By Richard Feloni
Back in January 2018, Insider Inc. cofounder and CEO Henry Blodget kicked off Business Insider’s “Better Capitalism” series at the World Economic Forum’s annual meeting in Davos. He spoke about the ways America’s approach to business over the past 40 years have led to rising inequality, with the rich getting richer and the middle class declining. This shift resulted in populist anger, he said, and slowed economic growth.
But it didn’t have to be that way.
Given that we recently finished a decade and began a new one, Business Insider embarked on a project called “The 2010s: Toward a Better Capitalism.”
Over the two years of exploring what “Better Capitalism” could mean, we’ve taken a look at how the US got to historically high levels of inequality, how labor power declined, how short-termism contributed to a climate crisis, and why our current version of capitalism is not the way America has always practiced it. Along the way, we found that while these issues are 40 years in the making, it took the financial crisis and Great Recession to bring them to the forefront. The 2010s saw millions of Americans reconsidering the economy that guided their lives.
For our decade in review series, we spoke to everyone from the CEO of outdoor-apparel darling Patagonia to the billionaire founder of Bridgewater Associates. What’s striking is that regardless our source’s worldview, all agreed on one thing: The US is at a turning point in its history, and if it wants to have a healthy future, it needs structural reform.
Below, we’ve collected summaries of and links to each story in the “The 2010s: Toward a Better Capitalism” series.
Occupy Wall Street gave the country a vocabulary that even its initial detractors would go on to use regularly.
The Occupy Wall Street Movement of 2011 was not particularly large, and was widely derided by establishment figures on both the left and the right. But it captured a real angst that came out of the financial crisis and recession.
The rallying cry of “We are the 99%” ingrained itself in American culture, adding a new degree of class consciousness based on the tremendous wealth gap that was on its way to reaching a level not seen since the period that led to the Great Depression and eventually WW II, where it is now.
As for the issues the Occupy protesters were once mocked for — a wealth tax, universal health care, and a general rethinking of how companies approach business — they all became mainstream by decade’s end.
The 33-year-old economist Gabriel Zucman has been at the forefront of the inequality debate this whole time.
Three French economists have led the way in collecting and analyzing data on the rising levels of inequality around the world: Thomas Piketty, Emmanuel Saez, and Gabriel Zucman.
Zucman, at just 33, has been in an advantageous position, having collaborated extensively with Piketty and Saez and turning his research into proposals with a real impact.
His career began during the recession, and when he came to America in 2013, he and Saez set to work charting the degree of US inequality since 1913. They discovered that the top 0.1% owned 20% of the country’s wealth, and that their share had been on the rise since the 1980s.
By 2015, they had turned toward determining solutions for an imbalance they felt threatened America’s stability. They came up with a wealth tax proposal, which taxes billionaires’ assets. The Democratic candidates they proposed it to for the 2016 election found it too radical for the public, but for the 2020 race, both Warren and Sanders have worked with Zucman and Saez on their own versions, and are passionately backing it.
Elizabeth Warren helped make the call for antitrust reform a political movement once again.
Last September, 50 American attorneys general announced an investigation into Google’s domination of internet advertising and search. The Federal Trade Commission said in December it was going to investigate the fairness of how Facebook integrated its apps. Antitrust policy, aimed at preventing corporations from exerting monopoly power that harms competitors and consumers, is a regular part of the news cycle.
We spoke about this development with Matt Stoller, author of the antitrust history “Goliath,” and a researcher at the Open Markets Institute who helped put an antitrust plank back into the Democratic platform for the first time since 1992.
He attributed the buzz around antitrust to Warren, who began calling for breaking up Big Tech back in 2016. Stoller, however, has seen that there is also notable Republican support for strengthening antitrust, most loudly from Trump’s ally Sen. Josh Hawley.
To Stoller, the past 40 years of deregulation have resulted in a power structure that has exacerbated inequality, and antitrust is a key lever for reversing it. “We have the choice of whether we want to govern or let them govern,” he said, referring to the country’s largest corporations. “And that’s really what’s on the ballot right now.”
The nonprofit behind the ‘B Corp’ designation has created a tool to help companies determine and meet sustainability goals.
Management guru Peter Drucker’s line that, “You can’t improve what you can’t measure,” has become a cliché, but it fits perfectly with the current movement around sustainability. Whether a company is looking solely for good marketing or is earnest, a sustainability initiative is meaningless unless it can be closely tracked and measured against real metrics.
B Lab, the nonprofit that has been pushing against shareholder primacy since 2007, released its SDG Action Manager tool in January, in conjunction with the United Nations Global Compact. It provides companies of all sizes and industries with a self-assessment against the UN’s 17 Sustainable Development Goals (SDGs). The tool then helps the company determine which goals and policies to set, and how to track them.
B Lab, whose community includes large public corporations like Danone and smaller private companies like Patagonia, aims to have 5,000 active users for the SDG Action Manager by the end of the year.
Toys R Us bounced back from bankruptcy with worker policies that could provide a model for labor rights.
