Tavis Barr wrote: > > Michael-- > > Your piece on US Steel was interesting. Thanks. It raised a bunch of > questions, though: > > You describe one view of production (unit cost-minimizing) as "industrial" > and the other (revenue maximizing through rents) as "financial." While > the classification has some aesthetic appeal (your industrial capitalist > would spend more time in the shop cutting tools and your financial > capitalist in the field analyzing and influencing markets), it seems to > me that the difference really just reflects a difference between > competitive and monopolistic behavior. Yes, indeed. The industrialsts did too much competing for the financial types, so they remade the economy at the turn of the century through trust, cartels and outright monopolies. In many cases, it took a different mentality to succeed at the productionist side than to win at the finance side. > Getting back to Louis' original point: It seems an interesting hypothesis > that steel companies have switched their operations toward market control > and away from production techniques. Your case for the 1920s and 1930s > seems clear. In the 80s and 90s, though, the new rage is these > mini-mills that produce as much output with a fraction (like a tenth) of > the production workers of the previous mills. Yes, the minimills came in nearly 3/4 of a century after the formation of U.S. Steel. The company maintained control, as did most of the cartels, by directing their investment to buying up potential competitors. As far as I am aware, > there are a number of these mills and price-fixing has become much more > difficult. So we may be back to more "competitive" conditions. Yes. Bethlehem Steel Corporation, the nation's second largest steel producer in 1956, employed eleven of the eighteen best-paid executives in the U.S. Every vice president had his own dining room with linen tablecloths and full waiter service. Each Bethlehem plant had its own golf course, and the company employed three individuals whose only job was playing golf with clients. > then, have firms not dropped non-production workers? But they have. Is there more R&D > to do? Have computer advancements not really been implemented in > non-production work? I'm just being pesky. There is a great debate over the degree to which computers have and will increase efficiency in the production side. Ed Wolff has recently shown that much of the increase in competitiveness in manufacturing has come via contracting out business services. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 916-898-5321 E-Mail [EMAIL PROTECTED]
