Date: Mon, 19 Aug 1996 13:57:22 -0500
From: dhenwood-AT-panix.com (Doug Henwood)
Subject: Re: US profit rates


At 12:19 PM 8/19/96, Rahul Mahajan wrote:

>I'm not sure I buy this. Stock options, of course, are irrelevant. Speaking
>purely economically, though, the salary (in real money) that executives
>draw represents, for the most part, surplus extraction as surely as the
>profits the capitalists make.

Absolutely. But the trend in exec "compensation" is away from direct salary
and towards options. This is supposed to align the interests of managers
and shareholders, as the theorists say.

>It's also, if I'm not mistaken, not
>completely insignificant in size compared to the total profits.

For the top managers, it really is. The headline eye-popping money pulled
down by the likes of Michael Eisner is mainly options. You gonna make me
read through some 10-Ks to cite some numbers?

>Politically, of course, it has a different significance. In the good old
>days, the capitalists made economic concessions to the class struggle by
>creating a "labor aristocracy." Now, they do it by creating a class of
>managers.

Well, yes and no. We've been talking about top managers, not middle
managers. They're the ones whose "compensation" is macroeconomically
insignificant. Middle managers are far more numerous, and are neither
socially nor macroeconmically insignificant. One reason the U.S. has so
many more middle managers than other countries do is because our labor
force is fractious and hard to control (see, among other things, David
Gordon's Fat & Mean for a development of this theme). But these are
precisely the target of downsizing; the shareholders want more money for
themselves, and fuck the middle managers. So that trend is being reversed,
though obviously it has a long long way to go.

Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <dhenwood-AT-panix.com>
web: <http://www.panix.com/~dhenwood/LBO_home.html>




     --- from list marxism-AT-lists.village.virginia.edu ---