Workers and Managers

[Gar Lipow]

The NYT has an example of what I've been talking about - how managers 
undercut the interests of owners, while not neccesarily benefiting those 
of workers. The solution offered by Moshe Adler might or might not work 
- but I guarantee it will not be tried. Because if workers were given 
the right to organize and elect representatives to audit the books of 
the companies they work for, they might start discussing wages,  and 
working conditions while they were at it. Maybe even unionization, or 
worst of all whether they need all these managers and owners. In short 
capitalism suffers from managers - but would suffer much worse without them.

Breaking with lbo-talk tradition, I will simply give a URL and quote two 
relevent paragraphs, rather than forwarding the whole article at the 
expenses of Doug's bandwidth.

http://www.nytimes.com/2003/01/27/opinion/27ADLE.html?pagewanted=print&position=top

...

 > The theory is simple: When the government regulates an industry, that 
industry can benefit enormously if regulators do not do their job. Of 
course, the public may lose more than the industry will gain. But it 
hardly matters, because the loss to each member of the public will be 
minuscule. According to the theory, malfeasance occurs when its benefits 
are concentrated and its costs diffused. In other words, regulated 
accountants will find a way to make the new oversight board complicit.

....

 > Shareholders usually have such a small stake in an individual company 
that they have no incentive to monitor either the company's management 
or the independent auditors whose job is to keep management honest. But 
employees have a real stake in a company's future. When executives 
artificially inflate stock values at the expense of the long-term health 
of the company, rank-and-file workers can lose their jobs

 > It may just be that the best solution is to give employees 
representation on the audit committee of their company's board of directors.