raghu wrote: >> The far-sighted capitalist works his employees moderately to maximize >> their lifetime productivity, invests on R&D, infrastructure etc to >> sustain profitability and pays his employees enough to keep >> consumption levels high (but not enough to start accumulating) and his >> workforce contented.
A far-sighted capitalist aims to maximize his or her wealth. As a CEO, this would involve maximizing salary, benefits, and the shareholder's value. Why would a far-sighted capitalist care about anyone's lifetime productivity? the chances are that most employees will be gone from the far-sighted capitalist's workplace in a few years -- or even sooner. These days, turnover is normal and life-time employment agreements (with true pensions and the like) are the exception. (The days of union contracts are mostly gone, as are the idea of large corporate hierarchies based primarily on promotion from within.) The far-sighted capitalist would care about (the present value of) the revenues produced by the employee during his or her tenure with the company _minus_ the costs necessary to keep that employee around during that period. The tenure period would be adjusted in order to maximize this number. And it may turn out that the company can make a bigger profit by moving operations off-shore rather than getting involved with hiring domestic employees at all. Why would a far-sighted capitalist care about R&D unless it produces "intellectual property" that can be used to rake in royalties? Capitalists clearly don't care about basic research, unless the costs can be dumped on taxpayers while the benefits are hogged by the capitalists. The same goes for infrastructure: they want _others_ to pay for it. A far-sighted capitalist strives to socialize risks and privatize benefits. Why would a far-sighted capitalist care about high consumption levels of workers? If workers have high wages (and can consume a lot), there's no guarantee at all that they'll buy stuff from the far-sighted capitalist's company. Ford pays you a lot, but there's no reason you should buy a Ford when Toyota produces better cars for the money. Paying high wages can make workers content, but a far-sighted capitalist knows that contented workers can be found for lower wages in a place like Vietnam. In the latter locale, there are more people who are desperate to work. And the more that operations move to such areas, the more that the far-sighted capitalist's employees will be motivated by fear -- and the absolute need to pay those bills -- rather than by positive incentives. A far-sighted capitalist as raghu sees him or her would be George Soros and the like. But when George actually acts as a capitalist (rather than as a pundit and a self-appointed philosopher-capitalist), he's not so far-sighted. He's just greedy. We should reject the mystical idea that there's a basic unity between what's good for a far-sighted capitalist and what's good for the capitalist class as a whole. There's a collective action problem. Capitalists will only unite to promote their long-term collective self-interest (as Soros, Volcker, or whoever defines it) when they're under pressure from the outside. Even then, they'll try to profit from opportunistic behavior. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
