Charles Petersen

2021 Hopin Virtual Events Platform

Abstract: Employee stock options have been one of the primary engines of the dramatic rise in economic inequality in the United States since 1980. But the origins of these strange financial instruments date to much earlier. The use of stock options as a compensatory device first took off in the go-go 1920s. The swiftly rising stock market made payment dependent on rising stock prices attractive, and the inauguration of a substantial tax differential between income and capital gains led executives to press their luck and try to get earnings from options taxed under the latter category. The importance of options to the rise of inequality in the 1980s and 1990s, then, might appear as another similarity between the first and second ‘Gilded Ages’. But it was in the 1950s and 1960s, at the height of the New Deal Order, that options next gained ascendancy. The rising use of options was a product, moreover, not of the Republican but of the Democratic party. It was the Revenue Act of 1950, passed by a Democratic Congress and signed by Harry Truman, that created a special class of options that were taxed at the far lower capital gains rate. Economic historians have argued such options contributed little to the rise of executive salaries and the pushback against the egalitarian legacies of the New Deal in the 1950s and 1960s. New evidence, however, demonstrates that it was the stock options of mid-century that did much to pave the way for the explosion of economic inequality in the 1980s and 1990s. The Neoliberal Order, in short, was not the rejection of the New Deal Order — it emerged from the previous era’s own policies and contradictions.

2022 Mexico City

Abstract: It is a curious fact that the firms that most loudly declared themselves to be exemplars of “meritocracy” in the 1970s and 1980s were famous not just for their managers’ claims of rigorous rationality but for their extravagant displays of emotion. “Constructive confrontation” was what the CEO of one such firm called his preferred approach to problems in the firm’s flexible organizational form—it was also widely known as a “euphemism for screaming.” This paper explains this apparent contradiction between claims of rationality and displays of emotion through an archivally-based reconstruction of the communication strategies of the early Silicon Valley. The focus is on two firms, Fairchild Semiconductor and Intel, and two executives, Robert Noyce and Andy Grove. Faced with challenges to their authority from movements for racial and gender equality while also navigating the transition from bureaucratic to flexible organizations, white male managers found a way to preserve their prerogatives by combining claims of a rational hierarchy, “meritocracy,” with an ostensibly universal but highly gendered affect, aggression. Evidence of these developments range from images of workplace parties in employee magazines to hand-made collages of executives as Playgirl pin-ups, from the everyday language of managerial social Darwinism to the dreams executives recorded in their personal notebooks. The paper culminates by tracing the gendered origins of a communication device that typifies these paradoxes: the “family tree” of spin-outs and start-ups that was prominently hung in personal cubicles and corporate foyers across Silicon Valley—to all appearances a symbol of nepotism, yet celebrated as a depiction of meritocracy in action.