17 May 2019

Collective Capitalism, A Concept

Stonehenge, Salisbury Plain, England
Capitalism, the root of all evil; according to every socialist or communist who has ever stood upon a soap box. 

Socialism, is communism for slow learners; according to many meme's on the internet.

Communism, the system where everyone is equal....except those at the top who are more equal. 

Every political theory ever presented to Earthlings has its flaws and no system has ever been used in its perfect form. In theory, all these political systems work. However, they all overlook a very fundamental flaw....humans. We humans are not perfect, and we tend to corrupt all that we touch; intentional or not.

Today, I want to explore capitalism, identify the primary flaw and then present a possible solution. Until, the peoples of this planet decide to evolve above a money based economy, it is best to present a solution that will work with the systems we are currently familiar with. Capitalism and the free market economy is a fair, honest and open system of commerce. Fellows like Adam Smith (The Wealth of Nations 1776) go it great detail explaining how the free market economy is the best system to operate by. The greatest flaw of capitalism is the perceived unfair success of the very few at the expense of the many. Of course, if you switch your point-of-view, this flaw or weakness, is also the greatest strength; if you are willing to work hard, you can enjoy unlimited success and wealth. So, does this mean the people who cry the loudest about how unfair capitalism is are also the laziest people, not willing to work hard for their personal success?? Sounds harsh, but it may have some truth to it. Humans are lazy in general and unless motivated, they are willing to accept less if they can stay in their comfort zone. Those willing to take risk or are self-motivate will always get more than those who are not willing to put in any effort. To this end, capitalism is a good system, it is self-regulating; the more effort you put in, the greater your rewards. However, there is but one lingering flaw.......even the most successful company or corporation, did not make all their success without help. 

Let us explore the idea of collective capitalism. First, let me define collective capitalism - as a system of free market economy that differs from classic capitalism, in that a group objective is at the core of success, instead of an individual objective. Instead of the blood, sweat and tears of a thousand employees making a single owner rich beyond their dreams; have a successful company where the owner makes a healthy profit and lives very comfortably and all those employees who made the success possible get a greater share of the profits. In this way, the employees are finding it worth their while to give their blood, sweat and tears to the company and the company rewards them for their sacrifice. There is a symbiotic relationship in companies that are successful - the company and the employees need each other for success. When greed enters the relationship it skews the symbiotic relationship out of balance/harmony and the company fails. It does not matter where the greed comes from top or bottom. The skewing will rob the symbiotic relationship of the synergy that generated the success.

Through the life cycle of a company it would be difficult to assign a fair division of income to labour. However, in the beginning, it would be reasonable to expect that risks are high, revenue are not, but if the employees believe in the potential of where the company could go, you have the nucleus of synergy to go to great heights. In the early days, if their is great leadership, great company vision and great employees who believe; the potential for success is very high. When this company succeeds in a collective capitalism environment, the more the company succeeds, the more those who make the success possible will be rewarded. As success can ebb and flow, I would suggest a wage & profit sharing formula as being a fair method of rewarding the employees. In the start, wages might not be as high as they will be later when the company is making success and profits. Risk is thus shared by those who get in early. The owner risks everything to make success and so do the employees who join early for the future payoff. As success increases, wages should be high enough to pay for life and keep staff turnover to a minimum. Whether the company calculates profits quarterly or annually, a possible formula for distribution could look like this: The Owner is paid 25% of the profits, 25% are reinvested in the company infrastructure, 25% are saved and 25% are shared with the employees. With a wage plus profit share program, the more successful the company, the more the employees are rewarded. In theory, the more you are rewarded, the more effort you are willing to put into continued success. This works right up until you have enough. Once you have achieved enough, the motivational power of money ends and then time becomes the motivator. In that I want more time off to live life with my enough money. If this is respected by the company, then everyone works hard, plays hard and lives well. 

This is not limited to working at the company level (single company, single location). With the right leader, this could work at the corporate level (single company, multiple locations), community level (multiple companies, same location), county level (multiple companies, multiple locations), country or continent level. This is merely the process of working together to achieve common goals. It worked in Canada during WWII. It could work again. We just need leaders with vision and employees who believe and a system to reward everyone's efforts fairly. Reduce the wage difference ratio between those at the top of the company and those who are working hard at the bottom. 

Together everyone achieves more = TEAM. This acronym is flaunted at almost every team-building exercise, ever. If we can curb greed, just a bit and share just a bit more; the whole cycle will grow. When more employees make more money, they buy more, when they buy more, more companies need to hire more and the cycle grows. 

That is my simple solution to make capitalism better. 

Until next time...create solutions, not problems!

Mountainman.