Executives

[Lech]

A simple question.

Do executives (CEOs and such) deserve their large pay?

[Dimitri]

Someone "deserves" his pay if the the value of the labour he put on the commodities created by him, equals his remuneration.
Hence the answer is obvious. No!
It is ridiculus to have a CEO getting payed $300 000 000  a year for simple management.
Yes his job is important (although the nature of this job will be different under socialism), but does not deserve this much pay.

[Lech]

Thanks. I know it is a silly question but I couldn't figure out how to justify my answer.

[Dimitri]

No question is silly.
Ask anything you want noone will judge you.
Everyone needs to learn somehow.

[caesarscook]

I would add that "deserve" is a moral judgment and according to bourgeois morality, they do "deserve" their pay.  As according to this moral outlook, private property and its preservation (i.e. the "right" to exploit others) is the highest moral good.  However, the very conditions of existence of the working class produce ideas about "fairness" and what is "just" that contradict and are in conflict with tradition and the ruling ideas.  I think most workers' concepts of fairness and what is deserved far more approximate what Oi said than that of bourgeois law, justice, and morality.  There's a section in Alan's new book on Reformism or Revolution that deals with this, where he takes on Dieterich for saying that profits are "stolen" from the working class, which is (in technical terms) incorrect, as what is "stolen," i.e. unlawfully taken, is determined by the ruling ideas corresponding to the current mode of production.

[Lech]

No question is silly.
Ask anything you want noone will judge you.
Everyone needs to learn somehow.

I can't begin to tell you how much I appreciate that sentiment.

I would add that "deserve" is a moral judgment and according to bourgeois morality, they do "deserve" their pay.  As according to this moral outlook, private property and its preservation (i.e. the "right" to exploit others) is the highest moral good.  However, the very conditions of existence of the working class produce ideas about "fairness" and what is "just" that contradict and are in conflict with tradition and the ruling ideas.  I think most workers' concepts of fairness and what is deserved far more approximate what Oi said than that of bourgeois law, justice, and morality.  There's a section in Alan's new book on Reformism or Revolution that deals with this, where he takes on Dieterich for saying that profits are "stolen" from the working class, which is (in technical terms) incorrect, as what is "stolen," i.e. unlawfully taken, is determined by the ruling ideas corresponding to the current mode of production.

You make a good point. I suppose my question is better phrased as "In propotion to the amount of work that an executive does, has he acutally earned the money he makes?"

[PeasantsWithPitchforks]

I'm curious about the institution of private property....how is it exploitative again?

[Dimitri]

I'm curious about the institution of private property....how is it exploitative again?

When we say private property we don't mean your house, your toothbrush etc, we mean the means of production (land, factories etc).
To say it in simple words, the workers produce all the goods and services ,while they are paid a value a lot less than the value of what they produce. Therefore the emplyer appropriates the surplus value. The employer therefore is only a parasite feeding off the work of his workers.

[Domino_Gray]

Now, it seems the morality, or lack thereof, as well as the material manipulation of the modern CEO has been dealt with aptly.

I would however like to illustrate the progressively corrupting nature of an unregulated capitalism. See, in truth, not all capitalism is evil and much of the reasoning behind it, is solid. It is however requiring of a responsible, objective and reasonable body of oversight who has the exclusive purpose of ensuring the well being of the Nation's economy, and subsequently the people who make up that nation. After the great depression in both Britain and America, and the adoption of Keynesian mixed economics, we find fine examples of functioning and healthy capitalism. 

The of course, like a sharp repetitive pulsing music in a horror flick, inevitably enters scumbags like Nixon, Reagen or Thatcher. These people manipulate the overly simplistic understanding and personal prejudice of their constituency. They use Cold war drivel to push people into seeing socialism as wicked and oppressive(Please watch Reagen's Evil Empire speech). Using the misinformation about socialism, they vindicate themselves and pressure people, with confused notions of patriotism, into deregulating the market to serve the personal interest of the private sector.

To demonstrate the effects, I would like to cite an interesting little number. In the 1980's the average CEO was around 50x his employee. Considering that it was a basic management position, the idea of them earning that much was offensive, but hey, that's capitalism. Now however, the gap has widened so that the average American CEO makes somewhere about 350x his average employee.

