Social Capitalism: The New Market Philosophy?

Suddenly it dawned on me in the midst of a recent meeting of Deepak Chopra's Evolutionary Leaders: What we're missing is a market philosophy called social capitalism. People are hammering capitalism and socialism a lot these days. Yet when I think of socialism's root word, I think of sociability or something good for society. Webster defines socially-minded as "actively interested in the well-being of society as a whole."

I like that. But I don't like the definition of socialism: "an economic or political theory advocating government ownership and administration of the means of production and distribution of goods." That's not in the best interest of society.

Nor do I want feudalistic capitalism or feudalism masked as capitalism. But that's where the last 40 years have taken us. The wealth gap between the workers and the bosses is one of the most reliable metrics of healthy capitalism. The exact ratio is CEO pay-to-average worker pay, a ratio that 38 short years ago was 28-to-1.

Great by me if a CEO makes 28 times the average wage of his employees. Responsibility deserves rewards. At the company I founded, Tires Plus Stores, my pay was 10 times what my average employee made. Fast forward to 2005's ratio, a whopping 465-to-1.

Remember, capitalism is a system of wealth distribution that's both determined by private citizens and affected by worker productivity. Recall the old line, the harder we work the more we get paid? Despite ballooning productivity the last 40 years, non-executive workers' real wages are down 5 percent during the same period CEO pay has exploded from 28-to-1 to 465-to-1.

Corner office fat cats are coining a new expression of greed: pigs get fat and the middle class gets slaughtered. Falling wages, loose credit, high interest rates and predatory advertising (among other things) eviscerated the middle class. Through this lens the recent consumer collapse feels like karma. In a nice little bit of symmetry, a consumer pullback causes retailers to cut back on distributors and manufacturers run by -- you guessed it -- those selfsame fat cats.

Yet here's the rub. When you and I get into trouble we're reminded that Bill Clinton ended welfare as we know it. Pitty the needy. But when business falls off and big corporations get into trouble we taxpayers bail them out, whether or not we like it. Sounds like socialism for the rich and capitalism for the rest to me.

Bottom line: I'm a capitalist so long as corporate leaders are actively interested in the well being of society as a whole. Neither feudal capitalism nor corporate socialism is in society's best interest. Which brings me back to my epiphany. Maybe social capitalism is the way to organize our society.