Is Capitalism Getting Fixed?
It’s pretty much common knowledge that capitalism is broken. Right wing media would have us believe there’s a growing rift between those who want to fix it and those who want to swap it for something else, but my sense is we could get consensus on at least the underlying problems if we were a little less focused on extracting political advantage from the continued division.
What we should be focused on instead is what we can do to improve the reality we all saw with our own eyes during the pandemic… crippling inequality, poor access to healthcare, racial bias, educational disparities, food insecurity, all impacting those not just at the bottom, but in the middle. This scares people, and too many scared people in a democracy becomes a scary thing in itself.
My kids, of course, blame me. Graduating college in 1988 — the first in my family to do so — I thought I was living the American dream. “Greed is good” was the unofficial motto back then, and Ayn Rand was required reading for anyone who aspired to a better life than what they’d grown up with. We really believed that if you pursued your own interests well enough, everyone would benefit. It was a liberating idea, in retrospect, if a naive one.
I spent the decades that followed broadly focused on delivering for shareholders, like most of my friends. While I don’t think we were evil, I can admit we were wrong not to be more focused on other constituencies, on the community and on the planet as a whole. Regardless, we created a world where the zip code you’re born in shapes your life more than the talent you’re born with, and that’s a world that cannot stand.
Everyone sees this, and a movement to reform capitalism, led by those at the top of it, seems to be gaining steam. In June of 2015, Laudato Si — “on care for our common home” — was written by Pope Francis. “The lessons of the global financial crisis have not been assimilated,” said the Franciscan monk now at the head of the Catholic church, “And the market cannot guarantee integral human development and social inclusion.”
The encyclical called the world to action to turn back the twin tides of environmental and economic catastrophe. By September, Sustainable Development Goals were agreed to by the United Nations, and in December, the Paris climate accord was signed. It wasn’t perfect, and it wasn’t enough, but it was a start.
In August, 2019 — even as new political leadership in the U.S. railed against the global climate pledge it had ushered in — business stepped in to fill the gap. More than 180 CEOs of leading U.S. companies signed the Business Roundtable’s new statement of corporate purpose, committing to do a better job advancing the interests of all of their stakeholders: customers, employees, suppliers, communities and shareholders. JP Morgan Chase Chairman and CEO Jaime Dimon called it “a call to action to do more for everyone who works for us, and society in general.” “Capitalism must be modified,” Dimon continued, “to do a better job of creating a healthier society, one that is more inclusive and creates more opportunity for more people.”
Recently, as the U.S. returned, diminished, to the global community of nations, something called the Council for Inclusive Capitalism has emerged to tackle these issues on a global scale, putting the Holy Father in league with Hedge Fund titans in a plot twist not even M. Night Shyamalan could not have seen coming.
Jaime Augusto Zobel de Ayala, the Chairman and CEO of one of the largest business groups in the Philippines recently joined the council, and said the following:
“I’ve long been a firm believer in the virtues of the capitalist system across nations… Capitalism has lifted millions out of poverty. It has improved the lives of billions more , and created dynamic and adaptive societies with a plethora of choices and life-changing conveniences… The capitalist system… is still quite fragile [though,] and has led to growing inequalities between segments of our society. Covid-19 has shaken that fragility to the core, and threatens to worsen those inequalities. Millions recently or marginally lifted out of poverty have been pushed back into it, and business slowdown and shutdowns have resulted in job cuts. Basic services such as water, electricity, healthcare, education, dignified housing, and internet connectivity are further out of reach now for large segments of the population. We must find ways to compensate for these wide disparities. All of us who thrive on the successes of capitalism need to have a sense of responsibility and empathy to counteract the forces of inequity that the system also creates .”
Can even the rich and powerful tame the forces of capitalism? It sure seems like they have a better shot at it than the poor and powerless. Can we trust them to fix the system that benefits them? Maybe, if they’re afraid enough it’s going to collapse. In the meantime, the idea that business people are responsible for more than maximizing returns to their shareholders is gaining momentum in the world.
And that is at least a promising start.