Why Cisco Isn’t Socialist & Who Really Is
Ellen McGirt is undoubtedly a good business reporter. Her recent cover story for Fast Company “How Cisco’s CEO John Chambers is Turning the Tech Giant Socialist,” is a great piece that shows the many interesting and truly innovative reforms that Chambers has instituted at Cisco.
However, I think McGirt is trying too hard to be clever or just doesn’t understand what socialism really means. Socialism is a political system that uses the force of government to take money from some and give it to others. Cisco is a private enterprise that’s only asking for you to buy their products.
McGirt’s confusion seems to arise from the socialist-sounding rhetoric of CEO John Chambers. He uses what McGirt calls “Collectivist Catchphrases” like “Co-Labor” to describe Cisco’s approach to management. He’s replaced managers (what many consider the avatars of capitalism) with councils and boards; emphasizes information sharing, rather than hoarding; rewards cooperation, rather than back-stabbing ladder-climbing.
But Chambers is no socialist, he’s a capitalist responding to a problem as old as business itself: How do you give those with good information and good ideas, the power to get things done?
Nobel Laureate Ronald Coase discussed this power/information theme in many of his works, such as “The Nature of the Firm” which he wrote in 1937.
Coase also recognized that while a business is a collectivist enterprise, it must be disciplined by existing with a larger competitive system.
Essentially, every business is a small experiment in social organization. Some take a hierarchical approach, where information is passed up the chain of command, and orders are passed back down. Others, like Cisco, attempt to create a more varied and sophisticated system of dealing with information and the power to execute business plans.
Thankfully, the meta-system of capitalism allows all of these approaches to exist side-by-side and compete with one another. This allows us to see which system really works, and which was just a Utopian pipe dream.
If I was to point to a socialist company, I wouldn’t be looking anywhere near Silicon Valley.
No, the real socialists are on Capitol Hill today, asking for our tax dollars. But, that’s where the socialists always are.
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Pablo
