>
> [mbs] My impression is that non-profit-max behavior is
> ubiquitous, but I'm not prepared to trot out a summary
> of the empirical I-O lit.
>
> I'll give you another example. Anti-profit maximization
> via outsourcing. There's evidence of the use of outsourcing
> for motives other than cost-minimization in the IT field. I
> got into this because of my interest in privatization. Contracting
> out is done for reasons other than efficiency or cost, hence it
> should not be surprising that contracting could end up costing
> more (ergo less surplus value, I would guess, because these
> are payments that come out of the firm for purchased inputs).
>
Outsourcing's payoff seems to be on the level of organisation, rather than
profits - fragmenting your workforce on the one hand, and tightening your
focus on the other (the 'focus on core business' argument). Well, that's
at least my take on it, from the perspective of someone who has seen much
of their workplace's workforce outsourced.
The first aspect of this is more relevant when you have a possible danger of collective organising (not just unions, but other kinds of 'company culture' links which affect industrial psychology and thus industrial relations). Marx's work in the 'Results of the Immediate Process of production' chapter, where he talks about the results of the difference between the governing assumption of each commodity being produced using 'socialially necessary labour' and the real world of speedups and slowdowns in factories, is interesting here - 'class composition' theorists have used it as a starting point for a fuller analysis of the workplace, and the frictions therein. These theorists (e.g. Bologna, Negri) still use Marx, but focus on capitalism as the maintainance of control (and thus the 'circuits' of capital - the process of reproduction of capitalism), rather than simply capitalism as sucking max profits from a set of workers.
The second aspect - of focussing on core business - is the argument generally touted by economists for outsourcing. My subjective impression in one case is that outsourcing does help managers do this, although with rather more caveats than the pro-outsourcing pundits talk about.
So - on the larger debate - I think the fact that non-profit maximising behaviours are common in corporations is true, and that this behaviour is related to the question of 'the reproduction of capitalism'. Marx has typically not been read with this question in mind, but it is there in his work. Partly because of the nature of the 19th C. capitalism Marx analyses - which fought out this question on the terrain of the raw supply of labour hours, and sought to maintain profits by maintaining the long working day, working people to death, and pulling people in from the countryside - this question is not the primary focus of the narrative Marx relates in Capital.
And finally, I think understanding this non-profit maximising behaviour is vital for a full understanding of capitalism - there are tensions within capital, tensions whose source becomes apparent as soon as view capital as embedded in a human society where labour power is not an abstract input but something which must be created and controlled in a manner appropriate to the maintaince of the capitalist social relation.
Peter -- Peter van Heusden <pvh at egenetics.com> NOTE: I do not speak for my employer, Electric Genetics "Criticism has torn up the imaginary flowers from the chain not so that man shall wear the unadorned, bleak chain but so that he will shake off the chain and pluck the living flower." - Karl Marx, 1844