The Corporation in America
Kuttner, Robert
In November 1932, in the pit of the Great Depression and within a week of Franklin Roosevelt's election, Macmillan published Adolf A. Berle and Gardiner C. Means's The Modern Corporation and...
...Software innovation may thrive in an Adam Smith—style economy of thousands of independent producers...
...Or the recognition of new classes of "stakeholders," including communities and employees...
...Challenging Schumpeter and Galbraith, but as progressives, Adams and Brock offer hard-to-refute examples of the plain laziness and stupidity of large corporate managers...
...Government's own large pools of capital, notably the Social Security trust funds, which are now invested exclusively in the government's own bonds, could be invested more pro-actively...
...Unions, of course—both as the most immediate counterweight to corporate power and as broader political actors in society...
...John Kenneth Galbraith, in contrast, has viewed corporate bigness as inevitable and perhaps economically functional...
...To whom should it be accountable...
...It is only in the context of a total lack of authority and responsibility that union locals emphasize wage gains rather than the long-term health of the enterprise...
...In the American Economic Review, the economist W. L. Crum, a paragon of orthodoxy, attacked it for overstating the true degree of economic concentration...
...The monopolist maximizes earnings by raising prices and depressing output—and society is the loser...
...Such industries are linked closely to governments, either for defense purposes or because of logical economies of scale and requirements for huge capital outlays...
...Hence they cannot claim to be optimizing for society generally...
...When have they been less sacred in America than in the last three years...
...If we are to have "free trade"— that is, relatively open commerce—among nations with different competitiveness strategies and different levels of wages and living standards, such commerce must be predicated on a common social charter and on worldwide high growth...
...Then, to echo Berle and Means, how do we make sure that these same corporations serve a broader interest than that of their current executives...
...All workers would be paid a "second stream" of income derived from partial ownership of their companies...
...Even Sweden, where social democrats know a thing or two about the power of capitalism to undo the compromise of the "Third Way," the Meidner plan, which proposed wage-earner funds held in the name of workers, providing an income stream for workers, but not able to be sold or speculated upon, was approved only in a very truncated form...
...There are four other candidates as instruments of accountability: the workers, the government, "the community" (sometimes represented by outside directors), and the corporation's bankers...
...There are really several distinct issues here...
...Finally, despite the giddy experiments of the 1980s attempting to make managers accountable by threatening or consummating hostile corporate takeovers, the result was no improvement in either productivity or accountability...
...The remedy here is not to turn institutional investors into monitors of management but to insist that they fulfill their logical role as sources of "patient capital," by conditioning their tax status on long-term holdings...
...As practical reformers, they looked forward to more of a Croly-style remedy, in which nominally private corporations would be operated almost as public utilities, with managers as a technocracy and "public policy rather than private cupidity" deciding where the profits went...
...The match was made in 1928 when Means, then thirty-four, journeyed to New York to direct a Social Science Research Council study on the impact of corporations on society...
...Classical economics is all about the efficient deployment of resources that results from supply responding to demand via signals embodied in prices...
...and technocrats play at least as strong a role in shaping organizational goals as they do here...
...the ideal remedy was to restore corporations to shareholder control and to reduce their concentrated market power...
...by classical theory...
...Stockholders toil not, neither do they spin, to earn that reward...
...unpublished, forthcoming from the U.S...
...Many on the moderate left, including Seymour Melman, Edward S. Herman, Mark Green—as well as most of the Marxian left—find the modern corporation an affront to productive efficiency as well as to social justice...
...Over the years, the right has generally attacked Berle and Means, both for challenging standard theory and for inviting economic intervention...
...norms...
...corporations are newly discredited, for their failure to deliver either job security, reliable profits, national loyalty, or "competitiveness...
...But logically, it is the worker who cares most about whether the company is around in a decade, not the shareholder, who is free to sell out at a moment's notice...
...If managers are not subject to the direct discipline of their ostensible masters, and if they are rigging prices and squirreling away profits, it follows logically that corporations are unlikely to be operating in the best interests of either their owners, their employees, or the efficient optimum based on supply and demand assumed This article is part of a series on the American economy made possible by a grant from Harry Kahn...
...It has produced a weird oscillation between price fixing and ruinous competition, leaving most airlines in the red and re-creating the airline cartel, but without either the security or the policing of rate and route regulation...
...In their view, economic concentration, financial manipulation, and administered pricing were implicated in the Great Depression because they invited speculation, distorted prices, and, hence, retarded economic efficiency...
...Both books suggest something of a new social contract, in which unions and workers commit to a new flexibility, a willingness to absorb changing technologies, and a new commitment to the profitability of the enterprise—and managers commit to stop bashing unions...
...Apparently, in some systems and some industries large scale and oligopoly pricing power are conducive to technical progress...
...It offered middle-class pay, stable employment, career ladders, fringe benefits, and, above all, job security...
...Kelley and Watkins argue that because of the atomization of American WINTER • 1993 • 41 industry generally and the American antipathy to planning, the network of Pentagon contractors stands out as of the few oases of planning, in which the security of long-term contractual relationships exists and best-practice manufacturing techniques are diffused from Pentagon sponsor to prime contractor to subcontractors...
...Government can legislate codetermination, so that managers are accountable to workers, and genuine profit-sharing, pension entitlement, and shared ownership to redeem the promise of Meade and Kelso...
...The Japanese Keiretsu system, likewise, offers a Schumpeterian blend of dynamic innovation and rapid diffusion of technical learning, but within an institutional system that is stable and durable...
...The industries that used to enjoy stability thanks to regulation—airlines, telephone companies, trucking, broadcasting—have now been cut loose to compete in the marketplace...
...His countryman, the social democrat Sir James Meade, writing at about the same time, posed in Efficiency, Equality, and the Ownership of Property (1965) the practical egalitarian policy choices for the mixed economies of the West as these: a redistributive welfare state (too bureaucratic and requiring too high a tax burden), a trade union state (the unionists would bargain too hard for wage increases that would be inflation44 • DISSENT ary and that would eat society's seed corn), and a "property-owning democracy" of broadly distributed shareholding wealth (Meade's own favorite...
...in other circumstances, innovation thrives on atomistic competition...
...But this is another false choice, as suggested in two of the best recent books on workers and global competitiveness, Irving and Barry Bluestones' Negotiating the Future, and Ray Marshall and Marc Tucker's Thinking for a Living...
...Kelley and Watkins analogize the American system of Pentagon contractors to the Japanese Keiretsu—the intricate web of industrial networks...
