The following is an excerpt from Marjorie Kelly’s book: The Devine Right of Capital
“In major companies today stockholders serve about as many functions as an eighteenth century French marquess, which is to say almost none. Except collecting their own income.”
How would you respond to this statement?
By major companies, she means publicly traded companies. Privately owned companies are directed to a much greater extent by their shareholders, as the shareholders are typically the officers.
A little sloppy on her part.
I wonder if Marjorie Kelly understands why private business owners would ever issue stock in their company and take on stockholders that contribute nothing (sic).
I guess entrepeneurs are just teh stupidz.
A few additional excerpts and questions from Marjorie Kelly’s book: The Devine Right of Capital
“Employees are said to have freely contracted for their wage, so that’s all they get. They are believed to have freely consented to an arrangement where they have no property rights and no governance rights-much like wives of old, who were believed to have freely consented to the loss of their property rights upon marriage.”
“When economic texts and business press trumpet phrases like free enterprise, free trade, and the free market, there is a contradiction staring us in the face: that free enterprise is in the business of trampling freedom.”
Again, I would appreciate any responses to the above passages.
Also, do you think that there is a wealth bias exhibited in corporations where non-stockholding employees are not compensated appropriately for their labour and unfairly locked out of decision making processes?
how so?
This argument is so convulated. What property rights are workers giving up? The marraige thing is an appeal to emotion designed to sort of get your blood boiling, but what exactly is the connection she is making here, it seems like a painfully dishonest argument.
Sounds about right. You don’t get more than you agreed to.
Non-sequitur.
Non-sequitur.
What is a “wealth bias”? People with money, have more control and more options. That’s how we end up with successful firms prospering, and unsuccessful firms failing. It’s how a rational world works.
Non-stock holding employees, are only employees. If they can get better compensated, they would change jobs. They aren’t indentured servants. Particularly in the west, we have a lot of options, from joining the public service, going on welfare, opening our own businesses, changing jobs etc.
What is “unfair” about not being allowed to participate in the decision making processes? They are employees. They are paid now, rather than waiting for a share of later profits (or loss) because they do not have an interest in how the capital of the firm is utilized. If they would be willing to forego wages, and to take the risk of generating a profit or loss (essentially becoming stakeholders) then perhaps they might have a claim to a voice on how the business is run. But since they get paid before the shareholders take a profit or loss, and assume no risk, why should they have any place in negotiation?
I am all for worker owned and managed collectives. There is nothing stopping leftists and progressives from opening them RIGHT NOW. The problem is, they don’t want to take risks, they only want the upside, and they don’t have the capital to invest (they want capitalists to fund their adventures), or a conception of how to manage such an enterprise to a sustainable and successful end.
Workers are NOT managers. The distinction is very important, and anyone who has worked in a minimum wage job, knows the difference between a casual labourer, and someone with the capacity to organize, delegate, and plan.
Exactly. I don’t think I’ll ever understand the left’s fetish for equal worker ownership. What is so damn noble and just about workers owning their own firms? Why is it less noble to have shares in a number of firms? Or none at all?
Furthermore, why does an expansion of ‘workplace democracy’ require pure worker cooperatives? This article implies that it doesn’t: http://www.csmonitor.com/2006/0823/p09s01-coop.html
I googled Marjorie Kelly and it came up as a journalist, i.e. stupid and ignorant.
Throughout The Devine Right of Capital, Marjorie Kelly continues to drive home the point that the value of stockholders in our economic system is overstated-with employees and society overall losers in the current arraignment. I am finding it difficult to reconcile the following passages with what I have picked up along the way from reading works by Mises, Friedman, and Hazlitt. What would be your best response to Kelly’s commentary below?
“The liberty that capitalism invokes is thus a medieval notion of liberty. It is liberty of property: freedom as the right to the undisturbed possession of property. In the days of the feudal barons, this meant freedom from the king’s interference. The lord of the manor could do what he liked within the bounds of his own estate, and his serfs had no recourse.”
“In the democratic era, we recognize a different concept of liberty, liberty of persons: the right to full personhood, no matter how low one’s station. All human beings have the right to dignity and freedom. This is a liberty we turn to government to protect. But where liberty of property is paramount, liberty of persons does not exist.”
“Democratic freedoms stop at the company door, because inside the corporation the democratic polity is no longer sovereign. Here we can see how private property and liberty combine into economic sovereignty: the sovereign power has liberty in its own private realm. Stockholders are sovereign because we believe they are the corporation, much as the medieval world believed the king was the state.”
“The time has come to recognize that corporations are not just pieces of property but are something more complex and alive, requiring a more nuanced set of human rights. Shareholder property rights can remain in some measure, but they must take their place alongside property rights for employees and the community. Because all persons are created equal, the economic rights of employees and the community are equal to those of capital owners. Aristocratic privilege must give way to economic equality, in a new corporate order that recognizes a constellation of economic rights.”
she is incoherent. she speaks in gibberish. do you find it convincing?
It’s just another excuse to justify further transfer of ownership from the private to the public sector. Share holders retain the right to sell their shares! There is no greater and more important aspect of ownership.
She is trying to imply a connection which simply does not exist. Capitalism is not about favoritism. In a capitalistic society, the employee has the same exact rights to employer has. The employee has the right to accept a contract, just as the employee has the right to break the contract (and suffer the consequences, as outlined by the contract). She also does not consider that what disallowed private property ownership in a medieval society was the State. In a capitalistic society, private property could be accumulated by all those who have the means to do so, and there would be a greater percentage of persons with the capability to acquire private property. There are no land redistribution schemes in Spain, currently, but yet the average small farmer is better off than the South African small farmer or Zimbabwean small farmer who received their land after it had been stolen from the wealthy. And, the average small farmer in Spain also has a greater ability to acquire even more land.
Why not?
This is partly true, but she ignores the fact that a corporation cannot coerce somebody to accept a contract, while the State can. There is a very important difference she does not want to cover between Capitalism and feudalism. Is she a Marxist?
Everybody is born with the same economic rights. Some use them more efficiently than others. This is what causes disparity. But, this disparity is not a bad thing. It allows for investment and economic growth, which ultimately benefits those who make less money, because their wages will increase.
I am not convinced that her idea of “economic democracy” or changing ownership rules with respect to private party is desirable. It is my understanding that ownership of private property is key to economic freedom and to raising our standard of living. Furthermore, I am at odds with her notion that all people are created equal. In reality, we all have different levels of natural talent, education, experience and skills. Also, two people may be relatively close in their ability to complete a task; however, there may be different levels of motivation which causes one to be more productive than the other.
Here are a few additional quotes where Kelly attempts to separate her argument from the ideas commonly propagated in communist theory.
“Wealth should not be dispersed entirely, as communism attempted to do. Communism aimed for equality of outcome, when the more proper remedy is equality of opportunity. Communist theory did correctly identify property (wealth) as the source of the problem, but in seeking to eliminate private property altogether, it eliminated incentive. Without the engine of self-interest, the system foundered.”
“The point is not to do away with wealth but to change the system design that gives illegitimate power to wealth-just as in the fight against sexism, the point was not to do away with men but to change the system that gave illegitimate power to men.”
“Many of us would like to acquire wealth one day, and the possibility of doing so should remain open-though it should become broadly open, to employees as much as entrepreneurs, to community members as much as stockholders. And as we broaden the potential to attain wealth, we should also change the mechanism by which much concentration of wealth rises, which is inheritance.”