Technology as a stable factor
CharlesB at SPAMCNCL.ci.detroit.mi.us
Mon Oct 25 10:16:14 MDT 1999
>>> "John M. Legge" <jlegge at msn.com.au> 10/22/99 06:30PM >>>
buying competitors is far more common than competing them into bankruptcy,
and negotiated mergers and acquisitions (Daimler-Chrysler) more common and
far more successful than hostile ones.
Charles: Do you have any data on this ? Anyway, negotiated mergers and acquisitions
are aimed at becoming more competitive, so the logic holds.
Anyway, I am skeptical that business scientists keep track of how many firms are
"competed in to bankruptcy". It doesn't paint a pretty picture of the system to make a
record of this.
At any rate, I said specifically companies buy each other. The example I gave was of
car companies merging and acquiring. So, maybe you are not arguing with me but saying
one form is greater than the other.
the condensation of industries into two or three co-respective competitors is
hardly a demonstration of fearful competition between firms. The residual
competition is to raise or maintain the return on equity and hopefully the share
price. Firms are not directly concerned with surplus value: it is not recorded
in their accounts.
Charles: With conglomerates, the competition and threat of being bought is not
confined to those within an industry. Some of the fierce monopoly competition is
between monopolies and non-monopolies.
Not recording surplus value in their accounts that you see and not being concerned
with it are two different things. Anyway, surplus value is what logically underlies
profits, and profits are very much of concern to actually existing firms.
the evolution of industries, with horizontal aggregation and vertical
disaggregation tends to reduce "revolutionising the means of production"
as a form of competitive innovation: specialist suppliers produce the means of
production and sell these to every competitor in an industry. The PC, and
Windows, is certainly a crucial form of technology today but the profits go to
Microsoft. Every firm in most industries uses Windows, and so no one of
them can gain any particular advantages from it.
Charles: I'd have to see some evidence on less vertical monopoly.
You seem to think that there isn't much technological innovation today, that it has
slowed down to "stability" with monopolization. I first disagree on that basic point,
that innovation is not rapid today. There has been monopoly as the dominant form of
organization for about 100 years. We have already had the argument on whether there
has been in fact rapid innovation of technology in the last 100 years of monopoly
So, since I don't agree with you that there hasn't been rapid innovation in the last
100 years, I would have to for sake of argument ask , what is the motive for that
rapid innovation if not competition ? Maximum accumulation is still the motivation of
monopolies, thus, they do seek to innovate to get their commodities produced at lower
labor costs per unit in order to sell at the market price with lower cost and higher
profit margin. There has been competition with foreign firms in this period , at
least. But I still think the monopolies compete with each other too.
No doubt, as Michael says in his book, monopolization was intended to make the climate
less competitive for the monopolies, but this doesn't mean that it is really less
competitive overall. There is fiercer competition for small businesses because of the
monopolies. And there is international competition, though that is being monopolized
in the latest phase of capitalism.
Monopolies do go bankrupt. See Chrysler bailout, for example. So, monopolies are in
Government financed innovations in technology are another freebee for monopolies
across the board. ,especially since the advent of state-monopoly capitalism.
But if you are saying that innovation is not motivated by competition today, WHAT
ARE YOU SAYING IT IS MOTIVATED BY ? Happy scientific curiosity ?
Odd you say the PC is certainly a crucial form of technology today, but in your other
post you claimed that computers are not an innovation relative to the beginning of the
----- Original Message -----
From: Charles Brown <CharlesB at CNCL.ci.detroit.mi.us>
To: PKT-Seminars <PKT-Seminars at csf.colorado.edu>
Sent: Saturday, 23 October 1999 4:30
Subject: Re: Technology as a stable factor
> I don't doubt that there are private and public measures to stabilize corporations
>relative to technological development. Company A seeks to insulate itself from
>technological competition. However, Company A also is constantly trying to get an
>advantage on their competitors , i.e. "destabilze" the others ? For example,
>companies take protection of trade secrets very seriously.
> I guess my point is relative to other types of economies, technology develops faster
>in market economies, no ? Because if Company A can get the same number of goods for
>fewer workperson hours, it increases its relative surplus value and makes a
>super-profit relative to its competitors. So it can force them out of business ; or
>buy them out rather than be bought out, like American Motors bought up two old car
>companies, then Chrysler bought American Motors, and then Daimler bought Chrysler.
>Monopoly competition and all that.
> >>> michael perelman <michael at ecst.csuchico.edu> 10/21/99 11:22PM >>>
> I wanted to thank Charles for taking the time to read the book. I wrote a hurried
>response between classes. The problem is that if you let technology revolutionize
>too fast it throws the market into chaos. John
> Legge emphasizes measures that firms take that insulate them from competition. I
>point to measures that the government uses to minimize competitive pressures.
> In either case, you do see, as John says, a very stable situation. In the book, I
>point out other measures of stability.
> > Charles Brown wrote:
> > On page 17 of your book , you say ,"In short, prices should be flexible enough
>(to) adapt to new technologies or the development of new patterns of demand. However,
>both of these factors are relatively stable."
> > I thought that technology and the instruments of production are constantly
>revolutionized in market economies.
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
> Tel. 530-898-5321
> E-Mail michael at ecst.csuchico.edu
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