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I am missing something here, and I am genuinely curious what it is I'm missing. If a capitalist starts a manufacturing business with the goal of making money,

I am missing something here, and I am genuinely curious what it is I'm missing. If a capitalist starts a manufacturing business with the goal of making money, and if he then discovers that the business would run much more effectively by letting the skilled workers make the decisions than by hiring a layer of management ... then why wouldn't the capitalist go with the more effective approach? TL;DR rephrase -- why would a business owner maintain a layer of management if that was truly a less effective way to go? Is Chomsky (or Noble) claiming there's something like a "conspiracy" amongst the "managerial class" to create fake jobs for managers, merely to maintain class power? (Or, if not, what am I missing from his argument?)

steveklabnik 14y ago
> then why wouldn't the capitalist go with the more effective approach? "Making money for me" and "making money for everyone" are not the same thing. For example, if your business has 1MM in profits, and you own half, then you get 500k. If you ran that as a cooperative, you made 2MM in profits the next year, but you own 10%, you made $200k. Worse for you, better for everyone else and the group overall.
- charlieflowers 14y ago
  OK, that makes sense but doesn't connect all the dots for me. I am starting with the assumption that no one gets an ownership stake for free. You can start a business if you want, and you can either bootstrap it or take investment. Either way, the owners are not handed their ownership ... they "buy" it with what they put in. Is this Chomsky/Noble point of view arguing that workers should be granted a degree of ownership by virtue of the work they do?
  - steveklabnik 14y ago
    The basic tenet of socialism is that democracy is good: the traditional corporate model is dictatorship, and it should be reformed into democracy instead. > the owners are not handed their ownership ... they "buy" it with what they put in. Sure, but then they have it, and that's great. Being rewarded for your work is good. Problem is, they have to do nothing to maintain it. After an initial period of work, they have it forever. Whereas a worker who comes in afterward has no access, and even though they also put in a lot of work, they won't get any ownership. Those people are not being rewarded for the work that they do, which we all agree is bad. > workers should be granted a degree of ownership by virtue of the work they do? Basically, yes. People should be in control of themselves, and their situations. Ownership == control. Please note that I'm painting in _very_, _very_ broad strokes here. There is a ton of space under this tent.
    - charlieflowers 14y ago
      >>>"Sure, but then they have it, and that's great. Being rewarded for your work is good. Problem is, they have to do nothing to maintain it. After an initial period of work, they have it forever. Whereas a worker who comes in afterward has no access, and even though they also put in a lot of work, they won't get any ownership." I agree with the point that it is "too bad" the worker will work 30 years and never gain ownership. But ... if the worker doesn't like it, why doesn't he start a business? And ... is it right for government to forcibly take a piece of ownership away and give it to the worker? Is that the proposed solution? Gosh, when you look at this discussion, you ask yourself, "Why on earth would anyone sign up to be a perpetual worker?" BUT -- there's a lot more to a business than just the skilled work. There's marketing, capitalization decisions, strategy, etc. Seems the businesses who are best at that will outcompete the others. I guess that then makes the argument for "professional management" (I promise I did not set out towards that goal ... I stumbled there by "thinking out loud").
      - steveklabnik 14y ago
