Adam Smith died before banks were established in the United States. That is important to remember.
Americans like to make money, and there is nothing wrong with that. The idea of capitalism was the economic component of the social and political liberalism of the Enlightenment, and as an Enlightenment-based nation, it is natural we adopted it. Owning property and being given the freedom to succeed materially from your talent, luck and labor is as natural a notion to this Republic as freedom of speech and voting. Indeed, whatever its drawbacks, capitalism has played a role in democratizing peoples around the world, and is unparalleled as a tool to elevate standards of living. Simply put, capitalism as it was intended – a rational system based on mutual self-interest and fair competition – remains the most equitable and dynamic way to construct an economy.
The current economic upheaval is not a repudiation of capitalism, but of corporatism. It is the natural demise of an untenable mode of operation that was at its core anti-capitalistic. Capitalism is about making rational choices to pick winners and losers in the marketplace. It is about smart investments. It is about long-term growth and innovation through open competition. It is about stability. The corporatist scheme meets none of these criteria. When speculation drives the market, common-sense regulations are shunted and quarterly gains become a higher priority than sustained growth, disaster is to be expected.
The market is correcting itself now, with ample help from the government, but a large part of this transition is a changing attitude among the people themselves, especially young adults. We were raised to believe that there would be a place for us in the corporatist world. We are a hard working lot, and for most of us that has included putting in time at large corporations. The bureaucracy and authoritarianism irked us, but we saw safety as the reward. Though the lack of promotion and low wages were bothersome, it was sold to us as the cover charge we owed for access to the party.
We are awake now. We see the corporatist structure offers only stagnation, group think and a growing disparity between the people who work to build a business and those who reap the rewards. We invested our time, our talent and our enthusiasm in entities that cast us out at the drop of a hat (well, drop of their stock price). Our illusions are shattered and we live with constant uncertainty. Those of us who were dumped from the established economic structure since the outset of the Great Recession, and those who work in fear of getting axed in the next round of layoffs, have seen quite clearly that we are on our own.
More and more, young adults are coming to embrace that idea, and therein lies the genius of capitalism. It is a self-correcting system, and while Keynesian economics are applied to right the dreadnaughts of international corporatism, we on the street level have set about finding our own way. New technologies have lowered the threshold for access to the marketplace, and the collapse of the ancien regime has given us few alternatives. For many, we must make it on our own or not make it at all.
Enter the entrepreneurial movement.
The Kauffman Foundation for Entrepreneurship is taking a leading position in this new trend. The site is well worth checking out, and they articulate these ideas quite well. Hopefully Kauffman and others will be able to capitalize (pun intended) on the shift in zeitgeist from corporatism and toward traditional capitalism.
Now is the time for it. There is a growing feeling that we have abandoned our economic roots, and must reclaim the market for the people. We began as a nation of small business owners. We were founded by merchants and tradesmen, who sought to tear down the aristocratic power structure and replace it with egalitarian and meritocratic leadership. We built, we grew, we innovated and invented. We produced. And even well into the Industrial Revolution, we did it ourselves.
We can get back there, and it is increasingly clear that we simply must. Ours can be a movement to correct the corruption of the capitalist ideal and rediscover the creativity within it. We must break through the precept that ruthlessness is a prerequisite of business success. Competition does not mean annihilation, and growth does not mean 25 percent a quarter. That is unsustainable and, beyond that, simply bad for the collective psyche. We, who are social networkers and emergence-model thinkers, understand that cooperation is overall more logical and yields better results than constant warfare. We know that the world is too fluid for monolithic corporate control, and too diffuse for top-down hierarchical decision making. We feel that it is not only right but more effective when people have a stake in their work.
Get a CafePress account. Put up an Etsy page. Go to yard sales and auction off your finds on eBay. Buy that cheap property and start the coffee shop you always wanted to have. Print up business cards for the boutique clothing line you’ve been designing.
Rebuild the American economy from the ground up, the way we used to do it.