Gregory Zuckerman, Wall Street Journal special reporter, and author of The Greatest Trade Ever, just tweeted: “Spoke re my book at Peking University, great questions-Everyone’s a capitalist today in the East, even as capitalism is disparaged in West” @GZuckerman
Zuckerman’s tweet, reminded me about why I still believe in capitalism even knowing it needs a lot of work. It is inherent in some funny way in our DNA. Here is my logic.
First, Capitalism is the best-to-date system for working with human potential at its highest. What I mean here is that human agency—initiating, executing, and controlling one’s own volitional actions in the world— is core to growing as a person, to contributing and making a difference and in living a meaningful life. The way we have structured most work in corporations has eliminated this drive and opportunity. It mostly plays out in entrepreneurial ventures, but it is inherent in the capitalist model. Companies need to rebuild organizational and work systems to foster it, and then the magic happens. Capitalism has this at its core when it is not distorted. That “agency” is what is awakening in the East, which Zuckerman is seeing.
Second, Capitalism demands external considering, which means we are considering others when we make decisions. By that I mean, a businessperson only succeeds when they can get in the real shoes of their customer/consumer. Not the intermediate shoes that market research gives, but the real lives. It awakens caring when we know someone. Failure happens when customers do not feel cared about, understood and taken into account. They are not considered. Business can survive with such ignorance for a while, but those businesses that really know the customers and work to make their lives better, succeed. Such as Apple (conflict alert, I am a dedicated Apple consumer) and Virgin Airlines. Again, when greed and fraud get in the way, capitalism is being distorted. But the basis of capitalism is to create great offerings that demonstrate, “care” for others, providing a product or service for them that they cannot do as well for themselves.
Third, Capitalism demands “Systems Thinking,” which is how our brain is designed to work and how society and the planet get healthy. Systems thinking is the way we think when we see dynamics among all players in a system and understand the dynamics so well we can add, in a leveraged way, something unique. To be successful in business, executives, managers and all employees have to learn to think systemically, connecting to all stakeholders or they will make errors of omission and commission. Capitalism allows this to work freely. It is not fragmented as a Socialist or Communist managed system is. Without the demand to learn and understand “living systems” at work. We do not have a chance of having healthy businesses, societies or bioregions without it. If education if built to see this, then capitalism can carry out its best work. This give responsibility a chance of working because people can learn to see the systemic effects and reciprocity that returns to them. I do not see that happening without people really learning how free markets work.
This does not mean I am blind to the frailties of Capitalism. I believe they are failures of ableness, to see systemically, and education to understand “shared value” and reverberating outcomes, and not inherent in the principles of capitalism. We have lost of work to do to shift “capitalism” as it is current working. Or not working.
Zuckerman is rightfully dismayed or startled. The highest possibilities of capitalism are being distorted and possible lost if we do not get back to its real best assets and stop the distortions. Capitalism needs to be a core part of the curriculum starting early in school. Not as a moneymaking model, but as a brilliant system can foster democracy, creativity and selflessness, built from agency, external considering and systems thinking. I think Harvard Business Review contributor and blogger Umair Hague, ( @umairh )in his new book, The New Capitalist Manifesto, has some great ideas on this along with my soon to be released book, The Responsible Business. I will post a Book review on Hague’s book next week and hopefully a Q&A if I can slow him down long enough.