Social movement oligarchy

This analogy is going to make me unpopular with some friends. Meh.

Outside of the CEO class and the wingnuts who think that any criticism of actually-existing-capitalism is the beginning of a slippery slope that leads to Stalin, Pol Pot and North Korea, the following proposition should be uncontroversial; t he CEO-class are screwing the share-holders, running what should be a shared enterprise (cough cough) for their own benefit.  The share-holders aren’t bothered enough (usually) or engaged enough to do much about this.

My ‘controversial’  analogy is this:  this behaviour – organising life to the benefit of the “in-gang” at the expense of the stated aims of the organisation – is not totally unknown in “social movement organisations.”  There is a silent majority that thinks there’s a collective enterprise going on. They pay financial dues.  But there’s the active “core” that has other motives alongside (and sometimes in stated or unstated competition) with the organisation’s aims. There, I said it.

See this quote from “Oligarchy in the UK,” a review of Ferdinand Mount‘s “The New Few: Or A Very British Oligarchy”, published in this weekend’s FT. The review is by the FT’s chief leader writer…

What interest Mount is the way that this business class has managed to seize control of companies and extract such vast rents from them, almost irrespective of the wishes of their owners. THe answer, he suggest, is to be found in a basic flaw of shareholder capitalism. The inevitable dispersal of ownership that occurs in widely-held listed companies leads ineluctably to the entrenchment of management power.

This “principal-agent” problem has only deepened with the decline of the individual shareholder and his replacement by money managers who are naturally sympathetic to executives. … Freed from the tiresome constraints of shareholders, the only limits on pay are those imposed by executives on themselves.  But, as Mount points out, “a director who regularly votes for the lowest plausible pay rise for his colleagues is unlikely to prosper. He is the equivalent of the man who never stands his round or the journalist on expenses who never signs the restaurant bill for his colleagues’ lunch.”

See also:

Robert Michels on organisation

About dwighttowers

Below the surface...
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2 Responses to Social movement oligarchy

  1. James Doran says:

    I’m not sure this is such a controversial thesis. I’m always hinting to my Trotskyist (SWP/SP) friends that the fact they are in two different parties – with two sets of full timers and two separate newspapers – is a “return of the repressed”, reflecting the competition of different capitals, and that it would be in their best interests to co-operate, but it is the organisational interest which prevents this.

    Perhaps the only thing that would prevent the excesses of executive pay in the long term would be the kind of statutory changes to corporate governance that have been long opposed – regulation of pay differentials, worker representation, etc.

    • dwighttowers says:

      Yes, I may have oversold the “call me an extremist”/”Am I alone in thinking” line. Melodramatic. What is interesting to me is how the FT is doing some of the most supple thinking on all this – especially in their Life and Arts section on a weekend (a hotbed of radicals- seriously).
      We absolutely need a “high pay commission”!!

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