        > But ... if the worker doesn't like it, why doesn't he start a business? Starting a business is not a possibility for many people. This requires initial capital, for example. Most people do not have capital. > And ... is it right for government to forcibly take a piece of ownership away and give it to the worker? Is that the proposed solution? Chomsky is an anarchist, so no, he would not suggest that. it's actually the opposite: the ability of the owner to retain ownership is due to contractual agreements that the state upholds under threat of violence. Without the state, corporations (and capitalism) are not possible. > Gosh, when you look at this discussion, you ask yourself, "Why on earth would anyone sign up to be a perpetual worker?" :) An observation that Marx made was that because the worker sells their labor-power (ie, capacity to labor), they do not get to retain the advantages of increased productivity: the capitalist does. When we become more productive, we have two choices: work less, or work the same and get even more. The ones with the power make those decisions, and since they're not the ones doing the work, guess which they choose? The movement from the 12 hour day to the 10 hour day to the 80 hour day to the 40 hour week was not due to productivity gains: it was due to socialist and other worker-led movements. > (I promise I did not set out towards that goal ... I stumbled there by "thinking out loud"). No worries :) I'd say that you're confusing correlation and causation: there are many, many more traditionally structured businesses than socialist ones. There are many success stories on the other side: http://en.wikipedia.org/wiki/Mondragon_Corporation http://en.wikipedia.org/wiki/Mondragon_Corporation
  - gbog 14y ago
    Chomsky may have a more ductile view on ownership, when it applies to means of production. And you can't assume the rationality of the capitalist, many psychological and cultural factor play the game when choosing to empower workers or management.
    - charlieflowers 14y ago
      >>> "And you can't assume the rationality of the capitalist" That's definitely true. But, his business incentives are aligned with whatever is most effective. If he wins the business competition, he makes a lot of money. So at the macro scale, business owners would be inclined to do whatever works best ... as opposed to hiring a management layer they don't really need (and incurring costs) to adopt a less effective approach.
      - steveklabnik 14y ago
        > his business incentives are aligned with whatever is most effective at making money. Fixed that for you. Many, many things make lots of money but are not effective: http://en.wikipedia.org/wiki/Great_American_streetcar_scandal http://en.wikipedia.org/wiki/Great_American_streetcar_scanda...
        charlieflowers 14y ago
        I agree with your edit. That's what I meant. But I don't think there's a huge gap between "what is most effective" and "what is most effective at making him money." Well ... OK ... I can think of examples when that gap is huge, so scratch that. The point is ... in the example of choosing between (a) hiring managers even though it costs more and is less effective, or (b) not hiring managers, saving that money, and being more productive too -- why would the capitalist choose to maintain a management layer?
        steveklabnik 14y ago
        > why would the capitalist choose to maintain a management layer? Humans are pattern recognition machines. Many successful companies have tons of managers: why try out this weird alternate strategy I have no experience with when so many companies work hierarchically? Starting a startup has so much risk involved, and risk needs managed. New management strategies are incredibly risky. I don't think the cooperative model being possible even enters into most people's minds.
cloudhead 14y ago
Because in general, the people with experience in the sectors he talks about will want a position of power, and aren't interested in working with their hands. Business owners want to hire these people (I won't place a judgement on the decision itself) and therefore need to have the open positions. Things are changing though, at least in the tech sector.

