dutch industries internationally competitive. The subsidiary of the Ministry for Infrastructure and Environment called Nederland circulair! (2017) brings it to the point by stating that the existing possibilities for reusing and recycling raw material only allow for manufacturing third-rate products, which in turn leads to the annihilation of millions of Euros every year. Ultimately, the Dutch state

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) program circular economy exemplifies how the role of politics has been “[…] reduced to finding the technical means to achieve goals (e.g. economic growth) that in themselves are understood to lie outside the realm of politics” (Fisher, 2007). Also the KCPK, as the Dutch PBI’s innovation hub, is entrenched with the post-Fordist buzzwords of circular economy and sustainability. The circular economy program is a tool to increase the Dutch PBI’s economic sustainability, rather than facilitating their growing ecological sustainability (KCPK, 2017). In line herewith, the KCPK claims that most of its innovation projects lead to economic efficiency and environmental performance (e.g. KCPK, 2016). This, actually, means that whatever is environmentally friendly needs to be economically profitable first. The primary focus of the KCPK on technological innovation to drive the industry’s international competitiveness and (transnational) capital growth, thus, aligns well with the Ministry’s circular economy program. Concluding, the agenda of economic sustainability underlies both the purpose and impact of the circular economy initiative by the state as well as the herewith funded innovation projects as facilitated by network organizations such as the KCPK. Ultimately, the label of sustainability legitimizes the allocation of public funding to inter-organizational networks geared at industrial survival and sustainability (e.g. Methmann, 2010, p. 349). Thus, in post-Fordism technological innovation

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) first serves the purpose of enhancing companies’ competitive advantage, profit maximization and cost efficiency by improving production processes and fostering market-driven product specialization, and only then serves the purpose of increasing industries’ ecological sustainability (Fisher, 2007; Kelly, 1999). As long as technological innovation is propagated as the most important factor for economic growth, organizational strategies aimed at improving environmental sustainability will remain rooted in the capitalist rationality of granting primacy to profit and growth above all else (Phillips, 2014, p. 443). In fact, ecological sustainability and circular industries are at best side- products of transnational capital accumulation through market- driven product specialization and efficiency-driven process innovation under the agenda of economic sustainability (McManus, 1996; Perkins, 2007; Shiva, Salleh & Mies, 2014; Smith, 1996).

4.4 Labor-capital relations: New forms of precarity and the managerial middle-class In this section, I turn to the dimension of labor-capital relations in the formation of inter-organizational networks of the Dutch PBI during post-Fordism. I elucidate the concurrences of, on the one hand side, the transnationalization of production and ownership paired with the dynamics of financialization and, on

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) the other hand side, the decline in labor union density in the Netherlands and beyond (Stockhammer, Durand & List, 2016, p. 1818). Through a closer look at the reproduction of precarious working conditions alongside the rise of the managerial middle-class, I also consider the racialized economy of the capitalist mode of production as relevant to the erosion of working-class cohesion in the post-Fordist Netherlands.

4.4.1 The decreasing importance of unions despite the reproduction of precarious working conditions

Even though the weakening of labor unions’ bargaining power from 1980 onwards is undeniable, labor -capital relations in the Netherlands are often romanticized as a successful example of the polder model. The polder model describes the consensus-based culture between the dominant agents of labor, capital and state during early post-Fordism. Many scholars, politicians and media outlets utilized the Wassenaar Agreement of 1982 for polder model propaganda, mystifying it as consensus-based and the cause of wage-restraint induced job and economic growth (e.g. de Vries, 2014; e.g. Delsen, 2002). Starting with the Lubbers I cabinet in the 1980s and continuing past the Lubbers III cabinet in the 1990s, “competitiveness has been considered as the central key to economic and employment growth” and “wage restraint [as permitting] enhanced international competitiveness

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[.] thus creat[ing] growth in output and employment” (Becker, 2005, p. 1079; Becker & Schwartz, 2005, p. 14). Heralding labor rights destruction as the only way to secure capital accumulation and, as often argued, rising wealth for all is quite essential to post-Fordist labor market de-regulation and competition- centered discourses (e.g. Becker, 2005). As prime example, the Wassenaar discourse, which propagates a Dutch culture of consensus between labor, capital and state, is a farce. First, because the various Wassenaar ‘agreements’ of the 1980s and 1990s coincided with decreasing numbers in union membership, decreasing union power and the neoliberal co-option of unions (Becker, 2001, p. 463; Bieler, 2009, p. 233). Due to this power imbalance between the state, industry and unions one can hardly argue that these agreements were consensual (Becker, 2001, p. 464-466). Second, these negotiations were not unique to the Dutch context and so-called polder model, but also appeared in other national contexts around the time of post-Fordist labor flexibilization and neoliberal re-regulation (Becker, 2005, p. 1079). Actually, the Wassenaar ‘agreement’ of 1982 was a non-consensual declaration of intent by the social democratic union (FNV) and Christian-democratic union (CNV) on a “’cost neutral’ redistribution of work” (Becker, 2005, p. 1085). Instead of the expected reduction in daily working hours for full-time employees, the implementation of the Wassenaar ‘agreement’

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) induced drastic wage restraints and labor flexibilization (e.g. Oorschot, 2004; Remery, van Doorne-Huiskes & Schippers, 2002). These entailed an enormous increase in part-time, zero- hour, low wage jobs for female, migrant and juvenile employees (Becker, 2005, p. 1081, p. 1087). In fact, the Netherlands is a champion of labor market flexibilization exhibiting the sixth highest percentage of flexible workers in European comparison, with only Poland, Greece, Spain and Portugal have higher shares of people in flexible employment contracts (ISHN, 2017; Barbieri, 2009, p. 5). In 2015, forty percent of the Dutch labor force worked in flex-time contracts, earning on average thirty- five percent less than people with fixed employment (Barbieri, 2009, p. 4; de Beer & Verhulp, 2017, p. 8). Since the beginning of the economic crises in 2008, such forms of occupation increased at a much higher rate than full-time employment (ISHN, 2017). Therefore, it is not surprising, but surely insignificant that Dutch employment protection legislation for full-time, regular jobs remains amongst the most ‘generous’ in Europe (Becker, 2005, p. 1087-1088). In the Dutch PBI, this rise of post-Fordist precarity materialized in an increased workload per worker, in addition to the continuity of hazardous working conditions, including extreme temperatures and humidity or rapid changes thereof, high noise disturbances, constant exposure to dangerous chemicals (such as asbestos or different sulfites) and physical

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) stress (Jungbauer, Lensen, Groothoff & Coenraads, 2005; PKGV, 2001; Torén, Hagberg & Westberg, 1996; Torén, Persson & Wingren, 1996). The increased workload per worker was sugar-coated as an alleged rise of employee efficiency, when actually it was caused by strategies of decreasing employment costs, that is by decreasing the number of workers per mill in the industry (Interviewee 6 & 7, 01:05:25). Such strategies yielded in an excessive decline in employment numbers during the 1980s and 1990s, hereby stimulating post-Fordist deindustrialization further. In the Dutch PBI, deindustrialization continues until today: while a comparably large paper mill counted around two-thousand machine operators in the 1960s, the number decreased to a total of two- hundred workers per mill in 2016 (Interviewees 6 & 7, 01:05:25). During the 1990s and 2000s, strategies of downsizing in terms of employee-numbers based on advice from external consultancies were deployed to increase profits and lower the cost factor of labor extensively. Only recently, paper mill directors argue for the profitability of adding workforce as workers’ productivity outgrew sinking employment costs. One interviewee explained the revenue maximization per employee as follows: “workers will make more profit than [we] have to pay for them” (Interviewees 6 & 7, 01:12:19). Even though the rise in manufacturing labor productivity is argued to be partially constituent of the decline

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) in manufacturing employment and deindustrialization more generally, the measure of workers’ productivity undermines the precarity inherent to having ever less workers produce ever more paper under hazardous working conditions (Jonker‐ Hoffrén, 2011, p. 387; Tregenna, 2011, p. 3). During an interview one manager summarized this issue as follows: “So each worker is at ninety percent of their capacity, without having problems. So it means they don’t have even the time anymore to think […]” (Interviewees 6 & 7, 01:11:35). This manager’s positive assessment of the intense working conditions of paper machine operators in the Dutch PBI is highly biased, revealing his refusal to acknowledge blue-collar working conditions in Dutch paper mills in order to legitimize profit-squeezing strategies such as downsizing. While rationalizing peoples’ ability to cope with work as “capacity” and exploiting this “capacity” to its limit, the comment “not even having time anymore to think” exemplifies management strategies of revenue maximization at the cost of workers’ welfare. The second cause for the decrease in employment numbers in the sector, despite the reduced number of available positions, is the dire shortage of educated blue-collar workers. Under the Lubbers I cabinet and continuing into the 1990s the education sector got re-regulated, marked by cuts of public funding and a focus on specialized education as well as prioritization of higher education. As one interviewee explains,

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[t]hey killed this system at the end of the 80s, beginning 90s, and then they turn over to the overall education and MAVO and things. But they now, they are starting again with the leerling system. […] And this is something, the whole industry is facing. That we slept for 10, 15 years for education because poor education means also you have to invest time and resources. (Interviewees 6 & 7, 01:40:11, 01:41:25)

In other words, post-Fordist trends of deindustrialization are interrelated with lower vocational education rates in the Dutch paper sector. For these reasons, the average worker’s age in the Dutch PBI is around fifty years and “[s]o the biggest problem in this industry […] is keeping the knowledge, transferring the knowledge in, within the company before they go on retirement” (Interviewees 6 & 7, 01:05:25). One could think that the old-workers’ knowledge might be redundant in a fully automated paper mill, but it is not. A high rate of machine- stoppage mostly due to paper ripping, approximately once per day in most Dutch paper mills, requires the machine operators to manually intervene with the machine beyond just “pushing a button” (Interviewees 6 & 7, 01:05:25). A widely spread alternative to retirement-induced knowledge-gaps is to buy-in the relevant knowledge from experts. These practices are costly and not always efficient because such experts do not operate

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) paper machines on a daily manufacturing basis, as they are commonly studied engineers (Interviewees 6 & 7, 01:05:25). In sum, the concurrence of the decrease in unionism and the rise in productivity occurs primarily at the cost of the workers. The demand for ever higher output numbers by ever fewer employees in hazardous conditions reproduces workers precarity in post-Fordism. This development is further underpinned by structural changes affecting dying manufacturing industries, like the Dutch PBI. These are the relocation of production sites to emerging markets (deindustrialization) and the re-regulation of the educational sector, which focusses less on manufacturing personnel and more on service sector and knowledge workers. In line herewith, the following section explores the development of the managerial middle-class in relation to capital and labor during post-Fordism.

4.4.2 The rise of the managerial middle-class

The emergence of the managerial middle-class and its manifestation in the Dutch PBI dates back to the 1950s and 1960s (Kriesi, 1989, p. 1088). In the early 1980s, the Dutch PBI, as many other industries worldwide, witnessed a drastic increase in managerial positions. This class fraction’s growth is an essential facet of post-Fordist labor -capital relations (Kriesi,

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1989, p. 1088). The managerial middle class is also referred to as the professional managerial class (PMC) (Ehrenreich & Ehrenreich, 1979), new petty bourgeoisie (Poulantzas & Hunt, 1975) or white-collar workers (Burrell, 2002; Hyman & Price, 2016). It “consist[s] of salaried mental workers who do not own the means of production and whose major function in the social division of labor may be described broadly as the reproduction of capitalist culture and capitalist class relations” (Ehrenreich & Ehrenreich, 1979, p. 13). Herewith, managers take a unique position in post-Fordist labor-capital relations. Corporate managers are neither fully in power of deciding on their own working conditions, including their salary scale, their working hours, their liabilities and tasks, nor dependent upon organizing their labor force in the form of unions to actually negotiate their working conditions. Instead, they inhabit a certain position that lies outside the union-negotiated tariff for different sectors. In the Dutch PBI, the specific circumstances of managers are described as follows by an interviewee:

[f]irst of all because [.] the competition between the companies for hiring educated people is just higher, so you need more freedom [to negotiate your working conditions], the second thing is, the working hours are quite long. Sometimes you stay fourteen, fifteen hours because there are some problems, you also are on call sometimes, considering that your salary actually

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doesn't increase that much. […] So basically, the tariff doesn't apply to me [and] we have direct negotiations. (Interviewees 6 & 7, 00:47:48)

The flexibilization of working conditions also effects the managerial class fraction, as eight-hour working days are often exceeded by far. Due to the rise of modern technology managers are expected to be available throughout the day and always in case of an emergency (Interviewee 3, 00:45:16 ff., 01:01:29; Interviewees 6 & 7, 00:49:42). In contrast to blue-collar workers, managers are in the position to negotiate their salaries and schedule their working days autonomously, often through – as one interviewee calls it – “gentleman agreements” (Interviewees 6 & 7, 00:52:11). Next to their unique bargaining positions within organizations, the managerial middle-class also exhibits powers concerning negotiations about future investments and legal boundaries of making (paper) business. This power simultaneously depicts their responsibility to maintain and increase the profitability of the business in the interest of the shareholders. Hence, in post-Fordism negotiations are not limited to politicians and transnational shareholders, but also include corporate managers, whose interests at times stand in opposition to those of the shareholders. In the Dutch PBI, this new petty bourgeoisie of high wages earning, mostly white, male workers in suits faces contradictory expectations, which are tied to their role within

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) the corporate mill. Paper mill managers have to negotiate their role as representatives of the particular TNC, which owns the paper mill, on the one hand side, and their role as representatives of the Dutch paper and board industry, on the other hand side. One manager describes this tension as follows:

[a]ctually I’m not loyal to [name of TNC], […] [i]n my personal opinion, I’m loyal to this mill. Because here we are fighting for not being closed down in some future. We are small. So, we are fighting and the head quarter is deciding they have [number of] mills, we are too small in profit. So, I’m loyal to this factory. I’m part of [TNC], but my first loyalty goes to this location. (Interviewees 6 & 7, 01:56:45)

In the case of the Dutch PBI, paper mill managers operate under the continuous tension of keeping ‘their’ mills profitable, while fearing the ever-present possibility that the shareholders or shareholding TNC shut down the mill to diminish competition, decrease overcapacity or follow asset-stripping strategies. This threat became an actual, dominant trend after 2000, when TNCs started to move production units abroad, close down machines in the Netherlands or dismantle entire plants (Bouwens, 2012, p. 205). In essence, this leaves managers in a contradictory situation: identifying with the Dutch PBI and fearing the shutdown of ‘their’ mill and at the same time executing their shareholders’ will, which solely adheres to rising profits and

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) growth instead of the national and local importance of the mill. Dutch paper mill managers feel a need to protect the national paper industry from their untamable, corporate employers (Interviewees 6 & 7, 01:56:45). The identification of white-collar employees with the Dutch PBI is, thus, essential to the survival of the industry. Despite the industry’s transnationalization during post-Fordism, the workforce characteristics within the Dutch PBI are unchanged, namely a comparably high average age of employees (about fifty years) as well as low turnover rates and decade-long careers. In fact, TNCs continued to employ ‘local’ managers and engineers, instead of replacing the white- collar staff with foreign professionals, because they followed corporate strategies, which assume that subsidiaries are embedded in distinct national cultures, not necessarily aligning with the ‘home culture’ of the respective corporation (Schneider, 1988). In light of these developments, mill managers face an arduous and complex future when it comes to ensuring the survival of the Dutch PBI by convincing foreign capital to stay (Bouwens, 2012, p. 205). This also explains, why the VNP stresses the importance of the Dutch PBI, even though the industry is almost entirely foreign owned and its managers (including most of the board members of the VNP) are employed by foreign TNCs.

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4.4.3 Racialized economies during post-Fordism

Underlying the rise of the managerial middle-class is the continuation of an “imperial racial economy, with its gendered, sexualized, and classed intersections” in post-Fordist Netherlands (Wekker, 2016, p. 2). The rise of the managerial middle class as a post-Fordist abscess of labor-capital relations posits the continuity of distinct elements of the colonial past, namely the racial segregation of the economy as manifested in post-Fordist labor-capital relations. During the era of post- Fordism, manufacturing work in first-wave industrialized countries, such as the Netherlands, was relocated to migrant, female and juvenile workers. Intertwined with this shift in employment was the post-World War II migration wave, “consist[ing] of three major groups: postcolonial migrants from the (former) empire, labor migrants from the circum- Mediterranean area and recently from Eastern Europe, and refugees from a variety of countries in Africa, Asia, Latin America, and the Middle East” (Wekker, 2016, p. 6). Similar trends of relocating manufacturing jobs to the outsider (within)11 in order to exploit and appropriate their workforce also took place in the United States of America. Post-World War II, the US economy shifted from agriculture to manufacturing, and US-

11 A concept used and developed by Gloria Wekker, describing the silenced experiences of people, which are part of a society, yet invisibilised and thus not seen as such (Wekker, 2001, 2016). 236

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Southern agriculture was industrialized. Subsequently, the racialized economy changed in so far as industrial blue-collar jobs were no longer limited to white people (Brown, 2003, p. 70- 71). The current role migrant workers play in manufacturing industries of first-wave industrialized countries depicts the racialized character of the post-Fordist accumulation regime as it describes (forced) migration12, allowing corporations to exploit labor at ever cheaper prices due to low (or non) labor regulations for migrant, female and juvenile workers (Castles, 2002, p. 1144; e.g. Castles, De Haas & Miller, 1998). “White supremacist racism” continues to underpin the creation and attempted legitimation of the managerial identity (Cooke, 2003, p. 1905). In fact, current racist justifications of the oppressive idea(l)s and practices of management date all the way back to early forms of Taylorism during slavery (Cooke, 2003, p. 1905). A statement by one of the managers in the Dutch PBI reproduces the inherently racialized character of the white, male, highly-educated managerial middle-class identity.

