Give smarter capitalism a chance first
Socialism is back in the news. It’s surprising to hear people talk about it as a viable force in U.S. politics, because socialism has been a dirty word in America for as long as I’ve been alive.
But now the candidate leading in the early polls for the Democratic presidential nomination is a self-described socialist, as is the member of Congress with the biggest social media following.
And this is even more odd: a real conversation about the foundation of our economic system is happening at a time when the economy is growing and unemployment is low. By the numbers, you’d think people would be satisfied with how things are going, not looking for change.
But in my line of work, you learn pretty quickly that numbers tell only part of a story. It’s the day-to-day reality of life for millions of Americans that is setting the stage for a debate over what direction the country should take next.
Here’s that reality: Many Americans have seen little benefit from the 2017 tax act, which is no surprise, since it was structured to drive most benefits to wealthier Americans. The stock market is strong, but more than half of Americans aren’t in the market. Most of the new jobs in recent years have gone to college graduates, leaving the one-third of the labor force with just a high school diploma still waiting for the recovery’s benefits.
And a lot of things are just expensive: Home prices are rising even as mortgage rates climb, gas prices make commuting a problem for millions, and one-third of families now take on debt to pay for child care.
On the left and right, a sense is growing that the system hasn’t been fair to ordinary folks. Increasingly, people understand that more and more wealth is flowing to the top, which isn’t the promise of capitalism. The top 1 percent of Americans now holds 40 percent of the wealth, a greater share than at any time since 1962. That’s more than the bottom 90 percent combined. The gap between the uber-rich and everybody else has been growing wider for decades. Steve Pearlstein, a Washington Post business columnist, notes in a new book — provocatively entitled “Can American Capitalism Survive?” — that while 80 percent of Americans a decade ago agreed that a free market economy is the best system, that share has fallen to 60 percent now. It’s just 42 percent among millennials.
But, of course, we don’t really live in a free market now. Every tax and regulation manipulates the market in some way — yes, often for the better. But government policies since the late 1970s, and an apparent change in how Americans think businesses ought to operate, have driven the wealth shift that is leaving millions of working families behind.
It’s a reality of our system that sticks in the craws of a lot of people: Greed is a great capitalist tool. Businesses, after all, are supposed to maximize returns to shareholders. Yet greed conflicts not only with the egalitarian ethic of America’s founding, but also with the teachings of the nation’s great religions. And in the name of profit, we’ve come to accept behavior in recent decades that would have horrified business leaders of the 1950s.
Some ardent capitalists, though, will tell you that there are ways to embrace values that dampen greed’s hold without tossing our existing system.
Consider, for example, “B corporations” — the “B” stands for “benefit” — which count positive impacts on society, workers and the community, in addition to profit, as a legally defined corporate goal. Patagonia, the outdoor gear company, is a “B corp” that has grown a fervent customer base in part because of its environmental advocacy, which has channeled tens of millions of dollars to benefit the planet.
That’s not socialism, mind you: Owners of a B corporation still profit, but they also use their role in the marketplace as a force for society’s good.
Nor is it socialist to advocate employee ownership of business, which helps redistribute wealth to people who labor daily for a paycheck. Nearly half the privately held businesses in America are owned by baby boomers, many of whom are looking for a solution as they near retirement. My favorite example is Stewart’s Shops, our region’s ubiquitous convenience and dairy stores. The company is now one-third owned by employees, and its stock has made dozens of workers millionaires.
Note this: The push for employee ownership and for B corporation expansion — two notions among many that are gaining notice as we weigh where we’ve gone wrong — aren’t mandated by government. They’re a result of a mindset of the people who run those businesses.
Maybe, then, rather than changing labels on our economy, we could start by encouraging more capitalists to behave differently in the marketplace.
There’s a reality of our system that sticks in the craws of a lot of people: Greed is a great capitalist tool. But there are ways to dampen greed’s hold without tossing our existing economic system.