Struggling with capitalism? Struggle no more. Moral Capitalism is finally en vogue.

This past weekend I picked up a copy of Fast Company’s November edition, the cover of the magazine lured me in: “Capitalism is Dead. Long Live Capitalism.” Those two statements summed up both the anxiety that I’ve been experiencing over the societal and political backlash to the capitalist model and the optimism that I feel for capitalism ultimately prevailing, but in a different, more moral and ethical, way. 

Fast Company sets forth what I wish to see happen: a compelling case for business done in an equitable and sustainable manner, not solely with growth as the driver of company success.  

Here’s a link to the digital copy: https://www.fastcompany.com/magazine/issue-236, but I highly recommend you pick up a hard copy.

A global debate is underway on whether capitalism can provide for society in a manner that affords all citizens rights and opportunities for a peaceful, prosperous and healthy existence. 

Overall, I am heartened by the debate surrounding capitalism because citizens and stakeholder groups are rightfully asking for a place at the table, and pockets of private enterprise have been responding in a manner that I believe is creating a necessary convergence around Moral Capitalism. There are some courageous leaders in business that are driving positive social and environmental change. 

To learn more about Moral Capitalism, I encourage you to read about the Caux Roundtable at https://www.cauxroundtable.org/ and review the principles that were formally launched in 1994 and presented at the U.N.’s World Summit on Social Development in 1995. The CRT Principles for Business articulate a comprehensive set of ethical norms for businesses operating internationally and across multiple cultures. In Minneapolis, this Friday, November 22nd, the Caux Roundtable is celebrating the 25-year anniversary of the establishment of the CRT Principles. 

While I am heartened by the dialogue, I am concerned that the binary nature of much of the public and political rhetoric on capitalism vs socialism is that those not steeped in history or economics find a way to disregard the positive and painful lessons of the past from both systems. The “pure capitalists” discredit the “pure socialists,” and vice versa, and the discussion, therefore, breaks down.

We cannot afford for the discussion to break down. We must seek ways to find a common understanding of the capitalist system that can facilitate the greatest freedom from the ills of poverty, inequality and environmental ruin.

What’s preventing a constructive global discourse on capitalism is that inequality is said by some to be inherent in capitalism. The notion of equality is rightfully front-and-center in the ongoing dialogue about capitalism. The gap between rich and poor is widening to unacceptable and unsustainable levels. Poverty and inequality are exacerbated when women continue to have far less access to capital and wealth than men do. Corporations amass more profits and political power, with little of that benefiting the worker. Many stakeholders feel left out, and they are pushing back on those who are benefiting the most from the current state of capitalism. 

Ardent defenders of the "trickle-down" nature of capitalism are resisting those arguing on the opposite side for alternative, more state-run, or state-directed outcomes. Socialism is being thrown out there in the debate as an easy alternative to capitalism.

Let’s acknowledge that capitalism cannot work effectively without appropriate government leadership, direction, oversight and intervention. Call that socialism? I call that good governance with strong judicial, legal and regulatory frameworks that work for the people and that facilitate good business practices. Of importance is that governments facilitate capitalism in a manner that works for all. Private money should not dictate who gets a louder voice in the system. 

We can achieve a more just capitalist system if business and government use the current stakeholder movement and citizen activism in a manner that allows them to achieve a higher understanding of and commitment to the moral and ethical obligations all actors have in a functioning capitalist society.

To introduce morality to the capitalist model is to ask for able citizens to understand and carry forth their broader obligation to society, not just to one’s self or to the enterprise which employs them or which they own. In addition, governments must govern for all the people, not just some of them. Businesses must accept and understand their impacts on society and mitigate negative externalities in their business models and propagate positive externalities, sometimes placing a common good before maximum profit in the short- and medium-run. And citizens must participate and hold government and private enterprise accountable to their communities. 

In closing, let me state for the record my belief: Capitalism is not dead and should not die. However, selfish, unethical, profit-over-purpose behavior cannot be rewarded in a capitalist society. Moral Capitalism is the answer.