Comment by jstewartmobile | Hacker News Reader

Comment by jstewartmobile | Hacker News Reader

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I'd recommend James Burnham's "The Managerial Revolution"

https://archive.org/details/in.ernet.dli.2015.17923/page/n3

The gist being that the capitalist/socialist arguments--the ones we continue to wear into the ground--ceased to describe reality a very long time ago, and that real power is now concentrated in the hands of high-leverage organizational men: technicians, managers, bureaucrats, executives, etc.

I've seen his thesis play out so many times in business--where the owner is terrified of what his top salesman, or best engineer might or might not do. Imagine what would happen to Google if their top search guys just walked out one day. Basically, we have a participant who is technically a wage-laborer, yet has more power than an owner. This is even reflected in the share rights (or lack thereof) for many companies.

Outside of local restaurants and developing countries, long gone are the days of the "bourgeois capitalist"--who knew his business from top to bottom--managing unskilled laborers who were as interchangeable as nuts and bolts.

And yet, these highly-managerial firms do generally outcompete their smaller-scale rivals. Clearly, the advantages of increased scale are more than enough to compensate for its drawbacks, at least in many cases.

That's the point. The "highly-managerial" firm is the present and the future, and in that kind of firm, the capitalist/socialist bourgeois/prole framework is an inaccurate model.

They're like mini command-economies, each with its own commissars, competing with other mini command-economies, subcontracting some parts of their activity to tiny "bourgeois capitalist" enterprises, and others to modern-day slave plantations.

I think Ted Chiang called them the original paperclip-optimizers.

The vast majority of any labor force is of the unskilled variety. The "bourgeois capitalist" are still in full command, even at the largest and most profitable tech firms.

We will always have proles. That wasn't part of the argument.

Going by Marx, the "bourgeois capitalist" was an owner, and that owner had a very large say in how the enterprise was run. He had power. Tech companies remain one of the few cases that still adhere to the old formula--probably since they're not old enough to have fully diluted their ownership.

For older companies, the owners tend to be pension funds and retirement accounts. And the ownership is often so diluted that replacing an obviously bad manager rarely happens. The mutual fund just sells the thing at a discount, puts "company X ceased to meet our investment criteria" in the next prospectus, and maybe, if things get bad enough, a hedge fund will pick it up on the cheap and fire the managers--who should have been axed years ago.

With some of the newer companies, there are classes of share that are so restricted that--even if you owned a large percentage of them--you'd still have no say in how the company was run.

> And the ownership is often so diluted that replacing an obviously bad manager rarely happens.

It can happen via a takeover bid - essentially, a bet that whoever is making a bid for control of the firm will be able to increase its value enough to profit from that investment.

Yes, and how often is that takeover bid entirely in the hands of one person spending his own money?

More often than not, it is done by an organization--like a hedge fund, mutual fund, or pension system--that pools the money of several investors together (the owners) to make the bid. Yet the fund managers are the ones who make the call.

In some cases, like the hedge fund, the compensation structure forces management to have the same priorities as the owners. In other compensation structures--like mutual funds, where they get a positive percentage whether the investments go up or down--not so much.

it's no longer the proletariat, it's the precariat.

“Let us remember that the automatic machine is the precise economic equivalent of slave labor. Any labor which competes with slave labor must accept the economic consequences of slave labor.”

― Norbert Weiner, Cybernetics: Or Control and Communication in the Animal and the Machine

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