Capitalism is venal. Capitalism is an abstraction, that lives outside itself. It creates self propagating desires, to ensure its own existence. It creates the culture of the Super Consumer. The evolution of the CEO is the purest reflection of the true nature of an unobserved capitalism.

[Pie]

Domino_Gray-
Are you in supporter of "regulated capitalism" or "Keynesian economics?" Your post makes me think so.

[Domino_Gray]

I am a rabid socialist. I also thinks Keynes was one of the most brilliant men to have ever lived.

It's not that I'm a supported of Mixed economics like Keynes. It's just that I'm not an opponent of it. I see a lot of the merit it has, I just don't personally subscribe to it.

[Pie]

Why are you not hostile to "mixed economics?" Seems like an awkward position from one who claims to be a "rabid socialist."

[Domino_Gray]

There is absolute merit to the production models in a capitalism. Even Marx conceded to this point. The issue is the irresponsible, dehumanizing and corrupt nature of capitalism. With a theorist like Keynes, the same man who singlehandedly both saved America and Britain and is the premise for almost all social institution in the West, sometimes you're forced to respect the enemy.

From an personal, moral, political ideology I am a "rabid socialist". However, I recognize the economic legitimacy of Keynes. I would to be so simple as to only see one way.

[caesarscook]

With a theorist like Keynes, the same man who singlehandedly both saved America and Britain and is the premise for almost all social institution in the West, sometimes you're forced to respect the enemy.

Keynes did not "save America."  In fact, if you are referring to the New Deal policies and the deficit spending they actually did not end the Great Depression in the US.  It was the increased production output in the war industries that got the economy moving and people back to work.  The New Deal policies were partial concessions to the working-class, but they did not end the Depression.  The same is true during and after the war, where Keynesian spending became more and more pronounced and progressively more explicit, e.g. "We're all Keynesians now."    But on what basis was this done? 

It wasn't done because deficit spending is a particularly successful policy.  It's not.  It inevitably creates conditions of hyper-inflation, as debts (even government debts) must be paid back.  No, the reasoning was that they could afford deficit spending on social programs in order to attempt to placate the working-class and create temporary and uneven "stabilization" of the class struggle.  But why could they afford this extra expenditure?  It was not because of the success of deficit spending in the 30s.  It was through the widespread destruction of the means of production wrought by the war, which created the pre-conditions for a re-establishment of a high rate of profit on the one hand and the opening up of the former colonies of the European powers to the U.S. market on the other. 

For the first, it goes without saying that the general tendency is for a progressive increase in the organic composition of capital as technology is introduced in production.  This results in a tendency, not a law or absolute, for the rate of profit relative to living labor (variable capital) to fall.  This results in crises.  There are countervailing factors and means for capitalists to try to combat this tendency, decreasing wages, increasing hours, or trying to squeeze more output within the given labor time, but ultimately, in a crisis, the rate of profit is only re-established through the destruction of the existing means of production, among other factors. 

This is what the war did.  The devastation of Europe by the war meant that it had to be rebuilt, the devastation of whole industries meant that capital became further concentrated, the "liberation" of the colonies from formal colonial domination meant the opening up of their markets.  All of these factors allowed for the huge post-war boom in the U.S., which in turn, through the mechanisms of world economy filtered throughout the imperialist west, allowing the Western capitalists to offer huge concessions to stave off discontent.  However, to laud these reformist deficit expenditures, which were made entirely on the backs of the Third World (Keynesianism really pre-supposes imperialism and is unthinkable as a "practical" policy without it), seems to me inappropriate.

We, of course, don't oppose reforms.  We're for whatever can be wrenched from hands of the bosses, but Keynesian deficit spending is not a long-term solution, as was proven in the 1970s, when the post-war market expansion reached its limits.  From that point to today, we have seen a back and forth in country after country between Keynesian spending and orthodox free-marketeering, neither offering anything that is really practical.  In fact, they actually sort of play off of each other, both being able to point out obvious flaws in the other economic theories, "switch places," and then do it all again.