...I remain skeptical...
...Although antitrust was revived somewhat, the First New Deal accepted the idea that concentration and market power were not necessarily evil, particularly in a depression that saw ruinous competition and falling prices...
...Their book fed into a broad stream of works that undergirded the economic interventionism of the Roosevelt era...
...Ralph Nader in the early 1970s proposed an overhaul of corporate law, requiring very large corporaLions to be federally chartered...
...The work force often gets a bum rap as seeking to maximize wages at the expense of investment...
...Millstein wants these big institutional investors, which own about half of all corporate stocks, to hold large blocs of stock for the long term, "provide patient capital and oversight, and selectively engage in corporate governance...
...What we have got to accept is that it has come to be the most powerful engine of . . . progress and in particular of the long run expansion of total output...
...The book quickly became a classic referent in the debate about the social role of the corporation, and it still is...
...The private cosponsor enjoys the exclusive right to license any jointly developed new technology for a period of years, the precise terms to be negotiated case by case, but the technology is permanently owned by the government and will eventually be licensed to competitors...
...Ira Millstein, a prominent Wall Street lawyer and crusader for reform of corporate governance, has argued that the dominance of institutional investors 46 • DISSENT can be turned into a virtue by regulatory changes that would allow them to play a more genuine role as the corporation's real owners...
...What does it owe society in return for the privileges and immunities it gets from the state...
...the real economic problem, therefore, is the institutional cultivation of innovation, not the perfection of price competition...
...aircraft innovation may require oligopoly, market power, and government presence if not govern42 • DISSENT ment regulation...
...Although the new management literature celebrates the empowered worker, little of it calls for a true shift in power...
...In the meantime, Roosevelt sponsored the short-lived NRA (National Recovery Act) in an attempt to cartelize industry and stabilize prices...
...Thus it is not sufficient to argue that because perfect competition is impossible under modern industrial conditions . . . the large-scale establishment or unit of control must be accepted as a necessary evil...
...Rather, the hero of theorists like George Gilder and his allies at the Wall Street Journal and in the Jack WINTER • 1993 • 37 Kemp—Phil Gramm wing of the GOP is the lonely entrepreneur...
...Within the economic priesthood, there has been for the most part a studied ignorance of the relationship of size, economic concentration, technical innovation, and growth...
...One concerns the sources of economic growth...
...The German and Swedish models of codetermination provide convincing proof that worker involvement in management is not only a good local form of managerial accountability (workers, unlike outside directors or shareholders, really know what questions to ask managers...
...On a day-to-day basis, managers did not become more accountable, only more insecure...
...This was the hallmark of what Michael Piore and Peter Doeringer were the first to dub the "primary labor market...
...The same basic debate reverberates to this day among American progressives, and its boundaries are far from clear or coherent...
...We must first consider the dilemma that most vexed Berle: the issue of who was properly entitled to all of the social wealth generated by managerial capitalism...
...The postwar boom was the golden age of stable oligopoly in large basic industries...
...As soon as growth slowed and unions were bashed, after 1973, pensions began to be cut back...
...Steel squandered its huge technological lead by investing in open-hearth furnaces that were already technological dinosaurs...
...Many American scholars have lately seen economic virtue in the German system, with interlocks between banks and corporations as well as labor-management co-determination, which taken together gives corporate executives close oversight from both workers and financiers, plus insulation from financial pressure to produce quick returns...
...And in Europe and America of a quarter century ago, there was the hope that the primary labor market would gradually expand to cover more and more workers...
...Thus, to review Berle and Means after sixty years is also to review three long-standing debates in political economy...
...Today, the world has been turned upside down...
...Aircraft is a good example, as is telecommunications...
...The effect of airline deregulation, for example, has not only left the traveling public with a bewildering blend of intermittent bargains and more usual cases of outright gouging...
...Ralph Nader, in the Brandeis spirit, has viewed the big corporation as generally malign—big, dumb, out of control...
...We could restore the 50 percent tax rate on corporate profits that obtained during the postwar boom...
...Still others on the left, such as Charles Sabel and Michael Piore, have insisted that innovation (hence growth) flourishes at smaller scale via a different sort of networking that empowers skilled workers and relies on a kind of updated artesan model...
...And when some pension funds have tried to get involved with management, the result more often than not has been to increase pressure for dividend payouts...
...Contrary to the idealized picture drawn by Adam Smith, corporations thus had substantial market power to administer prices...
...their only real power is their ability to sell off shares...
...The UAW never quite obtained Walter Reuther's longstanding demand for "a look at the books...
...Corporation, union, and government co-existed in a kind of equipoise...
...A new social contract must work both ways...
...Gilder fully shares Nader's disgust with General Motors...
...A combination of global competition, footloose capital, deregulation, and the shrinkage of military contracting leaves even the mightiest corporations without security in which to plan for the long term...
...GM 38 • DISSENT keeps proving Berle and Means's point that huge corporations answer to nobody...
...The New Deal did bring securities markets under much tighter scrutiny, it legislated the greater financial disclosure favored by Berle and Means, and it abolished—at least until the 1980s—the kind of financial manipulation they abhorred...
...All of this dealt workers as well as shareholders in on the profits...
...What is the relation of size and market power to innovation, growth, and the ability to sustain a social contract with labor...
...However, as Shiller goes on to point out, "The average institutional investor sells 40 percent of its stock holdings within a year's time of purchase...
...It is very hard to import the culture of German or Japanese capitalism...
...However, others on the left have looked longingly at the stable, dynamic, large corporations of Germany and Japan as well as the social contracts they permit...
...Even large firms like IBM, which enjoyed shelter from ruinous competition as scientific "first movers" with large-scale market power and proprietary technology, are being nibbled to death as advanced products become more like commodities...
...Berle and Means, and their heirs in the field of industrial organization, thought it mainly involved whether the financial and industrial economies are efficiently organized—an entirely different variable...
...It also undid one form of undue economic concentration, namely the ability of commercial banks to use depositor money to underwrite corporate stocks and bonds...
...However—and this was industry's quid pro quo—unions were refused any "management prerogatives...
...Berle and Means's timing was superb...
...But since the American corporation is governed mainly by state law, the New Deal did little to change the structure of the firm itself or the form of its governance...
...Second, American leaders can enlist other industrial nations in a program of global high growth and debt relief for poor nations and those of the former Soviet bloc, so that these nations become markets for American exports...
