By Bill Fotsch
It’s a big claim, the label I’ve chosen for this series of articles. We usually think of inspiration as coming from faith, from heroism, from great artistic achievements—not from something as ordinary as making money. Business is business, you might think. Necessary? Sure. Inspirational? Get real.
So let’s step back a bit. To understand the inspiring elements of capitalism, you have to look at the big picture. And the little picture(s). And a whole bunch of stuff in between, which will help you understand why so many people are not inspired by capitalism, and what you can do about it.
Big picture first. The capitalist system has created the highest standards of living in history. Thanks to capitalist enterprise we have plentiful food, clothing, and shelter. We have cars, computers, and high-tech health care. As people all over the world have learned, no other system has ever been able to deliver this level of economic development.
And you want to talk about fighting poverty? Capitalism fights poverty. The well-respected magazine The Economist noted not long ago that China’s rapidly growing economy pulled 680 million people out of misery between 1981 and 2010. That reduced China’s extreme-poverty rate from 84% in 1980 (under communism) to 10% today (under a mixed but mostly capitalist system). “Take a bow, capitalism,” said the magazine.
Then there’s the little picture, or, little pictures, of all the individuals who have taken advantage of the amazing opportunities capitalism can provide. Pat Kelly spent most of his childhood in a Virginia orphanage, then went on to found and lead PSS/World Medical, a billion-dollar healthcare company recently acquired by McKesson Corporation. Brandi Tysinger-Temple is a North Carolina mom who sewed clothes for her children—and then learned to sell her clothes to other moms on Facebook. Today Brandi is CEO of Lolly Woddle Doodle, a children’s clothing company that provides good jobs for more than 100 people in her hometown of Lexington.
Aren’t these stories inspirational?
So why does capitalism get a bad rap from so many people? Why do they find it distinctly uninspiring?
Most people would agree that private ownership of business is better than state ownership. But private ownership—capitalism—is messy. In the hurly-burly of competition, some individuals will stretch the truth or try to cut corners by doing things as cheaply as possible. They’ll take advantage of whomever they can, whenever they can. That’s why the U.S. and every other country in the world have laws and regulations governing the marketplace. Participants are required to play fair or face the music. It’s why Enron and WorldCom executives are in jail.
Liberals and conservatives argue vehemently, as they should, about how to regulate and how much to regulate. Disagreement about both questions is healthy. But nobody wants to go back to the days of rotten meat and toxic medicines. Markets work best when the ground rules are clear. Fortunately, in today’s world of social media and global communication, bad behavior gets penalized pretty quickly, often before governments can react.
But there’s a more important reason for capitalism’s lack of inspiration. Too many people don’t get to take part.
Think about your first job—in high school, say. Or think about the jobs that many of your fellow citizens hold, not to mention the jobs you might have to take if you were born in India or Indonesia. At best these jobs involve showing up for work and doing boring tasks for eight hours or more every workday. At worst such jobs can be stultifying, humiliating, or dangerous.
Moreover, some people find that their wages are barely enough to live on, let alone support a family. Even in the United States, a full-time employee at Walmart and many other companies may earn little more than $20,000 a year. If that’s a family’s only income, they’re eligible for food stamps. Inspired they aren’t.
But suppose you build a company in which everyone is a capitalist. Maybe you have a profit-sharing arrangement. Maybe you share ownership through an employee stock ownership plan (ESOP). Maybe you help people learn the financials and figure out how they can drive better results, with bonuses for everybody if they succeed.
There are plenty of mechanisms, and there are plenty of companies that do just this kind of thing, from Southwest Airlines to Colorado’s New Belgium Brewing Company. I recently read about an employee-owned grocery chain called WinCo, based in Boise, Idaho. More than 400 of the company’s employees—including clerks and cashiers—own more than a million dollars’ worth of stock. These people are inspired. This is capitalism done right.
I’ll be writing more about companies like these, and about all the other ways that capitalism can be inspiring. Business is about making money, sure. But it’s also about how people work together, how they learn to make better lives, and how they realize their dreams.
Done in the right way, capitalism can be every bit as inspiring as the Sistine Chapel.