The theory of Collective Capitalism was advanced by the American economist G. Means in the 1960’s. It supposedly overcomes the failings of traditional capitalism, which failed so spectacularly in the 1930s. It rejects the principles put forward by Adam Smith, the notion of the "invisible hand " of market forces being self correcting. The theory therefore reflects the process of the capitalist socialization of production but only in a distorted way. It relies on cooperation but ignores the determining fact that the ownership of the means of production is still private. It is not socialism is any real sense because the means of production still does not belong to individuals but to corporations.
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Collective Capitalist Theory
The essence of the theory of collective capitalism is expressed by Means in the following proposition:
“We now have single corporate enterprises employing hundreds of thousands of workers, having hundreds of thousands of stockholders, using billions of dollars’ worth of the instruments of production, serving millions of customers, and controlled by a single management group. These are great collectives of enterprises, and a system composed of them or dominated by them might well be called ’collective capitalism’” (The Corporation Revolution in America, New York, 1962, pp. 50–51).
Collective capitalism places an emphasis on cooperative long-term relationships, resulting in an economy directed by "relational markets". An example of this is interlocking share ownership, in which many companies own shares in other companies; this results in a spirit of cooperation between the involved companies, since each has an interest in the other's performance. An important example of this is the Japanese economy, in which 40% of the shares traded on the Tokyo Stock Exchange are owned by the collection of industrial groups known as the kigyo shudan, and a further 30% are owned by the network of cross-shareholdings known as the keiretsu. This results in a stability of ownership, since the potential for hostile takeovers is lessened, and also "friendly" competition; companies are encouraged to excel but for the benefit of others as well as themselves.
History
Japan is the only example of collective capitalism in practical form. It stems from the economic and social restructuring of Japan following World War Two. This programme of industrial development proved spectacularly successful, and Japan experienced tremendous growth; this led to Japan permanently adopting the collective capitalist ideal. Japan currently has the world's third largest economy by purchasing power parity (PPP) and the second largest by market exchange rates.
Collective capitalism's influence can be seen in modern Japan. Workers - particularly those who work for large businesses - become involved in their firms in ways unlike those that happen in other capitalist systems such as the United States. In return for loyalty and hard work, workers traditionally expect much more from their employers than their western counterparts, including job security - often for life - pensions and social protection. This system of collective cooperation and the domination of the worker in corporate policy has led to the Japanese system being dubbed "peoplism" by some critics.
Criticisms
Many critics have voiced concerns that, whilst collective capitalism often provides benefits for workers, it also places high demand on them and their families. Long hours and high levels of discipline are commonplace, resulting in high levels of stress and the emergence of karōshi or "death by overwork" among the Japanese workforce. This could hardly be called a benefit at all.