shady business practices

[ccb at valinux.com]

JC Write:
> Ron writes:
> | On Wed, 11 Apr 2001 ccb at valinux.com wrote:
> | > > > That's capitalism.
> | > >
> | > > That's disgusting.
> ...
> | I also resent any implied association between this particullarly base
> | concept of capitalism and American patriotism: the notion that if you
> | don't exhalt the almighty dollar, you must be a communist.  (I'm
> | responding to a whole bunch of comments at once, nothing personal about
> | this one...)

I didn't get a chance to reply to Ron earlier... I had no intention of
impugning your partiotism, it was your sanity I was after ;-).

> A few years ago, I  read  an  interesting  comment  on  this  from  a
> historian.   In  describing  the  idea  that  the  primary  goal of a
> corporation should be profit for its officers  and  shareholders,  he
> said that the first known expression of this idea in print was in the
> mid-1800's, and the writer was none other than Karl Marx.

I think most people at this point would acknowledge that the Marxist
caricature of the limited liability corporation has been very successful.

> Marx intended this as  a  serious  negative  criticism,  and  it  was
> understood  as such at the time.  The idea then was that corporations
> were permitted some  of  their  freedoms,  in  particular  limits  to
> liability  for  the  actions  of officers, in exchange for the social
> good  that  corporations  produced.   Marx's  claim  was  that   most
> corporations didn't work for the public good, but only for profit. He
> argued that instances of public good from corporations were  few  and
> accidental, and that they were more likely to do public harm in their
> search for profit.  This was a real contrast to the ideas put forward
> by Adam Smith and other earlier economic analyists.

Most people engaged in taking risks and building corporations have
always found this characterization insulting.  Aside from branding all
capitalists as being practitioners of this degenerate *and
self-defeating* form, he also unleashes a tide of demonization that
will reverberate for centuries.

> The point of this bit of history was the suggestion that, contrary to
> widespread belief, Karl Marx has been far more successful than people
> generally admit.  In this case, his attack on corporations  has  been
> turned  around  and  adopted  by  the corporate world as not just the
> truth, but is actually proposed as ethically desirable. So, while the
> former  Communist  world  has  rejected  his writings, the Capitalist
> world has openly embraced at least some of his ideas that  were  wild
> and outrageous when he wrote them.

Anyone that embraces the Marxist caricature of capitalism as desirable
is an idiot.  Marx's caricature is however a good reminder to any
business person that her business *is* a work for public good in the
persons of it's shareholders, it's employees, and it's customers.  Some
like to call these persons "stakeholders".

> Around the same time, an economist friend remarked that  one  of  the
> real  embarrassments  in  his  field is people they are more and more
> trying to pass for scientists, which means that they are being judged
> on  how  successful  their theories are at making predictions, but by
> far the best record in this regard so far has  been  from  economists
> who call themselves Marxists.  I won't go into the explanation of why
> these economists have the most predictive success.
> 
> (Ideaological trivia test question: Name some more Marxist ideas that
> are now considered correct in the Capitalist world.  No cheating now;
> try answering without rereading your Marx.  Stay on topic  by  giving
> example in the computer industry. Turn in your answers by Friday. ;-)

While you were reading Marx, I was reading Nietzsche ;-).

Marx was correct in his assesment that control over the means of
production was central in understanding the relationship between the
worlds of political and economic power.  One of the reasons I built
myself into a programmer is so that I could *be* the means of
production.  Moore's Law guaranteed that any capital equipment I'd
need would become vanishingly inexpensive and the emergence of the
internet has (so far) provided a vanishing inexpensive distribution
system for my work.

I labor under the delusion that we're in a Post-Capitalist world.
Large institutional investment engines deploy the capital invested
through mutual funds into corporations big and small.  Corporate
ownership is spread thin among owners of retail mutual funds held in
401(k) plans and the brokerage accounts of the petit bourgeoisie (try
that without M-x ispell-word!).

This is largely a world where corporate managers are either a)
founders with a vision that have not (yet) alienated the investment
banks or b) lackeys hired by the investment banks (speaking through
the boards) to run the company.

There are some gaping flaws in the system and closing them is probably
the "good fight" for this century.  My least favorite is the totality
of the limits to liability.  I believe that my free exercise of my
"endowed" (not enumerated) rights is contingent upon my ability to act
responsibly, there is no such linkage between the rights and
responsibilities of a limited liability corporation.  We rely very
heavily on strong moral character in the people making decisions
inside our corporations and it's no wonder that we're often
disappointed.

After we've all read our Marx, maybe we can get a look at Seymour Lipset's
book "It Didn't Happen Here - Why Socialism Failed in the United States".
Another simple question with a very complex answer.


Now why do I have to pay extra for "Touch Tone(tm)" dialing?


ccb

--
Charles C. Bennett, Jr.			VA Linux Systems
Systems Engineer,			25 Burlington Mall Rd., Suite 300
US Northeast Region			Burlington, MA 01803-4145
+1 617 543-6513				+1 888-LINUX-4U
ccb at valinux.com				www.valinux.com



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