Once upon a time, I was a very early employee of an internet service provider that raised hundreds of millions of dot-com boom-days dollars. I was specifically a network engineer, and more generally just an IT infrastructure implementation and management guy. Heady days.

Some time after the company had issued its IPO and begun hiring people by the boatload, control of the IT department fell away from the executives I knew personally and into the laps of a bunch of new “white knight” corporate types hired in from the likes of the local phone company and various billion-dollar black holes of enterprises that had imploded in the not-too-distant past. My role remained in network infrastructure development and management for our customer-facing network; all of the internal stuff got reorganized under a newly-minted CIO. Internal infrastructure wasn’t strictly my problem any more, though I cared deeply about seeing it done right, both because of my own knowledge of the field and due to IT’s pivotal role in the automation and smooth management of a large number of complex business processes facing a customer base and deployment footprint that were literally exploding in size.

The new people charged with running IT were managers, not engineers. Their expertise lie in spheres like hiring consultants, drafting proposals and securing funding for projects. None of them had a deep grasp of the processes they were supposed to implement, and problems began cropping up almost immediately.

Ultimately, there was a grand proposal to spend something on the order of $30 million to outsource the bulk of the IT infrastructure and all of the business systems that managed those complex processes which we were only just learning how to implement, manage and scale ourselves, as a company. Now, outsourcing parts of your IT infrastructure often makes a lot of sense, if several things are true. You must have the right outsourcing partner, who brings solid experience in managing IT in your line of business. These were not in evidence. You must also be in a business where IT itself is far away from the focus. If you’re operating a nationwide network of sawmills and lumber yards, for instance, your top people really ought to be folks who know wood and the lumber trade inside and out. IT expertise is something you can outsource in such a case. But when your business is IT itself,  well, outsourcing your own brain is ill-advised at best.

Eventually I took my concerns to the Chairman of the company, to whom I had personal access simply due to my seniority. The Chairman was a brilliant engineer, a guy who had made a fortune developing a series of innovative projects in a burgeoning field and developed those projects in turn into successful products. His previous start-up had been acquired for a hefty sum, the bulk of which went to him personally, and he had stayed on there for a time helping to manage all the transitional stuff that comes along with corporate mergers and acquisitions.

I laid out my case over the course of twenty minutes or so: what was being proposed was ridiculously expensive, likely doomed to failure for reasons of ignorance of the players involved (the IT management and the proposed outsourcing partner), and foolish for the reason I outlined above. The Chairman valued things like “propriety” and “decorum” and “respecting the chain of command” rather more highly than I ever did, and I quickly found myself getting nowhere, as he assumed that if these men had been hired into these positions to manage IT, they must necessarily know what they were doing.

The end of the conversation boiled down to an exchange that went roughly like this:

“Well, Mike, I hear what you are saying, but what would you have us do? Fire the CIO, Mr. So-and-So?”

“Well, that’s certainly one option, and a better course than the one we’re on now.”

“And what then? Put you in charge? Are you, Mike Gogulski, going to run IT for a half-billion-dollar publicly traded company?”

“Well, if I were assigned to do that, I’d certainly give it a solid go, and I believe that I could do it far better than these jokers.”

“But Mike, that’s insane! We couldn’t give you such a job! You’ve never been head of IT for such a large enterprise before!”

A few seconds ticked by as gears turned in my head, my face no doubt flushing with mounting anger.

“And which half-billion-dollar publicly traded company has Mr. So-and-So served as CIO of in the past? And for which such company have you served as Chairman? “

The response consisted of several deep sighs and a great deal of spluttering — the answers, of course, were “none”.

And thus ended the meeting, with me storming out of the Chairman’s office.

I was reminded of this little anecdote of corporate elitist jackassery while watching the amusing — and terrifying — video at Congressman Pete Stark: crazed lunatic on the disinter blog. Enjoy.

Workers in general do not care about profits nearly as much as they care about their own wages and well-being.

I’m not sure whether or not you fell off the definitional rails here. To the worker, his profit is his wages. More specifically, his profit is his subjective value of his wages minus the subjective value of the opportunity cost and the time+labor he forfeited to obtain them.

Let’s go through a likely and probable scenario for the creation of a new business in an Anarchist system:

1. A group of investors, be they relatively rich people, managers of a planned community or people interested in the boom of a town or neighbourhood, or a private bank acting for millions of normal people looking for a way to make some interest, see an opportunity, and pool their resources together.

With you.

2. These investors attract workers, who become the first owners of the new business. The investors give these workers a starting capital (as well as perhaps an ideal location or new ideas to use) in exchange for a set return on their investment.

