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.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.