[p2p-research] newsweek on The Creativity Crisis

[Kevin Carson]

On Tue, Jul 20, 2010 at 9:58 PM, Ryan Lanham <rlanham1963 at gmail.com> wrote:

> > There is a great deal of good basic science that is privately funded.
> Personally, I like that model.  States waste.  It's that simple.

Politicians and bureaucrats ought not to be the ones who
> determine where and how societies spend their resources except in issues of
> national emergency and economic growth--much as Adam Smith advocated.

Nice work if you can get it...especially when someone
> else is paying the bill.

I agree, in principle--with the caveat that managers of giant
corporations fall more on the "state" side than the "private" side of
the state/private dichotomy.  Corporate senior management has most or
all of the charastics of bureaucratic state planners.

The idea of shareholder "ownership" of the corporation is a myth.
Proxy fights almost always fail.  After a brief period of successful
hostile takeovers in the eighties effective counter-measures were
developed by management so that almost all takeovers today are
friendly and in collusion with the management of the bought-out
company.  And most financing of capital investment is with retained
earnings rather than the sale of bonds.

This means that management is really a self-perpetuating oligarchy in
de facto control of a mass of unowned capital, investing money that
they didn't contribute and won't personally lose.  When Oskar Lange
and Fred Taylor came up with their "market socialism" model, Mises
pointed out that they weren't real entrepreneurs:  they were "playing
at markets" because they were risking other people's money with none
of their own to lose, but stood to collect the gains from any
successes.  If that isn't a textbook description of the incentive
structure for people like Bob Nardelli and the hedge fund managers, I
don't know what is.  And the sheer information and incentive problems
created by hierarchy within the "little Gosplan" of a corporation are
almost a direct mirror-image of the irrationality involved in state
planning.

-- 
Kevin Carson
Center for a Stateless Society http://c4ss.org
Mutualist Blog:  Free Market Anti-Capitalism
http://mutualist.blogspot.com
The Homebrew Industrial Revolution:  A Low-Overhead Manifesto
http://homebrewindustrialrevolution.wordpress.com
Organization Theory:  A Libertarian Perspective
http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html