Thursday, November 29, 2012

Are You A Capitalist?

When I talk economics with people I have a few times been mistaken for a socialist. It seems that in our country today this idea has been drummed into us that anything that even remotely curtails capitalism is immediately labeled to be socialist or communist. That means unless you are prepared to accept this label, (a la Fox News style) you must be a supporter of unobstructed capitalism. This has angered many who believe in free markets but with a fair and conscious approach to it.

When asked if I am a capitalist I usually respond that I am a liberal capitalist. Recently the idea of compassionate capitalism has struck me as more accurately describing my economic beliefs. While there is no single definition, compassionate capitalism is fair capitalism; it is conscious capitalism; it is against the cut throat corporatism that we've seen increasing over the past few decades that seeks to outsources jobs, and cut wages and benefits of workers regardless of the profits line. Compassionate capitalism is for protecting worker's rights to have fair and decent pay and benefits; it is for considering the environmental consequences of a business' actions, and it is for a fair tax code that doesn't allow those making the most money to pay a lower tax rate than those in the middle.

In an interview with CNNMoney.com, Raj Sisodia, head of the Conscious Capitalism Institute describes compassionate or conscious capitalism has having four traits as it relates to business:

  1. First is a higher purpose. There needs to be some other reason why you exist, not just to make money. 
  2. Second is aligning all the stakeholders around that sense of higher purpose and recognizing that their interests are all connected to each other, and therefore there's no exploitation of one for the benefit of another. 
  3. The third element is conscious leadership, which is driven by purpose and by service to people, and not by power or by personal enrichment. 
  4. And the fourth is a conscious culture, which really embodies all of these elements: trust, caring, compassion, and authenticity.
More or less, these were the characteristics that many businesses used to have that we have since strayed from. There was a time when CEOs recognized the value of their workers and the community in which they operated. Over the years, the thirst for greater and greater profits led many business leaders to put profits over people. And so here we are, with CEOs making 400 hundred times the average worker when it used to be 10 or 20 times; we have workers taking pay and benefit cuts while CEOs get raises and even while profits increase. Something's wrong here. It doesn't take a genius to recognize why our economy is virtually flat: the middle class carry the economy, and the less disposable income they have, the less Americans consume. 

The lack of compassion exhibited by many corporations in recent years demonstrates the inability to consider those outside their social circles. That's what it means to lack compassion. If you live your life with a mentality that only considers the well-being of yourself, your family and friends, and those basically inside your social circle, then you allow yourself to be open to economic policy that will hurt thousands or millions of people, as well as animals and the environment. 

There is much more to this than I can possibly mention in a single post. For example, how exactly would compassionate capitalism be implemented in relation to the healthy competition between competing business interests? It seems that the compassionate capitalist must strike a careful balance between collectivism and individualism. Either extreme serves many the wrong way and there is plenty of room for argument. I just want to help offer the liberal capitalist an identity that isn't between either extremes of communism and unobstructed capitalism.

So when asked if I'm a capitalist, I'd say yes. I believe in free markets and free people, I just don't think that the bottom line is above all that we should be focusing on and that there is a need to have an economic system that consciously and compassionately considers all the pieces entangled in its web. Therefore, you can call me a compassionate capitalist. 

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