The benefits of capitalism are well known and have been covered at length in this edition of Directors & Boards. It is an economic system that helps to facilitate rapid economic growth, with limited government intervention, allowing producers to accumulate wealth by marketing their products to consumers who desire them. It rewards and spurs innovation, as producers realize that only a better, more satisfying product will cause consumers to choose their wares over an existing alternative. Capitalism also allows for social and financial freedom for American citizens, with everyone free to choose not only how they make their money, but also how they invest and spend it.
But let's pretend for a moment that capitalism is not a financial system that encourages the efficient creation of new products to be consumed but is itself the product. Let's pretend it is a new type of soda being released to the marketplace. Upon its release, a major segment of the buying public thinks it's pretty good. But a substantial percentage of potential customers think it stinks. That's basically the situation capitalism finds itself in now, according to a report from Pew Research Center (PRC).
The March 2023 report, Black Americans View Capitalism More Negatively Than Positively But Express Hope in Black Businesses, finds that…well, you can probably tell from the title. Fifty-four percent of Black adults have a “very to somewhat negative” impression of capitalism, with 49% saying that the phrase “gives all people an equal opportunity to succeed” describes the financial system “not at all” or “not too well.” Perhaps the most alarming part of that statistic is that the number has changed drastically since a similar report in 2019, and not in a positive way. The survey that was conducted four years ago recorded 40% of respondents as having a somewhat to very negative impression of capitalism. So, 14% more Black Americans became disillusioned with the capitalist system in the space of an Olympiad. Where will we be when the Games return to Los Angeles in 2028?
So, what sort of changes to the system are needed? Some small refurbishments? Move some furniture around and the capitalism feng shui should be all good? Not according to Black America. Nearly half (46%) of PRC's survey respondents said that the economic system “needs major changes” with 37% believing that it needs to be “completely rebuilt.” Even worse, Black citizens are extremely pessimistic as to whether positive changes to the capitalist system will be made in their lifetime, with 62% of respondents finding the chances to be “not at all/a little likely.” Just 12% found it “extremely/very likely” that positive alterations would be made.
What would make capitalism work for more Americans? Well, that's been covered at length in this edition as well, a tribute to the complicated conundrum that is ensuring an economic system that works for all our nation's citizens. There are those who believe capitalism pressures production, resulting in lower-quality goods, and limits economic checks and balances, which has the potential to create monopolies that discourage true competition. But perhaps chief among the concerns is capitalism's failure to create equal opportunity among American citizens, with limited mechanisms in place to help the inherently disadvantaged and an unequal allocation of resources resulting in most of the wealth being concentrated in relatively few hands.
It should be said that while the Black community is dissatisfied with capitalism, they are not the only ones. Similar PRC research found that 41% of Latino respondents had a somewhat to very negative impression of capitalism, with Latino women especially likely to find the system lacking (47%).
All of this is not to say that the capitalism baby should be thrown out with the bathwater. A 2019 article by The Guardian offered a series of ideas for giving the system a boost, including a raise in the living wage, the provision of high-quality childcare for employees with families and the breaking up of extreme concentration of wealth. Would these types of solutions work? I am not sure. But I do know that while I have not had the opportunity to live in places like China or Russia, the system we have (including its potential should it be strengthened) sure seems to beat some of the alternatives.
But back to that earlier thought: If you were the distributor of a beverage that a large percentage of your potential consumer base thought wasn't that good, you wouldn't just keep on pushing it out to the public hoping they would change their minds. A good businessperson would take in the negative thoughts about the product and take strides to make sure that it was something that more people would want to drink.
America is a business, and capitalism is a product in need of improvements. Let's keep working to make it better so everyone can enjoy its rewards.