We have some areas, where the academic level doesn't have to be quite high, you are more there to operate three buttons basically, so we have a high percentage of Turkish people, or with Turkish origins. […] Ehm, for the low, ehm, academic level jobs, well you hire

12 For further discussions on the nexus of forced migration, globalization and (neo-) colonialism please read: Angathangelou & Ling (2003). 237

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basically not illiterate people, but people not with a high school degree. […] I think, I'm not sure, if they are officially Dutch, we more define it as people, who speak Dutch. […] I mean, if you are able to communicate, it's fine for us. Not if you are in a position, where you have to co-ordinate, but if you understand, what we are telling you to do, it's fine. (Interviewees 6 & 7, 00:58:54)

This quote has to be interpreted as embedded in and reproducing the racialized economy, to which the Dutch PBI is no exception. Until the partial decolonization after WWII, manufacturing jobs in the metropoles remained predominantly white until they were handed down to migrant workers in first- wave industrialized countries (Brown, 2003, p. 70-71). Due to the interplay between the European integration and national labor deregulation policies the Dutch PBI exhibited growing numbers of migrating blue-collar workers from 1980 onwards (Castles et al., 1998, p. 72). They mostly migrated from countries such as Turkey, Poland, Bulgaria and Rumania, and, once arrived in the Netherlands, faced short-term working contracts, low social security standards and little to no support from unions (Castles et al., 1998, p. 72). For the respective manager to establish a causal relationship between the assumingly simple task of pushing three buttons and the percental number of (assumingly) Turkish people working in a mill is racist. It is

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) equally racist to link the notion of Turkish people to the idea of illiteracy and it is discriminatory to indirectly equalize not having a high-school degree with illiteracy (despite the fact that shaming illiterate people by giving illiteracy a negative connotation is already discriminatory in itself). Overtly racist statements like the one cited above and the concomitant racist atmosphere pertaining not only in Dutch manufacturing industries, but as a matter of fact in the Dutch societal context at large, are supported by an epistemology of ignorance (Sullivan & Tuana, 2007). In fact, similar to how Dutch colonialism was mystified as a ‘golden’ age, the racist structures analyzed here are eagerly kept secret through the white Dutch self-representation as “a small but ethically just nation that has something special to offer to the world” (Wekker, 2016, p. 4, p. 13). This ignorance enables white supremacy to continue its reign by forcefully defending non-knowing, innocence and the absence of race and racism from Dutch society (Wekker, 2016, p. 18). In a similar vein, it is claimed that racism, if at all, only takes place amongst the working class; it is said to surely not be part of the (managerial) middle class in Dutch societies (Wekker, 2016, p. 18). Of course, this is not surprising as management (as practice and scientific discipline) is essentially rooted in the colonial project (Frenkel & Shenhav, 2006, p. 7). Techniques of Othering reflect the racist roots of management as established by esteemed scholars, who ignored, how slavery and, thus, white

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) supremacist racism was and continues to be incremental to management as practice and science (e.g. Cooke, 2003). Exemplary,

Ferrero’s studies, which contrasted the stereotypical image of the lazy barbarian with that of the self- controlled, industrious and civilized European, were accorded scientific credence and were instrumental in shaping the worldview of important theoreticians of organization and management vis-a-vis the non- western ‘other’. (Frenkel & Shenhav, 2006, p. 9)

Othering is a strategy commonly deployed to build a dominant identity and maintain racialized, oppressive structures. In science, including critical branches of scientific research, Othering is reinforced through institutionalized discourses, which “[…] are predicated upon a colonial tradition where non- white people are seen as exotic Others who require Western scientific investigation and classification” (Liu, 2017, p. 50). The discursive use of Othering installs and legitimizes violent and oppressive structures such as patriarchy, nationality, borders, law, Western13 science and various forms of state and corporate violence, which are all based on building an identity in demarcation to the Other, who does not belong (Mignolo, 2012;

13 I use Western here and in later passages of the text as a descriptor for the mythical and fictional nature of “the West [a]s an ideological construction deployed in the asymmetrical power relations between colonizer and colonized” (Westwood & Jack, 2007, p. 248). 240

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Shiva et al., 2014, p. 225). Essentially, Othering within and beyond science, employs the following strategy: “If you want to be equal to us, then don’t talk about differences; but if you are different from us, then you are not equal” (Prins, 2002). In the Dutch context,

[p]ersistently, an innocent, fragile, emancipated white Dutch self is constructed versus a guilty, uncivilized, barbaric other, which in the past decades has been symbolized mostly by the Islamic other, but at different times in the recent past blacks (i.e., Afro- Surinamese, Antilleans, and Moluccans) have occupied that position. (Wekker, 2016, p. 15)

The above cited interview respondent, titled deputy manager, is himself a migrant worker from a West-Middle- European country, who enjoyed a middle-class upbringing and an international engineering education at different paper mills worldwide (Interviewees 6 & 7, 00:04:59). His father, also a paper engineer, who also worked at many different paper mills worldwide, actively supported his son’s career. Essentially, this vita resembles how the patriarchal and (neo-) colonial of the Dutch PBI, especially concerning the industry’s management level, is still based on ‘gentleman agreements’ (Interviewees 6 & 7, 00:52:11). Furthermore, assuming to inhabit a position, in which he the manager is legitimated to define another person’s identity (“we more define it as people, who speak Dutch”),

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) ultimately resembles the racist, authoritarian, patriarchal and imperial core of the managerial middle-class. Even though he the manager tries to hide this core by using the seemingly legitimizing plural “we”, he assumes a judge-like authority for himself (or in his words for “us”) by (de-) valuing the Other. Additionally, the racist, authoritarian and discriminatory nature of the manager’s last sentence is worth noting, as he clearly sees himself in a role, in which he tells the Others, what to do, while they have to (and be able to) follow his order. To conclude from the above explications: the reproduction of racist discourses and material practices is marked by the establishment and rise of the managerial middle class and its inherently racialized character. Furthermore, the managerial middle class is embedded in and reproductive of a society, which claims to be blind towards and, hence, perpetuates racialized realities. Overall, current (forced) migration and subsequent work displacement to oppressed groups in post-Fordism is different than in the colonial past. Not because people are no longer traded as slaves in the name of nation states and their corporate-friendly legislations on slavery, but because this phenomenon goes hand in hand with neoliberal restructuring processes yielding “fiscal austerity, the liberalization of trade agreements, a reduction of import tariffs, and wide-ranging cuts to public expenditure” (May et al., 2008, p. 63-66). By these means, racial inequality and labor market

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) discrimination are also characteristic of the Dutch PBI, exploiting so-called low-skilled migrant workers, who work under low social security standards and flex-time contracts while facing racist oppression. Two noteworthy conjunctures resemble labor-capital relations in the context of the Dutch PBI during post-Fordism. First, new forms of precarity tied in with the racialized character of the managerial middle class reproduce oppressive structures, which allow for the continuation of racialized realities and racism. Second, the established managerial middle class exhibits tensions concerning role expectations, negotiating their local identities, on the one hand side, and their corporate identities, on the other. Overall, the rise of the managerial middle class is essential for reproducing the oppressive structures inherent to post-Fordist capitalism by augmenting the hierarchy between capital and labor under the guise of extrapolating capital growth.

4.5 Concluding remarks The above analysis allows tracing the changes in all four dimensions of inter-organizational networks in the Dutch PBI throughout the transition from Fordism to post-Fordism. These changes reflect the more general characteristics of post- Fordism, while also being unique in their materializations. I will now sum up the findings per dimension.

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The role of the state in post-Fordism is conditioned by and its policies adjusted to the international competition regime, which stresses the importance of national competitive advantages based on “territory, population, built environment, social institutions and economic agents” (Jessop, 2002, p. 96). The showcased active and passive governmental steering and restructuring of economic affairs in the context of the Dutch PBI from 1980 onwards refutes the thesis that the state retrenches from regulative involvement during the post-Fordist accumulation regime. Instead, the above analysis shows how the state’s regulative involvement within and beyond the Dutch PBI changes throughout time. Despite the contradictory propagation of free market principles and rising competition, the cooperation between government authorities and managers of the Dutch PBI clearly traces manifold instances of industrial policy, which benefitted the profitability of industries, including the Dutch PBI. State strategies, such as deregulation of market structures allowing for a widespread transnationalization of ownership, neoliberal re-regulative activities in form of closer cooperation between public and private sectors for the purpose of R&D cooperation, processes of privatizing public sectors, active as well as passive financial support for industry demands, and flexibilization of labor, all pursued the goal of increasing the international competitiveness of Dutch industries. The governmental response to post-Fordist threats of

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) deindustrialization, the moving of production units abroad and subsequent shut-down of paper mills in the Netherlands, was to bolster industrial and, hence, capital growth through setting “strategic targets for flexible accumulation, continuous innovation and the promotion of the overall structural competitiveness of the national economy” (Jessop, 1994, p. 268). Herewith, the state continued to play a fundamental role in restructuring the politico-economic environments national industries are embedded in during post-Fordism. During post-Fordism the number one goal for the Dutch PBI was to soften the negative repercussions of rising deindustrialization and to put a stop to the moving of production capacities to third-wave industrialized countries, such as China. In the Netherlands, amongst others, the competition regime of the post-Fordist era is promoted as the only way to keep economic growth attainable by keeping fully transnationalized industries located within the respective national borders. With the full-blown arrival of the post-Fordist competition regime in the Netherlands, namely with the establishment of the NMa, new forms of cooperation between companies as well as between public and private sectors became fundamental. Foremost targeting R&D cooperation, industry- specific knowledge and innovation hubs sprouted, like the KCPK. A focus on a national identity of Dutch paper making became pivotal for propagating R&D cooperation despite the

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) growing dominance of the competition regime. With the goal to foster inter-organizational cooperation, the KCPK established local, regional and national level innovations projects in order to strengthen the industry’s competitiveness on the global level. Partially funded by (supra-) national institutions, the KCPK, as a daughter organization of the VNP, aims to increase the attractiveness of keeping paper manufacturing businesses located in the Netherlands. The opposing forces of cooperation during heightened competition manifest in the demand for certain forms of industrial cooperation, id est inter-organizational networks aimed at innovation, and the disdain of other forms of industrial cooperation, id est cartel structures. In fact, these new forms of industrial R&D focused cooperation are politically legitimized under fashionable notions, such as circular economy. Innovative technology, production processes and market-oriented products are propagated as sustainable solutions to ecological problems. Sustainability is the new buzzword under which the repercussions of deindustrialization are said to be tamable by re- orienting manufacturing along market demands and niche products. Hereby, technological innovation is embedded in a discourse on ecological sustainability, while actually prioritizing the need for capitalist profit accumulation and economic growth. In the post-Fordist time of hyper-competition, inter- organizational cooperation has never been about increasing

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) industries’ ecological sustainability (D’aveni, 2010; Langevoort, 2002). Overall, the innovation discourse, led in the name of ecological sustainability more generally and in the context of the Netherlands in the name of the circular economy program more specifically, disregards any positive aspects of collusive practices, which could help diminish the negative impacts competition- induced overproduction and its subsequent increase in waste have on our natural and social environment. Also within the final dimension of labor-capital relations, one can find tensions. New forms of precarity arose in first-wave industrialized countries, while harsh and exploitative labor was relocated to other geographical as well as demographic areas. Deplorable working conditions in newly industrialized countries such as China (currently the largest producer of paper worldwide) provide the basis for the culture of ever-growing consumption in first-wave industrialized countries. Also in European manufacturing industries, which are officially adapting supra-national safety and production standards, new forms of precarity arose. These include flex-time, low-paid jobs and decreasing social security standards, especially for migrant workers, women and juveniles. While automation and computerization in manufacturing industries seem to have decreased the harsh working conditions of blue-collar workers, time-efficiency and unethical productivity measures are actually increasing the daily pressures on workers in the Dutch PBI. Not

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Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) only does the dominance of capital over labor remain, but this power relation is further augmented by the rise of the managerial middle class. As this class mostly consists of white, male, middle- class, self-labelled “Westerners”14, the patriarchal and (neo)colonial character of the Dutch PBI is sustained. Also managers are confronted with certain contradictions in the post- Fordist accumulation regime. These relate to the fact that managers are both, internationally mobile representatives of big TNCs as well as locally placed managers, who, in the case of the Dutch PBI, identify more with the respective industrial site than their transnational corporate employer. Furthermore, the rise of the managerial class fraction lends impetus to the above-described contradictions of inter- organizational cooperation in the dominant competition regime. Local and national cooperative efforts, including short-term, daily activities as well as long-term, formalized projects, are strongly reliant on personal relations between managers (including various management levels, from executive manager to technical engineer) in the Dutch PBI. Globally, competition prevails over cooperation as most of the (Dutch) paper mills are not competing on a national level, but more so with their

14 I use the word Westerner as a critical notion to point to the discourse of Otherness. The term is established by a dominant group, in this case self- identified Westerners, whereby assuming to embody the norm and having a valued identity in contrast to the Other, “that is defined by its faults, devalued and susceptible to discrimination” (Staszak, 2008). 248

Chapter IV – The Dutch paper and board industry’s inter-organizational networks during post-Fordism (1980 until now) globally spread sister-mills. Currently, the biggest threat for Dutch paper mills is that their corporate shareholders shut down production as a consequence of following asset stripping or consolidation strategies. Inter-organizational cooperation and technological innovation, as fostered by the Dutch state authorities, is thus designed to convince industrial investment capital to stay within the national borders of the Netherlands.

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The historization of inter-organizational network dimensions during different phases of capitalism encompasses the importance of inter-organizational network formations for the survival of the Dutch PBI throughout the last four centuries. A prime example of the most recent inter-organizational network formation during post-Fordism is the KCPK network. As the industry’s innovation and knowledge hub, the KCPK aims to provide sustainable innovation through inter-organizational cooperation to keep the industry profitable and, thus, surviving (KCPK, 2018). Hereby, the KCPK creates an inter- organizational network including various agents and spanning intra- as well as inter-industry cooperation projects since its establishment in 1998. Furthermore, this network targets the creation of opportunities for sustainable development, such as profitable process and product innovation in line with rising environmental standards, in order to absorb threatening tendencies, such as the moving of industrial capacity abroad. To fulfill these missions, the KCPK aims to connect agents from within and beyond the Dutch PBI. Network scholars classify this role as that of a tertius iungens – a third who connects (Collins-Dogrul, 2012; Garriga, 2009; Obstfeld, 2005;

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Quintane & Carnabuci, 2016). This concept is based on theorizing nodal power in network literature. It describes a structural position – a broker position – in which a node serves as a connector between unconnected others to foster inter- organizational cooperation within a given network (Collins- Dogrul, 2012, p. 991). As an ideal-type broker, the KCPK would introduce every company and non-profit organization it cooperates with to each other and, thus, slowly connect all unconnected network members until the network is fully connected. The tertius iungens strategy allows the KCPK to maximize the number of possibilities amongst a various pool of network members to share network- and project-based knowledge, hereby fostering the survival of the Dutch PBI through inter-organizational cooperation. With the aim to increase the profitability of the entire Dutch PBI and, thus, to keep foreign investment located within the Dutch national borders through convincing the respective mills to cooperatively work out future outlets for profitable investment, the KCPK indeed aims to be a tertius iungens. Yet, with the rise of the transnational capitalist class fraction, the threats of financialization as well as concomitant deindustrialization, and the repercussions of hyper-competition for manufacturing industries during post-Fordism (see chapter four), being a tertius iungens, who aims to connect various profit-seeking corporate entities and align their interests in

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry cooperative network projects, seems an arduous task. Whether or not the KCPK manages to fulfill its role of a tertius gaudens, it is worthwhile to analyze the ‘if’ and ‘how’ of both its successes and failures of being a third, who connects.

5.1 The KCPK network’s evolution The KCPK started initiating project-based cooperation among companies of the Dutch PBI in 1998. Due to manifold reasons, the network fluctuates in the number of projects carried out. Based on project data from the KCPK’s server, Figure 6 depicts this fluctuation. For every time period all projects initiated in that period are displayed. The projects are further distinguished as to those, in which the KCPK is involved (square shaped line) and those, in which Bumaga is involved (triangle shaped line). The reason for the fluctuation in project numbers throughout all periods are manifold (diamond shaped line). First, the establishment of Bumaga in 2004 opened up various new paths for additional project cooperation. More focused on product innovation, Bumaga enabled the KCPK’s employees to apply for national- or EU-level funding, earmarked for private sector cooperation (see the triangle-shaped graph in Figure 6). Second, as an effect of the post-2008 crisis, the number of newly initiated projects significantly declined again as (supra-) national funding opportunities for public-private as well as private sector

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry innovation projects were cut (Kappeler & Nemoz, 2010). Transactions in public-private-partnerships decreased by fifty percent from 2007 until 2009; a general trend as austerity measures spread throughout “every type of outsourcing and joint venture between the public and private sectors” (DLA Piper, 2009). Many industries were affected by these cuts and the Dutch PBI was no exception to this trend as the decrease of project initiations by the KCPK and Bumaga from 2007 until 2011 shows. With the implementation of Horizon 2020, a program adopted by the European Commission (EC) in 2011, in order to strengthen European research and innovation in terms of increasing participation, rising economic and scientific impacts, and “better value for money”, the number of project- based cooperation in the KCPK network increased again to previous levels (Rusu, 2013, p. 129).

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Figure 6 Evolution of the projects initiated within the KCPK network

4 NUMBERPROJECTSOF

0 1998- 00 2001- 02 2003- 04 2005- 06 2007- 08 2009- 10 2011- 12 2013- 16 YEAR

total number of projects number of projects initiated by KCPK number of projects initiated by Bumaga Source: Own calculations based on own dataset

In light of the changes in the KCPK network structure, a closer look at the sectoral affiliation of the project members helps to understand who participates and possibly dominates the network, thus who benefits from its initiated projects most. In fact, the share of the type of participants in these projects has always been greatest for companies of national and international sectors other than the Dutch PBI (see Figure 7). At first glance, this seems surprising because the KCPK network is foremost meant to cater to the interests and (economic) sustainability of the Dutch PBI. Yet, many of the projects, especially on product innovation, involve agents from other industries, such as consultancy firms, printing companies, architectural firms, raw material producers and privatized research facilities. These

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry structures align with the recent EC initiative on increasing platforms for smart specialization, which help “establish[.] expertise from universities, research centers, regional authorities and business and depend[.] on a strong partnership among these actors” (Rusu, 2013, p. 131). In fact, the overall diversity in membership of the KCPK network projects shows, how well the Dutch PBI puts the goal of smart specialization into practice, as the KCPK network includes agents from all different sectors, such as commercial industry agents, research organizations and state agents. Nonetheless, the reliance of product innovation projects especially, and process innovation projects to a lesser degree, on other sector participants, also overshadows, how many companies of the Dutch PBI actually participate in the network projects over time. In fact, when analyzing the participation rate of Dutch PBI companies, the fluctuation in participation is striking. Figure 7 depicts this fluctuation. In this bar chart, color coded bars indicate the ratio of type of participants in all projects during each period (see Figure 7). While the number of business organizations stays relatively even throughout all periods (second darkest shade of grey), especially the number of state and research organizations varies greatly (second lightest and lightest shades of grey). The number of organizations of the Dutch PBI (darkest shade of grey) stays relatively even throughout all periods except during periods 2001-2002 and

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2003-2004. While the earlier rise in number of organizations of the Dutch PBI might be due to rises in funding opportunities and the slowly growing acceptance of KCPK-based project initiations throughout the industry, the second rise might be due to the establishment of Bumaga and the subsequent availability of new funding opportunities.