...Even a manager with the best will in the world—and the best union—cannot guarantee that the company will be in business next decade, or even next year, to reciprocate the workers' loyalty...
...Time magazine, with its usual hyperbole, described the book as "the Bible of the New Deal...
...Most studies have shown that leveraged buyouts enriched mainly their promoters...
...Its force exists only in direct ratio to the number of individuals who hold such wealth...
...The Wagner Act offered something of an internal corporate system of checks and balances, but only in firms that were unionized...
...If you did your job reasonably well, the job would be there tomorrow...
...The Twentieth Century Fund task force cites Berkshire Hathaway, the almost legendary investment/holding company run by Warren Buffett, for its constructive, long-term relationships with the companies whose stocks it held, such as Coca-Cola, GEICO, the Washington Post, and so on...
...In the New Deal era, however, as long as government was in friendly hands and unionism ascendant, corporatism looked to many progressives like a good way of converting giantism to social ends...
...In economic parlance, innovation is "exogenous" —the main economic problem is allocative...
...Are size, scale, and market power necessarily inefficient and antisocial...
...When a zealous executive read an advance summary of the book, he requested Commerce Clearing House to kill the book in deference to GM...
...This approach Kelso dubbed "two-factor" and later "binary" economics...
...In a later issue of the same journal, the more liberal economist Ben Lewis defended Berle and Means, but presciently averred, "It is altogether likely that WINTER • 1993 • 35 The Modern Corporation and Private Property will be productive of more pronounced and sustained results in the field of law and public policy than in the realm of economic theory...
...It will come as no surprise to readers of Dissent that the leading candidate to whom managers should be accountable are the corporation's employees...
...The GM outside directors have been a force for even more merciless cost cutting, plant closing, and employee layoffs...
...Government cannot prevent corporations from building factories overseas, but government does not have to subsidize them...
...A related debate has to do with the preconditions of technological progress— whether it tends to inhere in large, stable firms or small, entrepreneurial ones—of which more 36 • DISSENT shortly...
...Berle's answer, which now seems naive and dated, is that the increasingly broad distribution of shareholding suggested a possible social defense of shareholder income...
...48 • DISSENT However, in the newly turbulent global economy, a social contract in one company is as elusive as "socialism in one country...
...All of this was intensified by the Second World War, which at last created a true planning system...
...Why share, when you had the power to keep it for yourself...
...Some liberals, such as Ron Chernow, have argued that if carefully done this would strengthen banks and give corporations new sources of badly needed capital...
...For one thing, most institutional investors are not interested in going steady with their portfolio investments...
...Government can design a system of apprenticeship and school-to-work transition and lifetime learning, recognizing that all of these will make sense for the individual worker only in the context of full employment...
...These insights had far-reaching implications for economic theory and economic policy...
...Means, who earned his M.A...
...The predicate of the leveraged-buyout crusade, as well as the basis for its moral authority, was precisely the insistence that corporate management was accountable to nobody...
...For one thing, we could legislatively mandate profit sharing...
...Neoliberalism offers a high-skill, high-flex economy as the alternative to the old-style, confrontational (and presumably unionized) workplace...
...This left managers ultimately unaccountable and unions largely agnostic about the long-term health of the corporation...
...Citing the work of Richard Nelson, Dosi notes that the process of innovation involves differing combinations of "proprietary and public forms of knowledge" that vary according to the conditions of different industries...
...Yet the ideological import of their work is ambiguous...
...We also need to consider using public investment not just as a tool of macro-economic stimulus but also as a tool of micro-economic innovation, especially in the technology-intensive areas where military spending will continue to dwindle as a source of "technology-push...
...But that era was already beginning to fade by the time the book went to press...
...It gives workers the social contract that is now absent in the United 40 • DISSENT States...
...How does the debate change, given a global economy...
...Consequently, the social contract that flourished in the shelter of oligopoly has now dissolved, too...
...From yet another quarter, one major strand of the right—the law and economics school—has attacked antitrust even as it vigorously defends competition, on the bizarre ground that markets are so selfcleansing that any monopoly or price leadership will soon disappear...
...It can commit to a program of high growth and full employment, so that the process of creative destruction does not come entirely at the expense of workers and so that technological shifts lead to new skills and new opportunity rather than to idleness...
...It is not all that difficult to imagine policies that insist on a social return from the corporation...
...As if to prove Schumpeter right, the allocative efficiency of increased competition has put a damper on profits and reduced the economy's ability to generate dynamic efficiency over time...
...On balance, the New Deal itself was more Croly than Brandeis...
...But it did give its members virtual lifetime job security, at least until the late 1970s when the Japanese began overtaking Detroit...
...Berle and Means also evoke two debates that have raged in the pages of the economics journals...
...This is echoed yet again in the recent debate about long termism versus short termism, in which advocates of longer term corporate planning see insulation from financial markets as a virtue...
...On the first part of this debate, left and right have often switched camps...
...First, it allowed a kind of crude social contract...
...If investment in technology is not adequate at the level of the firm, because of accelerated competition, to what extent can investment in technology be socialized without depressing the incentive for proprietary innovation...
...Indeed, if anyone should have embraced Berle and Means as their own Bible, it was the hostile takeover movement of the 1980s...
...In addition, as the society has become more marketized, the gains WINTER • 1993 • 43 of productivity have become more unequally distributed...
...In part, the invocation of that Eden was slyly heuristic—intended merely to hoist classical economics on its own mythology —but the implication of their work is at least as suggestive of restoring market competition and shareholder power as of building a mixed or social democratic economy...
...managers had substantial ability to feather their own nests...
...Second, oligopoly (and in many industries, regulation) served to give the corporation relatively stable profits, a time-horizon that permitted a degree of planning, and a respite from ruinous competition...
...They are precisely not banks, but players of markets...
...Notwithstanding the WINTER • 1993 • 39 myopia of many managers, Galbraith's planning system of stable oligopoly was sufficiently conducive to productivity and innovation to generate a long-term annual growth rate of better than 3 percent, as well as a modest steady increase in economic equality for the quarter century between World War II and OPEC (Organization of Petroleum Exporting Countries...
...For all the radical populism of Nader's anticorporate rhetoric, his remedies often involve the Brandeis disinfectants of sunlight and competition...
...Distribution...
...There may now be reason to think that institutional investors have more things on their minds than the purely speculative considerations that some have argued dominates their thinking...
...It is alien to the culture of American capitalism...
