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Capitalism is in trouble – at least judging by recent polls.
A majority of American millennials reject the economic system, while 55% of women age 18 to 54 say they prefer socialism. More Democrats now have a positive view of socialism than capitalism. And globally, 56% of respondents to a new survey agree "capitalism as it exists today does more harm than good in the world."
One problem interpreting numbers like these is that there are many definitions of capitalism and socialism. More to the point, people seem to be thinking of a specific form of capitalism that deems the sole purpose of companies is to increase stock prices and enrich investors. Known as shareholder capitalism, it's been the guiding light of American business for more than four decades. That's what the survey meant by "as it exists today."
As a scholar of socially responsible companies, however, I cannot help but notice a shift in corporate behavior in recent years. A new kind of capitalism seems to be emerging, one in which companies value communities, the environment and workers just as much as profits.
The latest evidence: Companies as diverse as alcohol maker AB InBev, airline JetBlue and money manager BlackRock have all in recent weeks made new commitments to pursue more sustainable business practices.
[...] A 2017 study showed that many companies with climate change goals actually scaled back their ambitions over time as the reality clashed with their lofty goals.
But businesses can't afford to ignore their customers' wishes. Nor can they ignore their workers in a tight labor market. And if they disregard socially responsible investors, they risk both losing out on important investments and facing shareholder resolutions that force change.
The shareholder value doctrine is not dead, but we are beginning to see major cracks in its armor. And as long as investors, customers and employees continue to push for more responsible behavior, you should expect to see those cracks grow.
(Score: 0) by Anonymous Coward on Friday January 24 2020, @09:01PM (8 children)
From the end of the war until recently, everyone could profit from simply saving money because the interest rate was above inflation. It's the expansion of debt and artificially low interest rates that have increased wealth disparity. If you have equity, money has been practically free to borrow for the last decade.
How is this possible? Birth rates were declining so property should be cheap and the labor market should be tight.
(Score: 3, Interesting) by HiThere on Friday January 24 2020, @10:33PM (1 child)
The interest rate for small accounts hasn't be above inflation since at least the 1960's. There was a brief period when "treasury bills" or "certificates of investment" were above inflation, but just about as soon as they were opened to purchase for less than $10,000, that ceased being true.
OTOH, the stock market has often been above inflation, and so has the bond market. One is risky, and skimmed off by large players, the other requires long term investment of sizeable amounts.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 0) by Anonymous Coward on Friday January 24 2020, @11:46PM
Inflation 1958 - 2003 [frbsf.org] I opened an account paying 6% interest in 2006. Savings rates historically tracked just below the prime rate [fedprimerate.com]
(Score: 2) by maxwell demon on Saturday January 25 2020, @10:16AM (5 children)
Based on the total money that is in the world, property is cheap. Trump could easily buy a whole street without even noticing the loss of money. But the money is concentrated in very few hands. Add to that the fact that in our current economy manufacturing goods is not the best way to generate profits, speculation is. You don't need many employees for speculation (and those are certainly well-paid). Oh, and then there's globalization for those who still produce: What is barely a living wage in one country is a luxury income in another. So you produce in cheap countries and sell in rich countries. And put the headquarters in a low-tax country. Neither of which countries needs to be the one you are living in. Of course you need to have enough money to be able to afford this.
Yes, on a global level this still isn't sustainable. But at that scale, it is easy to close your eyes about the consequences until the system actually breaks down. Or alternatively take the position that while there is a problem, there's nothing you can do about it anyway, so you at least try to get the best for yourself while it lasts. Or hold on the quasi-religious believe that in the end the invisible hand will fix everything.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 0) by Anonymous Coward on Saturday January 25 2020, @02:17PM (4 children)
Tell that to your barrista. Immigration has been weaponised to depress wages and inflate property prices. Central banks have blown the biggest asset bubble in history and it's tulips all the way down. Not only was it unsustainable (as you correctly point out) but the elites have convinced the "left" that these immoral policies have a moral foundation. Importing unskilled people to do jobs that are ceasing to exist does not protect taxation revenue or create growth.
(Score: 2) by maxwell demon on Saturday January 25 2020, @09:13PM (3 children)
You cut away an important part of my sentence, and completely altered the meaning that way.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 1) by khallow on Sunday January 26 2020, @02:50PM
Where would the internet be without selective, deceptive quoting? Huh? You're destroying its deep purpose!
(Score: 0) by Anonymous Coward on Sunday January 26 2020, @10:34PM (1 child)
You're welcome - you took my contention that property should be cheap out of context by applying it as maxim to the 1% property owner.
(Score: 2) by maxwell demon on Wednesday January 29 2020, @01:42PM
Lust re-read your statement in the original context. I didn't take it out of context.
You stated that [implied: if the thing you quoted were true] property should be cheap [in the meaning that the market forces should drive it down]. I pointed out the fallacy in the argument by pointing out that, from a complete market point of view, it is cheap, since the 1% are also part of the market. It is not cheap for normal people because of inequality in money distribution. Or in other words, it's not so much that the average house is expensive, as is is that the average person is too poor to easily buy even a cheap house.
The Tao of math: The numbers you can count are not the real numbers.