Figure 7 Share of type of participants in newly initiated projects per period

1998- 00 2001- 02 2003- 04 2005- 06 2007- 08 2009- 10 2011- 12 2013- 16 YEAR

organizations of the Dutch PBI business organizations research organizations state organizations Source: Own calculations based on own dataset

A more detailed look at the activity rate of Dutch paper mills in the network projects of the KCPK is displayed in Figure 8. Here, threefold information is conveyed. Firstly, the absolute number of Dutch paper mills is depicted per period, ranging between twenty and thirty throughout all periods. Secondly, the dark grey bars indicate the ratio of Dutch paper mills

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry participating in all projects per period, ranging between ninety and eight percent. To allow for a more detailed understanding of this fluctuation, thirdly, the light grey bars indicate the percentual number of Dutch paper mills affected by M&As and fusions in the industry during each period. ‘Affected‘ refers to changes in the legal and/or organizational structure of paper mills. In fact, through adding this information it becomes clear that not only the establishment of Bumaga and subsequent change in project funding, favoring inter-industry over intra- industry cooperation, explains the steep drop in the participation rate amongst Dutch paper mills by over fifteen percent during the period with the most newly initiated projects (2005-2006) (see Figure 8). Also the M&A of Jefferson Smurfit and Kappa in 2005 reasons the decline in participation rate, as nine out of the total twenty-three paper mills in the Netherlands were directly affected by this merger. Commonly, such changes in shareholders initiate lean-processes to the management structures and interrupt ongoing project cooperation as well as changes in the future courses for inter-organizational cooperation practices (e.g. Berggren, 2003). In fact, the M&A of Jefferson Smurfit and Kappa caused the incorporation of three out of the five affected paper mills, which from now on carried out innovation projects within Smurfit Kappa’s own R&D centers. These factors explain the cease in the participation rate concerning the cooperative projects of the KCPK network.

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Figure 8 Activity of Dutch paper mills in network projects

100 90 80 70 60 50 40

PERCENTAGE 30 20 10 0 1998-00 2001-02 2003-04 2005-06 2007-08 2009-10 2011-12 2013-16 YEAR

percentage of participating Dutch paper mills percentage of mills affected by M&As or closure absolute number of existing Dutch paper mills Source: Own calculations based on own dataset

By 2007-2008, the participation rate of paper mills suddenly rose again (see Figure 8). The peak at ninety percent is due to the newly established corporate players, Solidboard BV, Solidpack BV and Eska Graphic Board BV, who followed innovation strategies based on inter-organizational project cooperation. As a time-lagged effect of the 2007 financial crisis and post-crisis austerity measures, which depleted the availability for project funding, the activity rate drops to an all- time low of about fifteen percent by 2009-2010. In the years following the crisis, also the revenue of Dutch paper mills was continuously decreasing, reaching its lowest level since the late 1980s in 2009, with a revenue of 1,493 million euros (VNP, unknown). During this time, three paper mills and two paper

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry machines in the graphic paper division closed down as well as one paper mill in the sanitary paper division. In times of economic downturn, project cooperation for the sake of process or product innovation is not a priority for paper mill managers (Interviewee 1, 00:07:32). Even though the KCPK tried to address the steep decrease in participation of Dutch PBI companies in network projects by eliminating the mandatory membership fee in 2011, the activity rate did not increase to previous levels. During the analyzed periods of the network, only one mill remains completely inactive, which is most likely due to its niche position as a producer of banknote paper. Additionally, the paper mill formerly owned by, first, Fort James BV and, later, Georgia Pacific Nederland BV, did not participate in network projects until it was sold to SCA Nederland BV in 2011-2012. This is due to confidentiality rules, namely the restrictions of the US ‘mother’ company concerning cooperation with other, potentially competing paper mills. In sum, the evolution of the KCPK network, its participants and its projects since 1998 reveals the impact of contextual factors, such as (supra-) national industrial policy, M&As and crisis-situations in the finance sector on its structural setup. This context also builds the basis for the further analysis of the constitutive power dynamics and the role of the KCPK within its network.

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5.2 Rising power asymmetry: A few brokers dominating the KCPK network To determine whether the KCPK fulfils its proclaimed function of serving as a ‘connecting’ network hub amongst the other network members the following measures are assessed. First, the betweenness centralization score of the entire network for each period, which indicates the network’s structural changes in terms of nodal power positions. This first measure is based on the second one, namely the betweenness centrality score of each organization in the network, which summarizes the ongoing struggle of each organization in the Dutch PBI to share knowledge through cooperation on the one hand side, while competing with one another, as well as with corporate siblings, on the other hand side. The tensions of these two forces erupt in the more or less dynamic power structures of the KCPK network. The betweenness centralization of the whole network per period is displayed in Figure 9, including the activity of the KCPK and Bumaga. The underlying data includes each project and the information on its participants for all periods since the project’s initiation. Social network researchers have continually pointed to the importance of network evolution and longitudinal analyses for better understanding network emergence, dynamics and structures (Ahuja et al., 2012; Gulati,

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1995; Gulati & Gargiulo, 1999; Knoben et al., 2006). Following these scholars, it is assumed that the network relations between companies and organizations do not develop from scratch during every period, but indeed depend on prior network compositions. This is in line with scholars claiming that network research needs to account for the multiplexity of ties, pointing to the economic, social and personal dimension of inter- organizational network relations, and thus their latency (Ferriani et al., 2013; Kenis & Knoke, 2002; Mariotti & Delbridge, 2012; Westphal et al., 2001). From this perspective, joint project cooperation is defined as latent relations, meaning that relations between agents could possibly continue after the actual event or cooperation has ceased. Both the longitudinal importance of network relations and their potential latency are taken into consideration for the analyses of the KCPK network. The cumulative dataset in question represents the periodicized version of the longitudinal network, treating past ties as latent ties to allow for a detailed understanding of the role of the KCPK and other central agents.

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Figure 9 Betweenness centralization in the KCPK network per period

PERCENTAGE 20

0 1998- 00 2001- 02 2003- 04 2005- 06 2007- 08 2009- 10 2011- 12 2013- 16 YEAR

Betweenness centralization in % Source: Own calculations based on own dataset

In Figure 9, the depicted betweenness centralization score reflects “the inequality of betweenness centrality scores among individuals […] as a percentage”, meaning the overall centralization in terms of how many organizations are dominant, central nodes within the whole network (Hanneman & Riddle, 2005). If the centralization measure is close to one (id est 100 percent), the network is dominated by a few brokers, whereas a centralization measure gravitating towards zero (id est 0 percent) means that the network is relatively heterarchic concerning bridging power.15 In the case of the KCPK network, the betweenness centralization score rises almost exponentially until the final period (see Figure 9). This indicates that the structural

15 For this measure, the two-mode network data was transformed into one- mode network data, since projects cannot be brokers in this research context. 262

Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry inequality in power positions between the different organizations rises more and more. So, ever fewer organizations are central nodes in the network and, hence, able to control or connect unconnected others. In the context of a rather small industry with low employee turnover rates, like the Dutch PBI, this rising centralization becomes especially meaningful. Thus, it is likely that the personal and organizational relations established through project cooperation prevail, to a certain extent, as a potential source of new project cooperation over time (tie latency). When the network betweenness centralization rises exponentially in such a context, it means that the less connected organizations and companies in the KCPK network grow more and more dependent on the central ones. In other words, the ‘non-brokers’ grow more and more dependent on the brokers over time. The continuously rising betweenness centralization score thus indicates the exponentially rising possibility for central companies to capitalize upon their bridging position. The dependence of non-central companies upon the broker- companies increases the broker-companies’ chance to connect other unconnected companies via the shortest path through participating in a new project.

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Figure 9 depicts exactly this; the whole network’s betweenness centralization score is exponentially growing due to a few central organizations capitalizing upon their bridging positions, ultimately continuing to obtain new, shortest-path bridging positions between a growing number of unconnected organizations over time. In essence, the powerful network agents grow even more powerful over time. To illustrate, which companies are the dominant brokers and whether or not they maintain or even increase their structural network positions and resulting nodal power over time, Table 9Figure 9 lists the normalized betweenness scores of the most dominant brokers per period. The color code once more indicates the group affiliation of the respective organization, id est belonging to the Dutch PBI (light grey), to (inter-) national sectors other than the Dutch PBI (medium grey), to the research sector (dark grey), and to the state (no state organizations are listed in Table 9). The dominance of Dutch PBI companies in fulfilling brokerage roles compared to state, research and other industries’ companies is immediately visible (see Table 9). Even though the total number of organizations and companies with betweenness centrality scores higher than one steadily increases over time, we know from Figure 9 that the overall inequality of dominance between the network’s agents rises. Therefore, it remains the case that ever fewer companies, including the KCPK and Bumaga, bridge between an ever-

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry increasing number of unconnected companies and organizations within the network.

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Table 9 Normalized betweenness centrality scores for most dominant brokers in KCPK network per period

2003-2004 2005-2006 2007-2008 2009-2010 2011-2012 2013-2016 ORG3 4.013 ORG3 14.312 ORG3 22.028 ORG3 31.708 ORG3 44.049 ORG3 54.898 ORG99 1.21 ORG87 1.051 ORG159 7.915 ORG159 12.237 ORG159 23.13 ORG159 35.486 ORG89 3.429 ORG66 5.41 ORG66 8.327 ORG66 9.096 ORG162 2.178 ORG89 4.056 ORG89 5.031 ORG89 5.33 ORG99 1.331 ORG162 2.371 ORG162 2.698 ORG162 2.634 ORG96 1.204 ORG25 1.351 ORG96 1.648 ORG87 2.444 ORG33 1.105 ORG99 1.349 ORG99 1.593 ORG82 1.877 ORG31 1.082 ORG31 1.318 ORG25 1.586 ORG96 1.865 ORG87 1.032 ORG96 1.287 ORG31 1.459 ORG25 1.805 ORG33 1.024 ORG33 1.15 ORG99 1.728 ORG87 1.012 ORG87 1.123 ORG31 1.476 ORG93 1.072 ORG33 1.233 ORG107 1.072 ORG93 1.208 legend ORG86 1.032 ORG107 1.169 DPBI organization ORG86 1.038 business organization ORG22 1.01 research organization Source: Own calculations based on own dataset

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In light of the advertised tertius iungens strategy of the KCPK, its dominant broker role, as well as that of Bumaga, is rather surprising. Even though the results are based on the project data of the KCPK, including only projects the KCPK or Bumaga were involved in, their dominant brokerage role, suggests that the KCPK actually follows a reverse strategy, namely that of ‘a third who controls’. This strategy is called tertius gaudens and based on the idea that the flow of information and other resources are controlled by a broker, serving foremost their own advantage at the cost of all other agents. Based on Burt’s Structural Holes (SH) theory (2005), this strategy describes the possibility of gatekeeping and therefore “a measure of strategic advantage and information control” (Hawe & Ghali, 2007, p. 64). The fact, that both the KCPK and Bumaga cooperate in projects with unconnected others time and time again, maintains their structural power position and ultimately defeats their goal of strengthening the Dutch PBI through stimulating knowledge sharing, increasing profitable innovation, and encouraging inter-organizational project cooperation. In support of this finding, an employee of the KCPK explained in an interview that, if the content of a project allows for it, they prefer to cooperate with a familiar party rather than a new one (Interviewee 1, 00:53:44). Furthermore, the KCPK exerts an authority in introducing new agents to the entire network. The interviewee explained that a party

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry introduced by the KCPK has a much better chance of joining network projects than a party approaching the network agents itself (Interviewee 1, 00:54:46). A striking result of such practices is the appearance of Dutch PBI companies in recurring brokerage roles. Even though their brokerage scores are much lower than the ones of the KCPK and Bumaga, they are nevertheless meaningful brokers. Thus, the KCPK network, which supposedly caters to the entire Dutch PBI, is dominated by only a few of the industry’s companies. A closer look at the network brokers’ history since 1998, including M&As, bankruptcies and moving production sites abroad, puts the (dis-) appearance of specific companies over time, as well as the intensification of some companies’ power positions in a meaningful context (see Table 10). Only three of all eighteen brokers remain SMEs, while the majority merged with or was acquired by transnational corporations or private equities over time. The re-occurrence of a few corporate names in Table 10 suggest that the Dutch PBI is characterized by a balancing act of concentration through high market shares, the legally enforced independence of production sites as split-offs, and the corporate strategy of buying competitors to shut them down respectively. In fact, Table 10 illustrates that only four out of all eighteen listed companies of the Dutch PBI remain unchanged in their organizational structure between 1998 and 2017. The other fourteen companies are sooner or later bought

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry by either private equity firms, such as H2 Equity partners or CVC, or transnational corporations, such as Norske Skog, Sappi, Mayr-Melnhof, Jefferson Smurfit and Kappa Holding, and two of them are even shut down in the process of fusions and M&As. A good example of such activities is the presence of five brokers in the KPCK network, all of which are directly related to the M&A of Jefferson Smurfit and Kappa in 2005. These are Smurfit Kappa Packaging BV (including Smurfit Kappa Roermond BV), Kappa Packaging, Smurfit Kappa Solidboard BV, Smurfit Solidpack, and Solidpack BV. The increasing dominance of transnational corporations and private equity buy- outs in the Dutch PBI explains the ongoing low activity rate of certain companies in the projects of the KCPK since 2010. As one interviewee explained, the lower activity rate in inter- organizational network projects of the industry is due to the dynamic interplay of competition and cooperation with rising numbers of transnational corporations. Even though the old forms of “togetherness” are still there, they have also been eroded, especially by the M&A of Smurfit and Kappa in 2005 (Interviewee 3, 00:18:37). In fact, he experienced the need for cooperation (“You cannot do it alone” Interviewee 4, 00:19:18) and the risk of getting accused of collusive practices (“If we are accused of cartel discussion then you are really in trouble” (Interviewee 4, 00:18:56)) as a sole contradiction. In fact, private

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry equity owned companies often follow short-term profit strategies, which essentially collide With longer-term commitments, such as inter-organizational project cooperation. Similarly, companies owned by transnational corporations often dispose of a centralized R&D laboratory, inhibiting managers from engaging in external R&D activities, such as inter- organizational project cooperation. Yet, recent research has shown that TNCs have started to internationally disperse their R&D activities as well, thus aligning with the findings of the KCPK network, in which foremost transnational corporations participate in project cooperation to a large extent (Lundan & Mirza, 2011, p. 31). As a result, it is likely that the publicly funded innovation projects do not serve the interest of the entire industry, but instead the interest of the dominating TNCs. In turn, this would mean that these recurrent project participants control not only the content of the current projects, but are also in the (structural) power position to control the set-up and content of follow-up projects (e.g. Kogut, 1988; Gulati, 1995). To grasp whether or not this is the case in the KCPK network, the following analysis scrutinizes the core-periphery structure of the network over time.

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Table 10 Organizational history of all Dutch PBI brokers since 1998

Source: Own calculations based on own dataset

ORG30 ORG89 Smurfit ORG35 Mayr- ORG103 Sappi ORG22 Eska ORG109 De ORG107 Stora ORG33 ORG28 Smurfit ORG159 Coldenhove ORG108 Schut ORG32 Crown ORG10 Parenco Kappa ORG96 Kappa ORG99 Smurfit ORG162 ORG3 KCPK ORG93 VNP Melnhof Netherlands Graphic Board Eendracht Enso Huhtamaki Kappa Bumaga BV Papier Eerbeek Papier Van Gelder NV BV Roermond Packaging Solidpack Solidpack BV Eerbeek BV Services BV BV Karton Berghuizer Nederland Solidboard BV BV Papier BV 1998 founded in 1907 1983: acquisition 1998: 1998: founded in 1993 founded in 1908 1999 of Parenco management buy- management buy- 1998: founded; as merger of as cooperative of 2000 1982: independence (former mill out of Koninklijke out of Koninklijke financed by VNP, did not exist Sappemeer mill farmers of Berghuizer (mill Smurfit Solidpack 2001 2001: new name KNP BT = did not exist did not exist WUR and TNO founded in 1991 and Hoogezand (strawboard) - Wapenveld) due to (mill in Loenen) 2002 faillissement of Van Kappa Kappa Packaging mill (both later acquired by 2003 Gelder and new co- Roermond Papier (organized by since 1998 orginally Heinzel 2004 restart in 1983 operation with Enso; BV CVC Capital subsidiary of strawboard) Paperboard 1994: merger of Enso 2005 from faillissement 2001: acquisition Papeteries de and Stora 2005: fusion of Kappa 2006 2004: privatization of Van Gelder of Parenco by 2005: fusion of Kappa Packaging, Jefferson 2005: fusion of 2005: fusion of Clairefontaine SA Packaging, Jefferson Smurfit Groep and 2007 of KCPK under Papier Norske Skog Kappa Packaging, Kappa Packaging, since 1924 owned since 1990 Smurfit Groep and Kappa Holding BV; 2008 VNP 2006: acquisition Jefferson Smurfit Jefferson Smurfit by family Sanders subsidiary of 1999: merger of 2005: fusion of Kappa Holding BV --> new division name 2009 founded in 1904 by H2 Equity too high marketshare Smurfit Kappa Groep and Kappa Groep and Kappa and family Van Mayr-Melnhof Van Leer NV and Kappa Packaging, 2010 Partners (under in board sector --> Solidboard BV; Holding BV; EU Holding BV; EU Vreeswijk Karton AG Huhtamaki Jefferson Smurfit split off of mill shareholders are requirement to sell requirement to sell 2011 2006: co- the directorship 2008: Stora-Enso 2004: subsidiary 2006: bankruptcy Groep and Sappemeer and Madison Dearborn Smurfit Solidpack; Smurfit Solidpack; 2012 operation of of Andlinger & moves Hoogezand (continue Partners and CVC continues as continues as of VNP (selling of Kappa Holding 2013 Sappi Lanaken (B) Company) production to as Eskaboard) Capital Partners and SolidPack BV SolidPack BV 2011: mandatory machinery and BV; new name Cinven Ltd. 2014 and Sappi Finland and (CEO+shareholder (CEO+shareholder membership 2013: new name property) Smurfit Kappa Dirk Schut) Dirk Schut) 2015 Maastricht (NL) Sweden and shuts 2012: acquisition changed into Schut Papier 2014: first official Roermond Papier 2015: four mills 2015: four mills (solid 2016 down Wapenveld of Parenco by H2 (solid board voluntary (before bid for acquisition BV board production) (starting 2004) Equity Partners production) sold to membership Papierfabriek 2016: new name by Andlinger & sold to Aurelius AG; Aurelius AG; 2017: acquisition of 2017: acquisition of continue as Solidus 2017 Schut) ESKA Company continue as Solidus Solidpack BV by VPK Solidpack BV by VPK Solutions Packaging Group Packaging Group Solutions

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5.3 Transnational corporations as powerful core-brokers In addition to accumulating unique knowledge about project outcomes and participants through occupying brokerage positions in the network, some of the brokers of the Dutch PBI exhibit further structural power as a result of constituting the network core. In other words, the KCPK network is constituted by a core of densely connected organizations and companies, which tend to cooperate in projects with each other more often than with peripheral others. Consequently, a few transnational corporations recurrently cooperate in inter-organizational projects, while the rest of Dutch PBI companies is excluded from these projects. These TNCs, which are recurrent brokers and form the network core, namely Smurfit Kappa Solidboard and Solidpack, inhabit a structural power position that allows them to bridge between unconnected organizations in the network’s periphery and, thus, increase their network power in terms of structural position as well as knowledge gain and control even more. Table 11 displays this core-periphery structure of the network in numerical form. I calculated the core-periphery measures based on a reduced network dataset, only including the ties between organizations and companies of the Dutch PBI.

