Capitalism on Trial

Over 200 years have passed since the emergence of traditional liberalism, led by Adam Smith. In the modern era, capitalism has evolved into a different system. One that is overly individualistic and promotes inequality. One that favors finance over the real economy and yields recurrent crises. And adamantly seeks to maximize not profitability, but rents, which the system generates and appropriates. The bottom line is king, employment is precarious… So I wonder: Is capitalism itself to blame, or is it the modernity and postmodernity that we are wrapped up in?

State of New York Court of Appeals Albany, New York October 14, 2009. Picture by Tracy Collins
State of New York Court of Appeals Albany, New York October 14, 2009. Picture by Tracy Collins

I asked myself that a few years ago, at a Congress near Paris. I posed the same question to a professor who had voiced a criticism like the one I just gave. Her response was essentially Marxist: Blame it on capitalism. I didn’t see it that way, nor do I now.

When it comes to the evolution of capitalism from Adam Smith onward and from the industrial revolution to the present, with all the aforementioned problems (and of course many others), I think we are witnessing the development of the individual, society and therefore the economy as dictated by modernity and, more recently, postmodernity. Individualism, for example, did not start in the 20th century; that happened much earlier. The predominance of profitability was not invented by marginalist economists or Milton Friedman. It is hardwired in the DNA of modern human beings. That’s how it goes.

It is an important question, although the response is probably less important. Because today’s capitalism is a manifestation of modernity and postmodernity. As such, the solutions may not come from government intervention, or the involvement of experts, or the political actions of society—since all are influenced by that same modern and postmodern thought. Ultimately, I think this boils down to two battlefronts:

  • Theory: We must scrutinize the concept of human beings and society framed within that modernity, which has become so pervasive.
  • Practice I am reminded of a quote saying something to the effect that compassion (not postmodern emotivism) and love will change the world. The solution is in the behavior of many people, not in structures.

About Antonio Argandoña

Antonio Argandoña is Emeritus Professor of Economics and holder of the "la Caixa" Chair of Corporate Social Responsibility and Corporate Governance at IESE. He teaches mainly in the areas of macroeconomics, monetary economics and international economics, and publishes research on business ethics, corporate social responsibility and organizational governance.

2 thoughts on “Capitalism on Trial

  1. If only every individual had -at least half of- the personal qualities of Jesus, Buddha Gautama, and Dalai Lama, compassion and love will spread faster. In fact, capitalism is more like a cigarette; it carries enjoyment, and concurrently, endangers health.

    ps. I don’t smoke, anyway.

    1. There needs to be a new form of Capitalism that is modulated so it is not so toxic.
      Please read the following which is a powerful solution and not just an ideology.

      The First-Ever Publicly Traded Corporation On Wall Street Guaranteed To Stop Economic Inequality Is Now In Development.

      Antilope, LLC, the parent company of is developing a web platform that monetizes the greed of Wall Street by means that guarantee to stop Economic Inequality. First Rate Crowd will utilize its “patent pending” Economic Inequality Rating system to ascertain how much Economic Inequality certain companies are responsible for. Those companies with a high rating, specifically those companies of the 1% which produce the most greed and Economic Inequality, will be avoided in favor of those with a lower rating, demonstrating support for the 99%. The use of this rating system represents a boycott of companies that do not support the values of the 99%.

      FirstRateCrowd is a powerful rating platform that combines the community’s strength with the power of crowdsourcing to achieve its goals. The platform’s “patent pending” for a crowdsourced online ownership by the community, eventually allows the members to be rewarded with both its revenue and control, depending on the members’ level of participation; a cooperative effort between FirstRateCrowd and the 99%.

      Tied to this initiative is the community’s development of an Economic Inequality Rating system. Used on a handheld device, the app’s technology allows people to scan a product and ascertain whether the manufacturer supports the 99% or the 1%; consumers make their purchasing decision accordingly. This app will redirect the revenue from the 1% back to the 99% by providing individuals an economic choice, thus reducing Economic Inequality. This system bypasses the usual political, tax and judicial gridlocks by positioning the power into the hands of the 99%. One does not have to vote anyone into office, change any tax codes, or enact any new laws; one simply makes an economic choice based upon the data provided by FirstRateCrowd’s community, causing revenue to flow back to the 99%. This infrastructure is a component of the economic engine the venture will use when applying for an IPO on Wall Street; one that represents 99%.

      Economic Inequality is a direct result of greed. Many Wall Street companies have contributed to the current state; an insatiable desire to accumulate more to the detriment of others, an old story. With this future public offering, the 99% have a new means with which to defeat this affliction. The world will have a new form of corporation allowing society to profit from the greed of other corporations. The more selfish they are, the more they will drive individuals towards FirstRateCrowd to fight this selfishness. Imagine that, a company earning its revenue and profits from the Economic Inequality generated by the very selfish ways of other corporations; surely it will prosper. As it grows in size and strength, it will decrease Economic Inequality. Finally, the world will have a company on Wall Street, a people’s company, that truly represents the 99% and their values.

      For the sake of your own future and that of the world’s, please join FirstRateCrowd in taking a stance against Economic Inequality.

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