steveklabnik 14y ago

> then why wouldn't the capitalist go with the more effective approach? "Making money for me" and "making money for everyone" are not the same thing. For example, if your business has 1MM in profits, and you own half, then you get 500k. If you ran that as a cooperative, you made 2MM in profits the next year, but you own 10%, you made $200k. Worse for you, better for everyone else and the group overall.

charlieflowers 14y ago
OK, that makes sense but doesn't connect all the dots for me. I am starting with the assumption that no one gets an ownership stake for free. You can start a business if you want, and you can either bootstrap it or take investment. Either way, the owners are not handed their ownership ... they "buy" it with what they put in. Is this Chomsky/Noble point of view arguing that workers should be granted a degree of ownership by virtue of the work they do?
- steveklabnik 14y ago
  The basic tenet of socialism is that democracy is good: the traditional corporate model is dictatorship, and it should be reformed into democracy instead. > the owners are not handed their ownership ... they "buy" it with what they put in. Sure, but then they have it, and that's great. Being rewarded for your work is good. Problem is, they have to do nothing to maintain it. After an initial period of work, they have it forever. Whereas a worker who comes in afterward has no access, and even though they also put in a lot of work, they won't get any ownership. Those people are not being rewarded for the work that they do, which we all agree is bad. > workers should be granted a degree of ownership by virtue of the work they do? Basically, yes. People should be in control of themselves, and their situations. Ownership == control. Please note that I'm painting in _very_, _very_ broad strokes here. There is a ton of space under this tent.
  - charlieflowers 14y ago
    >>>"Sure, but then they have it, and that's great. Being rewarded for your work is good. Problem is, they have to do nothing to maintain it. After an initial period of work, they have it forever. Whereas a worker who comes in afterward has no access, and even though they also put in a lot of work, they won't get any ownership." I agree with the point that it is "too bad" the worker will work 30 years and never gain ownership. But ... if the worker doesn't like it, why doesn't he start a business? And ... is it right for government to forcibly take a piece of ownership away and give it to the worker? Is that the proposed solution? Gosh, when you look at this discussion, you ask yourself, "Why on earth would anyone sign up to be a perpetual worker?" BUT -- there's a lot more to a business than just the skilled work. There's marketing, capitalization decisions, strategy, etc. Seems the businesses who are best at that will outcompete the others. I guess that then makes the argument for "professional management" (I promise I did not set out towards that goal ... I stumbled there by "thinking out loud").
    - steveklabnik 14y ago
      > But ... if the worker doesn't like it, why doesn't he start a business? Starting a business is not a possibility for many people. This requires initial capital, for example. Most people do not have capital. > And ... is it right for government to forcibly take a piece of ownership away and give it to the worker? Is that the proposed solution? Chomsky is an anarchist, so no, he would not suggest that. it's actually the opposite: the ability of the owner to retain ownership is due to contractual agreements that the state upholds under threat of violence. Without the state, corporations (and capitalism) are not possible. > Gosh, when you look at this discussion, you ask yourself, "Why on earth would anyone sign up to be a perpetual worker?" :) An observation that Marx made was that because the worker sells their labor-power (ie, capacity to labor), they do not get to retain the advantages of increased productivity: the capitalist does. When we become more productive, we have two choices: work less, or work the same and get even more. The ones with the power make those decisions, and since they're not the ones doing the work, guess which they choose? The movement from the 12 hour day to the 10 hour day to the 80 hour day to the 40 hour week was not due to productivity gains: it was due to socialist and other worker-led movements. > (I promise I did not set out towards that goal ... I stumbled there by "thinking out loud"). No worries :) I'd say that you're confusing correlation and causation: there are many, many more traditionally structured businesses than socialist ones. There are many success stories on the other side: http://en.wikipedia.org/wiki/Mondragon_Corporation http://en.wikipedia.org/wiki/Mondragon_Corporation
- gbog 14y ago
  Chomsky may have a more ductile view on ownership, when it applies to means of production. And you can't assume the rationality of the capitalist, many psychological and cultural factor play the game when choosing to empower workers or management.
  - charlieflowers 14y ago
    >>> "And you can't assume the rationality of the capitalist" That's definitely true. But, his business incentives are aligned with whatever is most effective. If he wins the business competition, he makes a lot of money. So at the macro scale, business owners would be inclined to do whatever works best ... as opposed to hiring a management layer they don't really need (and incurring costs) to adopt a less effective approach.
    - steveklabnik 14y ago
      > his business incentives are aligned with whatever is most effective at making money. Fixed that for you. Many, many things make lots of money but are not effective: http://en.wikipedia.org/wiki/Great_American_streetcar_scandal http://en.wikipedia.org/wiki/Great_American_streetcar_scanda...
      - charlieflowers 14y ago
        I agree with your edit. That's what I meant. But I don't think there's a huge gap between "what is most effective" and "what is most effective at making him money." Well ... OK ... I can think of examples when that gap is huge, so scratch that. The point is ... in the example of choosing between (a) hiring managers even though it costs more and is less effective, or (b) not hiring managers, saving that money, and being more productive too -- why would the capitalist choose to maintain a management layer?
        steveklabnik 14y ago
        > why would the capitalist choose to maintain a management layer? Humans are pattern recognition machines. Many successful companies have tons of managers: why try out this weird alternate strategy I have no experience with when so many companies work hierarchically? Starting a startup has so much risk involved, and risk needs managed. New management strategies are incredibly risky. I don't think the cooperative model being possible even enters into most people's minds.

cloudhead 14y ago

Because in general, the people with experience in the sectors he talks about will want a position of power, and aren't interested in working with their hands. Business owners want to hire these people (I won't place a judgement on the decision itself) and therefore need to have the open positions. Things are changing though, at least in the tech sector.