[lbo-talk] Jayati Ghosh on the contradictory effects of tech change

Marv Gandall marvgand2 at gmail.com
Tue Feb 16 09:23:00 PST 2016



> On Feb 16, 2016, at 8:01 AM, Shane Mage <shmage at pipeline.com> wrote:
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> On Feb 16, 2016, at 10:07 AM, Marv Gandall wrote:
>>> On Feb 15, 2016, at 9:31 PM, Shane Mage <shmage at pipeline.com> wrote:
>>> On Feb 15, 2016, at 9:17 PM, Marv Gandall wrote:
>>>> Corporations have a contradictory relationship to the state: They like state intervention which advances their interests, which is mostly the case, and oppose state spending on social needs which raises their cost of capital and taxes without offsetting net benefits to the system. They unanimously support the state’s bodies of armed men and the role played by the state’s governing parties as guarantors of the capitalist system. Wouldn’t we all agree with this?
>>> Well, I for one would not. Corporations are not persons. They can neither like nor oppose anything. They are organizational structures, institutions granted a license to steal (called "limited liability") by the state, institutions through which certain specific capitalists' interests are promoted. The bigger the corporation the more likely those capitalists are to be siphoning the monopoly rents into their own pockets at the expense of their stockholders and of the rest of their class (aka taxpayers or the state).
>> Wordplay, Shane. Corporations aren’t persons (except in law), but there’s a corporate culture of owners and manager who understand and defend the sole purpose for which corporations are formed. They like anything which contributes to profit and oppose anything which threatens it. That is all ye know on earth and all ye need to know.
>
> The exact opposite is the case. That "corporate culture" hates profit. When EVER does it not decrease profitability for a corporation to borrow money at interest to buy back it's stock--thereby increasing its costs without increasing its income? But giant corporations (a numerically tiny portion of the corporate universe) do that all the time so owner-managers can loot it by dumping option-awarded stock at ever higher (they hope!) prices. How does borrowing to take over another corporation, selling it's assets to pay back the loan plus a big dividend to themselves, firing its profit-producing workers, and putting it into bankruptcy do anything but lower profit by siphoning the monopoly rents into their own pockets at the expense of their stockholders and of the rest of their class (aka taxpayers or the state).? But giant corporations do it for that purpose all the time. What is the effect of profits when the manager-owners use corporate funds to pay themselves humungous salaries and buy back the corporation's own stock instead of expanding the business or even spending enough to keep it from deteriorating? What but to siphon the monopoly rents into their own pockets at the expense of their stockholders and of the rest of their class? Profit used to be important to that culture of owner-managers. Now they think of it as "so 19th century". In today's state-monopoly-capitalism (US model)/monopoly-state-capitalism(Maoist model) what counts as surplus-value is not profit-of-enterprise but rent. It is, after all, “the epoch of imperialist *decay*."

They may be investing in paper assets rather than investing in production, but they’ll typically go where they can get the higher returns. This may be a conjunctural or a structural problem, but it is not a subjective one, ie. a sign that the corporate sector “hates profit.” If all capitalists looted their companies with such abandon and unsustainable debt, in line with your caricature above, the system would have collapsed long ago without it needing to be toppled from below.



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