US Capitalism Is In Trouble, Part 5 of 7 – Solution 1 – Operate in a Mature, Just, and Equitable Manner

When you think about it, there are four main things a company can do with its profits, assuming it doesn’t just stuff them in a mattress overseas somewhere to avoid paying taxes: (1) expand, (2) offer lower prices, (3) pay employees more, or (4) pay themselves more (by simply keeping the money, in the case of a private company; or, generally, through dividends and/or stock buybacks in a public one).  Given the “self-interest usually wins” theme that we’ve established, companies will almost always do everything they possibly can to do the last of these – pay themselves.  We’ve seen this over and over and over again, particularly in the last 40 to 50 years. 

Some might say, “Okay, so capitalism is fundamentally flawed. We should just ditch it.”  That’s an idea that many have considered and that has already been experimented with extensively – the USSR and communist China being the most significant examples.  The overall conclusion is that, at least for now, we need a system that allows some level of self-interest to thrive.  Like it or not, this is what fundamentally drives people to perform, to improve, to innovate. 

So, the first and best fix for US capitalism would be to temper the “self-interest usually wins” mentality.  But isn’t capitalism, by its definition, a me-first, cutthroat, take-no-prisoners economic system?  No, in fact, it isn’t.  Nowhere in its definition does it say that primitive, callous greed needs to rule the day.  The 1950s and 1960s in the US are an example of when and where it didn’t. 

For self-interest to truly be tempered, though, people will need to mature.  People will need to accept that they, themselves, are not the be-all and end-all of everything.  Relatedly, people will need to have faith that there are enough resources for everyone to live comfortable, productive lives even without a billion dollars in the bank.  With these realizations, people in business will need to operate with integrity, fairness, and tangible expressions of caring for the public good, for no other reason than that’s the right way to do it.  Being long-term optimists for humanity, but short-term pessimists for humans, we doubt that this near-miraculous transformation will happen anytime soon.  So, in the meantime, we need an alternative.