Posts Tagged ‘markets’
Ho traces the rise of shareholder value beginning in the 1980s as the dominant ethos for business. It became “the central explanation and rationale for corporate restructuring, changing concepts of wealth and inequality, and the state of the America economy.” (122) She argues that the phrase was uttered constantly by her informants, and that “it shaped how they used their ‘smartness’ and explained the purpose of their hard work.” (123)
Shareholder value was premised on the notion that financial analysts knew more about what these firms needed than those with expertise and experience. And it also meant dismissing any concerns for stakeholders other than shareholders. Any money spent on others—whether that was employees or the communities that depended on these businesses—was seen as a waste. This stance justified and encouraged “hyperexploitive labor practices.” (146) The destruction such practices inflict are justified by the idea that it brings about “efficiency.” As one analyst said:
If I’m an employee, then there may be some temporary dislocations in the economy, but long-term, with a higher employment rate because at the end of the day, the most efficient, the most imperative industry should survive. The best operation should survive. (157)
When you come down to it, the word market is a negation. It is a word to be applied to the context of any transaction so long as that transaction is not directly dictated by the state. The word has no content of its own because it is defined simple, and for reasons of politics, by what it is not. The market is nonstate, and thus it can do everything the state can do with none of the procedures or rules or limitations. It is a cosmic and ethereal space, a disembodied decision maker–a Maxwell’s Demon–that, somehow and without effort, balances and reflects the preferences of everyone participating in economic decisions. It is a magic dance hall where Supply meets Demand, flirts and courts; a magic bedroom where the fraternal twins Quantity and Price are conceived. It can be these things precisely because it is nothing.
Because the word lacks any observable, regular, consistent meaning, marvelous powers can be assigned to it.
James K. Galbraith, The Predator State
Well beyond its impact on individuals and families, the submerged state exacerbates economic inequality by promoting some entire sectors of the economy over others, at government expense. In delivering subsidies to particular industries and creating incentives for people to participate in specific market activities, its policies protect and enhance profit-making capabilities in those areas. From 1980 until the current recession, the core sectors that it nurtures–finance, insurance, and real estate–outpaced growth in other sectors of the American economy. The fortunes of these industries emanated not from “market forces” alone but rather from their interplay with hidden policies that promoted their growth and heaped extra benefits on them. Suzanne Mettler, The Submerged State