And you are actually correct, Keynes was a brilliant man, brilliant at defending his class interests.  For example, his argument that workers would not accept pay cuts, so in order to increase profit output relative to wage expenditures, his deficit spending would do the trick, as the inflation it causes would decrease wages relative to inflation, as wages are fixed by contracts, while prices are not, is one of the most disgusting and cynical ways of trying to "trick" workers into pay cuts, but it actually does work for a time, as has been seen in the U.S. since the 1970s.  But who does it work for?

There is absolute merit to the production models in a capitalism. Even Marx conceded to this point. The issue is the irresponsible, dehumanizing and corrupt nature of capitalism.

Actually, this is not exactly what Marx argued.  He did have much praise for capitalism relative to feudalism, but nothing more.  He did not envision a mixed economy of any kind.  His visions for what communism would look like are laid out in their most detail (Marx actually avoided doing this most of the time, to his credit, as it was sort of a fetish of the Utopians) in his Critique of the Gotha Programme.  It is important that we make clear that capitalism is historically progressive relative to feudalism and lays the economic foundations for socialism/communism, but at a certain point, private property comes into direct conflict with social production, a rough paraphrase of Marx.  The only resolution is the transformation of private property into social property.

[Domino_Gray]

Now hold on. There's some misleading assumptions made here. Now, I recognize that because you obviously dislike Keynes, a real middle can't be met here. I don't expect to convince you to love Keynes, especially as I don't. I myself not subscribing to Keynes kinds of undercuts any points I might make. I would like to however offer an alternative understanding and clarify a couple of misstatements. By the way Ceaserscook, it should be stated that I'm onsessed with macroeconomics. Don't break my wee heart too much on this one:p

Now, the argument of the military industrial complex becoming the foundation of the American economy is one I won't refute. Mainly because it's right.

It is however unfair to completely disregard the effects of Keynes in America. Let's start with some quick history brush up. The events leading to the 1929 crash was completely foreseeable. It is unfortunate then, that the only person who saw it coming was Keynes. He consistently wrote, preceding the 1929 crash, the dangers of sticky prices and the dangers of unregulated speculative investment. The liberal capitalists argued the free market's hand will guide us invariably, and that the principles of supply and demand would protect us completely (mainly because it was those same principles that put money in their pockets). But of course, corporatism was formed, banking institutions function on concepts of profit instead of national well being, and greed silences reason.

Well, as is inevitable with speculative investment gone unwatched, the bubble burst. Capitalist dogmatism completely lost all credit. Suddenly the workers were forced to recognize that maybe, just maybe, pure self interest isn't the most responsible force for allowing the market to be free. What's worse, the ignorant pricks across the world reacted by adopted protectionism (Does any of this sound devastatingly familiar?). This cut world trade in 2/3rds of it's 1929 self, and so no one had the means to recover. Economists STILL refuted the evidence of Keynes and pricks like Rockefeller convinced the American people it was nothing more than a phase, and to continue to place the same blind faith to the market.

Well, apparently, having no world trade flow and over a quarter of your nation's population unemployed will create a loss of revenue. Continuing, to what was surely a mind blowing notion to men who had devoted their lives to the understanding of economics, apparently if there's a loss of jobs, there's less money spent. If there's less money spent, then there's less business revenue. If there's less business revenue, there's less jobs to be had. If there's less jobs to be had, there's less money spent. You start to see here why a depression in a "Classical" market is fucking horrifying.

Now all of this is just a history page placed very much in the layman's terms. Now what you seem to imply here ceaserscook is that Keynes was nothing more than another mask on the same Devil. He created however some key notes that I will argue not only significantly curbed the detriment of the Great Depression, but also introduced concepts very much on the side of the socialist agenda.

You knock very heavily deficit spending. The entire economy works on the premise of deficit spending. Deficit spending is the nature of healthy investment. But we'll assume of course, and I believe rightly, that you mean deficit spending to the terms pronounced by Keynes with famous lines like the "The government should pay people to dig holes in the ground and then fill them up".

