Reimagining Capitalism Series: Grounding Our Economy in a New Ideas and Values
By Audrey Stienon, Analyst, Reimagining Capitalism
This post expands on the first key pillar for building a new economic paradigm as outlined in Our Call to Reimagine Capitalism. Read the first post in this series, “An Introduction to Ideas, Rules, and Power and How They Shape Our Democracy and Economy” here.
Five decades ago, our society experienced a seismic shift. Underneath the layers of headlines about the crises of the day — lingering economic stagnation, growing calls for civil rights and racial justice, and the departure of a disgraced president — the values that we used to guide our lives were changing. Old traditions and ideals were being abandoned, and new ones were emerging.
One value, in particular, quickly rose to the forefront of our social discourse and crystalized to become our cultural touchstone: individual liberty.
Liberty, of course, is a bedrock American value — ranking right in between “life” and “the pursuit of happiness” in the Declaration of Independence. Our country was founded on the belief that a society and economy can only truly thrive when individuals are free to pursue their desires and self-interests, both at the ballot box as a citizen of a democratic nation, and in the free market as an enterprising participant of a capitalist system.
For two hundred years, a commitment to liberty was one of the integral pieces of the base on which we sought to construct an ever-larger, ever-more-inclusive American society. In the 1970s, however, this base of diverse values and norms failed to shelter us from the crises of the time, and we chose to prioritize liberty as the base value that could keep our social edifice standing. Meanwhile, we abandoned the other values, norms, and institutions supporting our society as unnecessary constraints on liberty, and through willful neglect if not active undermining, allowed these parts of our social foundations to erode and decay.
To build on this new, more sparse, foundation of values, we turned to a set of ideas that described markets as the ideal tool for maximizing liberty. Ideal markets, after all, are ones where anyone is free to buy, sell, work, or trade without interference. We therefore accepted as fact a simple, yet compelling theory: that these free markets, by generating wealth and automatically distributing it from businesses to working people, would create the best possible society for everyone.
For the past fifty years, these ideas have been the blueprint we used to design and build our society.
We have measured the wellbeing of our society by tracking the wellbeing of markets, and lauded ourselves as GDP, corporate profits, job numbers, and the stock market continued to rise.
We have sought to remove government from markets and our lives: lowering taxes, deregulating, and increasingly relying on markets to provide services that had once been the responsibility of government. We worked to weaken labor unions, community leaders, even our own elected representatives — anyone who threatened to challenge the wisdom of markets.
At the same time, we have empowered business leaders and trade associations, assured that these job creators knew best how to generate profits that would naturally, and without intervention, trickle down to the rest of society.
Have trickle-down economics worked? If we view our society through the narrow frame of profits and growth, we could almost believe that the last fifty years have been a success. Look at the stock market! If it’s reaching record heights, then we must all be richer than we’ve ever been before!
But, of course, we all know this view to be a delusion. By so many measures, our economy has failed us. Our growing GDP masks our growing inequality, just as rising job numbers ignore how job quality and wages have been falling, forcing more and more people to work multiple jobs while still being barely able to support their families. Meanwhile, growing corporate profits do not mean this wealth is shared with the working people who made those profits possible — let alone invested to protect people’s health during a pandemic. Finally, an excess focus on free markets has, if anything made the markets themselves weaker — less innovative, less competitive, less resilient — as businesses used their new freedom to earn profits through monopolies and rent seeking rather than producing services of value to society.
If these fifty years have been an experiment of an economic theory, it is time to conclude, based on overwhelming evidence, that it has failed. Freer markets did not create a freer society. In fact, by “freeing” business from having to account for the negative consequences of their behavior, we burdened people, communities, and the planet with the growing weight of these costs, and by “freeing” people from familial, community, and public support systems, we forced people to pay the full price of any accident or mistake they might run into.
In doing so, we eliminated the choices people could make. How many of us have been unable to search for a better job, move to a new state, or open a new business because we and our families simply cannot afford the risk? Our living costs are rising, and there is nothing left to catch us if we fall.
We have spent too long trying to balance the entirety of our vibrant and complex society on top of a narrow and crumbling foundation. It is time for us to widen our frame of thinking and design a society built using a broader set of values that will be resilient to the growing tremors facing the world.
