It’s surprising how often during a discussion about this economic model that I get met with the words “Oh, so it’s socialism”. If the listener is socialism-friendly, they think they know what I’m going to say, and if they’re not socialism-friendly, they’re terrified of appearing a Communist, so in both cases, they stop listening. If you look up Socialism, about the only thing rigidly attributed to it is that the State owns the “means of production” (capital; things like a steel mill). Consider the following comparison of the capitalist, the socialist, and the “profitless free market” point of view, regarding the ownership of the means of production.
In the capitalist model, a proprietor borrows money from a bank to build a steel mill. The loan enables him to hire firms to build the mill, and pay the employees from the time the mill is complete until the first sales are made. The proprietor in the capitalist model is driven by the quest for profits, and his management of the assets and employees will reflect that. As sole or majority owner of the mill (and the company), this creates a power dynamic that is not naturally insulated from abuse and exploitation.
Marx saw this abuse of the laborer and responded with Socialism, saying “because the proprietor can be a jerk, we should keep him from owning the ‘means of production’”. The State looks like a good alternative owner at first glance: it appears to be impartial, and it’s more than one person, so there’s low risk of egomania being a problem. But in a socialist model, the State doesn’t just own this steel mill, it owns all steel mills, with their local workforce nuances, different design ideologies, and technology from different eras. Not only does it own all steel mills, but it owns all capital in ALL INDUSTRIES. These things should be actively managed directly, by people in touch with the local specifics.
In the model I propose, company assets are owned equally by everyone employed by that company. This ownership gives the local company control over its business. The employees will be able to react to the challenges their location and technology mix presents to them. They’ll be able to upgrade or dispose of assets at their discretion. That’s ultimately the most relevant aspect of asset ownership.
In comparing these three perspectives, a question comes to mind. Why did we choose to let the proprietor “own” the “business” and claim the “profits” (excess labor from customers)? The knee-jerk answer to that is simply that the proprietor owes the bank the principle and interest on the aforementioned loan. It deserves reiterating at this point that the bank didn’t actually loan the proprietor money it possessed, it created money to make the loan. The bank didn’t actually put assets at stake, so the proprietor doesn’t actually owe the bank, so one could argue the proprietor doesn’t actually own the company. Of course, the story would be much different if the proprietor defaulted, but that’s just evidence that there’s more to unravel and properly categorize going forward.