...Yet given the diffusion of ultimate ownership and the inherent atomization of modern shareholders, they were skeptical that any such remedy could work...
...How to Intervene In the sixty years since Berle and Means wrote, the debate has come virtually full circle...
...as time went on, they would earn wealth increasingly as shareholders rather than wage earners...
...The elaborate rules are there because they were the best available defense against management's taking advantage of technological changes to undercut workers' wages, job security, and bargaining power...
...But both Berle and Means, and the apologists for hostile takeovers, begin from roughly the same premises about the putative sovereignty of the shareholder...
...Yet another body of work, pioneered by economist Oliver Williamson, elegantly pursues the theoretical implications of the obvious insight that the marketization of every transaction is not exactly costless to the firm— otherwise everything would always be contracted out...
...Coupled with a modicum of job security, codetermination also gives workers the confidence to share with managers the "tacit knowledge," in Michael Polanyi's term, that can unlock a great deal of productivity...
...It can prohibit plainly abusive and anticompetitive corporate practices...
...For the tacit premise is that if shareholder control could be restored, then the market economy might be self-regulating and perhaps distributively defensible after all...
...The business right, for most of this century, defended bigness, both in practice and in theory...
...Capitalism Socialism and Democracy (1946), p. 106) Standard economics grudgingly accepts Schumpeter into the pantheon, but honors his insights mostly in the breach...
...Re-regulation would leave airlines, passengers, workers, and aircraft producers better off...
...The brand of regulation implied by Berle and Means became one strand of the Roosevelt Revolution...
...However, German bankers, unlike their American counterparts, have a sense of stewardship and paternalism that contrasts radically with the go-go banking of recent years in the United States...
...Moreover, like Veblen before him, Galbraith has viewed the separation of ownership from control as potentially virtuous precisely because it left managers (Galbraith' s " technostructure , " Veblen' s " engineers " ), who prized innovation, free from the pressures of shareholders, who demand quick returns...
...It also made many managers lazy, and opened the door to abrupt competition from abroad...
...senator from Alaska, Ernest L. Gruening, who concluded, "Sing us no song of property rights...
...These public investments can provide returns that are partly private, partly social...
...Unlike Europe and Japan, the United States has neither state interventions in the manner of the French, the bank-industry interlocks in the fashion of the Germans, nor the Keiretsu of the Japanese...
...In the same spirit, a recent Twentieth Century Fund Report on Market Speculation and Corporate Governance called for a strategy of "relational investing" —the cultivation of long-term holdings by major shareholders "from industry itself or from the institutional fiduciaries" (pension funds, insurance companies) who would be "encouraged to take larger positions, in far fewer portfolio companies, and to hold them for much longer periods of time...
...During the postwar era of stable oligopoly, many analysts concluded, with varying degrees of enthusiasm or regret, that the large corporation could be beneficial after all, at least as long as it was tamed by a combination of government and union power...
...The hard part is winning their enactment...
...2, p. 381) Is Big Beautiful...
...But today we are back to the worst of all worlds...
...First, trade policy can demand reciprocity, so that other nations wishing to sell in our markets open their own markets to U.S.-based companies and do not pirate U.S...
...It will also give more third-world workers the fruits of their own labor, and give them the wherewithal to purchase products made in the U.S.A...
...ibid...
...It began with their observation that abuses in the financial sector and a lack of accountability on the part of managers left corporations operating inefficiently and without their presumed social virtue...
...Galbraith drew an astute picture of the American corporate capitalism of that era...
...The New Deal also pursued more benign forms of planning, regulation, and industrial stabilization through the RFC (Reconstruction Finance Corporation), which laid the basis for the emerging structure of the economy...
...The management consultant and philosopher of capitalism, Peter Drucker, proclaimed in 1967 that "pension fund socialism," virtually unnoticed, had already arrived...
...These last strategies will raise purchasing power in the third world...
...Read in its context, Schumpeter's best known phrase describing capitalism as "great gales of creative destruction" is not an apology for the institutional chaos of a pure market society but a plea for necessary balance between turbulence and stability...
...When Berle and Means wrote, the ills of economic concentration and financial manipulation were very much on the minds of reformers...
...But, in practice, ESOPs became mainly a device to help management raise tax-sheltered capital and occasionally to fend off hostile takeovers...
...The fear of losing shareholder confidence may constrain managers, but very imperfectly...
...As progressives once again attempt to build a mixed economy, clarity is required about the nature of the enterprise, the first principles, its ends and means...
...In the 1960s, writers of diverse ideological outlook saw the seeds of egalitarianism in the modern corporation and its increasingly broad base of "owners...
...management's power was offset somewhat—not by the shareholders but by the UAW (United Auto Workers Union...
...Millstein was a leading member of the Cuomo Commission on Competitiveness, whose recommendations embrace this sort of remedy by calling for SEC regulations giving greater power to corporate outside directors...
...In the American version of the welfare state, pensions and health insurance were based mainly on the employment nexus, not on citizenship, so the era of the stable oligopoly also guaranteed workers—at least those in "primary labor market" industries—these benefits as well...
...innovation is expensive, and "rents" — excess profits—are needed to finance it...
...The wellsprings of innovation are unknowable, at least by economists...
...After all, the elaborate and widely demonized work rules that now take up hundreds of pages in modern labor contracts were not inserted there because unions like red tape...
...To take autos as the signal example, the big three (GM, Ford, and Chrysler) monopolized auto production and sales...
...This is a pure case of allocative versus dynamic efficiency...
...Of course, their remedy—using borrowed money to put corporations on the auction block—was not at all in the spirit of Berle and Means...
...The great economic historians, such as Alfred Chandler, have pretty well demonstrated what Schumpeter inferred—major innovations have been made by large firms that enjoyed market power, economies of scale and scope, and thus an ability to reconcile the creation of the industrial lab with respite from the destruction of pure price competition...
...Many of the neoliberals around Bill Clinton talk of making government more marketlike and lionize the entrepreneur...
...Or with the right set of stabilizers, are they potentially beneficial...
...First, what is the relationship of size, scale, and market power to dynamic efficiency, technical innovation, and growth...
...It is testament to the basic conservatism of Berle and Means that, for all their progressive egalitarianism and decency, the word union never appears in The Modern Corporation and Private Property...
...it produced a new round of speculative abuse of just the sort that Berle and Means attacked in the late 1920s...
...For that matter, even the government cannot guarantee that particular corporations will stay in business...
