Can We Save Capitalism?

by Gage Mitchell

I was recently thinking about the concept of Servant Leadership. In that model the primary purpose of the leader is to serve their team, not themselves or their bosses. Then it hit me—shouldn’t that be the purpose of every business? To serve their community first, not their shareholders? That’s essentially what the Benefit Corporation movement is about, which is a step in the right direction, but what would it look like if ALL businesses adopted that model? As my mind was spinning on that thought the term “Servant Capitalism” popped into my mind, and I got excited.

What if we take the best attributes of Capitalism, and make a few critical changes to make the system benefit ALL instead of just a few? Let’s explore that.

The main arguments for Capitalism are that it provides incentives for hard work and creates a competitive environment that fuels innovation. Sounds lovely, really. However, Capitalism on its own isn’t a good long-term strategy because it’s built upon the assumption that the leadership of corporations will ultimately do what’s in the best interest of their communities over themselves. Don’t get me wrong, there are plenty of good corporations out there making the world a better place. They are proof that Capitalism can work when the greater good is set as a guiding principle for decision making. The problem is that for every good corporation you’ll likely find at least one, if not a hundred, bad corporations. And therein lies the problem.

In our current system, bad corporations are rewarded for doing bad things. They take unnecessary risks, for example, and accidentally tank the global economy and then the government steps in to bail them out. The executives still get their bonuses even if they have to lay off 30% of their workforce. Corporations fund lobbyists to get shady stuff packed into government bills and all of the sudden they’re getting subsidies that give them an unfair advantage over their better-for-the-world counterparts. The system is meant to let the best companies and solutions rise to the top, but instead it promotes greed and extraction.

No form of government works in its pure form, of course, because they’re all theoretical and don’t take human nature into account. That’s why most Capitalism we see in the real world today is actually a mix of Socialism and Capitalism. It’s also why modern Communism has begun to weave Capitalism into the mix. The different systems are meant to balance each other out. Even with our current ‘balance,’ the United States seems to be running toward a cliff wearing a blindfold telling itself, “It’ll all work out fine, just as long as we [fill in the blank].”

Now, I’m no politician or economist but seeing the social and economic inequities grow instead of shrink, seeing the world get closer and closer to climate disaster, and seeing our country fall behind in nearly every metric, it seems obvious the system needs to be fixed. So maybe instead of capitalists and socialists fighting for control, we need a new system that doesn’t come with the baggage of either. I don’t know if “Servant Capitalism” is the right name for it or not since it carries the baggage of Capitalism in its name, but here are a few low-hanging fruit ideas for what that system could look like—keeping the best attributes of both our current systems.

Real Prices

If we want a truly ‘free market’ that lets the best products and companies win, we need to have the real costs reflected in the prices we pay. That means adding in the social, economic, and environmental costs most corporations pass onto citizens and governments (so they can continuously increase their profit). With those costs accounted for the scales suddenly balance out, or even tip into the favor of the more sustainable products. And, if we truly insist on subsidies why don’t we subsidize the better, more sustainable, products? Can you imagine what the world would be like if the cheaper option was also better for people and the planet?

Fair Pay

A lot of corporations say they can’t afford to pay living wages even while they continue to pay massive executive bonuses and report bigger and bigger profits each year, all while complaining about the welfare they make necessary as they pass their labor (and tax) costs onto the citizens and governments. I know, I know… those gigantic salaries and profits incentivize the corporations to do great things, right? How about a compromise then? If executives want their $20 million salaries, let them have it—but only if their lowest paid employee is getting a minimum of 1/100th of their total compensation. Crazy? No, not crazy enough considering the average Certified B Corporation has only a 7:1 pay ratio versus the 144:1 general average. If we tied executive compensation to their lowest paid workers, you better believe the minimum wage would go way up, as would tax income for governments. We get to keep the hard-work incentive of no pay or profit caps, but we make it more of a team game. This is just one possible solution for fair pay, but you get the idea. 

Safety Nets

Bad stuff happens, and can happen to anyone. While we’ve seen the rich folks complaining about Reddit investors foiling their plan to tank a company and worrying about how they’re going to make their yacht payment, more often it’s working class citizens who are one medical emergency away from homelessness all while paying their share of the corporate welfare. Maybe we can shift some of the trillions that go into corporate tax cuts and bail outs (trickle down) and give it straight to the people who actually need it (trickle up) and who actually keep the economy running (i.e. doing the work and buying what corporations have to sell). Nobody, rich or poor, should have their life destroyed because of an unforeseeable disaster—but let’s get real about who’s getting the handouts.

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I could go on, and on… but I’ll pause, because I’m curious: What ideas do you have? How would you save, or evolve, Capitalism? Shoot us an email at hello@kindshipgroup.com to share your thoughts.