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This reduction in network size is necessary because of (1) the vast number of single-project-joining agents, especially from other business sectors, and (2) the generally clustered structure of a two-mode network, which overshadows the formation of an actual core-periphery-structure. Next to these methodological arguments, also the purpose of the KCPK network, namely to maintain the Dutch PBI through cooperation, legitimizes the reduction in network size for calculating its core-periphery structure. Table 11 lists the final fitness values and the density matrices for calculating the core-periphery measures of each network per period. The final fitness value ranges from a minimum of 0.508 to a maximum of 0.578, and demonstrates “how well the observed network data approximates an ideal core/periphery structure” (Boyd, Fitzgerald & Beck, 2006, p. 166). The final fitness value for the KCPK network is reasonably high for all periods, approximating an ideal model; hence, the empirical model is adequate (Shomade, 2007, p. 152). In addition, Table 11 illustrates how densely the network core is connected per period, compared to the periphery. While the density of periphery-to-periphery interactions (see values for 2/2), meaning companies of the periphery linked through peripheral events, is close to zero, the density of core-to-core interactions (see values for 1/1), meaning core companies frequently cooperating in joint projects, is closer to one. In each period, around forty percent of all possible joint project

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry cooperation is realized in the core of the network, while only ten percent of all possible joint project cooperation is realized in the network’s periphery.

Table 11 Core-periphery scores per period (only Dutch PBI organizations)

Core-periphery scores per period 2003 2005 2007 2009 2011 2013 ------2004 2006 2008 2010 2012 2016 Final ff ff0.5 ff ff ff ff fitness 0.578 53 0.520 0.538 0.508 0.517 value* 1/1 1/1 1/1 1/1 1/1 1/1 0.422 0.382 0.400 0.426 0.421 0.372 1/2 1/2 1/2 1/2 1/2 1/2 Density 0.188 0.130 0.150 0.254 0.253 0.265 matrix 2/1 2/1 2/1 2/1 2/1 2/1 0.111 0.080 0.102 0.088 0.100 0.090 2/2 2/2 2/2 2/2 2/2 2/2 0.007 0.007 0.015 0.016 0.017 0.009 *Calculated on the basis of two-mode network containing only Dutch PBI agents Source: Own calculations based on own dataset

The resulting power dynamic of such a core-periphery structure influences both the strengthening of favorable positions of the already powerful companies as well as the thematic direction of network projects. Prior cooperation influences the establishment of future joint projects through direct communication and the harmonization of research

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry interests, as “[a]ctors in the core are able to coordinate their actions, those in the periphery are not, [placing core agents] at a structural advantage in exchange relations with actors in the periphery” (Gulati, 1995, 1999; Gulati et al., 2000; Hanneman & Riddle, 2005, p. 280; Lorenzoni & Lipparini, 1999). The core of the network is made up by a decreasing number of organizations and a rising number of projects (see Figure 10). From 2007-2008 onwards ever fewer companies of the Dutch PBI constitute the core through cooperating in ever more projects together. Concerning the power dynamics at play in the KCPK network, the small number of TNCs in the core of the network is able to capitalize upon their prior structural advantages by maintaining their core positions. Thus, what is left to ask is: do the continuous broker-companies also constitute the shrinking core of the network over time, possibly uniting both forms of power in their structural network positions? When an inter- organizational network grows to be dominated by companies recurring in the core and as brokers, the power asymmetry between network agents increases over time. Manifesting their structural position of power and control in the network, network-relevant knowledge is kept to a few dominant companies in the network. In this way, the unequal distribution of power intensifies over time.

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Figure 10 Absolute number of organizations and projects in the core of the KCPK network per period

2003-04 2005-06 2007-08 2009-10 2011-12 2013-16 NUMBER NUMBER OF ORGANIZATIONS/PROJECTS YEAR

Organizations Projects Source: Own calculations based on own dataset

Figure 11, Figure 12, and Figure 13 visualize the evolution of the network structure per period, including manifold information, which allows for a thorough analysis of the role of the KCPK, as well as that of all other brokers and core-companies of the Dutch PBI. The network visualizations are translated into a one-mode network, meaning that a tie between two Dutch PBI companies indicates that they participate in the same project. Isolates lying ‘outside’ the network structure are companies and organizations that do not participate in any project during that period. The ties between agents forming the network core are dark green; the ties between core and peripheral agents as well as amongst peripheral agents

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry themselves are depicted in light green. Similarly, the different shades of green of the nodes indicate whether companies and organizations recur in the network core over time. The darker the green, the more frequent the companies and organization occur in the network core. The form of the nodes indicates whether the specific Dutch PBI company is listed as a broker during that period; ellipses are brokers and squares are non- brokers. While the core-peripheral value of nodes (color indication) is based upon network data including only companies and organizations of the Dutch PBI, the broker value (shape indication) is based upon network data including all network agents. Even though both calculations are based on the two-mode network, the actual visualization is translated into a one-mode network in accordance with the main research interest of this chapter, namely to explore the power dynamics of the network as based in the agents’ structural network positions.

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Figure 11 The KCPK network in 2003-2004 and in 2005-2006

Source: Own calculations based on own dataset

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Figure 12 The KCPK network in 2007-2008 and in 2009-2010

Source: Own calculations based on own dataset

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Figure 13 The KCPK network in 2011-2012 and in 2013-2016

Source: Own calculations based on own dataset

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Interestingly, from 2009 onwards, the core does not contain any SMEs, but only transnational corporations16. Thus TNCs, despite undergoing M&As, constitute the core agents and brokers of the KCPK network over time. Furthermore, as all prior ties between the companies are considered for each period, the actual decrease in core agents suggests that previously cooperating companies choose to cooperate in further projects. Whether this is interpreted as path dependency or trust, the recurrent cooperation of core companies does shift the power dynamics of the network in their interest. Due to being in a position to influence the initiation of future projects, these projects, as well as funding and knowledge resources provided by the KCPK and other agents of the network, serve a limited number of powerful network companies, instead of the entire Dutch PBI. Even though R&D cooperation is exempted from anti-competition laws, the steering of the KCPK network by a core of TNC-owned companies and their control over the network’s ‘communal’ financial resources could be interpreted as a competition stiffening practice. In other words, a few, powerful TNCs get to determine the network-level financial conditions for the entire Dutch PBI. The fact that anti-collusion

16 This finding is based on the definition of Smurfit Kappa Solidboard and Solidpack (the two core participants in the KCPK network) as TNCs, since both operate across many national regimes. See yearly report of the VNP for more information on the operations of these TNCs (VNP, 2013, p. 53; VNP, 2014, p. 46). 281

Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry laws and cartel prosecution have hitherto not dealt with network-based cooperation might have created a unique condition for TNCs to exert control over the utilization of national and supra-national funding. A closer look at the actual companies that form the exclusive, powerful network core from 2009-2010 onwards illuminates, who benefits from the KCPK network’s power asymmetry. These are the KCPK, Bumaga, Smurfit Kappa Solidboard, and Solidpack. That the KCPK and Bumaga are core organizations as well as brokers in the network is not surprising, since the network data is built around these two network hubs. As only two other agents constitute the core from 2009-2010 onwards, and the relative number of brokers decreases over time, meaning an increase in power asymmetry, both the KCPK and its subsidiary Bumaga do not fulfil their advertised role of connecting the Dutch PBI through inter- organizational cooperation. Instead, the KCPK serves as the essential hub of its network, transmitting unique knowledge and investing into long-lasting relations with a few core companies of the Dutch PBI, while maintaining its structural power position over time. Therefore, it can be assumed that while (cl)aiming to play the role of a tertius iungens, a third who connects, the KCPK actually plays the role of the tertius gaudens, a third who controls. Overall, it becomes clear that the KCPK’s goal of sustaining the entire Dutch PBI through cooperation and

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry knowledge sharing is not represented in the power dynamics of the analyzed inter-organizational network over time. Other researchers have uncovered similar trends of partially publicly funded networks benefitting a few, powerful, transnational corporations. Faria (2004), for example, found Brazilian automotive networks to be “political economies led by TNCs and other members of the transnational capitalist class, comprised of chief corporate executives and members of the local elite” (p. 206). In a similar fashion, Gerybadze and Reger (1999) found that transnational corporations execute their R&D cooperation in multiple learning and innovation networks, yet “with one dominant center [sic] of coordination” (p. 251). A closer look at the organizational history and ownership structure of the two core companies and brokers – Smurfit Kappa Solidboard and Solidpack – is essential for understanding the wider impact of the project cooperation between the KCPK, Bumaga, Smurfit Kappa Solidboard and Solidpack on the Dutch PBI. Jefferson Smurfit (JSG) acquired Kappa Holding (Kappa) in 2005. At that time, JSG was jointly owned by its own management and by Madison Dearborn Partners (MDP), which is “a private equity fund based in the USA, [investing] in management buyout and other private equity transactions across a broad spectrum of industries” (Commission of the European Communities, 2005, p. 2). Even though the M&A was publicized

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry as an exciting endeavor to “combine[.] two highly complementary businesses”, the reality was that JSG, under the lead of MDP, bought its rival (Business Wire, 2005). Therefore, the merger was subject to EU competition approval and consultation, resulting in (1) the new group Smurfit Kappa Solidboard, (2) the disposition of the mills in Sappemeer and Hoogezand, which continued as ESKA Graphic Board until sold to Aurelius AG in 2015, now continuing under the name Solidus Solutions, and (3) the disposition of Smurfit Solidpack (Commission of the European Communities, 2005). Smurfit Solidpack was sold to three external investors, including Dirk Schut, CEO and shareholder of Solidpack since 2005, who has held various management positions in the Dutch PBI for decades (Consultancy.nl, 2017). Dirk Schut used to work for Meerssen & Palm, Schut Papier and De Naeyer Papier, and was a board member of the VNP (Consultancy.nl, 2017). In 2017, Solidpack was sold to VPK Packaging Group and Dirk Schut became partner of Fortaleza Capital, a consultancy for M&As, which, interestingly, was involved in the 2005 disposition of Smurfit Solidpack (Consultancy.nl, 2017). In essence, the two most powerful companies of the inter-organizational network since 2009 are both transnational corporations. Smurfit Kappa Solidboard was owned by Madison Dearborn Partners and CVC Capital Partners and Cinven (all three are private equity firms) before selling four out of five Dutch mills to Aurelius AG in

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2015 (Orbis, 2017). Solidpack is currently still owned by VPK Packaging group, which in turn is owned by the global investor group Auriga Finance SA, owning no fewer than eighty companies throughout different industries worldwide (Orbis, 2017). Powerful network positions come with advances of connecting unconnected others and controlling the flow of information between them (Obstfeld, 2005). Regarding the KCPK network, the two corporate brokers hold unique information about past and current projects, their members, and the respective knowledge outcomes and are, thus, able to control the network cooperation, subsequent knowledge flows and set- up of new project cooperation. The growing dominance of Smurfit Kappa Solidboard and Solidpack in the network core indicates that the power dynamics in the KCPK network shift towards a hierarchical instead of a heterarchic structure over time. Additionally, the dominance of these two transnational corporations in the KCPK network suggests that they receive public money for innovation projects, which foremost benefit their own interests instead of the industry’s sustainability. The initiation, content and possible exclusion of other companies of the Dutch PBI from the network projects are likely to be controlled by these two core-brokers. Overall, the above-explicated findings regarding the inter-organizational network of the Dutch PBI are in line with

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry the identification of a transnational capitalist class fraction dominating the post-Fordist accumulation regime. The allocation of public money to private industrial projects, which are controlled by transnational corporations – as in the case of the KCPK network – is an often-critiqued facet of the European Commission Investment Plan for Europe (EC IPE). As the in 2015 established European Fund for Strategic Investment (EFSI) only deems projects ‘investable’, which promise a high return on investment rates, the EC IPE is solely a strategy of socializing risk and playing into the hands of the already powerful – the transnational capitalist class fraction (Medarov & Tsoneva, 2015, p. 9, p. 14). This is what the analyses above show as well: an inter-organizational network attracting public funding for projects, which foremost benefit the dominant transnational corporations rather than the sustainability of an entire industry, in this case the Dutch PBI.

5.4 Concluding remarks The analysis of the power dynamics within the post-Fordist inter-organizational network of the Dutch PBI illustrates the difficulty of creating and maintaining heterarchy in inter- organizational networks. Evidently, the KCPK manages to stimulate new forms of inter-organizational cooperation and to secure state funding for innovation projects even in post-Fordist

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry times of hyper-competition. Yet, it does so by maintaining a powerful network position, which enables the KCPK to remain an essential network hub for providing connections between different agents and controlling the flow of information. Furthermore, the KCPK network and its publicly funded projects foremost benefit the rising profitability of transnational corporations rather than the sustainability of the entire industry. In this way, state- and EU-financed inter-organizational cooperation geared towards ‘sustainable’ capital-growth under an intensified competition regime, such as project-based financing of the KCPK network, foremost contributes to profit- making strategies of TNCs, which dominate national manufacturing industries during post-Fordism, as in the case of the Dutch PBI. These findings are well aligned with the theoretical observations on non-heterarchic network structures and the interplay of cooperative and competitive dynamics, id est coopetition, in capitalist inter-organizational networks. As established in the first chapter of this research, the tensional relation between cooperation and competition in the capitalist accumulation regime results in institutionalized power-plays between various capitalist class fractions. Aligning common interests while competing to create surplus value reproduces a power imbalance between network agents over time. The most recent example of an inter-organizational network during post-

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Fordism as analyzed above, illustrates these theoretical derivations. First, the investigation of the network power dynamics reveals the non-heterarchy of the KCPK network as it is comprised of a core-periphery structure since its establishment. Over time, the core-periphery structure intensifies, clearly diverting from the heterarchic assumptions proposed by the network ideology. Strengthening the network’s non-heterarchy, the actual number of Dutch PBI companies in the network core decreases over time, while the ratio of brokers within the core increases. These findings are supported by the observations of an interviewee concerning the organizational structure of the KCPK and thus its network. He observed the M&A of Smurfit Kappa as an impactful moment for the entire KCPK network. The M&A of Smurfit Kappa in 2005, now disposing of larger laboratories as well as R&D departments, created questions as to the purpose of the KCPK for its own operations. In addition, the Smurfit Kappa mills experienced extensive pressures from the board of directors to cut costs in all areas of operations. As a result, Smurfit Kappa succeeded in convincing the VNP to switch the mandatory membership of the KCPK to an optional one (Interviewee 3, 00:05:33). As a result, the KCPK lost a host of its members by default and struggled to encourage companies to participate in future project cooperation (Interviewee 3, 00:07:17). Therefore, in contrast to the wide-spread belief that

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry networks are a heterarchic form of cooperation, outside of markets and hierarchy, the empirical analysis shows that the inter-organizational network at hand actually features strong power asymmetry, dominated by a limited number of TNCs. Thus, TNCs control current projects and follow-up project initiations in the KCPK network by inhabiting dominant structural network positions, thereby increasing the network hierarchy. Second, the domination of R&D focused inter- organizational network cooperation by TNCs contradicts the strategies of European and national industrial policy aimed at increasing smart specialization and the international competitiveness of European industries through financing inter- organizational innovation projects spanning a diverse group of agents involved. In the case of the KCPK network, which receives project-based national and EU-level funds for driving technological innovation, it is evident that the financed innovation projects span a limited group of agents involved, mainly TNCs. In fact, an interviewee summarized that, one the one hand, competition for funding rose greatly on national and international levels and that, on the other hand, the KCPK fulfilled a unique position in making funding available to industry players (Interviewee 1, 00:19:08). At the same time, the KCPK was bound by confidentiality agreements to only share a limited amount of information with third parties and other

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry network agents (Interviewee 1, 00:42:51). Thus, it remains contestable whether or not the supported innovation projects are actually able to provide positive outcomes for the entire Dutch PBI. Additionally, an interviewee disclosed the fact that paper companies never cooperate with direct competitors within the KCPK network, which in turn limits the access to the network for those who are direct competitors of the already dominant agents (Interviewee 1, 00:49:05, 01:10:12). In support of this, a manager of an medium sized, family owned paper mill disclosed that even though cooperation and innovation are key to his business model, his paper mill never cooperated with the KCPK (Interviewee 4, 00:01:55 – 00:04:51). These statements support the finding, that the power dynamics of the KCPK network shift towards hierarchy more and more over time. Certainly, the KCPK network is a great example of the rising dominance of the transnational capitalist class fraction in post-Fordism more generally and within the Dutch PBI more specifically. To sum up, the inter-organizational network of the Dutch PBI as established by the KCPK remains an organizational model pierced by capitalist principles of profit and growth. Its essential goal is to revive a dying industry, which is almost entirely financialized through private equity buy-outs and transnational corporations. The KCPK’s efforts to fortify inter-organizational cooperation for sustainable innovation in

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Chapter V – Power in the current inter-organizational network of the Dutch paper and board industry alignment with national and supra-national regulations for paper production do yield short-term innovation successes for production processes or product specialization and, thus, relieve the industry of competitive pressures at times. Yet, as the findings show, the rising dominance of the transnational capitalist class fraction during post-Fordism more generally and within the network more specifically undermines the KCPK’s strategy of revitalizing the entire, national industry. Through providing close-knit relations between few, powerful, corporate agents, the KCPK network mostly benefits a small number of TNCs. It is these tensions that will have to be resolved in the future, if the Dutch PBI is to survive.

