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. Both capitalists are maximizing markups times quantity over capital; the first one assumes little market power and the second one a lot. They certainly adopt different choices of technique, and the "financial" capitalist adopts one that is grossly inefficient. But the "financial" capitalist is still solving a profit-maximization problem based on steel production, not on speculative activity. So it isn't necessarily an explanation of why the nature of work in the steel industry might have changed, unless there are huge numbers of market analysts, which I doubt. 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. 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. Why, then, have firms not dropped non-production workers? Is there more R&D to do? Have computer advancements not really been implemented in non-production work? I'm just being pesky. Cheers, Tavis On Thu, 1 May 1997, Michael Perelman wrote: > In the extract I posted, the technology in question was from the 1920s and > the charge came from Fortune magazine, writing only a few decades after > the formation of U.S. Steel. > > Under Carnegie, new technology came at a furious pace, so much so that > Morgan and others wanted to buy out Carnegie who was undermining the value > of their invested assets. At one point, he destroyed an unfinished > factory because he had just learnt of a better technology. > > Under U.S. Steel, innovation more or less ceased. Some of the Youngstown > plants shut down in the early 70s predated World War I. > > My point was that the company ceased to have a productionist mentality and > adopted a more banker-like mentality. > > -- > Michael Perelman > Economics Department > California State University > Chico, CA 95929 > > Tel. 916-898-5321 > E-Mail [EMAIL PROTECTED] >
