Does Capitalism Work?
The other night we had a much-debated conversation around the question, “does capitalism work”?
Capitalism is a powerful driver of competition, wealth, innovation, and prosperity but can also create instability and inequality. Essentially capitalism works for some but not all.
I have always loved the saying “you can’t be what you can’t see,” which can apply to capitalism too. If you come from money and lose it, you know you can return to having money again because you knew what it took to get there. That is why we have seen many fall and return. Americans love a good comeback story. It defines capitalism.
The problem is that capitalism applauds excellence to some, and socialism casts a much bigger net for all. I am not espousing socialism, but too many Americans are not making it.
The new study that poor children who grow up with children with means have a higher chance of breaking out of poverty is not surprising. People living in capitalism can bust through. That is the good part of capitalism. The concept that anyone can make it in America is not as accurate as it might have been at one point. Now it is getting much more difficult.
When people rise up and succeed, we all applaud. Succeeding has a roof over your head, food on the table, income in your pocket, and savings in the bank that equal how you want to live your life. Unfortunately, too many people these days can’t hang their hat on that.
Perhaps it is time for capitalism to evolve where there are more opportunities for equality across the spectrum of our lives. Different models where more people can succeed. Is it better for social systems to help those in need? Is it new education models? Is it casting a larger net in social venture investing?
The cataclysmic event of Covid opened up all of our eyes to inequality. Too many are struggling to survive, and that is bleeding into our streets. The answer isn’t clear-cut, such as more police or middle- and low-income housing. Addressing inequality is social and economic. Those changes must be at the core of our country’s foundation.
Capitalism is still the most effective way to create opportunities, but it is time for a new era of capitalism where we take what works and focus on the weaknesses so that we can all succeed at the level we hope to. If we started doing that, perhaps some of the issues our communities are dealing with right now would ebb, and our economy would accelerate.
Something has to change.