Louis Kelso's idea of the ESOP, or employee stock ownership plan, was further developed by William Greider in his book One world, ready or not: the manic logic of global capitalism. This arrangement was believed "to provide a market-based solution to the excesses of contemporary globalization, i.e., maldistribution of wealth and unrestrained nonterritorial finance" (Dannehl 2005). Unfortunately, the concept, herein referred to as market populism, was shown to further deepen the gap in the distribution of wealth in Thomas Frank's One market under God: extreme capitalism, market populism and the end of economic democracy. This paper will attempt to explain the problems that arise when attempting to reconcile the works of both authors against one another, while continuing to support the concept of the ESOP as proposed by Kelso and Greider.
The largest problem between the two works is the belief by which each author examines the design and implementation of the ESOP. Each author considered the situation using a different theoretical model, which greatly impacted their conclusion about the performance of Kelso's model. Greider's assessment of the 1990s version of the ESOP is based closely on the historical structuralist design, whereas Frank evaluates the circumstances using a realist approach. An assessment of each author's criteria for analysis will be made to illustrate this point; it will also explore how the proposal was intended for use versus how it was put into practice. It is obvious that Greider is a student of the historical structuralist method, because of his close consideration for Marxist theory. For instance, Greider works to reevaluate Marx's conjecture that the fundamental struggle is, as it has always been, between capital and labor. The use of Marx's critique of capitalism and the appalling excesses that it created is a central tenet of Greider's criticism of the capitalist system. Even more notably, chapter three of his book is aptly titled The ghost of Marx. Additionally, class divisions tend to play a large part in Greider's evaluation of economic conditions throughout the world. When he refers to a problem in any nation his example is generally of the labor versus capital nature. Case in point, an illustration of IBM Computers in India depicts the socialization of women outside of the family base; he demonstrates IBM's desire to change the influence of culture and to condition their employees for maximum capitalist benefit. Greider's opinion on the role of the capitalist class as the politically dominant class also influences the closing arguments within his book. In his suggestions for averting the impending crisis, Greider notes that a large-scale public outcry must occur to avert political attention from capitalist benefactors. At this time, would it then be possible for the state to exhibit some autonomy from the dominant class, this is a central belief of the historical structuralist philosophy. Frank's biting critique of the 1990s fascination with market populism can be best explained using the basic principles of realism. In the realm of the market, there is a general understanding that realism is not wholly applicable in the same way as it might be in the political sphere. However, Frank recognizes that human self-interest is the driving force behind the actors he is examining; the actors in question being the management theorists and their capitalist disciples. This rational, self-interest is characteristic of the realist individual and can be found among the business elite. From experience, the market is a cruel entity where the pursuit of profit pits one person against another; the market requires that one man lose so that another may gain. The reality is many people tend to lose so that one may gain substantially; thus, widening the ever-increasing income gap discussed in the introduction of this paper. It is on very rare occasions in history that all were able to gain, and, even then, those periods were short-lived. Thus, it is safe to say that exception circumstances surrounded them. Another connection between realism and Frank can be made in that he understands that even though the system sucks, that is how people relate. His book is a critique of human nature and its impact on the market, along with the ability of some to exercise control over the many. On this, he does not offer much in the way to fix it, because this trait of human nature is considered inherent and looked upon with pessimism by realism theorists. The perspectives described above are used to study international political economy; each offers a unique perception of actors or events. Often problems arise when two perspectives are used to study a single phenomenon. The level of importance placed on a variable can greatly determine the success or failure of a theoretical model when put into practice. When comparing across perspectives one even has to take into consideration the lack of importance for some variables. In this case, the realist perspective does not even acknowledge the significance of the class structure; instead, they use human nature as the determinant between success and failure. Whereas, historical structuralism appreciates that capitalism itself encourages class constructs and that this organizational structure puts one section of society at the command of the other. An evaluation of the insights offered by each author will further depict how each came to their conclusion and will resolve that the ESOP solution offered by Greider and Kelso was not correctly implemented in the 1990s under the guise of market populism. Here, Frank's observation was of an exploitative group that did not actually serve the public interest as Greider and Kelso would have required. Most markedly, Greider's assessment of the ESOP is that it would be used for the betterment of both the social and labor environments, in which the corporation was located. This shows an optimistic view of the human spirit that, when given the opportunity to improve the whole, they will do so without thinking only of oneself. He specifies that the ESOP itself was to be used to actually empower workers; to allow them a say in the matters concerning their future with the company as well as the company's future. Originally, the ESOP was intended as a supplementary bonus income towards employees with a vested interest in the labor and community aspects of a corporation. Both Kelso and Greider specify that this is important because it enhances labor's desire to continue improving in both the production and marketing of their product so to benefit more greatly through their ESOP. The critique of market populism as offered by Frank notes that it was espoused as a tool to amass worker support for a cause in which they have no self-interest. Legitimacy was the key objective of management theorists. They played on the fear of capitalists that workers may unite against the traditional corporate archetype for the visible excesses that it flaunted. To quell these fears, which they had created, management theorists convinced corporate executives that only they held the key to trust between the worker and the employer. Realism theorists would agree that these rhetoricians wielded a power that is "terrifyingly absolute" (Frank 2000, p. 178). Management theorists also played on the naïveté of the ignorant masses, leading them to believe that they were empowered through management literature. It understood that "workers worked better when they thought they were being paid attention to, when their labors were appreciated" (Frank 2000, p. 184). In reality, this literature skillfully guided enlightened individuals into the direction most beneficial, first, for the management theorists and, second, for the capitalist manager. In the end it was basically a delusional reality supported by a superficial freedom. Management literature was the perfect disguise for corporate indoctrination and market populism as a slogan provided the ideal conditions. Even still, Greider and Kelso present a viable option for preventing the impending crisis as created by capitalism. However, a lesson can be learned from the inaccuracies cited by Frank about the version implemented in the 1990s under the pretext of market populism. The main difference between the ESOP, as intended by Greider and Kelso versus the form it took under market populism is who was wielding the power. Knowledgeable workers or community members, those with more than just a stake in the short-term success of the company in the market, were wielding the power in Greider and Kelso's model. As stated earlier, these workers also looked to the company for their basic income, and were focused on the long-term success. Community members also had a stake in the environmental and social impacts of the company as well; including its ability to create a thriving industry and provide support for the creation of further infrastructure. This focus was also shaped due to the structure of their holdings, which were under an institutional arrangement until they were able to be paid off or in other instances until the employee had retired and been able to finally access their shares. The latter is the case for workers employed by Caterpillar, Inc. in the labor division. Frank's critique focuses on the ability of outside individuals, with no stake in the success or failure of the company to influence those in control. These proponents of rhetoric used their expertise and understanding of human intellect to fashion views that were beneficial only to themselves. This style of rhetoric had been previously used in the political sphere with much success, it was all a matter of drawing in the gullible public. Management theorists used words like democracy, freedom and liberalism to do just that, to deceive the populace. Other issues have already been touched on, but it is this particular point that presents the most problematic feature of 1990s market populism; if it had been implemented with the public interest at heart, another version, closely connected with the theoretical ideal, would have materialized. Thomas Frank. One market under God: extreme capitalism, market populism and the end of economic democracy. Anchor. 2001. Greider, William. One World, Ready or Not: The Manic Logic of Global Capitalism. 1st Ed. Simon amp; Schuster. 1998. Dannehl, Charles. International Political Economy. Lecture. Bradley University. Peoria, IL. Spring Semester 2005.
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