>Yeah. They always had the potential power, but it didn't become
>actualized until the late 1970s/early 1980s (in the U.S., that is).
>Though in the old days, shares were held mainly by individuals; as
>institutional investors came to account for a larger portion of
>shareownership in the 1960s and 1970s, it became easier for
>shareholder to organize and lobby.
and
>Increasing shareholder value basically means doing everything you can
>to boost profits - cutting employment, busting unions, reducing
>social responsibilities, shutting divisions, abandoning risky
>long-term projects, outsourcing, etc.
It seems like the shareholder vs. management debate usually gets treated, especially by leftists, as a petty internal squabble among the elites, a rearrangement of power perhaps but nothing that has a more-than-cosmetic effect on capitalist relations. Which I guess is true in the short term, but couldn't shareholder control have some real long-term consequences? I mean, if capitalism has historically been about the plucky manager and the daring captain of industry taking risks--revolutionizing modes of production, financing new technology, etc.--what happens when the more conservative shareholders take over? As (I think) you said in your book, Doug, shareholders don't like gambling so much and would rather rely on the old ways than throw their money at risky new ventures. Their control would tend to stifle innovation (the "revolutionary" character of capitalism), one of capitalism's primary features, which, it seems to me, would have real, substantive effects on how capitalism works.
And are we seeing someting like this in the current downturn (not a recession, yet)? Consumers are borrowing and spending like crazy still, and their confidence is surprisingly resilient, but neither of those facts nor Unkie Al's kind indulgence has been able to make capital spending budge. Could the reason be that managers know they will be destroyed by shareholders if they start spending in this climate?
Anyway, I'm probably in over my head here. I'll stop and let the smart people tell me where I've gone wrong.
Eric