...Today, when corporate management is brought to heel at all, it is humbled by mergers or hostile takeovers or brutal pressures of foreign competition, not by mass movements of indignant shareholders, let alone workers...
...The high prophet of this brand of "imperfect competition" was of course Joseph Schumpeter...
...A great deal of the recent business school literature on empowerment, total quality management, employee involvement, and so on, is the counterpart of pensions pre-1973 — that is, something unilaterally extended by management that can be unilaterally rescinded...
...As for Kelso, his onetime friend George Roberts was quick to perceive that Kelso's idea of using tax-sheltered loans to acquire stock for employees was far too clever a capitalist device to squander on the workers...
...And U.S...
...Berle and Means must be understood as creatures of their time...
...does the ostensible nationality of the corporation really matter, as long as it is providing jobs here rather than there...
...Yet Galbraith and Nader alike look to Berle and Means as a touchstone, signaling us to be wary of the big corporation generally...
...And given the new globalization of the corporation, what does the modern business firm owe its country of origin, and how shall that host country enforce its will...
...This could include everything from a "civilian DARPA," to industrial extension, to civilianization of the national laboratories, to selective relaxation of the antitrust laws to allow more of what the WINTER • 1993 • 47 Europeans call "pre-competitive research...
...In this respect, perfect competition is not only impossible but inferior, and has no title to being set up as a model of ideal efficiency...
...Kelso, meanwhile, persuaded the late Senator Russell Long, a quasi-populist, to write a tax preference for Employee Stock Ownership Plans (ESOPs...
...The English economist Robin Marris, in The Economic Theory of Managerial Capitalism (1964), emphasized its benign paternalism relative to its employees...
...The 1920s, like the 1980s, were an era of conservative rule, in which antitrust enforcement was weakened and Wall Street invented with regulatory impunity abusive financial devices that allowed new forms of speculation and pyramiding...
...Today, as in the winter of 1932, a new progressive administration prepares to take office amid a new economic crisis...
...The Bluestones and Marshall and Tucker are, of course, entirely pro-union...
...Not surprisingly, this variation on lemon socialism usually fails...
...whose father's 1940 classic, The Managerial Revolution, built on Berle and Means) observed that six decades of research indeed vindicate Berle and Means's premise that the "separation of ownership and control does adversely affect the performance of the firm," but faulted them for promoting a brand of regulation that failed to empower shareholders...
...Last year in the National Review, James Burnham, Jr...
...The British sociologist Ronald Dore captures this paradox in the title of his elegant book about Japanese capitalism, Flexible Rigidity...
...For the most part, standard economics imagines that growth is mainly a macro-economic problem...
...They were likewise writing before Keynes's General Theory and before the rise of the CIO (Congress of Industrial Organizations...
...It is intriguing to look backward a quarter century and ask why all of these visions of people's capitalism misfired...
...Berle and Means straddled this divide...
...Relatively high corporate taxation appropriated nearly half of the corporation's social product...
...A few dissenting economists, like Galbraith, as well as students of economic history, technology, industrial organization, and comparative economic systems, accepted the basic insight that large scale and "rents" can often be conducive to Schumpeterian dynamic efficiency under the right institutional conditions...
...By early 1933, it had been cited in two Supreme Court decisions...
...Trade and Labor...
...We could require companies to offer loot-proof pension funds, and we could properly regulate them...
...theirs was the rhetoric of Brandeis...
...The Pentagon, they note, because of its demand for ever more sophisticated weapons, has long been committed to the promotion and diffusion of manufacturing technology...
...Their arguments helped strip the corporation of its presumed legitimacy—at a moment when history had provided the exclamation point...
...Yet the very word "competitiveness" and the new idiom of debate are conducted largely in the paradigm of markets...
...MIT economist Paul Krugman calculated, from government data sources, that fully 70 percent of the income gains during the 1980s went to the top one percent of the population...
...That can be accomplished only in the context of codetermination, as well as labor-law reform that ends the one-sided union bashing and fulfills the promise of the Wagner Act by allowing unions the freedom to organize without management retaliation...
...But despite the long-standing and largely justifiable disgust with Melman's "Pentagon Capitalism," military contracting is one of our economy's few refuges of long-term planning and is clearly a source of Schumpeterian innovation...
...Drucker's "pension fund socialism" was a mirage in two respects...
...There was some discreet fixing of prices and use of market power—but if GM got too greedy it could expect to be slapped down by the Justice Department's antitrust division...
...Despite the progressivism of The Modern Corporation and Private Property, more than a little of this neoliberalism is implicit in Berle and Means...
...This contrasts with the general slowness of American small firms to adopt advanced manufacturing techniques...
...The task force also offered several other generally constructive recommendations, including a steeply graduated capital gains tax, to reward long-term holding...
...Who are its other "stakeholders," and how might they be empowered...
...and after the fact they should be widely diffused in order to enhance the productivity of the economy generally...
...However, most economic theory has treated technology as a "black box...
...The two men realized their work complemented one another almost perfectly...
...But for now let me at least sketch a map...
...The same may be true of telecommunications...
...Antitrust can be rehabilitated...
...The matter of how to render WINTER • 1993 • 45 managers accountable, and to whom, is a conceptually distinct problem...
...Stockholders (owners) are effectively passive...
...The monopoly rents that allowed firms like AT&T to invest in long-term innovation by subsidizing Bell Labs or the regulation that allowed the airlines to subsidize the development of new generations of jetliners by making long-term purchase commitments to Boeing and Douglas have evaporated, too...
...Berle and Means are pre-Keynesians of a kind, but they also represent a continuing institutionalist sensibility that wrongly got wept aside when the centrist neoclassicals— what Joan Robinson called "bastard Keynesians" — captured Keynes and crammed him back within the confines of classical economics...
...There is surely a lesson here...
...Financial capital, for the most part, was usefully passive...
...Professor Charles A. Beard, in the New York Herald Tribune, termed it the most important work since The Federalist...
...We could change ESOP law to reunite control with nominal ownership...
...In Schumpeterian terms, perhaps the most serious consequence of all is the drying up of customers (airlines) for aircraft manufacturers' new generations of more fuelefficient planes...
...It was Schumpeter's great insight that what drives economic growth is technical innovation...
...1988, pp...
...Schumpeter insisted that the two necessarily went together...
...A rereading of Berle and Means after sixty years invites some hard first questions, mostly new variations on old themes: • What, socially, do we expect of the corporation...
...Not everyone was employed in the primary labor market, but those who were at least received these benefits...
