Alternative Economic Models - An Ownership Economy

SnowyChainsaw

I have been thinking about Alternative Models of Ownership and I would like to hear your thoughts on the subject. I am not particularly well versed in economics but I have tried to outline the argument as best as I can:

Capitalism has a great potential for the generation of wealth. It minimalizes the cost of production while maximising profits made from selling the goods produced. However, in the interest of keeping costs as low as possible, very little of that wealth is allowed to trickle down to the labourers and is therefor not efficiently distributed throughout society.

Socialism, on the other hand, is very effective at distributing wealth. Since the means of production is collectively owned, everyone benefits equally from the goods produced. However, the incentive to put in the extra effort needed to generate additional wealth is minimalized by a lack of scarcity and little reward for hard work.

Therefor, an economy in which the means of production are collectively owned but still allows the free market to operate will both incentivise the generation of wealth and distribute it efficiently throughout society.

Members of a society can acquire ownership over the means of production by establishing small collectively owned yet independently operated cooperatives that, when working together as a network, can fulfil the same function of larger, corporate enterprises. This will allow members of society to reap the rewards of the goods they produce without undermining the effectiveness of the free market.

This video series explains the idea far better then I ever could.
I was also inspired by The Labour Party's paper on Alternative Models of Ownership.

Thorongil

trickle down — SnowyChainsaw

Aaaand you lost me.

Here (since you cited youtube videos):

AngleWyrm

Redistribution through taxation produces a similar result.

Londoner

Members of a society can acquire ownership over the means of production by establishing small collectively owned yet independently operated cooperatives that, when working together as a network, can fulfil the same function of larger, corporate enterprises. — SnowyChainsaw

You cannot both be independent and also work as a network. The two pull in opposite directions. Yes, it would solve many problems if we could just combine the upside of both small scale and large scale enterprises, while avoiding the downside, but that is easier said than done!

I think the videos you link to show rather an idealistic view of pre-industrialised society (e.g. in the 2nd video). Rather than experiencing stability and independence, most small farms and enterprises lived permanently on the edge. The videos see industrialisation as being about the city, but the same thing was happening out in the countryside.

I would suggest you consider the Chinese experience. Industry (especially agriculture) was organised in communes and there was a lot of experimentation with the size and shape of those communes, and their degree of autonomy, with the object of keeping just the balance that you describe. So you need to say why your own version wouldn't end up following the same path as China.

Cavacava

↪SnowyChainsaw

Members of a society can acquire ownership over the means of production by establishing small collectively owned yet independently operated cooperatives that, when working together as a network, can fulfil the same function of larger, corporate enterprises. This will allow members of society to reap the rewards of the goods they produce without undermining the effectiveness of the free market.

I like the videos, ideas are presented very clearly, but I am not so sure of all the conclusions, which are very attractive, I guess I just don't see their possibility.

Also, I worked with a company that was owned by its employees and based on around a 10 year history of operations, from when it became an employee owned company to when I looked at the books, the company operations had gyrated widely and that's why I was called in.

This company's problem was not its product (it put aerial lifts on utility trucks and sold completed units to utilities, cable and TV companies) , sales growth was steady, the problem was with the leadership of the company. A good leader has to be able to act decisively, but fractions had developed in the company leading to questions about management and that lead to missed quotes, and more expensive operations.

Of course that is just one case but I think it points to a problem. Today a leader of a decent size company must produce results, or they will not have a job. They cannot be hampered by employee/owners 2nd guessing and not following their directions.

I think it is more likely we will see much larger corporations forming over the coming years employing less and less people per unit sold using machines/computer/economies of scale to achieve these goals.
Governments and corporations will become more and more complicit in how the Government is operated. Corporations need people who can buy goods, they will realize that unless they can make provisions for an increasing labor population, the market for their goods will dry up...

SnowyChainsaw

↪Londoner

↪Cavacava

Thank you both. Those are some very valid criticisms.

Alternative Economic Models - An Ownership Economy

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