The Post Capitalist Society

To paraphrase Peter Drucker in his book, Post Capitalist Society, what Karl Marx envisioned has been achieved in America, and true capitalism is alive today in China.

Marx wanted the wealth of companies to be in the hands of the workers. This has been achieved in the West through the holdings of pension funds. Capitalism, taking personal financial and business risks to create wealth, is now the China story. So from an economic perspective, China is capitalist and we, in the west, are the opposite. To make this convolution worse, Wall Street hijacked our wealth and lost it. This dark side of the “Post Capitalist Society” kind of sucks!

Drucker also points out that when new capitalists are successful in North America, governments usually go after them, as has happened with Microsoft, Google, Dell, and others. This disturbing and unfortunate reality kind of takes the fun out of pushing the boundaries.

Governments are bringing in more regulations in an attempt to prevent the kind of situations that lead to financial crises from recurring. Many of these regulations require more disclosure from companies in an attempt to create transparency. Transparency should be a good thing, as better information should help individuals be better investors; it takes out the risk. So maybe it is good, but psychologically, more disclosure makes boards of directors and executives cautious and risk-averse. Risk aversion kills innovation and gives true capitalists a significant advantage over the cautious. The cliché no risk, no reward comes to mind.

Fortunately, there are still many innovative companies in America with brave leaders. In large public companies like Apple Inc. (Nasdaq: AAPL) and small private ones like Boston Power, innovation is at the heart of their success and our collective future. These companies are part of the bright side of the “Post Capitalist Society” making the world a better place. They are not risk-averse!

Closer to home, the company I run (Lytica) is constantly driving new innovation. One of our products, FreeBenchmarking.com, enables price transparency for electronic components in a secure and confidential manner.

Reflecting on what I have written above, is price transparency good for the electronics supply chain, or, for that matter, any supply chain? My answer is absolutely yes in the near term for the supply chains of early adopters. In the long term, it has the potential of being transformational, which has both good and bad consequences.

Transparency will change the industry. Early adopters will build lower cost and more secure supply chains because of their access to a wealth of new information. Late adopters will spend a lot of their time reacting to intense competition rather than creating it. What’s your answer?

By Ken Bradley – Lytica Inc. Founder/Chairman/CTO

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