...The workers also got industrywide master contracts, so that wages would at last be "taken out of competition," a longstanding labor goal, and the further understanding that annual productivity increases would be passed along to workers...
...In a majority of cases, they spiked share prices only temporarily, added a huge burden of debt to the acquiring firm, and left the target firm leaner and meaner—which often means stripped of assets...
...Schumpeter objected that the more potent form of efficiency is dynamic and technological...
...This seemed plausible enough in the 1960s, as it did in the 1920s when the "American Plan" of profit sharing and stock bonuses was offered as a more individualistic brand of populism, and when "people's capitalism" was genuinely on the march...
...in a static sense Pentagon contracting is as inefficient as the economy gets—the home of hundred-dollar hammers and sixhundreddollar toilet seats...
...Had banks been allowed to speculate in corporate stock, in addition to third-world loans and real-estate deals, the bailout bill would likely be twice as big as it already is...
...Government, which is to say, public policy, can be a check on the arbitrary power of managers...
...Once the large corporation offered hierarchy and conformism—but pretty reliable job security as compensation, for white- and blue-collar workers alike...
...Postwar neoclassical economics did accept Keynes's point that static efficiency should be put to one side when the macro-economy was depressed—one could distort market signals in order to restore output—but the paradigm was largely disdainful of Schumpeter's very different defense of price-distorting "rents" for the sake of innovation...
...One form of accountability that has been proposed, and which mostly has not worked, is greater accountability to the institutional investors (pension funds, insurance companies, mutual funds...
...In the German system, bankers are the real agent of corporate accountability...
...technology and innovation are not part of the standard story...
...But at the time nobody imagined that global competition would be a serious threat...
...The postwar economy was very much a managerial economy of the sort criticized by Berle, but without the financial manipulation criticized by Means...
...But because their objective remains profit maximization, outside directors (unless elected by workers or communities, or appointed by government) are poor candidates for insisting that corporations operate in a broader public or social interest...
...The chapters of Capitalism Socialism and Democracy read with the most approval in economics classrooms today are those celebrating the entrepreneur, not those defending oligopoly...
...And thanks to the informal "Wall Street rule" —that institutional holders of shares (such as pension funds) customarily vote with management or sell their shares—this immense corporate wealth ostensibly held on behalf of workers did not lead to a shred of increased worker control...
...In November 1932, in the pit of the Great Depression and within a week of Franklin Roosevelt's election, Macmillan published Adolf A. Berle and Gardiner C. Means's The Modern Corporation and Private Property...
...Private investment, public investment, and research and development outlays all declined during the 1980s...
...Berle, the lawyer of the duo, spent the same years investigating how shareholders were losing power to corporate management...
...Control...
...And—the punch line—what set of policies might turn the giant corporation to more social purposes in the 1990s...
...How, then, to spread corporate wealth...
...As Robert Hessen observed, at a fiftieth anniversary symposium on Berle and Means sponsored by the conservative Hoover Institution (!), Berle and Means, deliciously enough, owe their notoriety in part to General Motors...
...Berle himself, writing in 1967 in an introduction to a revised edition of The Modern Corporation and Private Property, at the peak of the postwar boom, asked, "Why have stockholders...
...We have seen that one remedy, the hostile corporate takeover, whose litmus of legitimacy was that it would "maximize shareholder wealth," was a fraud...
...Dosi proposes that "appropriability" —the likelihood that the innovator will capture most of the fruits of innovation—helps explain whether size is conducive to innovation...
...The benign utopia of people's capitalism left out power...
...Virtually no employee of a large corporation has job security...
...In other cases, involving management buyouts, the takeover mainly provided windfalls to the incumbent executives—pure Berle and Means, still again...
...proprietary technology...
...Their book was originally supposed to be published by Commerce Clearing House, whose parent company had GM as an important client...
...Does this mean more worker ownership...
...Securities regulation both required extensive disclosure and eliminated most of the financial pyramiding that contributed to the speculation and crash...
...This was yet another facet of the separation of ownership from control, not in existence when Berle and Means wrote, but perfectly in character with their broader insight...
...These abuses, however, involved flaws in the law of corporations, the organization of the firm and of capital markets, not the "macro-economic" failure of a market economy to reach its full-employment potential...
...But here government is not without strategies either...
...Berle and Means observed that in the modern corporation ownership is separated from control...
...Only a tiny fraction of the nation's thousands of ESOPs are employee controlled, and ESOP earnings are equal to less than 1 percent of total wage and salary earnings in the United States...
...To make them over into banks would require not just changing the regulatory and tax incentives in favor of longer term holding (which is good), but transforming them institutionally...
...And the threat of hostile acquisitions spawned a whole dialectic of abusive strategem and counter-strategem, from poison pills to golden parachutes, none of which maximized either accountability or shareholder benefit...
...Further, the idea of worker-owned or worker-controlled corporations has proved thus far a chimera...
...They are beneficiaries by position only" (xxiii, revised edition...
...Government can also change tax rules to discourage exorbitant compensation to executives, and to encourage long-term shareholding...
...The Nation for February 1, 1933, ran an effusive review ("Capitalist Confiscation") by a young journalist and later U.S...
...In the 1980s, it was the supply-side/hostile-takeover right that attacked the large, bumbling corporation as inefficient...
...It took Keynes to observe that the remedy for price deflation was not pricefixing but rather the use of public spending to restore aggregate demand...
...The use of institutional investors may thus herald an end to the problems that Berle and Means described...
...Although relational capitalism beats the promiscuous kind, and the recommendations of the Twentieth Century Fund Task Force, the Cuomo Commission, and kindred groups are certainly benign, they do not go quite far enough...
...The efficiency taught to apprentice economists is still the static, allocative brand...
...an American version of co-determination was never institutionalized in law...
...Before turning to the practical policy choices, one must address the theory...
...Better yet, we could solve the problems of looting, vesting, and portability by adding a second tier to Social Security retirement and socializing pensions entirely...
...More empowerment of shareholders...
...Office of Technology Assessment...
...This also suggests the need for re-regulation of at least some industries...
...The clarion call of the supply-side right was to sweep out the cobwebs—from the government bureaucracy and the Fortune 500...
...Robert Reich and Ira Magaziner, at this writing two of Clinton's top economic advisers, have long argued that Americans must learn to work smart or they will be compelled to work cheap...
...The answer to the question, "Who Is Us...
...they could include codetermination as well...
