Fast Company had an article titled "Are You Ready To Consider That Capitalism Is The Real Problem?" Wow. A young college student asked Nancy Pelosi that question and she responded with "No, I'm sorry to say we're capitalists and that's just the way it is".
Capitalism has done a lot of wonderful things for us but the kind of capitalism we've had for the last 20 or 30 years is not working for most Americans. And according to the statistics in the article, a lot of people around the world are skeptical about the benefits of capitalism.
The kind of capitalism we've had is one that says that businesses' prime directive is to make profit for shareholders only and not worry about society or workers in general. The mantra I've heard is "provide value to the shareholders", over and over and over again. I remember, a long time ago, after some layoffs, the CEO said, "Okay, I know we've gone through some layoffs and seen our co-workers lose our jobs and we just want to go through the grieving process, but it's time to get back to work and provide value to our shareholders." And this has been the message impounded on the public: we need to make money for the shareholders.
"...there’s something fundamentally flawed about a system that has a prime directive to churn nature and humans into capital, and do it more and more each year, regardless of the costs to human well-being and to the environment we depend on.
Because let’s be clear: That’s what capitalism is, at its root. That is the sum total of the plan." Fast Company, "Are You Ready To Consider That Capitalism Is The Real Problem?", July 11, 2017.
Today, it's common to blame globalization for the people's angst about their lives. Tomorrow the fingers may point at automation. But at core, it is capitalism's (or CEOS's, Harvard, and the rich investors') insistence on providing value (turning the money stream) to the shareholders. So globalization was a way of transferring money from the workers to the shareholders. Cut costs in the US and hire in low wage countries so CEO's can satisfy the shareholder imperative. And based upon a couple of articles I've read, they've successfully done that: we've had tremendous GDP growth since at least the '80's, but most, if not all benefits, went to the top (10%, 1%?). We could have had globalization (maybe) if we had provided some form of safety net and education/training to enable recovery. But it doesn't looks like we did. We could have had globalization (maybe) if the people who had lost manufacturing jobs were able to land on their feet with just as good a wage paying jobs or better. But instead they faced serial job losses. We could have had globalization (maybe) if new and better paying jobs appeared, just as when agriculture declined in the 1800's and industrial jobs took its place. But instead, we got low wage service McJobs such as Walmart and McDonalds.
This is how bad the concept of capitalism and the insistence that all gains go towards the shareholders: the article mentioned a recent incident where an airline CEO tried to raise his employees' wages for sticking through some tough times, but now that the airline industry was making ("raking in") profits, he wanted to help them join in the rewards. What was Wall Street's response? It hammered the stock price down. JP Morgan was quoted as saying:
"wage increase as a 'wealth transfer of nearly $1 billion' to the workers."
I remember, back in the '80s, reading articles about companies laying off employees and shareholders cheering on. The stock prices would rise after layoff announcements. I thought, "How could this be? People are cheering for the loss of jobs." And if you run that logic of constantly cutting costs to meet the shareholder imperative, the end game would be a lot of unemployed people and eventually loss of customers. Your workers are your customers. And I wondered, "Who are these shareholders?" I know that shareholders consists of CEOs and their top executives, Wall Street, hedge fund managers, private equity managers. But shareholders sounds like it should be egalitarian so there should be other people. And so there are the pension funds. Except, pension funds are no longer offered (that's been dying probably since the 80's). Then there are the money market funds and that's probably where the average person invests. So average American may be cheering on the loss of jobs of average Americans. Think about that: you are cheering on the loss of jobs.
But, I can't imagine average American really trusting Wall Street to handle their money so I suspect not that many average Americans are investing in the market. So at the end of the day, I imagine that the majority of the shareholders are probably the ultra-wealthy and few average Americans. But I don't really know though.
And now it looks like the millennials are ready to entertain the idea capitalism in its current form is not working for the majority of the people. And they are willing to look for something new.
We probably need to find something new before automation disrupts capitalism. I see automation as having the potential of automating the vast majority of the jobs such that we have massive unemployment. If most jobs can be done by computers, robots or software, then what is left to do? If most people are not working, then they don't have the money to buy goods. Companies won't have the customers because the "customers" don't have the money. Capitalism breaks in this scenario. If all money flows to the few with the capital and not to the workers, eventually, it will be a collapsing set of capitalists, with fewer and fewer capitalists as they all try to gobble up the money. I can't see this being the end game because capitalism (and society) will break before then.
Millennials will be the first generation living under a new form of "market". We might have life without jobs. We might have everything being free because the robots do all of the jobs and they don't need money. Maybe capitalists will lose their capital as all of the robots and software becomes a public good. Capitalism will break but I don't know what will take its place.