Erica Smiley, executive director of the union rights group Jobs with Justice, believes that if the US has any shot at reducing its historically high inequality, companies have to not only treat workers better, but give them more say in the direction of their business.
She pointed to the Fair Food Program and Toys R Us as examples of how to make this work. In the former, Florida farmworkers have made deals with farm owners and multinational food companies like Yum Brands around fair wages and safety practices.
And following bankruptcy and a restructuring, Toys R Us employees formed a “mirror board” to meet with the actual board, a model somewhat similar to the co-determination model in Germany that Democratic presidential candidate Sen. Elizabeth Warren advocates for.
“It’s time for business to evolve, and place worker participation at the center of its growth,” Smiley wrote in an editorial.
Opportunity zone legislation may reshape business communities across America.
The legislation for opportunity zones passed in 2017 as part of the Republican tax bill, but its roots are in a bipartisan effort that was led on the policy side by Democratic Sen. Cory Booker and Republican Sen. Tim Scott.
Opportunity zones are generally low-income communities where investors receive tax breaks, and do not have to pay capital gains taxes if they keep their investment for 10 years. There are nearly 9,000 of them across all 50 states, DC, and five territories, and the regulations around it were only just finalized in December.
Steve Glickman is a former adviser to President Barack Obama, and as the cofounder of the Economic Innovation Group, he set out to develop an investment model that would incentivize wealthy investors to move money into parts of the country especially hit by the financial crisis.
Glickman is hoping that the policy outlasts this era of polarization and becomes one of the country’s go-to tools for addressing pockets of inequality through business opportunities, not gentrification that shuts out existing residents.
Labor leader Sara Nelson is America’s most influential flight attendant, and she’s on a mission to revive unions.
Sara Nelson is the president of the Association of Flight Attendants-CWA, an affiliate of the AFL-CIO, and she gained headlines a year ago for inspiring air traffic controllers to not show up for work during the federal government shutdown. It had a ripple effect that led to grounded flights, and within a few hours, the government reached a deal that ended the shutdown.
In an editorial for us, Nelson wrote that the financial crisis and recession gave corporations and political donors an opportunity to crush labor power, but that these experiences of the past decade also sowed the seeds for a new labor movement that is gaining momentum and will come to fruition in the 2020s.
She said her union is fighting alongside those pushing for universal healthcare, significant climate policy that also creates jobs, and regulations that rein in unchecked corporate power. “But to win those fights, all workers need a sustained structure that can call people in and rally us to fight together in solidarity,” she wrote. “Workers need unions.”
Patagonia CEO Rose Marcario has been leading collaborative movements that bring competitors together to fight climate change.
As the CEO of outdoor apparel company Patagonia, Rose Marcario has significantly grown her business while doubling down on its mission to have a positive effect on the environment.
Under Marcario, Patagonia has sued the Trump administration for reducing the size of a national park and led a successful boycott against the location of a trade show due to support for that policy, refused making corporate gear for any company without a significant sustainability policy, helped spread a regenerative agriculture practice to other companies, and has continued co-leading the Sustainable Apparel Coalition alongside Walmart.
“The 2020s could be the decade where we invest in the future, not rob from it,” she wrote in an editorial. “The coming years could see innovation and collaboration providing solutions to our biggest global challenges. We know the answers — we just need the courage needed to act on them.”
Bridgewater founder Ray Dalio said all economic and financial reforms must have productivity as their primary goal.
Bridgewater founder Ray Dalio has been one of the several billionaire business leaders calling for structural change, and even deemed American inequality a “national emergency.”
In an interview with Business Insider, he said that he’s open to a wide range of ideas on topics like healthcare and taxes, but that no policy will have a long-term beneficial effect unless it can increase the US’s productivity. This has been on the decline since 2004, and has been especially low since the financial crisis.
Dalio said that the most effective tactic for increasing productivity lies in educating our workforce.
He told us that if the US can’t move past its intense polarization and ends up choosing either far left ideas or the status quo, it will head toward an economic and social crisis of the kind last seen in the 1930s, which saw the Depression and start of WW II. He gives the country a 30% chance of avoiding that disaster, but is trying to remain hopeful.
Insider Inc. CEO Henry Blodget said that while all of the ideas you just read are great, we can’t forget about raising wages.
Insider Inc. cofounder and CEO Henry Blodget has spent the past decade writing about the ideas that he formalized as “Better Capitalism” in 2018.
In a new editorial, he wrote that he’s been happy with how the business world has embraced the notion of “stakeholder capitalism” over shareholder primacy. But he wants to keep the spotlight on his pet issue, wages.
“The people who have been most hammered by ‘shareholder capitalism’ have been low-paid employees, many of whom are now paid so little that they’re below the poverty line,” he wrote. Wages have remained stagnant for the past 40 years, the same time period of profit maximization at all costs.
Corporations need to remain innovative, Blodget wrote, but if they are going to maintain long-term success, they must raise their workers’ standard of living.
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