...But contracting out—buying rather than making—leaves the firm vulnerable to uncertainties, incurs transaction costs, and risks sharing knowledge with suppliers who may not be loyal...
...who is an "American" company?—is any company, regardless of its ultimate ownership, that provides jobs in the United States, does not discriminate against U.S...
...The larger social contract is the responsibility of government...
...KKR basically adopted Kelso's idea and kept it for Wall Street...
...Brandeis wished, through a rather different set of policy interventions such as antitrust, to restore the discipline of competition and reclaim the sweetness of the human marketplace...
...A quarter century later, GM repeated the blunder when it harassed Ralph Nader, whose successful lawsuit against GM provided the financing for the first generation of Nader's Raiders...
...In 1993, the National Association of Manufacturers (NAM) may still be a bulwark of blue-chip Republicanism, but it has long ceased to be a hero of conservative iconography...
...The trouble here is that the fiduciary goal of an institutional shareholder is to maximize short-term wealth...
...Ideally, the shareholder's position will be impregnable only when every American family has its fragment of that position...
...A good example is the 1985 book The Bigness Complex by economists Walter Adams and James W. Brock, a kind of latter-day Berle and Means duo (who, remarkably, never cite Berle and Means...
...Whatever the security and room for innovation provided by the era of oligopoly, they are now long gone...
...American corporations today are seeking shelter by cutting wages, fleeing the country, and using gimmicks to resist discipline by their shareholders...
...Do these people ever try to comparison shop for airline tickets...
...1120-1171), reviewed every major work exploring the relation between scale and innovation and concluded that to simply ask whether large size and market power facilitates technical advance poses too simple a question...
...He cautioned: "But that justification turns on the distribution as well as the existence of wealth...
...In agricultural research, for example, small scale and atomized production did not provide fertile ground for research into productivity-enhancing hybrid seeds, fertilizer, machinery, and so on...
...it took the U.S...
...Almost anybody can throw together a 486-level computer from available parts and break IBM's price...
...But instead of rendering the corporation accountable by dethroning the manager and empowering the shareholder, the liberals of the New Deal and Fair Deal tempered corporate abuse by resorting to what Galbraith would later call "countervailing power...
...To make the point in the idiom of Albert Hirschman's famous construct, German corporate capitalism tolerates giantism, but renders its managers accountable more efficiently —via "voice" rather than "exit...
...Unless we opt for purely defensive protectionism, there remains the risk of the footloose corporation exporting jobs...
...Quite apart from the traditional notions of economies of scale and scope or market power and rents, Williamson's theory of transaction costs supplies yet another rationale for why bigness may be functional and not just Adam Smith's case of merchants conspiring against the public...
...But it can do a number of things...
...This new brand of contract will work best in a unionized environment, because a union is necessary to guarantee the worker's side of the bargain...
...Productivity growth stagnated...
...But in some weird alchemy, all of the cost-cutting fails to add up to a wealthier society...
...Different industries used this shelter with varying degrees of concern for the long term...
...By the same token, the Berle-Means message is also ambiguous for the right...
...Capitalism itself, unless leavened by a very powerful social democratic welfare state and a strong labor movement, has exactly the predisposition to economic concentration (from which flows political concentration) that Berle and Means discerned in the 1920s...
...AER, v. 78, no...
...High-speed rail is a good case in point, as is advanced optical fiber telecommunications...
...In hindsight, it is easy to condemn GM for using its substantial market power to invest in tailfins rather than fuel-efficient engines and to note that U.S...
...policy can insist on a global social-market economy, based on the principle that pay should roughly match productivity wherever products are made and that environmental and labor standards of products exported to the United States should approximate U.S...
...The Progressive Legacy To properly locate the legacy of Berle and Means, it helps to recall that twentieth-century American progressivism really divides into two great currents, which are nicely personified by Herbert Croly and Louis Brandeis...
...To replace the cold war stimulus to technology, the new administration needs a technology policy—several policies, really...
...A landmark 1988 essay in the Journal of Economic Literature, by Giovanni Dosi ("Sources, Procedures, and Microeconomic Effects of Innovation," JEL, Sept...
...Free trade is much less harmful when there is a genuinely level playing field...
...companies sell products within their borders, assuring that those sales generate some domestic jobs, and we can do likewise...
...Otherwise, it will produce what Brandeis called a race to the bottom...
...And third, how does a global economy, in which the market outruns the stabilizing instruments of the nation state, change the conversation...
...The long-term security enjoyed by defense contractors is also disappearing...
...Outside directors can help serve as a check on management to some extent...
...Who is the constituency for such a set of policies...
...At about the same time, Louis Kelso, part crackpot and part seer, proposed a blueprint to carry out Meade's vision...
...The dynamic efficiency described by Schumpeter, and its relation to imperfect competition, never became pat of the economic paradigm, for it cannot readily be modeled...
...The Wall Street Journal welcomed corporate raiding even as the NAM opposed it...
...But standard economics readily admits that this standard view of "allocative efficiency" is static...
...Despite its limitations, it was an epoch of steady growth and diffusion of real wealth unsurpassed in industrial history...
...Public policy cannot afford to ignore these conclusions, for the wrong kind of antitrust policy, the wrong kind of technology policy, the wrong kind of deregulation, the wrong policy toward intellectual property, the failure to recognize the unacknowledged impact of the cold war on technological innovation will all have negative effects on American prosperity...
...The sort of "planning" pursued by General Motors, they insist, has neither been reliable for workers nor constructive for society...
...Other nations negotiate "content" agreements when U.S...
...This American version of corporatism may have done some damage to the "allocative efficiency" imagined by classical economics based on perfectly competitive prices, but it had two substantial offsetting virtues...
...With Croly, his remedies have been mainly aimed at taming private bigness, via countervailing government and labor power, not at breaking up concentration or empowering the consumer...
...That, in turn, allows management to plan for the long term, and to invest at something like twice the rate of its American counterparts...
...What contribution do they make, entitling them to half the profits of the industrial system, receivable partly in the form of dividends and partly in the form of increased market values resulting from undistributed corporate gains...
...The former, in The Promise of American Life (1909), saw economic giantism as inevitable in industrial society and sought to turn it to social purposes via government intervention—pursuing "Jeffersonian ends with Hamiltonian means...
...They further observed that modern corporate wealth was highly concentrated—the smoking gun was Means's calculation that the largest two hundred nonfinancial corporations controlled 49 percent of all corporate wealth...
...This is true of global corporate capitalism generally, but is particularly true of its American variant...
