Summary of Chapter 12: The Modern Corporation
The first of the forces transforming modern capitalism which Braverman will discuss is the modern monopolist corporation, and how it has been formed by the concentration and centralization of capital in fewer hands. Before the invention of the modern corporation form, capitalist enterprises were limited by the scale of the “personal fortunes and personal capabilities” of individual capitalists (179).
It is only in the monopoly period that these limits are overcome, or at least immensely broadened and detached from the personal wealth and capacities of individuals.
This makes vast amounts of wealth available (from stockholders, etc.), and largely replaces the individual owner with a “specialized management staff.” “Owner” and “manager” are two aspects of the ruling capitalist class; “as a rule, top managers are not capital-less individuals, nor are owners of capital necessarily inactive in management. But in each enterprise the direct and personal unity between the two is ruptured.” The limiting personal form of the past has been replaced with an institutional form. The existence of a managerial element within the ruling class gives an opening for those from lower classes to rise by virtue of ability, through “a process of selection... having to do with such qualities as aggressiveness and ruthlessness, organizational proficiency and drive, technical insight, and especially marketing talent” (180), which abilities are co-opted by the capitalist organization; nevertheless, managers are usually drawn from within the ranks of the ruling class.
B discusses the large number of jobs which go by “manager” in the census, most of these are much lower positions than the ones he is talking about. The expansion of upper management corresponds with a great expansion in scale and also diversity of departments in modern capitalist enterprise vs earlier family-run firms.
However, this emergence of management as a part of the corporation is perhaps outstripped in importance by the role of marketing. B traces the development of transportation networks which allowed corporate products to reshape city life: “cities were released from their dependence on local supplies and made part of an international market” (182). The food industry (e.g. Gustavus Swift’s refrigerator railroad cars) played an important trailblazing role: “the industrialization of the food industry provided the indispensable basis of the type of urban life that was being created;” this industry was also important for developing the “marketing structure” of modern corporations. Specialty and electrical equipment need not only distribution but maintenance and service available in urban markets, this affects corporate structure and marketing network; example, auto industry.
Finance is discussed as another important division; subdivisions are formed within these divisions, because each division may require its own accounting division, personnel, etc. “Thus each corporate division takes on the characteristics of a separate enterprise, with its own management staff” (183). This is made yet more complex by vertical and horizontal integration. This “pyramiding” in turn creates a need for decentralization, resulting in the “modern decentralized corporate structure” of the 1920s through Braverman’s day. Each division is relatively self-governing and contributes to the corporation as a whole.
From this brief sketch of the development of the modem corporation, three important aspects may be singled out as having great consequences for the occupational structure. The first has to do with marketing, the second with the structure of management, and the third with the function of social coordination now exercised by the corporation. (184)
Marketing becomes of great importance as a means of reducing uncertainty in business, by inducing demand. Braverman quotes Thorstein Veblen extensively on the “fabrication of customers” (185). Marketing also reshapes manufacturing, with styling, design, and packaging, as well as planned obsolescence and the idea of a “product cycle: the attempt to gear consumer needs to the needs of production instead of the other way around.”
2. Change in overall structure of management
The proliferation of divisions represent the “dismemberment of the functions of the enterprise head;” each takes over “in greatly expanded form a single duty which he exercised with very little assistance in the past. Corresponding to each of these duties there is not just a single manager, but an entire operating department which imitates in its organization and its functioning the factory out of which it grew. … Thus the relations of purchase and sale of labor power, and hence of alienated labor, has become part of the management apparatus itself.” (185-6)
This means we can now look at labor relations, and exploitation, within this realm of “management:”
Management has become administration, which is a labor process conducted for the purpose of control within the corporation, and conducted moreover as a labor process exactly analogous to the process of production, although it produces no product other than the operation and coordination of the corporation. From this point on, to examine management means also to examine this labor process, which contains the same antagonistic relations as are contained in the process of production. (186)
3. The corporate function of social coordination.
The complex division of labor which has emerged with modern capitalism comes with an increased need for “social coordination” or planning. Because our society resists the rational emergence of this, it is left to corporations to play much of the role of social planning in our society. This is irrational, because corporate planning is limited to seeking returns on capital, at the expense of all other motivations. [This is the same argument made today by the “planned degrowth” school.] As long as the corporations play such a huge role in investment, and control of resources, personnel, etc., government in fact plays a secondary role in social planning, filling “the interstices left by these prime decisions” 187).