Capitalism: Its Two Variants

There exist 2 variants of capitalism: Individual Capitalism and Communitarian Capitalism.

Individual Capitalism is epitomized by the United States. Japan , at the other extreme, exhibits a form of communitarian capitalism.

The 2 tables below outline the differences between the 2 systems.

MAJOR CONCEPTS & ASSUMPTIONS
UNDERLYING THE ECONOMIC SYSTEM

*CONCEPTS & ASSUMPTIONS*	PURE COMMUNITARIAN CAPITALISM*	*PURE INDIVIDUALISTIC CAPITALISM*
*How to optimize the performance of a system:*	*Cooperation at all levels will optimize the system.*	*Competition at all levels will optimize the system.*
*The key driving force in the economy:*	*The desire to build for the future.*	*The desire for current consumption and leisure.*
*Motivation for work:*	*Work provides utility. Individuals live to work.*	*Work provides disutility. Individuals work to live.*
*Responsibility for skills and training prior to employment:*	*Responsibility of society. Strong high schools and apprenticeship programs.*	*Responsibility of the individual beyond relatively weak high schools. Few apprenticeship programs.*
*Relationship between government and business:*	*Government supports and cooperates with business to optimize the system.*	*Government regulates business to promote competition. Click for* *Summary of the 2001 and 2005 ASCE Report cards on U.S. Infrastructure.*
*Government policy:*	*Promote growth in supply.*	*Promote growth in demand.*

MAJOR BUSINESS CONCEPTS ATTITUDES AND PRACTICES

*CONCEPTS ATTITUDES & PRACTICES*	*PURE COMMUNITARIAN CAPITALISM*	*PURE INDIVIDUALISTIC CAPITALISM*
*Dominant objective and focus:*	*Building for the future with long term focus.*	*Profit maximization with short term focus.*
*Organizational Structure:*	*Horizontal, flat or lean with relatively few layers of management. Bottom up consensus decisions.*	*Vertical with many layers of management. Top down autocratic decisions.*
*How profits are used:*	*As fuel to keep investing and building.*	*To increase consumption and leisure for stockholders.*
*Hierarchy of organization’s constituencies:*	1. Employees 2. Customers 3. Stockholders 4. Suppliers	1. Stockholders 2. Customers 3. Employees
*Employment and job security:*	*Lifetime employment promotes bonding.*	*Uncertain employment discourages bonding.*
*Responsibility for training after employment:*	*Companies provide cross training and job rotation.*	*Individuals are mainly responsible for their own skills.*
*Route to management:*	*Long multi-function internship.*	*From college, to single function specialization, to management.*
*Management* *attitude toward teamwork:*	*Teamwork and cooperation are essential for optimizing the system.*	*Teamwork is risky. Individual performance will optimize the system.*
*Management behavior in economic recession:*	Cut: 1. dividends 2. management compensation. 3. workers pay and jobs as last resort.	Cut: 1. workers pay and jobs 2. management compensation. 3. dividends.
*View of leadership:*	*A leader manages processes or work.*	*A leader manages results.*
*Management attitude toward problems:*	*Understands the variability within the system and tends to blame the system first.*	*Specialist has less understanding of the system and tends to blame employees.*
*Tools of management:*	*Employee empowerment, group praise and profit sharing. Statistical control. Managers facilitate, counsel, teach and provide resources.*	*Management by objectives, merit ratings, incentive pay, quotas, standard rates and quantities, piecework and annual ranking of employees. Count results.*