Tuesday, November 8, 2011
Shared Capitalism (by Francesc Trillas)
It may be a surprise to many that most firms even in the US are not like the traditional text-book capitalist firm. That was uncovered some time ago in the book "Shared Capitalism" (see the introduction here). This book was mentioned today in Bellaterra (where my university is located) by Prof. Vicente Salas, one of the best economists in Spain. The quotation was in the context of a presentation on firms and competitiveness. Salas has argued that one should be very careful to distinguish between a firm's competitiveness and a country's competitiveness. Strengthening the competitive position of a firm may be achieved by increasing profits without increasing productivity, thanks for example to market power or other market failures (like generating negative externalities), that may be contradictory with whatever it is to increase a country's competitiveness. A firm that shares not only its profits, but also its decision-making process, with workers and communities, may be much better towards contributing to a country's welfare. What apparently was a modest reference in business economics, was actually a call to a better society. If that call had been heeded some years ago, perhaps some countries like Spain would have had a different growth model, and today we would be facing a different scenario.