|"Rev Dr" Lenny Flank
Joined: Feb. 2005
|Quote (Kristine @ May 04 2007,21:09)|
|But I must ask, Lenny, do you even think that our system is capitalist anymore?|
No. Indeed, the corporations themselves are building the basic framework of socialism, and they are being forced into it by their own economic interests.
There are some economists who have declared that the rise of employee-stock-ownership plans and IRA's and 401(k)'s and such, have "democratized" the economy, leading to "ownership" of the corporations by a larger and larger number of stockholders. That, alas, is bullshit. It is, of course, the stockholders who "own" the corporations, but stock ownership in the US is still heavily centralized -- despite all the crap you might hear about "union pension plans" or "employee stock ownership plans" and "IRA plans" counting for the majority of stock, it is a simple fact that stock ownership, as with all wealth, is (and always has been) heavily concentrated in a very few hands. In 2001, the wealthiest 1% of the US households owned 33.4% of all wealth, while the bottom 80% of househoulds owned just 15.5% of wealth. The wealthiest 1% of households also owned 44.1% of all stocks, bonds and mutual funds (the bottom 90% owned just 15.5%). Of all stockholders, the wealthiest 1% held 94.8% of all stock holdings with value of $5,000 or more.
To explain where this all leads, I will quote-mine from myself:
Stock ownership is, in a corporate economy, particularly important, since it translates directly into corporate power. And what the corporation or joint stock company has done is centralize ownership, control and financial benefit, into a very small number of hands. Rather than "democratizing" the economy, the joint stock company only centralizes it further.
And as a side effect, the joint stock company has in effect removed the controlling capitalists from the sphere of production. The actual day-to-day management of the corporation is left to a team of hired executives, managers and directors, who are responsible solely to "the stockholders" -- i.e., the wealthiest 1% of the population that controls nearly all the corporate stock.
This hired managerial apparatus is not in itself capitalist--that is, it does not extract any surplus value by virtue of owning capital. It is true that, in many corporations, the major shareholders are themselves members of the managerial apparatus, but this is peripheral to their role as capitalists. To the extent that the managers or executive officers of a corporation are not in themselves the major shareholder, they cannot be viewed as capitalists in the strict sense of the term (although they are certainly capitalist in their outlooks and value systems). They are merely "hired guns" who manage the capitalist's interests for him in exchange for part of the spoils.
The popular distinction between "labor" and "capital" as being "those who work" as opposed to "those who don't" here reaches its clearest form. The corporate capitalist, besides performing no labor in the process of production, now is not required to take part in directing or managing it either. As he does with the laborer, he merely buys the ability of somebody else to do this for him. In essence, the corporate capitalist simply sits back and lets other people produce his living for him. His living comes, not from his "management skills", nor from his "entrepreneurship", nor from his "superior business acumen"--it comes solely from the fact that he, and he alone, owns capital. Corporate owners are not at all necessary for the process of production and are, in essence, social parasites. They do not labor to produce anything, they do not manage their own enterprises; instead, they hire others to do all of this for them. In short, they do nothing to earn their keep, and live solely by hiring others to make their living for them.
Although the corporate sector of the economy is owned jointly by the capital-owning class (the small number of stockholders), it cannot be said that any corporation is "owned" by any individual (unless, of course, the corporation is itself a family-owned business). In essence, the capitalist system itself has done away with private property ownership and has introduced social property in its place.
In the heydey of the capitalist system, economic decisions were the perogative of a single owner, who made his decisions individually and in his own short-term interests. Today, however, this capitalist ideal no longer applies. In the modern corporation, the search for long-term stability and profitability forces the corporations to make long-term plans for the investment and use of their capital and resources. These decisions are no longer made by individual property-owners; they are made by a network of hired managers and professionals. In essence, private short term investment has given way to joint long-term planning for the optimum utilization of resources.
Another crucial factor which resulted from the joint stock company is the separation (both legally and in practice) of ownership from management. In the early days of capitalism, the capital-owner had to serve as his own entrepreneur and manager. He could profit from his investment only if he himself made the decisions upon which profitability was based. This allowed the capitalist to justify his appropriation of surplus value as "compensation" for his decision-making entrepreneural role.
Today, however, the socialized capital-owning class has no such connection to business decision-making. Instead, the capitalist stockholders are able to hire the services of a network of professional managers, decision-makers and innovators who perform this role for them Those who own a majority of stock in a corporation have no need of business sense or entrepreneural ability; they can merely hire others who have these abilities. The stockholder-capitalist makes his living without lifting a finger. He performs no labor, produces no commodity, and develops no new innovation. The only thing he does is allow the managers to use his capital and then cash the dividend checks they send to him. Even if one accepts the argument that the capitalist as decision-maker receives his profits as compensation for his decision-making ability, one can certainly not make this argument when the capital-owner makes no decisions at all, but merely hires others to do this for him.
Thus, capitalist practice itself demonstrates that the capital-owner, the stockholder, is superfluous and parasitical. If the managers perform their tasks on behalf of the absentee stockholders, they can perform them just as well if those stockholders are deposed and replaced by elected representatives from the workplace and the surrounding community. There is no reason why the managers cannot be made responsible to the social entity as a whole rather than to the minority of stock-owner members.
Developing methods of capitalist management are beginning to acknowledge this fact. In the days of individual capitalism, economic enterprises were essentially top-down affairs, mere extensions of the capital of a single capitalist who ran the enterprise in essentially dictatorial fashion--Carnegie Steel, Ford Motor Company, the Gould railway empire.
As corporations moved towards social ownership and control by professional managers, however, they turned from a vertical system of organization to a horizontal association of diverse economic enterprises. This process accelerated with the onset of the overproduction crisis, which forced corporations to diversify in order to survive.
The old "dictatorial" method of management works fine for a vertical organization which only had to monitor a small number of routine tasks, but top-down management fails miserably when faced with the task of integrating and coordinating a large number of diverse units.
As a result, modern managers have been forced to adopt methods which are more horizontal and "democratic", through the use of such concepts as project teams, work councils, ad hoc committees, and autonomous project teams. And, since this diverse economic process is too large and too involved to be overseen by a small number of hired managers, it has become necessary to integrate the workers in the shop more fully into this coordination process. This management concept was pioneered by the Japanese, and has since been adopted by US corporations, which have referred to them as "job enhancement" or "industrial democracy".
The long-term effects on the capitalist mode of production will be profound. These new management styles weaken the very core of the capitalist's raison d'etre. If management and workers can make economic decisions without the input of the owners, it is obvious that the owners are not needed and can be dispensed with. Furthermore, the increasing integration of workers into this management process will make the workers able to carry out these management tasks by themselves, thus making the professional management sector equally unnecessary. The capitalist program of "industrial democracy" is the beginning of a new social and economic structure which will eventually bring full control of the economy to the workers who run it. These infant "workers councils" represent the future society of worker control; they represent the beginnings of socialism. All that remains is to kick out the absentee stockholder-owners and their hired representatives, and turn "industrial democracy" into *actual* democracy, run by elected representatives from the surrounding social entity.
Editor, Red and Black Publishers