Paradise and Perdition
This week we got a little lesson in how things really work. It came in the form of 13.5 million documents, the so-called Paradise Papers. This latest trove of leaked data spells out how corporations and the extremely wealthy squirrel away their cash to keep it out of the taxman’s reach.
We’re talking big money. The Papers come from only two Bermuda-based firms specializing in this shell game, but they represent 120,000 people and companies with about $10 trillion in assets. For reference, that’s half the annual US economy.
Capitalism at a crossroads
You don’t have to want to Occupy Wall Street for that kind of thing to rub you the wrong way.
Of course that’s not all. Fires are burning much closer to home. Economic inequality in the US has reached levels not seen since the 1920s, and we're at the point where 47% of American families couldn't come up with $400 in an emergency.
It’s little surprise that a recent Harvard University poll found that a majority of 18 to 29-year-olds in the US said that they don’t support capitalism. And it's not just the young: Support for capitalism is at an all-time low among older Americans as well.
But perhaps the problem isn’t so much with the system, as with our assumptions about it. Can’t we be more ambitious about what we expect paradise to look like?
Three stories about capitalism
Jonathan Haidt, a moral psychologist and professor at NYU's Stern School of Business argues that society is split into two polarized and incomplete stories about capitalism.
The first story plays out in the Paradise Papers and above: Capitalism is a system of exploitation that robs people of authentic work in the pursuit of profits for the rich. In the second story, capitalism is a system of empowerment and liberation that’s unparalleled in its power to unleash human ingenuity and improve quality of life for people around the world.
What gives? How can both things be true? More importantly, can we get to a third story that is neither opportunistic nor overly idealistic, one that Haidt says is both “dynamic and decent”?
This third story will mean re-imaging what capitalism and business can do for us as individuals and as a society.
Reclaiming what's ours
Our economy is a wonder of human ingenuity, thoughtfulness and unimaginable complexity. This isn’t some system that a bunch of bankers at Goldman Sachs dreamt up to exploit the 99%. It’s a system that’s evolved over thousands of years and that in many ways it represents the best aspirations of the human spirit, creativity and aspiration.
But for too many of us, reared in an era of mega corporations, that system has become something complex and foreign. If we were once a nation of creators and entrepreneurs, we seem to have become a country of consumers and disgruntled employees. In telling our new story we don’t need to replace capitalism, we need to reassert our ownership of it.
A capitalism for the people
We know the path out of these woods. It’s what Luigi Zingales has called a “capitalism for the people”. Nobel laureate, Edmund Phelps, describes it as a return to a modern economy, such as existed from the 1820s to the middle of the 20th century, to re-establish an age of true prosperity that he calls mass flourishing.
This is an ambitious vision that’s not only in our grasp, it’s our birthright. Millions of independents are living this story today. They’re doing it despite the headwinds of a game that’s been rigged to be pro-corporate rather than pro-market. They’re moving beyond zero-sum thinking and economic measures that account for everything except that which makes life worthwhile. In the process they’re re-writing the story and re-claiming what it means to prosper in human terms.
These independents show us that pursuing happiness means pursuing work that’s built on initiative, creativity and originality, both as individuals and as a society. It means demanding more of our economy and our work than what shows up on a spreadsheet or paystub. And it means finding ways to ensure that everyone can bring their ideas, skills and vision to market in ways that are consequential, fulfilling and sustaining.
So in that case the question isn’t whether capitalism is good or bad. The question is, what do we want it to do for us now?