Before responding to Wallace Stevens’ comments, I am going to continue to explore the ways in which capitalism has changed, and the questions raised by those changes for the project of a transition to socialism. I apologize for the rather crude and elementary character of these remarks. This is a subject about which I know very little, and sitting here in Paris, I am limited to what I can glean from the Internet. As always, I will try to anchor my remarks in some concrete facts, thereby encouraging my readers, I hope, to do the same.
Exxon Mobil is the second largest American company by net receipts, after Walmart. It is also, after Apple, the publicly traded company with the largest market capitalization [which is to say, the total value placed on its shares by the stock market price of those shares each day.] Its current market capitalization is about 357 billion dollars. [Apple’s is about 650 billion!] The President, Chairman of the Board, and Chief Executive Officer [or CEO] of Exxon is a character named Rex W. Tillerson. Tillerson, who is 63, has worked for Exxon for forty years. As you might expect, he is a very rich man. At last count, he owned 2,288,874 shares of Exxon stock, which, at about $85 a share, means that he personally owns a bit less than two hundred million dollars of Exxon Mobil. He makes thirty or forty million dollars a year, depending on what sort of year Exxon is having [not so good lately, what with the fall in the price of crude oil.]
Tillerson did not become CEO of Exxon because he owns so much Exxon stock. He owns so much Exxon stock because he is CEO [and has held various other executive positions along the way.] One of the principal devices modern corporations have of circumventing the tax laws is to give their executives options to buy stock in the company at a set price, regardless of whether the shares appreciate before the option is used. The gains generated by these options, when exercised, are taxed at capital gains rates [I think I have this right], which are much lower than personal income rates. Top executives over the years acquire enormous holdings in the companies they run. The rationale for this boondoggle is that it makes them care about how the company is doing.
But rich as Tillerson is, his holdings in Exxon Mobil amount to only .05 of one percent of the market capitalization. He is, as it happens, the individual with the most Exxon stock, but his holdings are dwarfed by those of a number of investment companies, such as Vanguard, which own vastly larger amounts of Exxon. Even these investment companies, however, own fractional portions of Exxon that do not come close to giving them the voting power [one share, one vote] to take control of the company. Recently, it should be noted, the Rockefeller family tried to get Exxon to separate the Chairman of the Board position from the President position. Despite the fabled wealth of the Rockefellers, they failed, and Tillerson prevailed.
Most corporations these days resemble Exxon Mobil, in separating ownership from effective control of the capital assets of the corporation. Walmart, by the way, is an exception. The four principal heirs of Sam Walton, each of whom is one of the ten richest persons in America, collectively own about half of Walmart’s shares, although I think I am correct that none of them has ever occupied a management position in the company.
This observation about the divorce of ownership from control is hardly news, needless to say. The classic statement of it can be found in the 1932 book by Gardner Means and Adolf Berle, The Modern Corporation and Private Property. But although this book has been around for eighty-three years, the development it reports occurred well after Marx wrote Capital. In Marx’s day, corporations by and large were run by the men who owned them. That ownership conferred on them the power to control the businesses, to make decisions about what to produce, whom to employ, what wages to pay, what working conditions to impose on their workers, and so forth. The profits of the businesses belonged by law to the men who owned them. Hence, it made perfectly good sense to suppose that transferring ownership of the means of production to the workers, either by force or by law, would also transfer effective control of those productive resources to the workers as well.
Today, things have changed, and the old understandings must also be changed. Now I do not really care whether you label this change “a change in appearance/content, or a change in form/essence/laws of motion,” to quote Chris. Frankly, I do not really understand that language. It has the sound of bad nineteenth century metaphysics, not good twenty-first century radical critique. But I am quite sure that if workers want to take control of the economy away from those who now effectively run it and use that control to change their lives, they had damn well better stop long enough to notice the change I have been describing.
Please don’t quote Marx to me again. Don’t find a passage in which Marx said something prescient or perceptive about the new arrangement of joint stock companies in 19th century England. Since he was a genius, I have no doubt we can find such passages. But they are not a substitute for an analysis of what is going on in capitalism right now.