The American Sustainable Business Council (ASBC) was formed a decade ago as a coalition of businesses focused on a “triple bottom line” of profit, people, and planet. It was intended in part to organize a liberal business response that might help check the business lobbying power of the US Chamber of Commerce and show politicians that not all businesses supported a low-tax, low-regulation agenda.
This year, its annual conference, held earlier this month, was organized around the theme of Making Capitalism Work for All. Many conference speakers at the conference maintained that capitalism is not working, at least in its current US incarnation.
But is capitalism reparable? The conference’s title suggests ASBC believes so. And, certainly, at a conference of business leaders, even one with a liberal bent, the fact that ASBC would take this position is hardly surprising. As conference organizer Richard Eidlin said in his introductory remarks, ASBC “believes capitalism is a dynamic force…and that it also needs a reset.”
Still, it did not appear that either the scale or the scope of the challenge was fully appreciated. At the conference, many adjectives placed in front of the word “capitalism” were rolled out: stakeholder capitalism, responsible capitalism, common sense capitalism, conscious capitalism, community capitalism, Nordic capitalism, and market-based capitalism among them.
Naming these “models” aims to highlight the variation in business and government roles possible within a capitalist framework. The point is not exactly novel. The late French economist Michael Albert, for example, wrote Capitalisme contre Capitalisme (Capitalism against Capitalism) back in 1991, in which he contrasted a more “social market” Rhein (German/French/Continental Europe) form of capitalism against a more deregulated US-British variety. Yet the number of adjectives thrown about also betrays a certain conceptual fuzziness. In particular, it allows for the elision of some deep tensions within the US political economy that, to put it mildly, are not simply the product of the neoliberal turn of the economy since the 1970s.
In fact, many, if not most, speakers at the conference, in their analysis of American capitalism’s problems, seemed to place most of the responsibility for the nation’s current wealth and income inequality squarely at the hands of the current focus of much of the business world on maximizing shareholder value. At the conference, this was called shareholder capitalism. Of course, politically, shareholder capitalism is backed by low taxes on wealth and income and limited regulation—a set of policies commonly described as neoliberalism.
For example, Morris Pearl, who chairs Patriotic Millionaires, a group that endorses higher taxes on the wealthy and declares on its website that its members consider themselves to be “proud traitors to their class,” told conference attendees, “America was great in the time I was growing up. Since the 1970s, a few people said, we can make more money by liquidating the businesses and distributing the resources. That doesn’t work well for the long-term, even though it works really well for the short term.”
There is some truth to what Pearl says. Yes, income and wealth distribution were far more equitable in the US a half-century ago during the heyday of managerial capitalism—the quasi-stakeholder capitalism of its time—than today. Still, even then, inequality was endemic. Racial and gender inequality were worse, as was discrimination based on sexual orientation. Even class inequality, though less severe, was hardly absent, as was widely noted at the time.
For example, back in 1966, Dr. Martin Luther King, Jr. said he did not believe that civil rights alone could bring racial equality. King called for economic transformation. As King told his staff, “You can’t talk about ending the slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because you are messing with folk then. You are messing with captains of industry. Now this means that we are treading in difficult water, because it really means that we are saying that something is wrong with capitalism. There must be a better distribution of wealth, and maybe America must move toward a democratic socialism.” King, of course, was assassinated in Memphis in April 1968, while supporting striking sanitation workers. King came to Memphis as part of a broader Poor People’s Campaign that he helped lead the last year of his life.