Let us observe the contrary side, the classical labour argument. I will digress quickly to apologize for the way I may jump between America and Britain interchangeably; I just feel like that Keynes was too present in both nations to only limit myself to one. Well, continuing, the labour party argued of all things, as you seem to suggest is a wise policy, that they need above all things to balance the budget. How did they intend to accomplish this? Raise taxes and cut unemployment benefits and social programs. Fucking mind bogglingly stupid. Keynes was sadly in the minority when he said we needed to do everything exactly contrary to this. I will now emphasize the premise of these suggestions, as they are very much in the interest of socialist thinking (Being the "third wave" option to capitalism and socialism)

First, in times of absolute economic crises, it is the duty of the government to do everything it can to stimulate the economy, as it has failed largely enough that it risks circular recession(Otherwise called a depression, lol). To start, the government must absolutely create jobs. There can be no economy without production. It doesn't matter what is being produced, so long as something is. Secondly, and this is why Keynes is deemed as the centrist alternative to Classical Capitalism, broad based tax cuts to the lower class. Furthermore he pushed for the establishment of national social programs on a scale unheard of. To the Brits, they call it the dole. The yanks call it welfare. Keynes called it salvation. No socialist in the world would say that in times of poverty, easing taxes off of the poor working class is a bad thing. No true socialist would argue, as well, that creating jobs through government spending, so that the working class may have a means to support themselves is a bad idea, as this too is endemic of socialism.  Keynes however used sound selfish thought to rationalize it. If the way to end the depression is to get money flowing again, then by giving the money to those who need to spend that money for basic living standards, the money can not be saved or hoarded. It immediately must be spent and resurface itself as the face of prospering business, now ready to hire men on for legitimate work. Brilliant!

Now, you referenced the New Deal, which serves both our arguments. The New Deal was half assed. Citing the New Deal to debunk a Keynesian is like citing Mao to debunk a Communist. It was however, the best half an ass ever laid down on a lap! Yes, it placated and paid lip service to a lot of the real issue that were crushing the working class. But it was able to placate it, because it lowered the unemployment rate 10%. Now I can tell you with absolute certainty that were it not for The New Deal, the depression would have deepened, not lightened. Btw, "We're all Keynesians now" was a knock at Keynes, not a support. It was said by Friedman, who is as right wing as an economist gets. It was said with a satirical scorn and real bitterness.

There is a similar tale in Britain. Keynes was kind of adopted, and as a result the depression was kind of slanted.

Then the war struck. I say you declaring all economic improvements to be the result of a war time economy and the opening of new markets to be the exclusive reason, to be very glib, as the upward slants were indicated starting way back in 1933, 6 years before the war.

I'd also like to quickly touch on your comments regarding the hyper inflation of deficit spending. This much is true. A high debt will devalue the dollar as excess currency will have to be pumped out of the establishment. But once again we find the masterpiece of Keynes present in "The New Deal" fighting against two of your points regarding his supposed ineffectiveness. Keynes was a proponent of manipulating the Gold Standard to encourage trade. Following the advice of Keynes, Roosevelt deliberately devalued the American dollar internationally, which intertwined perfectly to manipulate a conscious inflation (what we are talking about here is the premise of macro economics). It is here we find that deficit spending in times of world wide economic downturn is brilliant. By devaluing the gold standard it wasn't required to raise prices in America and devalue the dollar as much as it was in places like Germany. As if this wasn't a genius moment of economic twisting, world trade was encouraged by the devalued cost of American goods. The markets you claim to be opened exclusively by the war, were in fact turned to buy American precisely because of Keynes.

"However, to laud these reformist deficit expenditures, which were made entirely on the backs of the Third World (Keynesianism really pre-supposes imperialism and is unthinkable as a "practical" policy without it), seems to me inappropriate."

I think it's hardly fair to discredit an entire economic theory because it supports globalization. All economics, especially Marxism, supports globalization. Globalization is just the only way. Protectionism is self defeating and dependency theorem is ignorant.

In a time period of depression, Keynes managed a way to promote business, create jobs and encourage trade. In other words, he was brilliant. He completely redefined the economic world, and offered the third option to cappie vs commie.

Yes, I am not a Keynesian. But you're damn right I respect him