On Feb 1, 2009, at 4:11 PM, James Heartfield wrote:
> And that was exactly what recommended the book to me. Still, without
> making any unnecessary obeisance to 'Marxist Models' (the idea of a
> 'model' itself being hostile to Marx's method of logical
> reconstruction through abstraction) I thought that as good as Wall
> Street was as an account of the process, I wanted to interpret the
> dynamic as being rather the other way around, that the shareholders
> movement took off because corporate accounts were bloated.
Depends. When the shareholder revo got going in the late 1970s/early 1980s, profits were low, yet investment was too high. Michael Jensen theorized, and Henry Kravis put into practice, the notion that firms should instead distribute the cash to shareholders, who could then redeploy it to better (i.e., more profitable) uses through efficient financial markets. They got the corps to shovel out the cash, but it mostly stayed in the financial markets.
Doug