An ode to the power of CEOs and capitalism to cure America’s ills

Forty years of business reporting have led Alan Murray to some pretty optimistic claims about capitalism in the United States. Drawing mostly on interviews with CEOs, the books that CEOs and business school professors write about CEOs, and CEO speeches, Murray feels confident that “capitalism has proven itself the best system mankind has conceived to organize human activity, to create prosperity, and to eliminate poverty,” and that we are entering a new era of stakeholder capitalism in which CEOs are combining a zeal for profits with a zest for solving our epoch’s great challenges: climate change, police brutality, public health emergencies — you name it, the CEOs are on it!

Lest you think that any of this is the prerogative of government, “the size and complexity of the issues facing society require the innovation and skill and dynamism that only business can bring to bear,” Murray writes. Each of the core chapters of his book “Tomorrow’s Capitalist: My Search for the Soul of Business” illustrates a different venue in which chief executive officers are triumphing and performing as the one functional, reliable, pragmatic institution in our otherwise fallen society. The book concludes with a sequence of chapters and bullet points to illustrate core tenets of stakeholder capitalism, with gems such as: “In the long run there is no tradeoff between purpose and profits,” and “Purpose must be authentic.”

Before we can evaluate the merits of these claims, it might be good to familiarize ourselves with how capitalism actually works and then with the parable of the All-American Orphan Crusher.

For an author who is pretty keyed up about capitalism, Murray offers little definition or description and only potted history. The most we hear is that markets and competition are involved, that government regulation is bad and scary, and that capitalism creates innovation and societal progress.

I get this. Capitalism is complicated, varies from place to place, and can be hard to describe. The best definition that I’ve come across comes from anthropologist Hadas Weiss’s work on the middle class, where she suggests that we might understand capitalism as a form of unplanned surplus value accumulation.

What this means is that there is an endless, competitive search for profit, and this profit-seeking is not centrally coordinated. States may create things like courts and currencies and regulation that allow the game to go on with some guardrails and without self-destruction, but generally speaking and ideally, states don’t dictate the outcome of market competition and, in turn, wealth accumulation.

Basic as it is, this definition helps us appreciate some of the more repetitive things that go on with capitalism: Industry profit margins tend to go down, leading to lower aggregate wages and increased investment in technology; competition also leads to consolidation of monopolies and of fortunes; monopolies and hoarded wealth in turn lead to plutocratic distortions of political systems, which then prioritize lower taxes on wealth, limited industrial regulation, imperialist conquest and cheap labor.