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After the past decades of neoliberal reforms, scholars are beginning to reevaluate the revival of national and EU-level industrial policy. The diagnosed turnaround of the role of the state in market intervention signals industrial policy to “be rising like a phoenix from its ashes” (e.g. Pochet, 2016; Wigger, 2019, p. 353). In alignment with these recent developments, my dissertation aims to systematically advance scholarly knowledge on the roles of inter-organizational networks throughout capitalist history. This contribution is especially meaningful in the light of the recent revival of industrial policy. Inter- organizational networks have long been misunderstood as heterarchic organizational forms of coordinating economic agents’ interests in post-Fordism. They have been misunderstood as either reducing the need of state agents in terms of market interventions or as lying fully outside of state agents’ reach (see transformation thesis). Yet, this dissertation contributes to a much needed, critical understanding of inter- organizational networks as neither new nor heterarchic. Inter- organizational networks are historically contingent forms of organizing the interests of manifold capitalist class fractions, including state agents, throughout all phases of capitalism. Thus, my dissertation advances scholarly knowledge on the variety of functions and roles inter-organizational networks take and play

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Chapter VI - Conclusion throughout capitalism and their interdependence with meaningful historical conjunctures. In fact, by building a unique, trans-disciplinary link between the fields of management and organization studies (MOS), critical management studies (CMS), historical network research (HNR), and critical political economy (CPE), I provide a critical approach towards studying inter-organizational networks in management research which to date has been missing. This critical approach, first, draws on the theoretical derivation that inter-organizational networks are embedded in their historically contingent politico-economic contexts (four phases of capitalism), and second, draws on a methodologically sound toolkit of foregrounding the longitudinal and in-depth analysis of the historically contingent manifestations of inter- organizational networks (the four dimensions of inter- organizational networks). Hereby, my dissertation contributes to the development of a theoretically contingent and methodologically valid framework for carrying out critical network research in all four fields of research, namely MOS, CMS, HNR and CPE. This dissertation’s research objective was to understand, how the Dutch PBI managed to stand up to politico-economic changes, including competitive pressures, technological changes, shifting industrial policy landscapes and labor-related concerns, since its establishment in the late 16th century. I explored the

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Chapter VI - Conclusion development of the industry by researching its inter- organizational networks throughout capitalist history. I framed inter-organizational networks from a political economy perspective, considering four main dimensions: state-industry relations, labor-capital relations, competition and cooperation, and technology. Thus, a major contribution of this dissertation lies in the historical (re-) construction of the Dutch PBI’s inter- organizational networks as embedded in the changing modes of regulation within capitalist development, which enables new and meaningful insights in the politico-economic conditions of industrial survival over time. Throughout the history of the Dutch PBI, inter-organizational networks serve as means to increase capital accumulation by negotiating the interests of capitalist class fractions. Importantly, the state is fundamental to these negotiations at all times as it spans initiatives for funding the cooperative search for technological innovation to develop new capital investment outlets, drives competition-centered policies to ensure, as former president of the European Commission Juncker calls it, “level playing fields”, and enables the flexibilization of labor (Juncker, 2019). Thus, my research shows that the role of the state, throughout all phases of capitalism, even in times of pronounced, full-blown (neo-) liberal tendencies, shall not be underestimated. Furthermore, the historical analysis of inter- organizational networks in the Dutch PBI shows that all four

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Chapter VI - Conclusion dimensions reshaped the contextual pressures of two noteworthy conjunctures for the industry. For one, the process of industrialization elsewhere severely decreased the profitability and leading international role of the Dutch PBI in the mid-19th century. Rising scales of production in its direct competitor countries and a lack in national adaption to foreign levels of industrialization quickly turned the tide for Dutch paper and board production. The Dutch PBI took decades to meet up with international standards of large-scale, industrialized paper and board production leaving hand-made, artisanal techniques of traditional Dutch paper making behind. Ironically, the second noteworthy conjuncture, namely the transnationalization of ownership and the accompanied process of deindustrialization since 1980, slowly turned the industry’s focus from ever more and ever quicker production, back to a focus on smaller-scale, innovative and niche-focused products. Both these conjunctures are meaningful to the Dutch PBI as they reshaped its inter- organizational networks in all four dimensions, all the while these dimensions helped to soften some of the pressures rooted in these conjunctures. In the following section, I will review the findings for each of the dimensions of inter-organizational networks throughout the history of the Dutch PBI. I, then, continue by explicating the contribution of this research to the management scholarship and practice, and end with a reflection on my work

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Chapter VI - Conclusion as well as suggestions for future research studies. In retrospect, I offer a short summary of the research project.

6.1 Findings Throughout this dissertation, I develop and discuss three main arguments on inter-organizational networks, namely that they exist throughout different phases of capitalism, that they always involve multiple agents including the state, and that they are arenas of power asymmetry. In fact, this dissertation traces, how inter-organizational networks, in the case of the Dutch paper and board industry, are neither new nor heterarchic. Based on an iterative research process of immersing myself in parts of the industry, of reviewing and critiquing academic literature on inter-organizational networks, of historicizing them throughout four phases of capitalism, and of visualizing the most current inter-organizational network as established by the KCPK, I have explored the multitude of materializations of all three main arguments within the Dutch PBI. In the very end of this research endeavor, I can thus conclude that throughout all phases of capitalism inter-organizational networks existed within and beyond the Dutch PBI as close cooperation between different companies and as state-industry projects. Furthermore, the changing content, form and scope of these inter-organizational networks corresponds with the different spatial-temporal power

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Chapter VI - Conclusion relations between capitalist class fractions in each phase. Consequently, the inter-organizational networks at hand are not heterarchic, but exhibit different degrees of power asymmetry between the involved agents. In contrast to the wide-spread belief that networks are a heterarchic form of cooperation, outside of markets and hierarchy, my dissertation sheds light on the fact that inter-organizational networks remain organizational models pierced by capitalist principles of profit and growth. In the following sections, I will review the findings for each of the four dimensions of inter-organizational networks, namely state- industry relations, labor-capital relations, competition and cooperation, and technology.

6.1.1 State-industry relations

In the past decades of post-Fordism, the role of the state has allegedly been minimalized. The findings of this dissertation tell a different story, namely that the Dutch state always kept an arm’s length position vis-a-vis the Dutch PBI throughout all phases of capitalism. Furthermore, the research shows in meticulous detail that the active role of the state changed throughout the different phases of capitalist development. In fact, during all phases of capitalism state authorities maintained close ties with dominant capitalist class fraction. During Dutch capitalism (1580-1815) ties were predominantly established with

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Chapter VI - Conclusion the merchant-capitalist class fraction, filtering colonial monetary and resource capital into national manufacturing industries. Yet, these ties also maintained the politico-economic focus on favorable trading policies, not always playing into the hands of the manufacturers. During Dutch monarchic liberalism (1815-1914) these ties were partially substituted through ties with a new rising capitalist class fraction, the gentlemanly capitalists. The joint project of the gentlemanly capitalists with support of state agents was ‘Building Industria’. Lobbying for the interests of the manufacturing elite, let it be understood not so much those of the Veluwian, family-owned, hand-made paper mills, the gentlemanly capitalist class fraction established close networking relations with, first, the monarchs and, later, the liberal cabinet. Based on these close ties with state agents, the two biggest companies of Dutch paper and board manufacturing at that time managed to bring all the Veluwian paper and board makers to their knees, forcing a switch from hand-made to mechanic paper production. In the next phase of Fordism (1914-1980), the state’s role in actively restructuring national sectors deepened further. Close relations amongst the newly established ‘old boys network’, a group consisting of leading political and business figures, secured the support of the Dutch state in reinvigorating national industries. The state supported the search for

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Chapter VI - Conclusion innovative raw materials, granted substantial subsidies in form of joint ventures, supervised state-led sector restructuring and corporatization efforts, delivered little to no prosecution of cartel practices, and facilitated consolidation strategies and M&As within the Dutch PBI and other national industries. In the next phase of post-Fordism (1980 until now), the networking ties between state authorities and capitalist class fractions seem to vanish. Yet, the propagation of free market principles and rising competition stands in stark contrast to the actual meaning state-industry relations carry for the inter- organizational networks, which foster the Dutch PBI’s survival. The research at hand clearly traces the manifold instances of industrial policy, which benefitted the profitability of industries, including the Dutch PBI. As a matter of fact, the state-initiated deregulation of market structures allowed for a widespread transnationalization of ownership, securing foreign direct investments into the Dutch PBI. The goal to increase the international competitiveness of Dutch industries, including the Dutch PBI, foremost played into the hands of the growing transnational capitalist class fraction. The rising dominance of this class fraction also entailed negative effects, such as the financialization of manufacturing industries and the moving of production capacity to cheaper, third-wave industrialized countries. The Dutch government responded to these threats by setting strategic targets of neoliberal de- and re-regulative

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Chapter VI - Conclusion activities, including closer cooperation between public and private sectors to spur R&D cooperation, privatizing public sectors, active as well as passive financial support for industry demands, and flexibilizing labor.

6.1.2 Labor-capital relations

Labor is an incremental part of the accumulation of surplus value in capitalism. My research shows the importance of labor- capital relations for the role and content of inter-organizational networks as means to negotiate capitalist class fractions interests. In the context of the Dutch PBI, labor-capital relations are inextricably interwoven with the industry’s inter- organizational networks throughout all phases of capitalism. These relations are foremost marked by the continuous rise in proletarianization. In fact, first the mechanization of production during Dutch capitalism (1580-1815) and later the industrialization of production during Dutch monarchic liberalism (1815-1914) sincerely changes the set-up and organization of labor. Becoming more and more dependent on urban, unidirectional wage work, the proletarian laborers started organizing themselves in anti-war, anti-work and anti-colonial workers’ associations, trying to ‘strike’ back at the exploitative capital owners. With the state-driven industrialization of agriculture, also the last peasants, who’s side-stream business

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Chapter VI - Conclusion was paper making in the Veluwe, became part of the modern proletariat. Even though these former peasants tried to regain their independence through, for example, self-employment in straw board cooperatives, close networks amongst gentlemanly farmers, gentlemanly capitalists, and state authorities brought cooperatives and worker’s unions to their knees during the phase of Dutch monarchic liberalism. With the end of World War II and the rebuilding of Europe through Marshall Plan aid, the criminalization of unionization was re-assessed during Fordism (1914-1980) (e.g. Vickers, 1998, p. 39). Even though unions were no longer criminalized, they nevertheless remained subordinated to the interests of the state and capital in the so-called pillarization of the Netherlands. In fact, strong employers’ associations (e.g. chamber of commerce) and the rise of Taylorist working procedures excelled the weakening of (communist) workers’ organizations further. During post-Fordism (1980 until now) labor-capital relations changed as new forms of precarity arose in first-wave industrialized countries, while harsh and exploitative labor was relocated to other geographical as well as demographic areas. Deplorable working conditions in newly industrialized countries such as China (currently the largest producer of paper worldwide) provide the basis for the culture of ever-growing consumption in first-wave industrialized countries. In European manufacturing industries, which are

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Chapter VI - Conclusion officially adapting supra-national safety and production standards, new forms of precarity arose. These include flex-time, low-paid jobs and decreasing social security standards, especially for migrant workers, women and juveniles. While automation and computerization in manufacturing industries seem to have decreased the harsh working conditions of blue-collar workers, time-efficiency and unethical productivity measures are actually increasing the daily pressures on workers in the Dutch PBI. Not only does the dominance of capital over labor remain, but this power relation is further augmented by the rise of the managerial middle class. As this class mostly consists of white, male, middle- class, self-labelled “Westerners”17, patriarchal and (neo-) colonial character of the Dutch PBI is sustained. In post-Fordism managers face the contradictory dynamics of being both internationally mobile representatives of big TNCs as well as locally placed managers, who, in the case of the Dutch PBI, identify more with the respective industrial site than their transnational corporate employer. Subsequently, current forms of inter-organizational cooperation span ‘old-men networks’ within the Dutch PBI, helping each other through more or less competition stiffening practices.

17 I use the word Westerner as a critical notion to point to the discourse of Otherness. The term is established by a dominant group, in this case self- identified Westerners, whereby assuming to embody the norm and having a valued identity in contrast to the Other, “that is defined by its faults, devalued and susceptible to discrimination” (Staszak, 2008). 302

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6.1.3 Competition and cooperation

These competition stiffening practices date back to early forms of cartel practices, which marked the Dutch PBI and its inter- organizational networks for centuries. Early contracts of correspondence secured capital accumulation for the merchant capitalist class fraction during Dutch capitalism (1580-1815). Such forms of cartel structures, also labelled fire insurances, were cooperative ventures between Zaansian paper makers. Completely independent of the paper production in the hinterland, Veluwian peasants had no interest in usury and practices of lending money, instead relying on local support structures between families. The early forms of cartel structures in the Zaanstreek slowly led to a stark concentration of the industry during Dutch monarchic liberalism (1815-1914). Soon, institutionalized cartel structures secured the industrialization of Zaansian paper making, in turn bringing Veluwian paper makers to start cooperating in cartel structures themselves in order to maintain hand-made Dutch paper tradition. With the rising internationalization and concentration of the Dutch PBI during Fordism (1945-1980), cartels became a dominant form of cooperation, decreasing competition to a minimum. Paper makers in the Netherlands tried to impede the decreasing importance of manufacturing industries in comparison to the rising importance of service industries for the

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Dutch economy by initiating intensified cooperation. In fact, cartels remained the most viable route to safeguard Dutch industrial growth more generally and the growth of the Dutch PBI more specifically, making the Netherlands internationally known as a cartel heaven during Fordism. During post-Fordism (1980 until now), the decreasing importance of manufacturing industries ceases in the process of deindustrialization. To soften the negative repercussions of rising deindustrialization and to put a stop to the moving of production capacities to newly rising industrial countries, such as China, Dutch authorities promote the competition regime as the only way to keep economic growth attainable and fully transnationalized industries located within the national borders. With the full-blown arrival of the post-Fordist competition regime in the Netherlands, namely with the establishment of the Nederlandse Mededingingsautoriteit (The Dutch Competition Authority), new forms of cooperation between companies as well as between public and private sectors became fundamental. These manifest in the contradictory dynamics of demanding specific forms of cooperation, id est inter-organizational networks aimed at innovation, and disdaining other forms of cooperation, id est cartel structures. As a result of foremost targeting R&D cooperation, industry-specific knowledge and innovation hubs sprouted, such as the Kenniscentrum Papier en Karton (the Dutch PBI’s knowledge center). With the goal to

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Chapter VI - Conclusion foster inter-organizational cooperation, the KCPK established local, regional and national level innovation projects in order to strengthen the industry’s competitiveness on the global level. Therefore, a focus on a national identity of Dutch paper making became pivotal, propagating R&D cooperation amongst agents of national manufacturing industries. Partially funded by (supra-) national institutions, organizations like the KCPK, itself a daughter organization of the Koninklijke Vereniging van Nederlandse Papier- en Kartonfabrieken (the Dutch PBI’s lobby organization), aim to increase the attractiveness for foreign direct investment to stay located within the Netherlands. In case of the Dutch PBI, this entails the promotion of cooperation to increase technological innovation and thus keep Dutch paper manufacturing businesses profitable investment outlets.

6.1.4 Technology

Technological advancements mattered substantially to the form and content of inter-organizational networks for the survival of the Dutch PBI. In fact, the early international fame of Dutch paper making was based on its famous invention, the Hollander beater. Only possible through financial cooperative structures this invention changed the tide between the now mechanized production of paper in the Zaanstreek and the continuation of hand-made paper production in the Veluwe during Dutch

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Chapter VI - Conclusion capitalism (1580-1815). Cost intensive innovations like the Hollander beater also determined the second shift in the history of (Dutch) paper making. The comparably late implementation of the steam-run paper machine in the Netherlands during Dutch monarchic liberalism (1815-1914) once more turned the tide for Dutch paper making, yet to its disadvantage. Compared to its foreign competitors, Dutch paper making remained small- scale. Only with strong state-support did the two biggest players of the industry manage to catch up with foreign developments, allowing for the production of ‘endless’ paper and the use of innovative, cheaply available raw material for board production, such as straw. By 1890, hand-made paper production using cloth and based on traditional hamerbak had completely stopped. As matter of fact, the following phase of Fordism (1945- 1980) is marked by an increased search for new raw material sources to secure the independence of the Dutch PBI from costly imports. Subsequently, the third major technological advancement – the innovative use of recycled waste paper – once more turns the tide for Dutch paper making and increases its international competitiveness, yet not close to its former fame. This technological innovation was possible through networked cooperation between agents of the Dutch PBI and state authorities. During post-Fordism (1980 until now), these networks were substituted by new forms of industrial R&D focused cooperation amongst agents of the Dutch PBI as well

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Chapter VI - Conclusion as with state agents. Politically legitimized under fashionable notions, such as circular economy, innovative technology, production processes and market-oriented products are propagated as sustainable solutions to ecological problems. Sustainability is the new buzzword under which the repercussions of deindustrialization are said to be tamable by re- orienting manufacturing along market demands and niche products. Hereby, technological innovation is embedded in a discourse on ecological sustainability, while actually prioritizing the need for capitalist profit accumulation and economic growth. Yet, in the post-Fordist time of hyper-competition, inter-organizational cooperation has never been about increasing industries’ ecological sustainability (D’aveni, 2010; Langevoort, 2002). Overall, the innovation discourse, led in the name of ecological sustainability more generally and in the context of the Netherlands in the name of the circular economy program specifically, disregards any positive aspects of collusive practices, such as the prevention of overproduction and subsequent decrease in waste, which could help diminish competition-led exploitation of natural recourses and labor.

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6.2 Discussion of findings for the future of the industry Based on my research one can draw lessons for the role of the KCPK in the Dutch PBI, but also other comparably small-scale manufacturing industries, as well as for the importance of industrial policy in light of different capitalist developments. Especially regarding the KCPK, chapter five delivers the ground to reconsider the role of the KCPK in its inter-organizational networks. The KCPK should, in order to achieve its main aim of rising the sustainability and thus profitability of the entire Dutch PBI, serve as a connecting agent between the multitude of organizations joining the network projects. In fact, to succeed in magnifying inter-organizational cooperation between all companies of the Dutch PBI, the KCPK needs to control for the dominance of certain agents and thereby increase the voice of less dominant ones. This could be achieved through a continuous effort to stay in touch with all companies of the Dutch PBI and thus connected to their everyday and long-term struggles. To pick up the topics companies are concerned with in light of deindustrialization tendencies and rising global as well as intra-corporate competition, remains of utmost importance to ensure a heterarchic inter-organizational network in terms of power-dynamics between its agents.

