Recently, I discovered that a 3rd economic alternative to go with Capitalism and Socialism which goes by the name "Distributism". I found this doctrine while researching my own ideas of wage slavery. I might have mentioned this before, but I believe that labor done without reward of a portion of incremental success based rewards (dividends, options, profit sharing, or total ownership) is actually a form slavery.
Let us look back thousands years ago to Greece which had a huge dependence on legal slavery. In fact, it was said that no free Greek actually worked for another except when he was an elected official working for the people. This, I'm sure, is hyperbole, but the truth remains that it was quite widespread and afforded the free Greeks a lot of leisure time which is the reason we get so much philosophy from the time period since no one had anything better to do but ponder.
In those times some would fall into debt of another, and they then had to sell themselves into slavery to pay off their debts. Sometimes they'd actually pay it off, but often when the debt was too large they'd die a slave when they were born a noble. Fast forward to the British colonies across the Atlantic, and you'll find the same thing called indentured servitude where a person would sell their labor for a number of years in exchange for a ticket to the "New World" where they would work and eventually fulfill their contract and become a free man.
What is the difference though between slavery and earning a wage? Well really it's just like buying or leasing a car and with the same outcomes. If you buy a car you've got a much bigger incentive to keep it running well because you're in it for the long haul. On the other hand, when you lease (or even rent) a car you're not going to treat it as well because it can be easily replaced. In industry, it's like this:
If you buy a slave you've purchased them at a value which (economically speaking) will be quite similar to, or with luck less than, their future cash flow (how much extra profit will they extract for you). Say, you take out a ten year loan to buy a slave for $10k for 10 years. Without looking at the interest, you'd be paying a thousand dollars a year, and you'd have to make sure that he stay alive so that your investment paid off.
With a wage slave, you're renting. You need only pay them a thousand dollars a years to stay with you, and if they get injured or die then you just rent another one (like a car). This is why there are all those labor laws in the US with unemployment, severance, etc., because during the Industrial Revolution and before the labor movement; this is exactly what happened. You'd hire a guy to mine coal, and if he got injured his kids would actually be on the hook - worse than slavery.
Before you say,"Well I work for a salary, not a wage", let's get something clear. A salary is even worse than a wage and being salaried means you're probably in a worse position than a wage slave. Here's my logic. As a wage earner you get paid in direct proportion to how many hours to work and even double for overtime. As a salaried employee you get exactly a certain amount every month which you can't do anything to change - lest you ask for a raise (which a wage earner could also do).
Generally, a salaried worker is in management, and therefore is not protected under most labor laws which are meant for the factory workers and so on. The only incentive to work a salary is so you could theoretically finish all your work early and leave while still earning your pay check, but try to keep a job doing that for very long. I think you'll find most salaried employees work far more than 40 hours a year, and yet that is what they're paid for.
This is the state of labor today.
Socialism rejects this is the way it must be because they see it as automatically bringing about a thin layer at the top who own everything. In reality, they're pretty much right on that. Looking at America one of the most capitalist nations on earth, you see there is definitely a class divide, and that what the socialists say is true. Their methods though, are not.
They say the means of production (land, buildings, equipment, resources, etc.) are in the hands of the few, and that this breeds a large class divide. Which again, I'd have to agree that this does and is happening. Their plan is to instead have the state run all production and distribution so that those "corrupt corporate pigs" can't exploit the people. Well, they missed the boat with that one. The infallibility of humans is not limited to the merchant class; it exists in politics too. As Steven Levitt wrote in his book Freakonomics, the merchant class actually have an incentive to be honest and hardworking because ones reputation means so much since business is heavily based on trust - even with the army of lawyers crawling about their ranks.
Socialists replace the board of directors of all the companies with a single politburo which essentially has the same function - to control all production of all industries. However, this massive and unwieldy bureaucracy has no personal incentive to help the "customers". This may explain why one communist country was left without hair pins when the government forgot to make them one year. So, essentially the socialists and communists didn't like the rule of people interested in pleasing the customer; so instead they replaced them with an inefficient body of people without interest in the people. Brilliant!
Well, with these two systems seemingly failing, distributism tries to find another way. This is by the use of personal property. They say lets not have a small class of people controlling the means of production whether it be the merchant class or the political class. They do this by saying that everyone should own their own means of production: plumbers their torches and wrenches, seamstresses their sewing machines and looms, and so on. This also puts to an end the aforementioned wage slavery.
I have to say on the surface this sounds exactly how I believe. As an entrepreneur, I'd like to own or at least control (via lease, etc.) my means of production. Whether it's my tools, my computer, my building, or whatever; I want the fullest control. From this control stems the power to better control my life, and if I'm good at what I do my company will grow. With this power though, comes responsibility. No longer will a corporation shield me when times are bad, still paying my wage. No, now I'll me at the mercy or the market and the "Invisible Hand" and hope it doesn't slap me.
Under distributism the workers I hire would be in a similar position. They'd own part of the company or at least a share of profits due from the extent of their labor. They'd be able to take part somewhat in decision making on some level, and share in the ups and downs that would follow. A lot of pressure really. Also, it would be hard in a company that was quite large. I can't see Wal-Mart ever seeing the benefit of giving John-Q stockboy a .00000001% stake in the company (which is actually $1,988 as of today), and I don't see having that minuscule of a vote as very empowering.
I believe a strict distributist would say to limit the size of the corporation so that no one may be brought to such a position, but you run into an economic decision problem amongst nations. For example, say that the US went this way and said no corporations are to exist with more the 500 or a 1000 workers (whatever reasonable, arbitrary number you wish). This would also limit the extent benefits of economies of scale in the nation. The result would be that the price of goods would increase with the costs going up due to this effect. This would make our nation uncompetitive with the world economy and all the trade embargoes and tariffs you could make would only hurt the nation.
I conclude , therefore than distributism is impossible to implement but does sound quite good on paper. I think that a mild Distributist - Capitalism might have a place in today's society, but this pretty much already exists with all the incentives (profit sharing, etc.) that's going on in places like Nucor Steel or even the ever-hated Wal-Mart.
As for improving the lives of the poor and working classes, I don't think there is a good solution. Even Jesus, not a small supporter of the poor in the least, said that "poor will always be with you" in Matthew 26:11. All we can do is as has often been said is to "teach a man to fish, and feed him for a lifetime".
Slave has a harsh connotation in today's environment, but back then it was accepted as a part of life. Slaves were considered to be in unfortunate circumstances, but they weren't considered bad people. Some, as it pains me to say, will always be wage slaves.
