Re: HOMESTEAD: Ray Carey's Democratic Capitalism

["Keith Wilde" <keithwilde@sympatico.ca>]

Re your latest comment, John, Carey has a special section on how CEOs should 
be compensated.

Keith

----- Original Message ----- 
From: "John Médaille" <john@medaille.com>
To: <homestead@cog.kent.edu>; <homestead@cog.kent.edu>
Sent: Wednesday, July 27, 2005 11:08 AM
Subject: Re: HOMESTEAD: Ray Carey's Democratic Capitalism


> 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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