COMMUNITARIAN VS. INDIVIDUALISTIC CAPITALISM
     "In the Anglo-Saxon variant of capitalism, the individual is supposed to have a personal economic strategy for success, while the business firm is to have an economic strategy reflecting the wishes of its individual shareholders...For the profit-maximizing firm, customer and employee relations are merely a means of achieving higher profits for the share-holders. Using this formula, lower wages equal higher profits - and wages are to be beaten down where possible. When not needed, employees are to be laid off...
     "...in Japanese business firms employees are seen as the No. 1 stakeholder, customers No. 2, and the shareholders a distant No. 3, whose divident pay-outs are low. Because employees are the prime stake-holders, higher employee wages are a central goal of the firm in Japan. The firm can be seen as a 'value-added maximizer' rather than as a 'profit maximizer.' Profits will be sacrificed to maintain either wages or employment.
     "Workers in the communitarian system join a company team and are then considered successful as part of that team...In the US or Great Britain, employee turnover rates are viewed positively. Firms are getting rid of unneeded labor when they fire workers, and individuals are moving to higher wage opportunities when they quit...In both Germany and Japan job switching is far less prevalent. In fact, many Japanese firms still refer to voluntary quits as 'treason.'"

REASONS FOR THE FAILURE
     "The continued success of the capitalist system and the failure of Soviet-style socialist economies can be attributed to incentives and markets, or the lack of them.
     "The socialists failed to recognize the importance of incentives. Workers, both in collective farms and in manufacturing firms, had no incentive to do more than was required. Managers similarly had no incentives. Firms could not keep any profits they made, and managerial pay in any case did not depend on the profitability of the enterprise...
     "Equally important, there was no incentive for innovation and growth. The increases in productivity of the labor force in capitalist economies over the past century...are...the result of the innovative efforts of entrepreneurs. These entrepreneurs almost surely did not succeed out of the desire to enhance the welfare of their workers; they were motivated by the lust for profits and the desire for returns to their savings...
     "Socialists wanted to replace the market mechanism for allocating resources with central planning. But they encountered two further problems. First, the bureaucrats did not have the requisite information to know how to allocate resources efficiently...Second, planners could not perfectly monitor the various firms in the economy, to ensure that resources were used in the way intended."