What’s So Great About American Capitalism?
In my previous post I shared the many ways American capitalism has driven systemic inequity in our country. And depending on your lived experience, you may be ready to denounce the entire economic approach. But I also mentioned that capitalism is just a tool, and the more important focus is on the people and the reasons why they believe in and continue to advocate for capitalism as our economic tool.
This is why we at CapEQ™ believe so strongly in capitalism that it is literally a part of our name. We recognize the failings of the system, but also feel strongly about improving the system, because of what we can achieve within it, together.
There are three reasons why American capitalism is pretty awesome
1) American capitalism attracts diversity
The inscription on the Statue of Liberty reads in its entirety:
“Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
“Keep, ancient lands, your storied pomp!” cries she
With silent lips. “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”
The promise of our country and the freedom that we espouse has consistently attracted dreamers, problem solvers, hard workers, and all manner of geniuses from across the globe. Our ideals have inspired people from all backgrounds to bring their talents to our shores and often transform our country and the world for the better.
Regardless of the ongoing political debate, we are a nation of immigrants who have found a shared identity in the belief that the United States is one of the best platforms for talent to achieve success. And despite all of our shortcomings, this belief often becomes a self-fulfilling prophecy, particularly for first generation immigrants.
2) American capitalism produces top global companies
According to Investopedia, American companies represent 80% of the world’s top companies as defined by market cap. Additionally, over half of the Fortune top 25 best global companies to work for are headquartered in the United States. And perhaps, unsurprisingly, several companies overlap in both lists. Most people tout market cap as the ultimate indicator of economic health, but the most recent financial downturns illuminate that profit at the expense of people and planet have longstanding negative externalities which are amplified due to our global interconnectedness. I’ve long espoused that people and the values they uphold are one of the most critical drivers of long-term economic success. The fact that so many US companies are considered great places to work is an indicator that these organizations have the raw material in place to aspire to the next level of shared prosperity.
3) American capitalism enables economic resilience
Each year, FM Global produces an economic resilience ranking which measures the economic resilience of countries and/or regions based on a variety of factors including political risk, corruption and quality of infrastructure. The United States is scored as three regions which all rank in the top 15. One important characteristic of this assessment is the acknowledgement and analysis of the multiple factors that enable a resilient economy. A great articulation of the interconnection of capitalism as an economic tool and democracy as a government tool is the concept of the “business commons”. Many people have truncated American capitalism to “make as much as you can no matter the cost”, but that phenomenon is relatively recent. Immediately post World War II, companies were more likely to invest in infrastructure, talent, etc. As globalism spread, many companies began investing similar resources internationally, and as Jan Rivken and Chris Christensen would say began neglecting the business commons. These are not nice to have measures, but many are the very factors that drive economic resilience. Although there is more work to be done to address the oftentimes crumbling business commons in the United States, American capitalism has a longstanding culture of looking to stabilize environments to create the enabling conditions required to facilitate resilient commerce.
Despite the many challenges with our economic approach, American capitalism works well for who it works for. So the question is how do we both harness the strength of our current approach and acknowledge historical and existing inequity from our system in service of economic inclusion? This is exactly the question we try to answer with our partners at CapEQ™. We’ll give you a little peek into our process in the last post.
