WORK FOR THE NEXT GENERATION

In the world of Karl Marx, capital mostly took the form of companies privately owned, companies that were in many cases managed by the individuals who owned them. It was relatively easy to see that the world was divided into landowners, entrepreneurs, capitalists, and workers. And as Marx argued quite persuasively, over a long period of time stretching across several centuries, workers had systematically been deprived of the tools of their labor and also of their skills, which more and more were built into the machines they tended. The wealth of the capitalist class was rapidly expanding as they appropriated the surplus of the productive activities of their workers in the form of money profits.

 

By the early 20^th century, the situation had changed dramatically.  As Berle and Means argued in their classic 1932 work The Modern Corporation and Private Property, ownership of private corporations in America has been substantially divorced from control and management of those corporations. Although technically the owners of shares of stock in a publicly traded corporation are partial owners of that corporation, in reality owning a share of stock in a corporation confers no control at all over its operation.

 

The management of a large publicly traded corporation are in fact employees of the Corporation, and their compensation appears in the accounting of the Corporation along with the other costs, such as raw materials, electricity, and such. To be sure, the managers of America’s great publicly traded corporations tend to be quite rich and frequently own large chunks of stock in the Corporation, but their ownership of stock in the Corporation is a consequence, not a cause, of their role as managers. Rex Tillerson, for example, Trump’s first Secretary of State, ended his private career as the head of Exxon Mobil. He held something like $600 million in Exxon Mobil shares, but that was a result of his career with the oil company, not a condition of his elevation to the presidency of it.

 

The enormous inflation in the compensation of corporate executives in the United States over the past 40 years can I think best be portrayed as systematic theft by the corporate managers from the faceless real owners of the corporations, the shareholders. When the United Auto Workers go toe to toe with the management of the automobile industry, it is not labor confronting capital, it is low-paid workers confronting high paid workers.

 

As the statistical studies of Thomas Picketty and others demonstrate, the enormous inequality in the distribution of income in modern capitalist societies is dwarfed by the vastly more unequal distribution of wealth.

 

In my paper “The Future of Socialism” I presented a little hypothetical example designed to demonstrate that in the modern Corporation it is impossible, according to the canons of cost accounting, to allocate unambiguously the costs of the Corporation to the several divisions producing different commodities. The implication of this fact, I argued, is that decision-making within the Corporation has become, in its logical structure, increasingly like the political decision-making engaged in by government representatives and can no longer be portrayed simply as determined by market forces. My point was, rather simple mindedly, that something akin to socialism was developing within the womb of capitalism.

 

That was simply a thought experiment, a first attempt to get my hands around the peculiar character of modern capitalism. If we are to think our way to a form of economic organization beyond capitalism, it is these sorts of investigations rather than celebration of “Occupy Wall Street” that is required.