Re: HOMESTEAD: Ray Carey's Democratic Capitalism

[John Médaille <john@medaille.com>]

At 10:48 AM 7/27/2005 -0400, Keith Wilde wrote:
>A very few comments inserted.  It looks like changed fonts don't come 
>through, so I'll resort to CAPS.

I can't control the fonts when I send, but it doesn't matter, because the 
quoted material has ">>" at the beginning of the line.


>>Does Carey go into the reason for that? The reason is, imo, the agency 
>>dilemma and the costs it imposes on the organizational structure. If the 
>>interests of the owners and the workers are divergent, there will be 
>>tremendous managerial costs imposed to ensure that the "agents" of the 
>>owners (the workers) are carrying out the wishes of the owners.
>
>YES, THAT IS THE MAIN BURDEN OF HIS ARGUMENT. THE INTERESTS OF OWNERS, 
>WORKERS AND MANAGERS ARE NOT DIVERGENT, AT LEAST NOT IN THE LONG TERM.  IT 
>IS ONLY THE ABUSES OF "ULTRA-CAPITALISM" (E.G. STOCK OPTIONS) THAT HAVE 
>TEMPTED CEOs AND CFOs (AND THEIR ACCOUNTANTS) TO BILK AND GUT COMPANIES 
>FOR THEIR OWN SHORT-TERM SPECULATIVE PROFIT.

Which brings up another issue, the "management" class. Theory has "owners" 
and "workers," but in fact there is a class that is both neither and a 
little bit of both. So the question of factor shares gets a little dicey.


>>Usury has indeed been consigned to the Dark Ages, which is odd 
>>considering how dependent consumption is on borrowing. The last great 
>>thinker to take usury seriously was Keynes, who said:
>>
>>Provisions against usury are amongst the most ancient economic practices 
>>of which we have record. The destruction of the inducement to invest by 
>>an excessive liquidity preference was the outstanding evil, the prime 
>>impediment to the growth of wealth, in the ancient and medieval worlds.I 
>>was brought up to believe that the attitude of the Medieval Church to the 
>>rate of interest was inherently absurd, and that the subtle discussions 
>>aimed at distinguishing the return on money-loans from the return to 
>>active investment were merely Jesuitical attempts to find a practical 
>>escape from a foolish theory. But I now read these discussions as an 
>>honest intellectual effort to keep separate what the classical theory has 
>>inextricably confused together, namely, the rate of interest and the 
>>marginal efficiency of capital. (GT, 351-2)
>
>VERY USEFUL QUOTE.  I WILL HAVE TO RE-READ THE BOOK!

Yes, its a pretty succinct statement of the problem.


John C. Médaille

"A dead thing can go with the stream...
but only a living thing can go against it."
         -G. K. Chesterton
http://www.medaille.com/distributivism.htm
john@medaille.com

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