...So, what is to be done...
...They note the inefficiency of the once-heralded conglomerate movement...
...Economic history plainly shows that increased social wealth results from technical progress over time...
...At a 1987 American Economic Association symposium on the twentieth anniversary of The New Industrial State, F.M...
...Despite heightened competition, sixty years after Berle and Means, as firms are newly footloose globally, and as mergers are more often contrived by managers than outsiders, the basic dilemma identified by Berle and Means persists: the large corporation remains practically accountable to no one...
...Roberts instead joined Henry Kravis and Jerry Kohlberg to form KKR, one of the pioneers of the leveraged buyout...
...Pensions, as fringe benefits, were voluntarily offered by managers when times were good and unions were strong...
...In the recent GM crisis, they forced out a chief executive...
...New Deal banking regulation had separated investment banking from commercial banking...
...Brandeis and Croly represent "ideal types," not pure historical lineages...
...A co-sponsor was Columbia University law school, where Berle, at thirty-five, was doing work on the diminishing legal rights of shareholders...
...Many variations on this theme are possible...
...Clearly, there are some industries that need big corporations in order to innovate and compete globally...
...It further follows that markets are not self-regulating after all, and that society therefore might improve outcomes by regulating corporations, taxing their profits, or altering their form...
...Workers like new machines and new skills—when they are the path to higher wages rather than layoffs...
...Neither our managers, our unions, our banks, nor our structure of corporate law are set up to facilitate workerowned firms...
...The overarching flaw in the vision is that capital income turned out to be too good to share with either workers or citizens...
...Is greater practical accountability to shareholders sufficient or even necessary...
...The closest American counterpart was the postwar system of large, stable, unionized, and often regulated oligopolies—the New Industrial State that Galbraith perceived in 1967...
...A very provocative example of the latter view is a recent monograph by Maryellen R. Kelley and Todd A. Watkins, The Defense Industrial Network: A Legacy of the Cold War (Pittsburgh, Carnegie Mellon University...
...That, in turn, will remove the artificial incentive for corporations to go where the cheap labor is, while still allowing a normal diffusion of technology and industry...
...Department of Agriculture to overcome this market failure...
...Context is everything...
...Studied indifference to issues of innovation in the name of "free markets" is also a policy...
...And in many cases the perfect competition of the textbook leaves producers with too little profit to reinvest in innovation...
...that assets were being squandered, managers feathering their own nests, and shareholders getting euchred — pure Berle and Means...
...If producers (corporations) have the power to influence prices, they distort these signals, and thus misallocate resources...
...The "Schumpeterian hypothesis" that innovation correlates with bigness is evidently valid for some industries, not for others...
...Globalization makes the business of taming the giant corporation more difficult, but not impossible...
...Clinton and Gore are already quite sympathetic to this approach...
...The size of General Motors," Galbraith wrote, "is in the service not of monopoly or the economies of scale, but of planning...
...So, sixty years after its publication, it is a good moment to revisit this classic, in light of the history of American progressivism, its shifting philosophical moorings and electoral fortunes...
...These questions, like the ones posed early in this essay, would require a substantial book to answer properly...
...These charters, unlike those of Delaware and its imitators, would require more disclosure and give far more power to outside (nonmanagement) directors...
...They were indignant primarily at the corporation's failure to serve its shareholders, not its workers...
...Though both went on to serve with distinction under Roosevelt, in a sense they were reluctant New Dealers—men who, in theory at least, mourned the passing of a presumed Eden when the real economy more closely resembled the textbook economy, without the need for government intervention...
...WINTER • 1993 • 49...
...Its main financial beneficiaries were the promoters...
...The Brandeis left attacked it...
...Even in a very capitalist country, the costs of innovation can be partly socialized...
...As a result, The Modern Corporation was snapped up by Macmillan, and appeared instead as a trade book with a much larger printing...
...Croly was the first American progressive corporatist...
...Scherer, the dean of American industrial organization economists, quipped that rereading Galbraith two decades later, he was struck by how perfectly the book described not the United States but Japan: "In Japan, pecuniary rewards are much less correlated with performance than here...
...individual employees' goals are especially strongly identified with those of the organization...
...First, to echo Schumpeter, how do we restore a degree of stability to corporate America, so that firms can plan and innovate...
...B]y surrendering control and responsibility," Berle and Means wrote, shareholders "have surrendered the right that the corporation should be operated in their sole interest...
...Second, how can society best make sure that these benefits are broadly diffused...
...As majority corporate shareholders, German bankers supervise managers, hire and fire them, and restructure firms when they get into difficulty...
...Most of their research was done before the Great Crash...
...Innovation, Regulation, Scale...
...In a background paper prepared for the task force, Yale economist Robert J. Shiller, a distinguished critic of the hostile takeover craze, asserted, "With the renewed concentration of investment holdings among institutional investors, the control could, in principle, pass not to the ultimate owners, but to professional representatives of the owners...
...There is currently a debate about whether to repeal the New Deal wall between commercial and investment banking and let commercial banks underwrite and even own corporate stock...
...employees in its hiring and promotion to management, and does not adopt nationalistic strategies to keep the best jobs and most advanced technologies in its home country...
...The idea of overcoming "short-termism" by making corporations more accountable to their shareholders—specifically by energizing their dormant boards of directors—has lately been the subject of intense study in the business schools and on Wall Street...
...The knottiest issue of all, in a globalized economy, is how to negotiate a social contract that stays put...
...Celebrants of the new competition insist that all of this uncertainty must be forcing the corporation to become leaner and more productive...
...For the most part, worker buyouts have been entertained by management only when a firm is in extremis...
...As Robert Reich asked, in a famous Harvard Business Review essay, "Who Is Us...
...in economics from Harvard in 1927, spent his years as a fledgling economist documenting economic concentration, the related power of corporations to administer prices, and the resulting failure of supply and demand to equilibrate in the manner imagined by Adam Smith and classical theory...
...Some on the antitrust left, meanwhile, continued to attack corporate giantism as both inefficient and undemocratic...
...This argument is used as a defense of "management prerogatives" in union contracts and as a postmortem on the demise of Yugoslavian syndicalist socialism: you just can't trust workers to look to the long term...
...There is already a program at the national laboratories, under 1989 legislation that allows Cooperative Research and Development Agreements (CRADAs), under which both public sector and private corporation contribute to a joint research project...
...Quite so...
Vol. 40 • January 1993 • No. 1
