Book Cover

Democratic
Capitalism,  The Way to a World of Peace and Plenty


CCDC #150

The attached is the second CCDC message taken from Chapter 10 of my book Democratic Capitalism, The Way to a World of Peace and Plenty. The subtitle expresses my optimism for the future. While such optimism has been general during much of human history the present mood is critical. The intellectual community has been critical of capitalism from the beginning but many are now critical of democracy. The idea that capitalism and democracy should be a powerful combination is not taken seriously in academia or in the intellectual community. Incredibly many of the younger generation do not believe that they will participate in a better life.

It is critical that those in a position to influence the culture and its value system finally assume their responsibility to study the economic and social alternatives. I hope my book contributes to such a vital obligation to examine alternatives.

Ray Carey

Excerpt from CHAPTER 10
The Way to a World of Peace and Plenty

My experience at running companies (see chapter 2) gave me confidence that I understood the circumstances required to release the enormous latent power of people to produce and innovate. For many years, my job was to identify the full potential of companies, provide the circumstances conducive to realizing that potential, and neutralize the impediments. From experience, I learned that full potential is reached through individual development in a harmonious whole because total performance is the sum of individual performance enhanced by the cooperative environment. The governance template required to make this theory work includes the following four elements: integrity, a prerequisite to cooperation and trust; maximum freedom that motivates each individual to be involved and to contribute; minimum structure that provides the disciplines for freedom to function well; and competence to accurately relate task to resources and to execute effectively.

According to my understanding of these basics, I put this formula into practice. I had learned early from team sports that each is responsible for individual conditioning and skill development but also for contributing to that rewarding sense of team spirit. Later I recognized that this principle is consistent with the human duality of individual ambition and the instinct for social cooperation in which each lends his or her strengths to compensate for the weaknesses of others, and each borrows strengths wherein he or she may be weak. In this lending and borrowing process, I observed that each person both learns and teaches, and thus the whole becomes greater than the sum of its parts. Why, I wondered, was this way of individual development in a harmonious whole not also applicable to families, to education, to companies, to governments, and to the world as the universal way for each and all to reach their full potential?

This paradigm of democratic, progressive human behavior provided me with the ideal; my job was then to find the means to reach the ideal. I did not realize at the time that I was engaged in an interactive process of truth-seeking that would confirm the ideal by identifying, examining, and testing the means.

From experience, I learned that when individual ambition is properly coupled with social cooperation, the improvement of group performance is not slight but huge. Motivation and a positive attitude are the first priorities because people must want to be involved, to contribute, and to be trained. Motivated people with a positive attitude and a sense of common purpose make implementation easier, whereas people with a negative attitude make execution difficult.

If motivation and a positive attitude are the first priorities to individual development in a harmonious whole, where do they come from, how are they put in place? Further examination showed me that individual motivation and a positive attitude depend on individuals with a sense of freedom, dignity, self-respect, common purpose, and a fair share of the rewards. How can these circumstances be provided? Excellent education and training require a financial commitment and doing the job well; the sense of freedom, dignity, self-respect, fairness, and common purpose, however, are more complicated because they depend on the quality of leadership and the culture of the organization. Democratic capitalism offers the decentralized structure, but the requisite culture still depends on the right selection and training of leaders at all levels.

The final component to be integrated with high-quality leadership in the democratic capitalist culture is the sharing of financial rewards that have been generated by the improved performance. This opportunity for individuals to make their contributions and reap their rewards was the mission of the profit-sharing and ownership plan that I designed and put into place while CEO of ADT, Inc. The contest to name the plan was won by a lady who said that her understanding of the proposed plan was that “the more people care, the more they will have to share”; hence, Care and Share. The lady was correct: Whenever capitalism is properly democratized, individuals participate freely and think of themselves as owners, thus improving individual and group performance. In this environment, peer pressure and leadership replace top-down, command-and-control management; the fun and satisfaction that arise from involvement and cooperation displace fear and mistrust.

Among hundreds of branches, I found a shortcut to identify those ADT locations held back by the wrong culture and weak management. Because Care and Share was voluntary and required a financial sacrifice to participate, a low level of subscription in a particular branch was an early and accurate indicator of trouble. In effect, non-participation was a vote of no confidence in local management by the associates in that branch, which demonstrates that business, like politics, is local.

Ray CareyRay Carey

Ray Carey learned through managing companies for 33 years how to change the work culture to provide employees with their best opportunities to develop and contribute. This experience began as a 28 year old plant manager and later president of an electric motor company, and concluded with eighteen years as president , chairman, and CEO of ADT, Inc.

See Carey's autobiography of his work career in chapter two of his first book,

Democratic Capitalism, The Way to a World of Peace and Plenty.

For more information about Ray Carey and his advocacy of democratic capitalism, visit the pages of this website.