The Ownership Solution: Toward a Shared Capitalism for the 21st Century

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The Ownership Solution: Toward a Shared Capitalism for the 21st Century

Jeff Gates

Addison-Wesley, 1998

Jeff Gates, who has long been involved in the movement for ESOPs (employee stock option plans) in the United States, argues in this book for worldwide systemic changes in the financial structure of capitalism to create a broadly distributed ownership of productive enterprise. He argues that there is a "design flaw" in capitalism as we now know it. By virtue of this flaw, the financial system produces more capital for those who already have it, but does little to "create more capitalists." As the book's subtitle suggests, Gates favors a "shared capitalism."

It is hard to know how to categorize Gates, and perhaps under impending world economic conditions it is unnecessary to do so. In the past, it would have been valid to point out that his enthusiasm for worker ownership reflected either (a) a dishonest, because unadmitted, desire to promote a transition to socialism as many socialists have advocated it for well over a century; (b) a naive, because uninformed about that history, effort to do the same thing; or (c) a desire to inject some modicum of worker ownership into a market economy, but without an exclusionary animus against the wage system, which would not itself be inconsistent with a free market system.

Worker ownership, when combined with an opposition to other forms of enterprise that involve "the wage relation," has long been part of the socialist program. Indeed, Louis Kelso and Mortimer Adler's book The Capitalist Manifesto (1958) was a plea for socialism, quite transparent to anyone who read the book seriously (which few did). The fact that so many advocates of a free market have gotten onto the ESOP bandwagon is explainable by their not understanding this, combined with their implicit assumption that employee ownership would never be carried to the point of banning other forms of enterprise.

The idea that capitalism has a "design flaw" making the rich richer and the poor poorer, and leading also to overproduction and a lack of purchasing power in the hands of the masses, has also been around for well over a century. It has been central to much socialist thought. If nothing new has been added to the equation, this is a tired, much refuted, argument - overcome by the immense productivity and broadly raised living standards generated within market economies.

The question that those who support capitalism and to whom socialism is anathema must now ask themselves, however, is whether this perception of a flaw as just described is now being borne out by the rapid on-rush of a radically labor-reducing technology. In the impending age of computers, robots, materials science and biotechnology (an age that is just beginning, even though we may think we are fairly well into it), will it not in fact be true that immense rewards will come to those who own the technology, while the billions of people who are not owners of the capital and who inevitably will not be "knowledge workers" compete for a constantly diminishing economic role? …