Breakdown. Who are these investors? Santa Claus? They just come around and give the “workers” a whole bunch of money AND a great idea, in exchange for a “set return”? I’ve met banks that work that way, but never investors. Is it possible for “workers”, as you go on to describe more in what follows, to become investors? If so, why would their values and motivations change so much?

3. The workers get to work and pay off the investment and interest.
4. Having paid off the investment and interest, the workers are now working solely for themselves (self-management). They decide of their own working conditions and wages. They decide of their management and the future of their business.

The non sequitur just deepens here. Let me try to get this straight, for my own understanding. The investors come together around a great idea which can create a self-sustaining and profitable business for those who own it, and then they just give it away to the people they need twisting knobs, pulling levers and bashing on keyboards to make it real. Why? Would you, if you were one of those investors with the brilliant idea to create wealth and the connections to bring an organization into being that could realize that idea just give it away for a “set return” on investment? If so, sir, you are a true saint and a man of great virtue, one to be admired and sung of down the ages. Funny, I can’t find anyone matching such a description in the phone book or my history texts.

In the world that I live in, investors want to become part-owners. Yes, they want others to perform the labor. But they provide the capital to make that labor possible, especially within the window where success or failure is not known and all money invested may be lost. I doubt very seriously that this dynamic would change in any substantial way minus the state, or that it ought to. To me, it’s simply an observation of human nature, and I believe that it is not human nature that we ought to elect to contest.

The workers would have a strong incentive to make the business grow so they can pay off the initial investment faster, and thus have free reign. But when that’s done, the workers (the only people who legitimately own the business) have a much stronger incentive to secure better wages and work conditions for themselves than they do of making more profits. So businesses (not corporations, obviously, since the corporate status is a creation of the State), as organizations, would seek to improve the quality of their work environment and their service, instead of trying to expand or make more profit.

If we accept a ridiculous premise, we can arrive at all sorts of ridiculous conclusions. I’m using forceful language here because I know you respond to it and because I believe you are a person with his eyes open. The workers in your scenario might or might not be motivated as you suspect. They might be motivated not by potential future security in the maintenance of a self-sustaining and growing business, but rather by the grim necessity of earning a wage to feed their children. They might be motivated instead by a cultural diktat which says that hard work is virtue. They might be motivated by the continuing chance to steal from the cash drawer. They might be motivated by the need to maintain a certain wage in order to maintain a gratifying lifestyle. They may know nothing of economics, and nothing of political theory. They may have extremely short time horizons which renders speculation about their incentives meaningless or at best questionable. They may be insane!

That was a response to the first sentence. Now the parenthetical, “the workers (the only people who legitimately own the business)”: Huh? I do understand there is a historical and moral critique which suggests that those “employed” today ought rightly seize and legitimately own the means of production put at their disposal through employment. I also understand there is a position which states that workers “should” own their means of production. The reality of things is much different, though, even if we imagine starting from a utopian genesis in which all property titles were legitimate and in which coercion were never employed except in legitimate defense. Inequalities of wealth will still occur. They will be based upon such factors as natural resources available in the starting areas and the intelligence of the economic actors, and become amplified over time. Eventually there arises a group of people with the capital to become investors. You or I or the lowliest of our brothers might be members of that class. But they rise from the same stock! They are not going to look around with superhuman virtue, seeking places where they can offer to advance the species for something as shitty as a “set return”! Were you or I in their place, we would rightly and honestly seek better than that.

To the second sentence, I say again that there is a fuzzy barrier here between the concept of “wages” and the concept of “profit”. It’s made even worse now in that the workers have taken over the ownership of the business. What then is to be the logical blade which separates “wage” from “profit”? If I am a co-owner with a few others of the means of our production — and thereby the means of sustenance of our selves, our families, our values, our political philosophies and our blogs — how could this division even exist at all? I will certainly not appoint one of my comrades in the industrial collective as he who shall determine what is “wages” and what is “profit”, especially being that “profit” as defined is that which shall be swallowed up by those who exploit us. The enterprise has input costs and it receives sales revenues. That difference is called net income, or something similar. From that income, that excess, that “gross profit” in a broader sense than the accounting textbooks define, must be derived the fixed wages of all employees (shareholders/members/comrades), plus the amount to be reinvested in expansions (via marketing, territorial growth, hiring, product diversification, etc.), plus the amount that should be disbursed to investors as compensation for their interest, plus amounts to be employed in improving efficiency, etc.

Would the fully-vested co-owner of such an enterprise sit around trying to draw lines between “profit” and “wages”? Surely not! These categories have become meaningless to his calculations, whether those calculations serve only his own aggrandizement or some nobler ideal of group advancement. “Profit” as bogeyman has become meaningless.