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Furthermore, to realize that the needs of SMEs or family owned firms diverge from those of TNCs is essential in order to develop an inter-organizational network, which benefits the entire industry instead of a few, dominant TNCs. The KCPK could also learn from the historicity of inter-organizational networks for the survival of the Dutch PBI by considering the former roles and content these networks carried and possibly adopt past experiences to future applications. Based on the findings of this research a follow-up operational analysis of the KCPK could majorly improve its performance of being a connecting agent rather than a controlling one. For companies of the Dutch PBI as well as organizations of other industries, the research at hand offers insights into the importance of inter- organizational cooperation to sustain firms and entire industries, as well as the possibilities of building inter-organizational networks around a central hub for distributing information and producing industry-wide knowledge. Concerning lessons drawn for state agents and industrial policy, the historization shows how specific forms of industrial policy are relevant to negotiate pressures of capitalist development. Especially in light of the long-standing traditions to promote free markets and propagate less state intervention in times of (neo-) liberal politics, my research shows how (in-) direct state guidance for industrial development has determined the survival of the Dutch PBI throughout all phases of

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Chapter VI - Conclusion capitalism. Thus, a critical understanding of the repercussions of state intervention, ranging from liberal trade policies to state-led industry restructuring, resurges the importance of industrial policy for a sustainable and balanced industrial development nowadays, especially in light of current climate challenges. Furthermore, with the recently noted revival of industrial policy on national and EU-level, one can expect the industry to be facing intensified competition and a growing chasm between capital and labor as Juncker’s agenda is aimed at “devaluing labour, intensifying competition and reducing corporate taxes”, in order to boost European industrial growth and profits (Wigger, 2019, p. 353). To counter these tendencies, the Dutch PBI could re-orient its inter-organizational network efforts towards “horizontal and democratic solidarity economy initiatives”, which safeguard the concerns of various stakeholders, including workers, citizens, indigenous cultures, activist and environmental organizations, in the production of goods and subsequent exploitation of natural resources (Wigger, 2019, p. 353). In line herewith, workers need to re-organize and strengthen their positions outside the ones assigned to unions in capitalism. More inclusive organizations of not only workers, but people carrying an interest in the circumstances under which paper and board is produced, need to form up outside the dominant class fractions in order to constitute a strong opposition to capitalist interests. In terms of technological

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Chapter VI - Conclusion advancements, questions beyond the capitalist paradigm could arise within the industry, allowing for truly innovative ways of producing common goods under solidarity circumstances. To do so, the incremental notion that competition leads to growth would need to be re-adjusted on a global level, considering natural resources as non-property and the Earth as a common good of all citizens, animals and plants.

6.3 Contribution to management network research My dissertation contributes to management network research by expanding the conceptual and empirical understanding of inter- organizational networks as means of industry survival. The main contribution of my dissertation to management network research is that I develop and apply a new conceptualization of inter-organizational network dimensions, which hitherto have not been covered in management network research, or if so only sporadically and never in a combined fashion. In fact, based on thorough review of selected management network research literature, the first chapter offered new conceptual insights into the four dimensions of inter-organizational networks. The lack of analyzing all four dimensions in a combined fashion is due to a narrow perspective prevailing in management network research, which does not consider the politico-economic factors

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Chapter VI - Conclusion that condition inter-organizational network evolution. Related to this insight, my dissertation also contributed to the lack of researching inter-organizational networks over time in management network research. Overall, chapters three to five show that all four dimensions of inter-organizational networks matter to the survival of the Dutch PBI throughout different phases of capitalist development. In fact, my research offers a critical lens to understand the formation, importance and roles of inter-organizational networks for industry survival by acknowledging them (1) as historically contingent, (2) as always involving multiple agents including the state, and (3) as arenas of power asymmetry. Below I discuss, how the proposed new avenue for carrying out management network research through DNA offers solutions to certain shortcomings in more mainstream approaches, such as network governance research, innovation, trust and performance research, and longitudinal studies of networks.

6.3.1 Network governance research

As reviewed in the very beginning of this dissertation, the network governance stream discusses networks in two ways: either as a new, heterarchic form of governance, next to markets and hierarchy, or as a form of cooperation, which itself requires governance. Since both these strands see networks as a form of

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Chapter VI - Conclusion cooperation unique to post-Fordism, they contribute to the transformation thesis, namely the idea of a societal transition, in which capital dominates state power (e.g. Davies, 2011, p. 9). The main contribution of my dissertation to this stream of work is that it moves beyond the dualistic discussion on network governance, towards a more dialectic approach of understanding inter-organizational networks. By, first, arguing that inter- organizational networks are historically contingent and, thus, embedded in the wider politico-economic structure of capitalism, I expand the knowledge on current forms of inter- organizational networks as representing a change in institutional structure not in social structure. By, second, arguing that inter- organizational networks involve multiple agents including the state, the dissertation showcases that the assumed heterarchical nature of inter-organizational networks, meaning that their members are equal in terms of power distribution, remains a utopia in a social structure that is grounded in capitalist relations of production. In fact, all three empirical chapters provide detailed analyses of the ways in which inter-organizational networks take on new forms of institutionalized power-play between various capitalist class fractions throughout time. Moreover, the developed perspective shows that the imbalance of configurations of inter-organizational network agents varies over time. They can exhibit forms of consensus and power- equality between agents, but this is not the norm. Hereby, my

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Chapter VI - Conclusion dissertation offers a new understanding and meaningful advancement of studying inter-organizational networks as both, a unique form of governance as well as a form of social cooperation that requires governance (Beach & Keast, 2010; Dhanaraj & Parkhe, 2006; Kenis & Provan, 2006). In addition, my dissertation contributes to the lack of researching power as a dynamic relation rather than a static resource in inter-organizational networks. By assessing power as the relational positions agents occupy within the evolving KCPK network, I put into academic practice what it means to theorize power as constitutive of network structures themselves, instead of something given within a network, such as agential traits. By acknowledging this widely underrepresented aspect of power in network research, my dissertation is instrumental in analyzing inter-organizational networks as both, sights of power symmetry and thus as heterarchic, as well as sights of power asymmetry and thus hierarchic. Herewith, it overcomes the ongoing debate in management network research about whether or not inter-organizational networks are a heterarchic mode of governance or need to themselves be governed. Through both, the historization of power imbalances between capitalist class fractions, and the network visualization of the most current network power dynamics, my research resembles a worthwhile contribution to move beyond the dualistic discussion on

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Chapter VI - Conclusion network governance, towards more dialectic approaches of understanding these.

6.3.2 Innovation, trust and performance research

My dissertation’s major contribution to inter-firm alliance research and the streams on innovation, trust and performance therein is its focus on the politico-economic embeddedness of inter-organizational networks. My examination of the historical development of the four inter-organizational network dimensions as interactive, provides a well-rounded exploration of the conditioning as well as lasting effects of inter- organizational network cooperation on the formation of trust relationships, the success of technological innovation and lastly the performance of an entire industry in terms of its survival. Management studies that explore the relation between inter- organizational networks and innovation, trust or performance, predominantly understand inter-organizational networks as either the condition for or outcome of one of these aspects. My dissertation has gone beyond the more mainstream imperative by exploring the relation between inter-organizational networks and innovation, trust and performance as two-directional. In line with only a handful of studies that address the possible two- directional relation between inter-organizational networks and innovation, trust or performance (Chesbrough, 2003; Grandori

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& Soda, 1995; Johanson & Mattsson, 1987; Lee et al., 2010; Rothaermel & Hess, 2007), I show that inter-organizational networks are fundamental starting and end-points to all three aspects. In so doing, I have expanded the field’s insights by dissolving the all too common cause-and-effect narrative dominating inter-firm alliance studies.

6.3.3 Longitudinal network research

My dissertation also contributed to longitudinal network research by providing rich descriptions and analyses of the historical development of inter-organizational networks within the Dutch PBI, that have, until now, received little attention in scholarly literature. I have provided a detailed examination of the interactive development of the four dimensions of inter- organizational networks in this sector. In particular, framing the existence and evolution of inter-organizational networks as historically contingent showcased the politico-economic embeddedness of these networks. Even though I historicize the Dutch and paper industry context more specifically, the periodization can serve as a viable reference point for further industry-specific research, which is dedicated to offer a critical account of network relations throughout capitalist history. One of my dissertation’s major contribution has been to provide a counterpoint to the cross-sectional network literature

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Chapter VI - Conclusion and its widespread tendency to view network benefits as entities independent of their spatial-temporal situatedness (Gulati & Srivastava, 2014). My consistent focus on inter-organizational networks from an evolutionary perspective portrays a substantial advancement in longitudinal research designs on networks. This was predominantly achieved by re-developing an evolutionary, dialectic approach towards studying inter-organizational networks, namely DNA. Thus, my dissertation distinguishes itself from the majority of cross-sectional and longitudinal studies as it acknowledges the historical contingency of networks, to study both inter-organizational network evolution and its politico-economic embeddedness. For instance, using DNA helped me to expand the scope beyond focusing on the retracting of network formation, development and ceasing throughout a timeframe of a few years up to a few decades. I, thus, offer new avenues for taking the longitudinal aspect of networks as promoted in SNA seriously, showing that what matters to the formation, development and ceasing of inter- organizational networks are not only the network relations themselves, but their historical as well as politico-economic embeddedness. In particular, I have shown that the past functions and roles of inter-organizational networks for the survival of the Dutch PBI do matter to our understanding of their current ones. DNA can be the stepping stone to a new and exciting wave of inter-organizational network research, where its

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Chapter VI - Conclusion political-economic embeddedness and historical contingency could be explored purposely and in great detail.

6.4 Reflections on this research and suggestions for future research In the following paragraphs I would like to attend to the ways in which the findings, conclusions and contributions of this research were reached. Foremost having been interested in researching the survival of the Dutch PBI since its existence, the focus of this research laid on the historical analysis of its inter- organizational networks, including all four dimensions, from a political economy perspective. This said, the mere task of historicizing any entity, much less a multi-dimensional, multi- stakeholder one, necessarily is deemed problematic in a few ways. First of all, to not only rely on a single source of data, I strived to triangulate data whenever possible. Despite triangulating the data from secondary literature analysis, interviews, participatory observation, informal conversations, memos on meetings I attended, and internal industry documents as well as archival data on projects, the following paragraphs pay due attention to the shortcomings in the empirical analyses. First, I discuss possible extensions of the dimensions of inter- organizational networks as well as their conceptualizations for

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Chapter VI - Conclusion future research. Second, I discuss two shortcomings in relation to the empirical analyses carried out in this dissertation. First of all, the four dimensions of inter-organizational networks conceptualized and empirically researched here, could be enriched by further ones, which increase our understanding of the formation and role of inter-organizational networks for industry survival. Certainly, the colonial facet of inter- organizational networks throughout capitalism could have been covered more substantially in this research since the Dutch PBI, as much as other Dutch industries, relied extensively on the exploitation of natural resources and humans in the colonized regions. I tried to compensate for the lack of this dimension by acknowledging the colonial facet of industry development to a certain extent. Yet, a more thorough analysis of the inter- organizational networks, which enabled the dense connection between national and colonial industries, could have greatly contributed to a focus that acknowledges the intersectionality of inter-organizational networks dimensions beyond the ones covered in this dissertation. Furthermore, the dimension of gender is crucial to consider for inter-organizational networks, especially in male- dominated networks. A more thorough comprehension of the effects certain practices such as gentlemanly agreements, which reinforce toxic masculinity and male dominance, have on gender relations and the role of women in the production of paper,

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Chapter VI - Conclusion could expand our knowledge of how the gender dimension of inter-organizational networks contributes to the industry’s survival. Yet, an inclusion of the gender dimension would have exceeded the limits of this research project, possibly constituting an entire dissertation in itself since existent research and literature on this dimension is rather sparse. Including the gender dimension of inter-organizational networks in the Dutch PBI would have involved a different research approach, foremost focusing on archival data analysis on the development of women labor in Dutch manufacturing industries, possibly triangulating this data with expert interviews on the topic. This is certainly a relevant and thrilling endeavor for future research. Regarding the empirical analyses of the inter- organizational networks, I want to pick up two points. One concerning the research design of chapter three and four, and the second one concerning the data creation and analysis of chapter five. First of all, the historization as carried out in chapter three and four of this dissertation is foremost based on secondary literature analysis. Having been particularly interested in the evolution of inter-organizational networks throughout capitalism, a retrospective analysis of these networks was inevitable. Yet, the retracing of past networks is always bound to be incomplete and negotiated through research bias. Certainly, also the historization of inter-organizational networks of the Dutch PBI carried out in this dissertation is limited as well

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Chapter VI - Conclusion as guided by a particular research interest of focusing on particular dimensions and not others. Thus, this avenue of historicizing inter-organizational networks in the context of manufacturing industries could gain from a future focus on other dimensions to enrich our scholarly understanding of the multi-dimensional meanings and roles of inter-organizational networks further. Concerning the research design for chapter five of this dissertation, the incorporation of further projects, which do not include the KCPK, could have provided insight into the importance of the KCPK and its network for the wider inter- organizational cooperation practices within the entire Dutch PBI. Some of the information conveyed in the interviews hinted at the possibility of contracted and non-contracted inter- organizational project cooperation outside the scope of the KCPK practices. Thus, I suggest that future research should consider the embeddedness of inter-organizational network within industry-wide cooperation practices throughout time. In a similar vein, the addition of information on projects from the physical archive could constitute a meaningful supplementation to the research at hand. Adding such information to the dataset could possibly yield new insights into the functioning and power dynamics of the current inter-organizational networks of the Dutch PBI, the role of the KCPK and the dominance of TNCs within it or augment the findings of this dissertation further.

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6.5 In retrospect With the objective to understand, how the Dutch PBI managed to stand up to politico-economic changes since its establishment in the late 16th century, this research successfully ascertained both the significance and the ramifications of inter- organizational networks for the survival of the Dutch PBI. I find that throughout all phases of capitalism inter-organizational networks in the Dutch PBI are neither new nor heterarchic. They change in form and content, and they are always sites of power asymmetry between different agents, including state agents. Thus, it is questionable, whether inter-organizational networks will ever turn from heterarchic ideal to reality, becoming the effective solutions to future problems of struggling industries, which they are recurrently claimed to already be now. We can be certain though that depending on the politico-economic contexts the Dutch PBI and other industries are facing in the future, inter-organizational networks will change their forms and content again – hopefully to serve the ecological well-being of the Earth, instead of sole economic interests of dominant class fractions under continuing capitalism.

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Appendices

Appendix 1: Guideline for Semi-structured interviews Introduction: introduce myself and the research project without mentioning inter-organizational networks - my research background - focus on the Dutch PBI from a managerial perspective, meaning to look at cooperation between different stakeholders including state organizations and firms from other industries 1. Biography of the interviewee

- Education and career path

- current position and wider description of the paper mill and mother company (i.e. TNCs, private equity or SME?)

- daily practices, including the way of working, what kind of events and meetings, whom with and what choices are commonly made regarding the operations management

- pick up on described practices, possibly diving deeper into the forms of work described (network, collaboration, cooperation, project etc.)

2. Cooperation in the industry

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- What aspects are important for your mill and for the industry as a whole?

- What does your mill currently struggle with or struggled with before and what were the solutions?

- Do you know about the KCPK and its role for industry?

- What does your cooperation with the KCPK look like?

- How could the work of the KCPK be improved?

- What needs to be changed for the industry to thrive in the future?

3. Innovation and state involvement

- How do you view the role of the state in terms of the development of the industry (i.e Co2 reduction, circular economy, “transitiehuis”)

- Should the state play a different role? Did its role change in the recent past?

- Do you ever have (in)direct contact with people from the state and if yes, with whom (i.e. organizational unit) and via whom?

4. Final question: What is a network for you?

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1 Appendix 2: Memo for Interviewee 5 / 24.03.16 2 3 • At KCPK

4 • Interviewee 5 brought some material along in connection 5 with our previous email exchange

6 • These documents contained PPP on the establishment of 7 the KCPK and two separate evaluations on the KCPK 8 regarding the Industry

9 • I was allowed to copy all of them

10 • Additionally Interviewee 5 brought a Master thesis 11 (supervised by Paul Ligthart) along for me to look at (I 12 have the same one borrowed from Paul, except with 13 different material, as this was confidential)

14 • We roughly talked for about 2.5hs in Dutch in a casual 15 way of him explaining me things regarding the 16 documents and openly answering some of my questions, 17 which were mainly related to previous topics, he had 18 brought up

19 • While talking we sat in one of the office rooms of the 20 KCPK side-ways across from each other, while 21 colleagues were also working on their tables

22 • I will outline some of the things Interviewee 5 had 23 mentioned throughout our conversation as I tried to take 24 notes without losing focus of the attention paid to him 25 and maintaining a rather natural, even social and at times 26 funny conversation 27 28 29 Interview notes:

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30 • 1998: KCPK was structured after receiving funding 31 (subsidizing) according to the programs (at this time two: 32 Europress-Masterpress and Vezelgrondstoffen), which 33 left the KCPK or at that time Interviewee 5 with being 34 able to allocate the money independently within these 35 programs (“zelfs bepalen binnen programma 36 aanschrijven”) 37 o In comparison: Now and since 2005 the funding is 38 allocated to the projects themselves, which are part 39 of the programs

40 • The programs were planned to endure 5 years, after these 41 5 years the program Europress-Masterpress program was 42 split and Eindproduct/Kwaliteit programs was built as 43 well

44 • This developed into the Energy Transition 45 (energietransitie), which officially started in 2004, even 46 though beforehand first steps into establishing this 47 program were taken already (Interviewee 5 also called it: 48 “energietransitie en competitie”)

49 • 2001: the KCPK and Interviewee 5 were closely 50 connected to directing impulses of Bianca Oudshof, who 51 worked for the ministry of economic affairs (“door 52 overheid gestuurd”) 53 54 • Question: What was and is then the role of the state?

55 • For this we have to go back in time some more

56 • 1989-90: new national program on landfilling with the 57 goal to erase the practice of landfilling altogether by 2000

58 • With this national program the NL was quite ahead of 59 the EU and other European countries (e.g. Germany 60 2005 etc.)

