[lbo-talk] Maximise or satisfice? (was:stupid americans?

Wojtek Sokolowski sokol at jhu.edu
Mon Sep 27 13:27:55 PDT 2004


Miles:
> This underestimates the constructive and innovative effects of
> capitalism. Let's face it: mediocrity across all positions in
> an organization = lower profits. The capitalist system provides
> systematic incentives to do anything that increases profits
> (e.g., the elimination of textile factory jobs in the U. S.).
> If workers are mediocre, less surplus value can be extracted from
> them. Capitalist organizations need knowledgeable, efficient
> workers, and they have them--look at the productivity numbers
> for U. S. workers today compared to the past!

There is a considerable body of organizational research that disagrees with the above statements. Both neo-classicals and marxoids agree that capitalism is about profit maximization and both presuppose perfect information and rationality in that pursuit. The instituitonalists, on the other hand, focus on how real people and real organizations actually work in real life. What they find is that beneath the ritualistic speeches about efficiency, optimal performance and profit maximization there is a lot of group-think, mediocrity, and the performance that is barely satisfactory. In other words, corporate officers tend to go with the crowd, ape each other, do the minimum expected of them, break the rules whenever they can get away with it, sometimes get lucky - but then at the end of the day talk about their own prowess, vision and extraordinary abilities to supersize, maximize, economize, rationalize and do good things in every which way.

In that light, world capitalism is like a movie theater - the best seats do not necessarily go to the smartest, bravest, and most skilled, but to those who got their tickets first. That is to say, if everything else being the same as it is now, the US and, say, India or China swapped their places in the "world system" and it was the US trying to get to the markets already dominated by Indian or Chinese firms, US corporations would be a laughing stock of mediocrity and incompetence.

One may also asks how come that the US firms - with all their mediocrity and inefficiency - gained their dominant position? The answer, I believe is that their main competitors, Europeans, decided to obliterate each other in the World War II - which had a twofold effect: (i) it substantially weakened Eurpeans countries individually and collectively and (ii) it created an unprecedented opportunity for US firms to profit from that bloodletting. Without WWII US would probably be at most a regional power today, bullying Latin America, but deferring to Europe and Asia.

Wojtek



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