Capitalism has emerged during the last two centuries taking three fundamental pathways.
- Adversarial Capitalism has typically pitted company against company, labor against management, and supplier against customer. This has created great wealth for the winners, but destroyed wealth for those wounded on the battlefield of what has often been unethical competition.
- Transactional Capitalism is the basis of most commercial exchange, seeking to buy low, sell high, bargaining, and differential perceived value between buyer and seller. People are seen as “replaceable parts” who can be swapped out for lower-cost alternatives, at will. Profit is maximized by ensuring lowest costs.
- Collaborative Capitalism, which has emerged as one of the most highly competitive, ethical, and innovative forms of doing business. Consistently, trust-based leadership produces a culture of teamwork, collaborative innovation, and dynamic adaptability. Profitability is superior, and a workforce imbued with strong community values builds sustainable eco-systems.
The collaborative nature of this form of capitalism does not imply the loss of competitive spirit. On the contrary, by aligning the interests of all stakeholders for a common goal, collaborative capitalism creates greater flow and creation of value, as does a winning sports team working together to compete in a contest.
The better all the parts work together, the higher the chances of creating, adapting, learning, and, ultimately winning.
Collaborative Capitalism embraces using people’s minds to produce new innovations, including better processes for production and removal of non-value added work.
Most forms of collaborative capitalism reward workers with either a percentage of the profits or a portion of the equity ownership.
Note: Collaborative Capitalism has absolutely nothing to do with Socialism. It is a distinct form of Capitalism, it competes on fair ground with all other businesses, and works in open markets like every other business.