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61 • The NL linked this program and legislation to a so called 62 “stimuleeringsprogramma”, which was demarcating a 63 “financieel ondersteuning voor oplossingstechnologie”

64 • In order to indeed develop such technologies CDEM in 65 the Dutch PBI and TNO worked together and came out 66 with a quite innovative, first of its kind solution that 67 would turn garbage into energy (or something like that)

68 • June 1998: TNO/WageningenUR the VNP and the state 69 decide to finance the KCPK together, each contributing 70 1/3 of the deal 71 o This was due (according to Interviewee 5) the bad 72 job he was doing at the TNO regarding the topics 73 the KCPK would pick up

74 • Until 1998 the industry paid the costs of TNO

75 • Only two programs were chosen for the focus of the 76 KCPK in order to stay competitive by not broadening 77 the range of topics too much to stay distinct to other 78 like-institutes

79 • 2001: TNO gets a new management, which decides that 80 the KCPK is not worthwhile maintaining as independent 81 organization and that the undertaken activities should be 82 moved to the WUR-groups

83 • At the same time Interviewee 5 was able to acquire more 84 and more money vie the industry for the programs 85 (VNP) and by that the state had to also pitch in more and 86 more money as the agreement was 1/3 on all sides

87 • 2001 marked an “omschlagsjaar”, because the total 88 number of the KCPK and TNO had grown from 12 89 employees to 30 at that point

90 • Whereas in beginning 2001 Interviewee 5 was only 91 working 3-4 days for the KCPK and 1 day still at TNO

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92 • In June 2001 TNO received a new management, who 93 decided on 9.11.01 that the KCPK should be merged 94 with the WUR, hence they wanted to stop with Papier en 95 Karton

96 • Yet the programs were contractually subsidized until 97 2004 (including the agreement of TNO) and hence no 98 reorganization of the KCPK before then was possible

99 • Also at that point the VNP said they would take over 100 Interviewee 5’s 5days a week in order to keep the KCPK 101 running for longer 102 o This decision was made by the board of the VNP, 103 which back then already and now consists of a 104 small amount of very involved paper mills, whereas 105 the others didn't care 106 o The board was back then and is until now totally in 107 favour of the KCPK and consists of 1/3 of all 108 paper mills

109 • In 2011 the mandatory/obligatory fee changed into a 110 voluntary one

111 • In 2012 one mill stopped participating (Arjo-Wiggins), 112 but joined back in in 2014 113 o This had always been the case for the VAPA, who 114 recently lost most of their members and 115 contributions 116 117 • Question: How do you perceive the ambiguity between 118 national vs. International interests within the PBI, as 119 most of the mills are nowadays foreign owned through 120 different constructions, but it is always talked about 121 making the Dutch PBI more competitive

122 • Until the 70s there was a legislation for obligatory cartels 123 in the Netherlands

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124 o This was given strategic importance as NL generally 125 lacked resources and the state decided who 126 produces how much of what (“overheid bepaalde 127 wie wat produceerd”) 128 o Hence most paper mills were given to/owned by 129 the national bank

130 • 80s bedrijven worden verkocht

131 • 90s economy of scale: the two biggest players exchanged 132 their production of paper and board, hence one 133 producing now fully paper, the other fully board to 134 become monopoly “voor maximale maarktimpact” 135 136 • Question: Can you tell me something about the 137 uniqueness of the KCPK in not being a research facility, 138 not having a laboratory?

139 • NL KCPK is unique in being halfway Industry/halfway 140 Institute

141 • In 91/92 all state owned institutes in the EU became 142 independent, meaning privatized, by shareholders, trade 143 associations and companies 144 o Often these institutes then collapsed due to the 145 diversity in interests and points of view within the 146 board 147 o The same happened throughout Central EU

148 • An example is the story of UCL in 2002-2003, when they 149 were facing threats of being a cartel, because the four 150 biggest companies were compiling UCL 151 o MPM decided to spill the information and by that 152 did not have to pay a fee, whereas the other three 153 had to, MPM had to leave UCL

154 • Similar with PTS? 329

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155 • PTS will probably go down within the next 5 years also 156 due to the diversity in shareholders or Germany finds a 157 different solution 158 159 • What makes the KCPK survive then and are you 160 generally in favour of internationalization, for example in 161 staff?

162 • Absolutely competition as major theme, but this does not 163 limit the employability

164 • There is a limited internationalization of employees 165 o 95% of the employees in production facilities are 166 local, for sure national 167 o All managing directors are Dutch except in 168 Maastricht (he is from Flaandern) 169 o Half of them have a technical background half of 170 them an added MBA 171 172 • Do you purposefully employ mainly international people 173 at the KCPK as a sign towards the future direction of the 174 industry or to indeed build an international network?

175 • During 2001-2004 Interviewee 5 did extended travelling 176 to build his international network and because he was the 177 chairman of the EU research group 178 o Hence he had more and more contact with 179 other institutes

180 • In 91/92 Interviewee 5 started out of personal 181 interest a relationship with Budapest/Hungry and 182 Slovenia a joint project to bring Dutch knowledge and 183 expertise to Central EU, but he realised that it was 184 actually the other way around with the knowledge and 185 expertise and who could learn from whom

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1 Appendix 3: Memo of Circular Economy 2 conference - 03.02.16 3 Circulaire Economie: impact op onze industrie 4 This conference was organized by the KCPK and held at the 5 Fletcher Hotel in Doorwerth. During the plenary session way 6 less people were present than after lunch. During lunch a lot of 7 employees (Spyros told me they can't get a whole day off), 8 people without suits and younger people showed up (also for 9 product presentations). 10 11 12 Presentaties met bestuurlijke focus 13 14 TU Darmstadt - Prof. Samuel Schabel 15 • Arie: "our industry" intro 16 • Schabel: switched topic from state of the art of recycling 17 in EU to representing research done at his university 18 (what we do); more and more fillers and inorganics are in 19 the paper (big problem); we are the only organization 20 making such surveys (research) in the EU for several 21 decades; we just asked for another grant; many mills have 22 scaling and fouling due to inorganics; how to separate 23 them from pulp/fibre 24 • Henk Q: the key for us now is to make this next step, but 25 nothing comes out of the research you are doing for us, 26 because you are looking at characteristics of material not 27 at the conditions 28 • Schabel: What we want to develop is new procedure, but 29 everyone with UV can do this… 30 • Henk: What would be ideal now… ; are you 31 communicating new procedure (coating now as state of 32 the art), but taking out mineral oils, within association in 33 Germany and colleagues?

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34 • Schabel: no, not yet, this is still the project for the day 35 after tomorrow 36 o --> checking competition, because still not 37 implemented in Holland 38 39 CEPI: Jori Ringman (Circular Economy Communication 40 EU) 41 • Royal association VNP / only one royal one / 600 42 companies / confederation of EU industry / 95% total 43 production EU 44 • Our ideas and needs: hopefully new person in committee 45 to take care of these 46 • CEPI: 1st ambition not received well in 2014; 47 disappointment for stakeholders/worries; for industry it 48 was just a rephrasing of the previous waste-saving 49 proposal; feedback of eastern EU was that it's pointless 50 to set a target-value that is unreachable in the first place 51 • Committee changed in 2015, very ambitious again and 52 not realistic 53 • Therefore we informed the committee in Brussel that 54 circular economy is not just about waste (because that is 55 already done in Paper Industry) 56 • We need to still review and align policy 57 • Renewability is a natural driver for circularity 58 o Promote bio-based material 59 o No human action without losses (total of EU is not 60 possible, because you could only produce less and 61 less, which is only possible with 1 to 2 companies, 62 but lastly some companies will always need to use 63 new material/resources 64 o Renewability as central 65 • realistic approach: cannot just use waste 66 67 • 2015 winter CEPI new proposal: bio-based aspect was 68 listed, but it is up to us to fill this with life --> lots of 69 opportunities

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70 • New step: review CEPI 2015, recommendations for 71 policies (work in progress) 72 73 Goals and problems: 74 • Need to get away from fossil-based carbon as fuel for 75 (decarbonize) energy, but carbonize in material 76 • "carbon is cradle for life for material" 77 • "we are not having this typical self picture in the market, 78 but we have a role in adding carbon to the material" 79 • Targets: always what people focus on, but my personal 80 tip is to focus less on it 81 • My feeling is that these targets are set as a safety net, sort 82 of a minimum, less of a role of push, but other elements 83 of the proposal are more of a push" 84 • Waste hierarchy, but here Lansink ladder 85 • No general ban for paper with fillings / you have to read 86 all elements of proposal side by side 87 • We got what we wanted, but legal phrasing makes it 88 difficult to see what is where 89 • Finding resources within / unused potential mostly in 90 waste 91 o Changing mindset in EU: everything is waste / end 92 of waste discussion --> it is up to you to prove that 93 it is not waste 94 o Major revolution in EU default: nothing is waste / 95 no side-stream until you say you cannot use it 96 • For NL: important to have cross-border collaboration 97 • Reuse and recycling as complements not contradictions: 98 1st of all recycling in paper industry, NISP across border 99 • This whole strategy will be rolled out 2015-2018 100 o Concrete actions for now and here and no future 101 commission plans 102 o Promise of money 103 • Copied from NL: copy Dutch green deal 104 system EU-wide 105 • Good opportunity for you

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106 • Structural fonds are not that interesting for richer 107 countries in EU 108 109 • Action by industry: IMPACT, PapeRec, BioPPP, 110 Recycling mill of the future 111 • Implementing in industrial scale: carefully select 112 incoming material 113 • "you put your effort, where it's most needed" 114 • "big mills can't do 100% clean recycling" because they 115 are too big 116 • Reffibre 2015 project picked on EU level from NL 117 • "we are the modest paper people": we are great, but 118 what's the point of shouting that, but people don't know 119 (biocarbon is not bad) 120 • We are biodegradable, we are sustainable, but we need to 121 improve all of society 122 • It is our all responsibility to make our case known 123 124 KIDV - Hester Klein Lankhorst 125 • "we are Dutch, and we are not modest" (started with 126 Arie introducing Schabel as modest) 127 o Video: doing the Dutch way didn't stream 128 • In NL framework agreement: 2013-2022 packaging 129 industry, municipalities and ministries 130 • Recycle rates are high, but also packaging / whole loop / 131 cannot do by ourselves / combine information so all 132 partners have such information about circular economy 133 • Project with five Universities: research on whole loop 134 • Branches are not capable and supposed to come up with 135 a sustainability plan: 75%-80% of packaging in market is 136 part of “brancheverduurzamingsplannen” (initially the 137 branches don't see benefit, but only a burden / yet they 138 help their companies herewith to become sustainable 139 • "the consumers want to know, what is best" 140 • Q: what is a branch? A: 18 different ones, wine, 141 FNLI/CBL/NVG (60% of waste volume packaging),

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142 webwinkel, ecommerce, cosmetics, pharma… (big and 143 small) 144 • Q: Why still “statiegeld”? A: In the beginning we did 145 some brainstorming: what do we know? Old feeling that 146 PVC is bad, therefore involved in agreement. The 147 supermarket did not realize that there is still this old bad 148 feeling about PVC 149 • Q: We already as a mill work together with branches to 150 make packaging sustainable / we also have no requests 151 from branches to deliver different material, because most 152 or almost all Dutch paper is PVC/FSC certified 153 • Arie: indeed, certification today is expensive and not 154 worthwhile anymore for the produces and our 155 consumers of paper 156 157 VNP - Corneel Lambrengts 158 • Don't want to use word royal, so association 159 • Complement to mills, which are experimenting 160 • "always important for us as a branch to be pro-active" 161 • Business model that moves forward and leaves space for 162 innovation 163 • Difficulty: we get more combined packaging / 164 composites of raw material / cascading use 165 166 Presentaties en pitches van industriele: 167 168 2nd Block: industrial pitches announced by Arie 169 • Newfoss: "gebruik maken van bestaande netwerk voor 170 plaatsen van ons machinen” 171 • BKC: brainstormen met Schut Papier; Budapest Uni, 172 UU, denBosch Hogeschool, HAN, Kunstacademie Artez 173 samenwerking voor plantengebruik; duurzame cellulose 174 productie; co2 besparing 15 ton --> financieel waarde; 175 "business is business" --> “laagere prijzen” (joked 176 inbetween about colleagues and Rene Koort) 177 • Stexfibres: connectie met Paper en Pulp industrie; 178 Hennep: gebruik van zelfde onderdelen in materiaal

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179 uithalen als in de Papierindustrie; technische connectie 180 voor fezelprocessen; rest misschien bruikbaar voor 181 papierindustrie; 2.5 MIO 182 • Autour solutions: Kadant Lamert; fast food companies 183 push us to use their cups --> avoid waste pictures 184 • Leroux & Lotz (switch to English, because recognized 185 non-Dutch speakers through previous presentation by 186 French Man): waste / biomass to energy / ESKA power 187 project; Q: what is the amount of investment? A: I am 188 not sure, if I have the liberty to say it… Other Person: 40 189 MIO 190 • RHDHV: Nerada - TU Delft + all Dutch Water 191 Authorities; waste water treatment plants / municipal 192 and industrial; growth market abroad (Brazil, Ireland, 193 UK, Scandinavia); natural way of treating waste water; 194 Alginaat is made from nature - therefore it is a 195 biopolymer that can be used for coating; this coating 196 technique is scientifically proven (point to study with 197 Michiel as co-author); we would like to join with you to 198 see how Alginaat is working in your process and how we 199 could alternate it; it would be so nice, if you would like to 200 update your process with your own resources; if you are 201 interested just come to me later; Arie: great sales pitch! 202 We will see the effect of it later! (seemed ironic, but also 203 valuing, because it was the purpose of this anyway); the 204 more Nerada we sell the more Alginaat is produced; Q: 205 for us it is not only about the chance, but also about the 206 risk; for us the risk is too high to use paper based on 207 municipal waste, this all has nothing to do with 208 simplifying the process, but with calculating the risk 209 • Alucha: recycling solutions for complex waste-streams; 210 StoraEnso Spain send a request back then, because they 211 were left with everything that is not paper and wanted a 212 solution; convert plastic and aluminium to convert back 213 to constituents; SCA and Twente: paper sludge to 214 implement at industrial scale with 100kg and later 1000kg

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215 with an end goal of selling to mills for 2-3 MIO; complex 216 making waste into resources 217 • Opure BV: biological waste water / waste treatment; 218 challenge to create value from waste; chose to work 219 together with Parenco, which is our connection and 220 involvement with the industry; we want to improve 221 treatment, reduce cost and spread interest 222 • Arie: choose from the company that is right for you to 223 help us, because the variety is here; and now it's up to 224 Michiel to link the various initiatives we just saw 225 226 Michiel 227 • PBI + her sidestream challenge 228 • Dutch Industry per group: 32% graphical paper, 4% 229 hygiene (2 mills), 64% packaging --> 80% recycle fibre 230 based 231 • Raw material competition / PfR remains main material 232 • Increase of non-paper components (organic and 233 inorganic) 234 • "something we have to deal with as an industry" 235 • "giving stress on our industry" 236 • Waste: sludges (graphical issue), rejects, water (packaging 237 issue) 238 o More than an energy resource / higher applications 239 possible 240 o All kinds of industry come into mind instead of 241 calling this waste 242 o End up with positive business case that is not just 243 based on fibre 244 • Evolution of the industry: value products, value side- 245 streams 246 • Dutch approach: integrated concepts 247 • "I invite you to our meeting where we reveal promising 248 developments" 249 • Challenges of preparing waste streams to raw material -- 250 > offered positive price

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251 • Goal: pollution prevention, resource recovery, profit 252 production 253 254 RVO Eurostars 255 • “Rijksdienst voor ondernemend Nederland” 256 • “Met klant of concurrent samen werken” 257 o “Geen suus-moeder relatie” 258 o “Binnen twee jaar marketable producten” 259 260 RVO EEN 261 • “Bemiddelaar: NOOIT zelf gemaakte netwerk” 262 • “Vooraf eventementen”: make clear who will be there for 263 what 264 265 KVK 266 • Darwin quote: “de meest angepast survives!” 267 • 6 steps: science-based on best-practices of most 268 innovative enterprises in EU not in your sector, but 269 cross-sectoral as a general benchmark --> because it 270 doesn't matter where you innovate, but how good you 271 are in innovating 272 • “60 analysen voor het hele land” --> “op is op! Aanbod 273 is er, het is op jullie daarvan gebruik te maken" 274 • Chat in between: we help them, because they don't know 275 where to find partners

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1 Appendix 4: Memo of Science meets Industry 2 conference - 02.02.16 3 Attendance: 4 • Kcpk: Spyros Bousios, Anouk Dantuma, Michiel 5 Adriaanse, Laurens de Vries, Ana Mafalda Gomes, Sanne 6 Tiekstra, Arie Hooimeijer 7 • PhDs: Stefan Chaves Figueiredo (TU Delft), Urska 8 Vrabic Brodnjak (Ljubljana), Reza Hosseinpourpia 9 (Goettingen), Bas van Velzen (VU), Anja Fillinger (TU 10 Darmstadt), Samual Schabel (TU Darmstadt), Jerzy Latka 11 (TU Delft and Wroclaw University of Technology), Julia 12 Schoenwaelder (TU Delft/TenTech), Martina Lindner 13 (Fraunhofer IVV) 14 • Industry: Henk Lingbeek (DS Smith DH), Claire 15 Schrenks (Smurift Kappa Roermond Papier), Ben 16 Kortekaas (MME), Jean Pierre Haenen (Sappi, R&D), 17 Hugo Geerdink (Coldenhove), Matthijs Wever 18 (Huhtamaki) 19 • Rogier Houtman, Mick Eekhout, Loes Kort 20 21 22 The meeting was held in a rather small room assembled with U- 23 form setup tables, a projector in the middle and three banners 24 on the left hand side when standing at the presentation spot in 25 the front of the room. Before this conference called "Science 26 meets Industry, Industry meets Science" I had been rather 27 nervous for a few weeks regarding my presentation and how my 28 research will be received in direct contrast to the more technical, 29 directly valuable for the industry research projects presented 30 there. Especially with changing the theoretical framework and 31 epistemological background of my research from a very 32 positivistic one to a clearly postmodern, critical one that 33 emphasizes the need for reflection upon my language use and

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34 how I perceive the language observed and engaged into with 35 others from the industry, I had a hard time finding "my role" in 36 this set-up. I was clearly labelled as the researcher, who conducts 37 research "using" the industry as a frame or basis (Spyros' words), 38 yet I wanted to rather be perceived as someone interested at 39 their experiences within their industry. With the invitation for 40 presenting my research (clearly outlined as: "Don’t worry about 41 not having ready results to share; this is not the point anyway. 42 What we are more interested in is a presentation of the 43 researchers’ context, why they do what they do, what is the 44 relevance of their work for our sector, what they wish to achieve 45 etc. Going into too much scientific detail would probably be too 46 much also for the wishes of the audience in this day, which will 47 be primarily composed of people on the management level of 48 the Dutch paper industry." by Spyros in an email conversation 49 on the 12.01.16) I felt caught between two worlds: on the one 50 hand side I know that the original set-up for this research was 51 thought of as me doing a more case-study analysis (this is 52 something Hans had thought of when originally getting in touch 53 with Michiel about the energy transition within the industry 54 guided by the KCPK), yet I switched pretty quickly in close 55 collaboration with Rick to obtaining the project-data of the 56 KCPK's archive to do a SNA, clearly positivistic based on 57 hypotheses-testing. As I had struggled immensely with the value 58 and impositions of such a research design for the scientific 59 relevance as much as the relevance for anyone involved, I 60 changed the research design again completely, moving towards 61 a discourse analysis of the network discourse in management 62 literature and the industry. This whole process that took about 63 two years led me to the uncomfortable position of indeed trying 64 to instead of impose and label what I had looked at the past two 65 years (mainly the archived project information, some small talks 66 with the people of the KCPK as well as one presentation in front 67 of HR-managers and Rene Koort in Eerbeek, and Joris Spaan 68 of the VAPA), trying to engage with people of the industry that 69 are involved in the projects I have information on. What I want 70 to say is that my presentation and the language I use was very 340

