Monthly Archives: June 2014

The Specter of Proprietism

As I’ve discussed before, proprietism is not just a theory. It is a force brewing about in our society, and many thinkers, from academics to activists, have pondered its basic features to some extent. This post is devoted to the specter of proprietism that is haunting the United States.

The first and most obvious work is Free Agent Nation by Daniel H. Pink. Pink is arguably the founder of the concept as he documented the growing population of independent workers right at the turn of the millenium. Pink underlines the role that information technology is playing in this movement, and includes anecdotes, statistics, and even his own experience as a freelancer to help illustrate the notion of the rising free agent nation. One seldom-discussed postulation in this book is that independent workers sometimes enjoy a work-life balance superior and more natural than that of the organization man.

The proprietist form of organization in business boldly addresses the principal-agent problem: the problem of the owner of an operation having to trust that the actions of the controller of the operation are in the owner’s best interest. Adam Smith, who is often nominated the father of capitalism and modern economic theory, was troubled by this misalignment in the corporate form of organization. The principal agent problem was also a major contention for Michael C. Jensen, a financial economist and organizational strategist. Proprietism is a form of organization that theoretically corrects the misalignment of most principal-agent relationships, and I often find the works of these 2 mega-thinkers necessary prerequisites to proprietism.

The article Electronic Markets and Electronic Hierarchies by organizational theorist Thomas W. Malone provides a theoretical basis for the movement of proprietism. The paper states that the increasing use of information technology in business arrangements will cause industries and firms to favor market structures over hierarchical structures. In other words, the future of business will swap large, hierarchical and centralized organizations for a web of contractor-client relationships.

The presence of the specter of proprietism is perhaps felt the most in the writings of Sara Horowitz and her ideology New Mutualism. Horowitz is the founder of Freelancer’s Union, a non-profit that seeks to help and unify the 42 million independent workers in the United States. is decorated in the colors of anarcho-mutualism, and it serves the practical purpose of providing great advice and resources to freelancers.

In ESOPs and CO-OPs: Worker Capitalism and Worker Democracy, David P. Ellerman writes about the benefits of employee stock ownership plans, in which employees of a company own and are compensated by stock in that company. This arrangement is extremely proprietist in nature because it is a system in which the workers of an operation are also the owners of that operation. ESOPs are also highly regarded among Rawlsian thinkers. John Rawls was a 20th century political philosopher who theorized that an elusive political-economic system he called Property-Owning Democracy would be the most fair and therefore most just system. A property-owning democracy would not be a form of welfare state, but it would instead be a system in which property was more fairly divided among a population. While POD and proprietism seem like disparate concepts, the general idea of a meritocracy in which ownership of capital is more evenly distributed among citizens is not unlike the big picture desired from a proprietist society.

Also, I’d like to mention some other texts I’ve read that don’t directly support proprietism, but seem at least like-minded.

The Second Machine Age by Erik Brynjolfsson and Andrew McAfee appropriately acknowledges the significance of the digital age and the social-media age. They stay mostly non-partisan and discuss possible future scenarios such as worker displacement due to automation and robotics in manufacturing and service. Proprietism is, after all, based on the premise that information technology is permanently affecting our society, so we need to adapt our political and economic models to fit the times.

Mastery, like all works by Robert Greene, is a wonderful book somewhere between history, social science, and self-help. With vivid anecdotes, studies, and narratives, Greene explains the painstaking discipline and understanding required to complete an apprenticeship and become a master at ones craft. I like this mentality, because a proprietist must become a master of one’s craft and develop his or her own unique brand of that craft.

Finally, the article Capitalism Redefined by Nick Hanauer and Eric Beinhocker introduced to me the concept of viewing capitalism as an evolutionary problem-solving system. The article states that “saying that profits are the goal is like saying the goal of life is eating.” They argue that prosperity should be redefined as to judge “economic activity by the social value it creates” rather than the “money it earns.”

So while proprietism has novelty in its concept and semantics, the theory is somewhat inevitable when considering the context of our times and current thinking. It is my hope that we will continue to think of ways to improve society and political-economic systems designed to fit a social and interconnected world.