Market forces in modern big business bureaucracies have the value of the legend of early Rome in historical Rome: they are a legend.
What that means is that modern big business bureaucracies have, to some extent, successfully insulated themselves against market forces by political means (including company-political means). What remedy would you propose?
I would argue that the biggest factor creating such insulation is regulation of commerce. Regulation of commerce benefits big companies as opposed to small companies, because the bigger the company the greater its political influence over the regulators. Hence, reducing the regulation of commerce would help to break up the upper-management vampirocracy your describe, since it would allow inefficient big firms to sink and more efficient small firms, led by management WORTH their pay, to rise.
But the Republican Party is the natural recipient for a rising aristocracy with its backbone in big business. The Republican party has long been susceptible to the interests of big business. It is, after all, never too hard to turn from a party of the respectable middle class to a party of the respected (or respect-purchasing) Upper Middle Class, and then of the Upper Class with no hint of middle and no great need for respectability. It went up that particular alley in the nineteen-twenties; but it proved a blind alley. Now, as Krugman rightly says, it has happened again.
I've noticed this. And I think it's political suicide -- it's the only strategy that can lose to the Democrats, who are almost equally alienating the American middle-class majority. "Optimates" versus "populares" indeed.
Inheritance taxes cut down the lesser aristocrats to the benefit of the greater ones. They make it difficult for an upper middle-class family to become upper-class, but the richest upper-class people simply establish foundations or provide for their children before they die. They do to some extent solve the "incompetent heir" problem, which is useful.
They are, however, cruel, if high enough to be very useful. How would you like to see your loved ones effectively disinherited upon your death? This creates a gigantic motive for their evasion, which means that they are usually rather effectively avoided. Which makes them less useful.
no subject
What that means is that modern big business bureaucracies have, to some extent, successfully insulated themselves against market forces by political means (including company-political means). What remedy would you propose?
I would argue that the biggest factor creating such insulation is regulation of commerce. Regulation of commerce benefits big companies as opposed to small companies, because the bigger the company the greater its political influence over the regulators. Hence, reducing the regulation of commerce would help to break up the upper-management vampirocracy your describe, since it would allow inefficient big firms to sink and more efficient small firms, led by management WORTH their pay, to rise.
But the Republican Party is the natural recipient for a rising aristocracy with its backbone in big business. The Republican party has long been susceptible to the interests of big business. It is, after all, never too hard to turn from a party of the respectable middle class to a party of the respected (or respect-purchasing) Upper Middle Class, and then of the Upper Class with no hint of middle and no great need for respectability. It went up that particular alley in the nineteen-twenties; but it proved a blind alley. Now, as Krugman rightly says, it has happened again.
I've noticed this. And I think it's political suicide -- it's the only strategy that can lose to the Democrats, who are almost equally alienating the American middle-class majority. "Optimates" versus "populares" indeed.
Inheritance taxes cut down the lesser aristocrats to the benefit of the greater ones. They make it difficult for an upper middle-class family to become upper-class, but the richest upper-class people simply establish foundations or provide for their children before they die. They do to some extent solve the "incompetent heir" problem, which is useful.
They are, however, cruel, if high enough to be very useful. How would you like to see your loved ones effectively disinherited upon your death? This creates a gigantic motive for their evasion, which means that they are usually rather effectively avoided. Which makes them less useful.