Capitalism done the right way?

E.F. Schumacher, in his book Small Is Beautiful, describes the Scott Bader Commonwealth, a chemical company where the founder turned much of his ownership over to the employees, and created a "constitution" that guaranteed a limited company size, a low ratio of remuneration between the highest and lowest paid employees (7-to-1), a no firing policy (since everyone was a partner), and guaranteed charitable contributions. At the time Schumacher was writing, in 1973, the company had been successful for over 20 years with this constitution in place.

But, I wondered, how had the company fared through another 40+ years of market tests? Pretty darned well, it turns out.

Here is a nice reform idea: let us rewrite our incorporation laws to favor company structures like this one. Efficiency should not be the only test of our social institutions: their humanity might be an even better one.

11 comments:

  1. This sound a *lot* like what I have been reading about Distributivism, the economic idea (or ideal?) of Catholicism:

    http://distributistreview.com/mag/

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  2. That's right: Schumacher's book prompted a renewed interest in distributism.

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  3. Employee ownership has long been seen as a good thing.
    Except by certain ancaps who deny ownership CAN be shared, and secretly long for feudalism.

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    Replies
    1. Ken, your inner liberal is showing.

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    2. Well seriously Alex, the old joke fits. I used to be liberal, but hanging out with liberals made me a conservative. Hanging out with conservatives made me a libertarian. Hanging out with libertarians is making me a liberal. :)
      I am serious though, a good close up look at Libertarians of various sorts these past few years, especially of the Paul variety has pushed me leftward.

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    3. Ken, I'm glad to hear that you are no longer a liberal. I'm not a conservative in the regular sense - I am more of a "Traditionalist", and I'm a Catholic above anything else - but I do view traditional conservative ideas as having a lot of common sense. I associate with them more.

      But as Gene (and Oakeshott) has pointed out, it is probably better to not have an ideology. You seem to be finding that out right now.

      One of the things that I enjoy so much about Catholic social teaching is that it seems to take the very best ideas from conservatism and liberalism; you really can't categorize Catholic thoughts on society. I used to view that as a weakness... now, I see it as a great strength.

      By the way, I should be up front: I am very glad that you are no longer a liberal (or a libertarian) =)

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  4. Wouldn't a libertarian just want to abolish incorporation? Never understood why.

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    1. Big corporate sponsorship?

      But some have recommended abolishing it.

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    2. That would make sense, but often their arguments against call it "statist" and "intervention in the free market" and a whole lot of other jargon I can't understand. They usually say that they exist only because of "government privilege" and that eliminating charters would make them go away…which is like saying you can make a hungry lion disappear by not paying it any attention.

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  5. With respect to efficiency:
    1. Do you think there is any truth to the meme/trope that an authoritarian government can make society run efficiently and even make it prosperous? Would China count as an example of this?
    2. Is there something about economics that is unusually obsessed with material efficiency? Maybe "economism" is a better word.

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