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71 much influenced by me filling the role of a researcher doing 72 research ON the P&P Industry as well as vocabulary used in my 73 previous research such as brokerage, network analysis and 74 Dutch Paper and Pulp Industry Network. All these aspect seem 75 counterproductive to the new standpoint I am taking with my 76 research, yet they are deeply embedded in my past research 77 experiences and struggles throughout my PhD. As much as I 78 would like to be able to take a rather neutral stance towards what 79 I am encountering in literature and practice, I am pre-scripted 80 with loads of scientifically adequate, positivist vocabulary of 81 what I am experiencing. 82 All these thoughts had been in my head before the day of the 83 conference and since then as well. 84 Once I entered the room about 1pm I grabbed my name tag, 85 signed, said hi to some people of the KCPK passing by and went 86 to the toilet. Shortly before the start of the conference I grabbed 87 a coffee and met Michiel, whom started a nice conversation with 88 me about having not seen me for a while, but being happy about 89 my presence. I told him that I was on sick-leave for quite a while, 90 but am back full-time since yesterday. We parted friendly, 91 knowing we would still have a chance to talk later on. 92 I sat down in a rather empty seat-row in the back of the room 93 sideways. Henk Lingbeek went to sit next to me and introduced 94 himself friendly. We started talking in English and he asked me 95 where I am from. We had some small-talk about his son, whom 96 he is very proud of, living in Hamburg and working for a car- 97 manufacturer. He is a mechanical engineer and his daughter a 98 researcher for breast cancer. Both have published numerous 99 articles already. He asked me what my research is about and I 100 said I am researching the project collaborations with the Dutch 101 Paper and Pulp Industry using archival information stored by 102 the KCPK. He asked, if I have any publications yet, but I said 103 that I do not. He asked, how long I have been doing this 104 research and I said that I am already busy for two years, but had 105 some struggles regarding imposing certain scientific ideas upon 106 collected material and that I had changed my framework 107 substantially, but that I will tell more about this in my 341

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108 presentation. We stopped talking and Laurens came to sit next 109 to me. 110 Anouk handed out name-cards to put down on the tables to be 111 able to make this conference a little more interactive. Arie 112 opened the conference saying he would appreciate, if the 113 industry people could introduce themselves shortly. Ben 114 Kortekaas started, introducing himself and Mayr-Melnhof he 115 works for as a Unit Manager “Stof voorbereiding” (retrieved 116 later on via linkedin). Matthijs Wever followed, who works for 117 Huhtamaki and is sent here, because no one else had time and 118 he is supposed to report back from this meeting. Henk 119 introduced himself as the manager of de Hoop, DS Smith Paper 120 in Eerbek, one of the biggest mills in the Netherlands and as the 121 chair of the KCPK board. He is currently in transitioning his 122 positions (I did not understand from where to what). Hugo 123 Geerdink introduced himself working in the innovation 124 department and in paper development at Coldenhove. Arie adds 125 to the introduction that Coldenhove is a good example of having 126 been involved in producing nowadays "dead" products such as 127 coffee-filters, but is "typically a mill that has been in 128 transformation and successful in niche production". Claire 129 Schrenks, substituting for Mark Nabuurs for Smurfit Kappa 130 Roermond Papier, entered late and did not introduce herself. 131 132 Excerpts from the dialogues/monologues during the 133 sessions: 134 • Arie: close collaboration with TU Darmstadt 135 • Samuel: good cooperation, looking what "Dutch" do b/c 136 less conservative than Germans (well, not always, haha) 137 • Samuel: enhance each other’s benefits by meeting PhDs 138 with Industry 139 • Samuel: make a network and promote exchange in EU 140 wide P&P and PhD meeting (initiated by him for 141 Germany, now also France, originally only Scandinavia) - 142 -> a little like here today 143 • Samuel: bringing people together and promoting 144 exchange is very good 342

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145 146 • Presentation Spyros: circular economy, public = 147 consumers, "the initiative does not lie with government 148 or public, but with companies" (slide 11); "train/educate 149 your whole workforce: strengthen their awareness…"; 150 projects vs. Forming a cartel --> EU legislation 151 (collaborating in innovation projects with actors from 152 same industry); make profit and find market = make 153 things/waste usable 154 • Presentation Stefan: Thank you slide for collaboration 155 with MM 156 157 • Arie: TU Delft expertise regarding Stefan's supervisor, 158 question to industry: has anyone ever used this 159 cooperation? 160 • Henk: question for Urska, how can this be useful for my 161 business? 162 • Arie: asking Reza for supervisor's name in Goettingen, 163 because he didn't know they also do Paper Research 164 there (Reza: only me, others are forestry) 165 166 Small talk with Spyros during coffee-break: 167 • Me: I think basing the topic of circular economy on just 168 one company is very capitalistic, because it will just lead 169 to more products and creating the need for more 170 products rather than engaging sustainably with using 171 waste 172 • Spyros: indeed network-building to share profits based 173 on waste recycling as in the example of Epson Paper 174 Printer and their network management 175 • Me: but in case the P&P industry would start working 176 together in sharing the waste-resources and the profit, 177 wouldn't that be a cartel? 178 • Spyros: no, only if the same market penetrators 179 collaborate, but not just companies from the same 180 industry or sector, e.g. DS Smith and Parenco are market 181 leaders and produce 80% of products for that market, 343

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182 hence they are not allowed to collaborate. Also they are 183 competitors, they don't want to share any of their secrets 184 for example, how much of this material is added to the 185 pulp to sell the product at a certain price to customer. 186 They have even a rule (didn't remember which one of 187 them, that the employees when running into each other 188 somewhere should avoid all (small)talk for reasons of not 189 spilling secret information. Similarly, all switching 190 employees sign contracts with paper mill to not be 191 allowed to share any of the knowledge about the mill. 192 Everyone accepts this in the industry and would never 193 ask someone or bring someone into a precarious 194 situation of sharing such knowledge. The industry is 195 based on switching mills, so for everyone it's normal that 196 you are not allowed to talk about such things from 197 previous mills. Biggest secret is the contracts and prices 198 with customers. 199 200 • Vocabulary: PBI = Paper Based Industry 201 202 • Presentation Anouk: waste = valuable sidestream; 203 intersectoral collaboration; storytelling for business 204 creation (example of tomato-package that works better 205 for customer-consumption to display "good" of AH, 206 than for the “leveranciers”, because no one sees the 207 "good" they do 208 209 Speeddating 210 • Samuel: trend in Germany since 90s-00s that big 211 corporations take over, but don't want to collaborate 212 anymore in interorganizational networks b/c they got 213 their own R&D --> similar story told by Arie 2 years ago; 214 difficult to get people industrywide together to fight state 215 imposed legislations; common reason for non- 216 participating: feel to observed by state and EU regarding 217 cartels and there were some cartel trials in the industry 218 for that reason too 344

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219 • Get stuck in position at Uni, not worth switching, 220 because less freedom and task diversity in the industry, 221 also because he is “verbeamtet”, less responsibility, but 222 maybe in industry less sleepless nights for securing the 223 wage and funding for employees and projects 224 225 • Michiel: Interesting your presentation, do you have 226 results yet? 227 • Me: no, because I really changed the framework of the 228 research trying to understand, if what I labelled from the 229 beginning as a network is actually lived, perceived and 230 experienced by everyone involved as an actual network 231 • Michiel: Well it is interesting, because when Hans 232 originally got in touch with me he was very interested in 233 our energy transition as a case for other industries. But if 234 you look at this transition and the projects, indeed what 235 you want to see, is what you see. If you want to see a 236 network, you see a network, if you want to see teams, 237 you see teams 238 239 • Spyros & Laurens: Where will you join tomorrow, which 240 session? Who do you want to talk to, who is important 241 for your research? Well the “Technische Dienst” never 242 collaborate with anyone. They do what they are told to 243 within the collaboration projects, but they don't do this 244 on their own. The managers will all be in the first session, 245 well actually in the closed session. Also the different 246 levels of management influence the answers to your 247 questions too. Laurens gives example of manager at 248 StoraEnso for “Technische Dienst”, who has 60-70 249 people underneath him. 250 251 Reflections / Thoughts: 252 • Henk often asked for publications, but why? Because he 253 reads scientific articles or because it is a benchmark for 254 him to rate the quality of the research? Or something

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255 else? (Have you published, can I retrieve an article? Also 256 pitched his sons article in presentation of Anja Fillinger) 257 • Henk left before my presentation, excused himself for it 258 and I said it is a pity, because he might be the only here 259 tonight that is slightly interested in it, laughing 260 • I thought he prepared a card for me, but it was for 261 someone else regarding his son's research 262 • I should've met Henk for speed dating too, I was stupid 263 not to get back to it the next day as he came up to me 264 and Stefan for some small talk 265 • Anouk handed me a present, as all presenters of the day, 266 the book of paper 267 • Circular economy goal especially propagated by KCPK 268 (2 research studies) and aims at intersectoral 269 collaboration (also because of cartel threat 270 271 Platvorm Eindproducten en Wereld van Papier: 272 Businesskansen voor Ketensamenwerking 273 274 • We want to make paper be able to better compete with 275 plastic 276 • Additional functions of paper 277 • Trends --> what is hip 278 • “Bedrijven moeten flexibler in opstelling worden, om in 279 aanmerking te komen voor toegevoegde waarde” 280 • “Voorzitter network: met projecten voor 281 marktimplementatie en meer dan 300 deelnemer” 282 • “Kennisnetwerk: Unis + bedrijven” 283 • "I cannot make you (verplichten) deel te nemen, but you 284 should" 285 • "If you find a project interesting, let's start with it 286 tomorrow. Heel graag" 287 • KarTent; the bird family, Metafas 288 289 290 Thoughts:

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291 • Throughout the talking small ways of eyes glowing up or 292 smiling show the love for the craft of paper and 293 fascination and passion about it (especially previous day); 294 similarly some of them like storytelling and glow when 295 talking about very innovative paper products 296 • Network term was used verbally and in writing almost 297 exclusively by state-representatives or EU-employees, not 298 by industry people or even cross-sectoral people 299 • One person of KCPK mentioned during small-talk that 300 networking with the people from the industry is 301 fundamental to maintain old or establish new 302 relationships for setting up future projects; but no one 303 mentioned that it is difficult to approach people due to 304 personal shyness 305 • The 1st plenary session was organized going from very 306 international to more national concerns, cross-sectoral to 307 sector-specific too 308 • The woman from KIDV seemed very uninformed about 309 state of the art in P&P and their connection to packaging 310 customers, which are in turn KIDVs "branches" 311 • All in all my overall impression is that this event was 312 more of a sales pitch on all different levels, eg. Selling 313 legislations as something valuable and an opportunity for 314 the mills and selling them products and process ideas; no 315 active participation or discussions among participants in 316 plenary, maybe during small-talks in between, but I 317 haven't witnessed any; only questions regarding 318 clarifications or risks and costs were asked

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Appendix 5: List of companies of the Dutch PBI (2011-2018)

Companies 2011 2012 2013 2014 2015 2016 2017 2018 Arjowiggins Security B.V. Coldenhove Papier Crown Van Gelder N.V. Papierfabriek Doetinchem B.V. Eska Graphic Board B.V. Georgia Pacific Nederland B.V. Van Houtum B.V. Huhtamaki Nederland B.V. Kimberly-Clark B.V. Mayr-Melnhof Eerbeek B.V. Meerssen papier Norske Skog Parenco B.V. Sappi Maastricht B.V. Sappi Nijmegen B.V. SCA Hygiene Products Suameer B.V. SCA Packaging De Hoop B.V. Papierfabriek Schut B.V. Smurfit Kappa Roermond Papier B.V. Smurfit Kappa Solid Board B.V. Solidpack B.V. DS Smith Paper De Hoop Innoviopaper Solidus Smart Packaging Solutions Essity Operations Cuijk Neenah Coldenhove VHP Security Paper WEPA Nederland Smurfit Kappa Parenco

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Summary

The Dutch paper and board industry (PBI) managed to survive four centuries of capitalist development, albeit in more marginal form. Even though this industry carries great importance for the politico-economic development of the Netherlands, it has seldomly been researched. This dissertation builds a trans- disciplinary link by drawing on insights from social network research, critical management studies and critical political economy, in order to answer the central research question as to how the Dutch PBI managed to stand up to politico-economic changes, including competitive pressures, technological changes, shifting industrial policy landscapes and labor-related concerns, since its establishment in the late 16th century. My dissertation aims to examine the role inter- organizational networks played, and will continue to play, for the survival of industries more generally, and the Dutch PBI more specifically. By contributing to a more critical approach towards studying inter-organizational networks in management research, my dissertation acknowledges inter-organizational networks (1) as historically contingent, (2) as always involving multiple agents including the state, and (3) as arenas of power asymmetry. Furthermore, this dissertation traces four crucial dimensions of inter-organizational networks to safeguard industrial survival over time, namely state-industry relations,

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Summary capital-labor relations, technology, and competition and cooperation. Such a renewed theoretical framework for studying inter-organizational networks necessitates the advancement of current methodological approaches. Consequently, my dissertation incorporates Dialectical Network Analysis (DNA), a critical methodology, which foregrounds the convergence of multiple sources of qualitative and quantitative data sourced from diverse research methods. This research finds that inter-organizational networks, in the case of the Dutch paper and board industry, are neither new nor heterarchic. It can thus be concluded that throughout all phases of capitalism inter-organizational networks existed within and beyond the Dutch PBI in the form of close cooperation between different companies and in the form of state-industry projects. Furthermore, the changing content, form and scope of these inter-organizational networks corresponds with the different spatial-temporal power relations between capitalist class fractions in each phase. Consequently, the inter-organizational networks at hand are not heterarchic, but exhibit different degrees of power asymmetry between the involved agents. In contrast to the wide-spread belief that networks are a heterarchic form of cooperation, outside of markets and hierarchy, my dissertation sheds light on the fact that inter-organizational networks remain organizational models pierced by capitalist principles of profit and growth. 412

Samenvatting (Summary in Dutch)

De Nederlandse papier- en kartonindustrie (PKI) heeft vier eeuwen van kapitalistische ontwikkeling overleeft, hoewel in marginale vorm. Ondanks dat deze industrie van groot belang is voor de politiek-economische ontwikkeling van Nederland, is er echter zelden onderzoek naar gedaan. Dit proefschrift legt een transdisciplinaire verbinding door gebruik te maken van inzichten uit sociaal netwerkonderzoek, kritische managementstudies en kritische politieke economie, om zo een antwoord te geven op de centrale onderzoeksvraag hoe de Nederlandse PKI sinds haar oprichting aan het eind van de zestiende eeuw fundamentele politiek-economische veranderingen heeft overleefd, waaronder concurrentiedruk, technologische veranderingen, verschuivend industriebeleid en arbeidsgerelateerde aspecten. Mijn proefschrift onderzoekt de rol die interorganisatorische netwerken hebben gespeeld- en zullen blijven spelen - voor het voortbestaan van industrieën in het algemeen, en de Nederlandse PKI in het bijzonder. Door bij te dragen aan een meer kritische benadering van het bestuderen van interorganisatorische netwerken in managementonderzoek, theoretiseert mijn proefschrift inter-organisatorische netwerken (1) als historisch contingent, (2) als bestaand uit meerdere parteijen waaronder de staat, en (3) als arena's van

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Samenvatting (Summary in Dutch) machtsasymmetrie. Verder traceert dit proefschrift vier cruciale dimensies van interorganisatorische netwerken, die het industriële voortbestaan te waarborgen: de relaties tussen de staat en de industrie, de relaties tussen kapitaal en arbeid, technologische veranderingen, en de dynamiek tussen concurrentie en samenwerking. Een dergelijk vernieuwd theoretisch kader voor het bestuderen van interorganisatorische netwerken vereist de verbetering van de bestaande methodologische benaderingen. Daarom omvat mijn proefschrift een kritische methodologie, de dialectische netwerkanalyse, die de convergentie van meerdere bronnen van kwalitatieve en kwantitatieve data benadrukt. Uit mijn onderzoek blijkt dat interorganisatorische netwerken, in het geval van de Nederlandse PKI, niet nieuw en niet heterarchisch zijn. Er kan dus worden geconcludeerd dat in alle fasen van het kapitalisme interorganisatorische netwerken bestonden in de vorm van een nauwe samenwerking tussen verschillende bedrijven en als overheidsprojecten – zowel binnen en buiten de Nederlandse PKI. Bovendien stemt de veranderende inhoud, vorm en omvang van deze interorganisatorische netwerken in elke fase overeen met de verschillende ruimtelijk-temporele machtsverhoudingen tussen de capitalist class fractions. De huidige interorganisatorische netwerken zijn dan ook niet heterarchisch, maar vertonen een verschillende mate van machtsasymmetrie tussen de betrokken 414

Samenvatting (Summary in Dutch) parteijen. In tegenstelling tot de wijdverbreide veronderstelling dat netwerken een heterarchische vorm van samenwerking zijn, buiten markten en hiërarchieën, werpt mijn proefschrift licht op het feit dat interorganisatorische netwerken nog steeds organisatiemodellen zijn die door kapitalistische principes van winst en groei gedefinieerd worden.

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About the author

Martha Emilie Ehrich was born in Lüneburg (Germany) on July, 27th 1989. She completed her secondary education (Gymnasium) at the Johanneum in Lüneburg in 2008. From 2008 to 2011, she studied Sociology (B.A.) at the Karls- Ruprecht University Heidelberg (Germany). In 2013 and 2014, she received two master’s degrees in Criminology from Hamburg University (Germany) and Utrecht University (The Netherlands) after writing her theses on the societal need for punishment, in which she applied Luhmann’s System Theory to Critical Criminology. In January 2014, she started working at the Department of Business Administration at the Management Faculty of the Radboud University Nijmegen (The Netherlands) on the PhD project titled “Neither new, nor heterarchic. Inter- organizational networks throughout the history of the Dutch paper and board industry”. Due to Martha’s interest and competency in carrying out trans-disciplinary research, the PhD research evolved into a cooperative project with the Department of Political Science in 2016. During her employment at the Radboud University Martha also worked as a lecturer at the Hogeschool Arnhem en Nijmegen (The Netherlands), teaching courses in social science research methods. After a year of travelling through Spain and Portugal, Martha moved to Berlin (Germany) in 2019, working as a

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About the author freelance academic author and editor as well as a founder of a solidary farming collective.

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