>> It's that neither in a NIPA/orthodox sense, nor in Marx's sense: "The
>> salary of the manager is, or should be, simply the wage of a specific
>> type of skilled labour, whose price is regulated in the labour-market
>> like that of any other labour" (Capital Vol. 3, Ch. 27).
>
> But it's not regulated by that kind of market at all. Study after
> study has shown no relation between pay and performance. Pay is set by
> board compensation committees, which are staffed by CEOs of other
> companies. It's a giant exercise in back scratching.
>
>> Of course you're right that if you count only production workers'
>> earnings as wages, then their share of GDP has fallen a lot. No
>> argument there. But what's good for the goose is good for the gander:
>> If Brenner had been forced to add managerial pay to his measure of
>> profits, his profit numbers would be hugely inflated, at an
>> accelerating rate.
>
> Most Marxists - regardless of theoretical perspective, like Shaikh,
> Brenner, Bond - want to argue there was no improvement in
> profitability in the 1980s and 1990s. Obviously I don't agree. To deny
> that is to miss a profound shift since 1980.
Alright, then we agree. As long we're not talking about managerial pay in the context of the rate of profit then there's something to be said for seeing it as part of the overall "returns to the capitalist class." I think it's better to put it that way, rather than "returns to capital."
I think I gave you this spiel over dinner last year, but this article - http://www.jstor.org/pss/2696595 - clarifies these issues brilliantly. It surveys what happened in the 80s and 90s and reaches a conclusion that confirms, and also fleshes out, what _Wall Street_ argued. Putting their argument in class terms (which they don't), I'd summarize it this way: Shareholders and managers are two components of the capitalist class whose interests don't automatically converge, and sometimes clash. Through the 70's, managers were dominant and shareholders dormant. Then the shareholders revolted with the 80's hostile takeover wave.
So far, just a rehash of Wall Street. But then they explore the backlash in the late 80's/early 90's, where managers pursued a legal counterattack using poison pills and staggered boards, threatening to neutralize shareholder influence. The war ended in a grand intra-class compromise/bargain: Managers would be allowed to keep much of their anti-takeover armor, but in return they embraced "shareholder value ideology" (the authors' words) with the zeal of converts and backed it up with (alleged) performance pay. The fruits of this proud - but still contested - bargain were on display through the late 90's boom and afterward.
So to simply lump managers' pay and shareholder profits into one homogeneous "returns to capital" pool risks downplaying the very real potential (intra-)class conflicts between the two groups. But since they have always in practiced formed a pretty tight class bloc - though marred by some serious skirmishing in the 80's - it makes sense in *political* terms to identify both flows as accruing to the "capitalist class." I know none of this is news to you, but anyway that's how I see it.
SA