So far I have dealt with the conflict between the managerial class and the owner class. On the face of it, this should not be the case because the owner is superior to the manager. He can order him around and he can fire him. But this is only the case if ownership is linked to control.
I will now attempt to explain further. Ownership can mean control and ownership can mean profit. Ideally, they go hand in hand, but not always and not completely. Essentially, these are two modes of how owners can behave, and the transition between them is not easy and may even be impossible.
Ownership as control. The owner controls the factory, directs it, issues orders, changes technology, enforces actions leading to products being produced with certain parameters. Ownership is a source of power for him. Almost invariably, what is behind this is that he is interested in or even enjoys the activities of the enterprise. Don’t think about the money, it will just come, as one Czech tycoon put it.
Ownership as a source of profit. An owner sells his share in a factory, buys small blocks of shares in various companies, and then buys and sells those shares depending on who can give him how much profit or how the share price is doing. He doesn’t try to control any business in the sense that he can decide what machines are put in or how people are trained. He is not interested in machines or people. He’s not interested in the products either. He is interested in profit.
When Czech economist Ilona Švihlíková distinguishes between ordinary capitalism and rentier capitalism, it is a different way of looking at the same thing.
The path from ownership as control to ownership as a source of profit is easy. The path from ownership as profit-making to ownership as controlling is very difficult and often impossible.
The overall conditions in the Western world are set up so that the profiteering owners have a power advantage over the controlling owners. Which means, among other things, that the managers make the decisions. Hedge fund managers can fire Mr. Hewlett-Packard from the board because he has probing questions about their amazing vision (that vision later ended in debacle and the world’s largest computer maker at the time fell into the second tier). Hedge fund managers are trying to remove Elon Musk from Tesla’s board and it’s not impossible that they will succeed.
The Trump revolution can be read – among other things – as an attempt to change the situation.
