There is something terribly wrong with the system we live in today. We call that system capitalism. However, it is more than just capitalism. It is the social, political and cultural environment in which capitalism resides. The only thing capitalism is supposed to dictate is that businesses own the means to production and use these assets to generate profit. Yet capitalism has come to mean much more than that—it has come to dictate our government, our culture, and our lives.
Once the realization hits, we each go through various phases of responses. From seeking government control of corporations through regulations to desiring a complete overthrow of the system, we are all reacting to the biting feeling that this system called capitalism has gone too far. It has infiltrated too much.
It is essential to put capitalism back into its place as an economic system. Additionally, it is essential to understand that the context of the economic system determines its direction and function. Once we make these distinctions, then we can begin to understand how to move forward and use capitalism to work for the good of society.
We should examine capitalism in two parts: the inside of business and the context of business. The inside of business is way in which corporations run themselves. It is important to understand this piece before we can understand how to redirect their drive. The context of business is the political, social, legal, and cultural system in which the business operates.
There are many things that can be done to revolutionize the way businesses operate. We should examine and develop these ideas and turn them into plans. We should look around at businesses out there that have already taken these steps and made these changes.
But in the short term, at least, and likely in the long run, it is foolish to take the most powerful tool in our society and throw it away because it is not being used properly. And that tool is the markets. Many environmentalists cringe at such language, but much of the distrust of markets is misdirected. Markets and businesses are very good at producing and distributing the services that society needs at the least cost to themselves. The political, social, and legal framework in which they operate dictates that task. The problem lies in the fact that the framework has not required them to produce and distribute goods at the least cost to society. This is the key to changing the capitalistic system that has overridden every part of our lives into a sustainable capitalism that improves our lives.
Yet to leave it at that, as many economists do, is grossly oversimplifying the issue. There is a huge chasm between the current status and the proposed solution. And we are all left asking how on earth could such a gap be bridged.
This is where we have to reexamine the system within which capitalism operates. The problem is that every aspect has been bought or brainwashed by free-market fundamentalism. Society has operated on the belief that if we just stand back and watch, capitalism will eventually solve all of our problems. And while we watched without touching, the markets did exactly what we told them to do: generate products at the least cost to the producers, thus generating profits for the fortunate owners. The reason why they also destroyed the planet, trampled on the rights of the poor and powerless, and undermined democracy is because they were never required to look out for these interests.
The good news is that we have many proven ideas to redirect capitalism. The bad news is that free-market ideology has such a strong hold on society that these ideas are exceedingly difficult to implement. And this is where the hard work must begin. In his book, Gus Speth lays out an excellent blueprint for this bridge. He talks about slowing down consumption, switching from hollow growth to real growth, shifting the value systems of society, and reclaiming the political process.