Analyzing the HP and Compaq merger in terms of capitalist ac

A detailed Summary of Analyzing the HP and Compaq merger in terms of capitalist ac

Hewlett-Packard and Compaq merged this past spring to form one of the largest IT companies in the market today. This merger has reshaped and changed the two companies significantly and has affected the computer industry, in general, to a great extent.

The purpose of this paper is to look at this merger in terms of Karl Marx's theories of capitalistic accumulation: How the new company benefits from this merger, and what effects it has on the jobs, and how its share of market has been changed?

I will start with the benefits of the merger for both HP and Compaq together. HP acquired Compaq for $25 billion in a deal bolster its market in the computing industry. HP has been well known for its imaging and printing products; and Compaq until recently was the second largest producer of PCs in the market. After the acquisition of Compaq, the new HP has structured into four broad groups: Imaging and printing, access devices, business services (consultation with companies) formerly associated with HP; and infrastructure business, (encompassing servers, storage and software) from Compaq expertise. This merger has helped centralize the resources of the two companies. It has gathered the assets of both companies to form a new bigger const

In time these profits will generate enough revenue for the share holders to invest a portion of their new earnings into new research and production of new technology. As a new branch of production is created, HP will require more labor and hire the unemployed workers to run the new productions. Thus a cycle starts, where the employed are made unemployed to start the accumulation of new capital and then they are re-hired to make use of the accumulated profits. In either case, the constant capital (assets) of the company increase.

According to Marx, this combination of the capitals from both companies lead to accumulation of more capital1. And the rate this accumulation is higher than it would have been if both companies earned separately. The idea of centralization eliminates the competition between these two market leaders and their merger together puts them in a position to combine their expertise to compete against the others in the computing industry. Therefore, it would enable the new HP to attract a larger share of the market.

Finally the wages at the company are affected by the proportion of unemployed people in the computing industry. The more unemployment there is the lesser the wages are, which leads to more exploitation of the labor. This exploitation will lead to accumulation of constant capital6 and in turn result in new job openings and better wages.

But how does this greater accumulation of capital changes the composition of the previously accumulated capital of both companies?

Some common words found in the essay are:
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Approximate Word count = 1210
Approximate Pages = 5 (250 words per page double spaced)

Category: English