Just based on the summary, it sounds like he has a lot of good ideas and one bad mistake: profit-sharing is socialized. So if the company does well then the employees do well, but individual contributors would have trouble getting rewarded.
It may not be as bad a mistake as you think. There's some experimental (if unintuitive) evidence that rewarding individual contributions in organizations is harmful, even to that individual's motivation. The extrinsic motivation extinguishes the individual's intrinsic motivation.
Many high achievers have an attitude of "achievement for the sake of achievement." Individual rewards crush that spirit.
B) Herzberg's Motivation-Hygiene Theory (Two Factor Theory). The idea is that a very low salary can lead to dissatisfaction, but increasing the salary beyond the required minimum isn't one of the things that increases happiness. Link: http://www.netmba.com/mgmt/ob/motivation/herzberg/
There's a huge difference between the sense of ownership that comes automatically from small organizations and the 'incentives' that a paternalistic committee chooses to bestow on a few in its largesse, while bleeding motivation in all the other ways large organizations do that PG talks about. I don't interpret any of those studies (including Herzberg's in the sibling post) to mean 'socialism isn't so bad'. Yes it is so bad. But that doesn't mean you can't implement capitalism poorly.
Capitalism isn't about profits, it's about motivation.