A Reply to William Lazonick’s Comment on our “Neoliberal Managerial Capitalism: Another Reading of the Piketty, Saez, and Zucman Data”

This paper is a reply to William Lazonick’s criticism of our analysis of managerial capitalism and its later phase in neoliberalism, based on the data on income distribution put forward by T. Piketty, E. Saez, and G. Zucman. Two of these criticisms are the expressions of basic misunderstandings. First, we do not believe the managerial revolution occurred against the will of capitalist classes, although, in various later decades, the income and wealth of these classes were dramatically diminished in the New Deal and after World War II. Second, we see in the maximization of shareholder value a central feature of neoliberal capitalism, as Lazonick does. The difference is that we address this feature in the broader context of variegated tendencies jointly expressing the class nature of neoliberalism, a social order targeted toward maximizing the income and wealth of upper classes. What Lazonick says of the taxation of stock options stresses some of the ambiguous features of the distinction between “wages” and capital income at the top that we fully acknowledge, but does not question our interpretation of the new trends in the income of the broader managerial class.