Skip to Content

Book Reviews: 'Bad Company - The Strange Cult of the CEO', & 'Anarchism'

Archetypal Fat Cats

'Bad Company: The Strange Cult of the CEO', by Gideon Haigh (Aurum £6.99)

They used to be called something like ‘general manager’, but nowadays the main term for the head of a big capitalist company is ‘chief executive officer’. While they are nominally salaried employees, their pay as archetypal fat cats is so high that they are in fact clearly members of the capitalist class.

It was the growth of limited liability from the early nineteenth century that gave rise to the modern capitalist corporation and hence to the CEO Firms were originally run by their founders (or their heirs), but the owners faced the debtors’ prison if they went bankrupt. So few would buy shares in a company unless they could be personally involved in supervising how it was run. Limited liability meant that shareholders were no longer personally liable for any misdeeds or bankruptcies, so owners could delegate day-to-day control to a salaried manager, with a board of directors overseeing the whole thing.

As the title of this short volume suggests, the CEO has become a kind of cult figure, with in many cases a celebrity status and a pay packet to match (averaging over $30 million a year in large US companies in 2002, for instance). Many CEOs work long hours, apparently, though of course a lot of this time is spent in luxury hotels and swanky restaurants, and they are seemingly surprised when their employees fail to share their taste for sixty-hour weeks. Their income is reinforced by the curious idea of a ‘guaranteed bonus’, and of a ‘golden parachute’, paid to them if they are sacked by the board of directors.

And what does a CEO do in return for this generous remuneration? It’s clear that they do not in any real sense run the company, since big corporations are far too complicated to be managed by individuals. Rather, they concern themselves with the company as a business, often having little detailed idea about what it actually produces, and give orders that others have to implement. The impression gained from Haigh’s book is that if the share price keeps rising, irrespective of any medium- or long-term benefits to the company, then shareholders and directors are happy. Reducing costs by cutting staff is a favourite, and none too sophisticated, approach.

With golden parachute in pocket, a number of CEOs go into politics - President Bush’s cabinet, for instance, is full of them, from Dick Cheney to Donald Rumsfeld. As Haigh quips, “the Bush administration is more a CEOcracy than a theocracy.” The extent of this cosying-up is fairly new, but governments do not have to be full of ex-businessmen in order to serve capitalist interests.

Haigh makes the useful point that, while workers are urged to keep wage demands in check so that they can compete with other workers (especially those in other countries), CEOs instead always want to be paid more so as to be in line with their counterparts overseas — the idea of ‘internationally competitive’ has different meanings for bosses than for workers. While he is well aware of the absurdities of CEO pay, he has some odd ideas about the way capitalism works. For instance, he claims that “Companies do not exist to make profits; they make profits in order to exist” He seems to think this is an important correction to a common myth, but in whichever version it just means that companies are motivated by profit-making. Nevertheless, his book does give a useful picture of what CEOs do and don’t do, and of why we have no need of them and their fellow-exploiters.

Paul Bennett


'Anarchism', by Seán M. Sheehan (Reaktion Books, 192 pp. £12.95)

The term “anarchism” covers a multitude of sins. From the egoism of Stirner, through the free market for small producers advocated by Proudhon, the revolutionary romanticism and posturings of Bakunin, Kropotkin's anarcho-communism, revolutionary syndicalism, to various avant-garde artists and writers.

Sheehan’s book was prompted by what he sees as the unconscious re-emergence of anarchist ideas and tactics in the “anti-globalisation” protests that began in Seattle in 1999. His aim is to present anarchism to such activists, even though not an anarchist himself. The result is a readable run-through of anarchist ideas.

Marx also comes into it Sheehan realises that there is a world of difference between Marx’s ideas and what in the 20th century came to be widely regarded as “Marxism”, i.e., the official doctrine of the Russian State, but which is more properly called Leninism and which, in its various forms, stands for state capitalism rather than socialism as understood by Marx.

Sheehan in fact pleads for a rapprochement between Marxism and anarchism. Certainly, those in the Marxist tradition and a minority of anarchists — the anarcho-communists and the class-struggle anarchists — share a common analysis of capitalism as a society based on the exploitation of the working class and want to see it replaced by a classless, stateless, moneyless, wageless society. But most anarchists today are into “direct action”, as an alternative to reformist electoral action, to try to get changes within capitalism and are not interested in longer-term, global change. When it comes down to it, they are just as reformist as any Labourite (or Liberal-Democrat) or Trotskyist, differing from them only in completely ruling out elections as a way to get reforms.

Marx, on the other hand, always insisted (as we do) on the need for the working class to win control of state power before attempting to change the basis of society from class ownership to common ownership. He also saw elections as one possible way of doing this. For anarchists, political action in this sense is anathema. The state must not be captured, it must be confronted. Anti-capitalists should not contest elections, they should boycott them. Confronting the state — as some of Sheehan's “anti-capitalists” tried in Genoa — is a senseless policy, especially when it’s a question of a minority confronting a state supported, even if only passively, by a majority. The state will always win in such confrontations since it has much more force at its disposable.

As to the time when there will be many, many more anti-capitalists (socialists), then boycotting elections — agreed there’s not much point in voting today, where all the candidates stand for the continuance of capitalism in one form or another — would also be senseless since this would be to leave state power in the hands of the pro-capitalists. Much more sensible would be to organise to take this power from them. That’s the difference between Marxian socialists and anarchism, a gap which, despite Sheehan, could only be bridged by anarchists dropping their dogmatic opposition to elections and political action. Hopefully, they will.

Adam Buick