We need values like the dignity of having one’s worth measured by one’s contribution to one’s community, and not one’s wage; like the security and stability that comes from knowing that, even if the worst were to happen — unemployment, sickness, injury, natural disaster, or even a pandemic — you would still be able to keep your family in your home, put food on the table, and receive needed care; like the justice of seeing past harm accounted for, and future harm averted; like the sustainability of a society that can prosper in perpetuity.
Our definition of success must be more than just a subset of economic indicators. True success is achieved when our families are safe and healthy, when our communities are welcoming and full of opportunity, when our use of our planet’s resources are not unsustainably destructive…and, yes, when our businesses, small and large, can thrive and support our society’s wellbeing.
Omidyar Network supports a number of organizations that are pushing to expand the range of values and ideas used to understand the economy. Our goal is not to advance any one solution, but rather to generate a multitude of proposals for moving us from a society that prioritizes only profits to a reimagined capitalism which prioritizes human flourishing in all its forms.
Our search for new ideas led us (unsurprisingly) to think tanks. This is why we are supporting a range of organizations that are elevating human centered perspectives on the social role of our economy and proposing innovative solutions to our collective challenges.
The Roosevelt Institute, for example, advocates for structural economic change through progressive policies. Their fellows are key voices in promoting the pursuit of economic security, more dignity, and, ultimately, more human thriving for more people. As its President and CEO Felicia Wong notes, “The move to values beyond ‘freedom to participate in a capital-focused marketplace’ is the central pillar of post-neoliberal thinking. If the new progressivism is to thrive, making plain the values inherent in our economic choices will be essential.” One of their recent reports, New Rules for the 21st Century, discusses the need to strengthen our democracy by thinking differently about the respective social roles of markets and government; last summer, they released a True New Deal promoting essential reforms for the COVID-19 era.
Meanwhile, American Compass is working to create a coalition of thinkers drawing on conservative values for family, community, industry, and strong social and political institutions to advance economic ideas that ensure markets are serving people and their communities. Launched in May 2020, they have published and hosted discussions with thinkers from across the conservative and broader political spectrum. In September, they released a joint-statement calling for a renewed conservative labor movement that elevates worker voices in economic and market discussions, which was signed by a number of prominent conservative figures, including Senator Marco Rubio and former attorney general Jeff Sessions.
Our second focus is in strengthening the coalition of organizations working to disseminate these new economic ideas and incorporate them into strategic and policy discussions.
Although the academic field of economics has developed an array of new branches of research — from behavioral to ecological economics — that deepen our appreciation for the complexity of markets and their impact on society, this new thinking is not reflected in the ways that economics is taught in schools and universities, especially at the introductory level. We are therefore supporting the dissemination of CORE, a new open-source economic curriculum developed with the collaboration of top economists, which incorporates recent advances in economic thinking. This curriculum is being adopted by schools and universities around the world.
To help coordinate and align this growing global field of organizations that are developing and implementing new economic ideas, we are also supporting the Economic Change Unit, which both amplifies new ideas and works to strengthen the groups working around the world to transition us to a more equitable, sustainable, and democratic socio-economic paradigm.
We have also turned to the media, given its power to shape how we all understand the economic forces impacting our lives, to help disseminate these ideas and reframe how we think about our economy. To that end, we have supported compelling reporting on the structural economic inequities that have been laid bare by the pandemic by journalists and photographers from new outlets such as Vox, and Thomson Reuters.
Finally, we know that good ideas do not come from experts alone, and that real change is impossible without a broader cultural shift in how we, as a society, understand and discuss the economy.
In addition to supporting a range of local and national organizations that are working to formulate and disseminate new ideas at the grassroots level, we are also working to cultivate the next generation of economic leaders and thinkers. Last year, we collaborated with The American Prospect in a high school essay contest inviting students to read and reflect on one of four books highlighting the interlinking economic and racial justice challenges facing our country. We also partnered with Teen Vogue to solicit ideas from young people about how they would redefine economic success in our society. Amongst hundreds of submissions, we heard ideas ranging from educating people to move money in support of racial justice to a worker-owned coffee shop on a mission to end wage theft and democratize the workplace.
The ground below our feet is shifting, as it did all those decades ago. It is our mission to ensure that we have a solid foundation of values on which to build, and as many design ideas as possible at our disposal. With these, we can embark on the collective task of making American society as resilient and inclusive as possible.