What is the Evolution & Future of Capitalism?
With Matthew Weatherley-White of The Caprock Group
It’s no secret that the capitalist system has done its fair share of damage to accelerate the climate crisis. In fact, over half of all global industrial greenhouse gas emissions are from just 25 corporate and state-owned entities.
While the rise of capitalism has aided the development of crucial services like the food industry, we also know that particular industry has evolved to serve high demand and the market economy in the cheapest way possible, now having lax regulations that contribute to the warming of our planet.
The development of market capitalism did not inherently place the planet on the bottom of the list, it simply got pushed there. But now, the evolution of capitalism is upon us. Innovative social entrepreneurs are tackling issues related to climate change while using profit to do it. Leaders in renewable energy, product development, and the food industry are utilizing the same concept of the free market to regulate wages that incorporate the true cost of labor, thus elevating personal wealth for factory workers and farmers.
Various certifications have been built through the same system as capitalism but challenge it to do more. Fair Trade, B Corps, and communities like 1% for the Planet, all demand more of the system we have.
So how are we seeing capitalism evolving and who is at the forefront of these changes? One larger than life proponent of capitalism turning into a force for good is Matthew Weatherley-White, co-founder of The Caprock Group which handles financial planning for families by using what they know about free markets, the economic system, and the global economy, to make impactful investments that have exciting returns and serve as a force for good.
What’s the Future of Capitalism Hold?
A Brief History of Capitalism:
Capitalism has been the dominant economic theory since the seventeenth century in Western Europe. The origins of capitalism can be attributed to a few factors, one being industrial capitalism and the industrial revolution, while another is Adam Smith’s influence that governments should have minimal involvement while free trade and competition persist. This element of government having little impact on free markets is referred to as laissez-faire and greatly impacts economic policies.
At its core, capitalism enables the individual to act in self-interest and pursue both private property and wealth, thus avoiding the distribution of goods to the community. This differs from another prevalent theory of the 16th to 18th centuries, Mercantilism, which restrains the power of the individual to serve self-interest. In direct opposition to capitalism is Marxism. Karl Marx believed that the industrial revolution exposed stark differences between the working class and the bourgeoisie. He advised the working class and followers of Marxist theories to rise up and take control of the means of production, which was in the hands of the world’s richest.
Advocates of capitalist philosophy argue that countries who are in the depths of poverty don’t have the same level of freedom that the richest countries do. If they could employ tactics of innovation and capitalism, they too could benefit. However, these proponents of capitalism continue to reap the benefits of poorer nations’ inability to compete in market systems.
Changemakers in the Field:
You may remember the Occupy Wall Street movement started by a group of activists in New York City in 2011. At its core, the Occupy movement pushed for greater economic equality. While the thousands of protestors who famously camped in city squares for weeks have dissipated since 2011, the Occupy movement is still informing massive change in favor of economic empowerment and climate change activism.
Occupy demanded a higher minimum wage and better treatment of workers from big companies like McDonald’s and Walmart, who conceded. Occupy opposed and continues to oppose traditional capitalism. The rise of the 1% and fall of the 99% is inherently fraught with racist and classist sentiments that continue to prevail as long as capitalism isn’t questioned and revolutionized.
Today, many people are demanding more of capitalism. Conscious consumers are more interested now more than ever in where their food comes from, how their products are made, and where their dollars go. They want to support environmentally friendly companies or companies that publish their lowest wages.
Some advocate for capitalism to remain in place, but acknowledge that it must evolve to include sharing of wealth and focus on climate change solutions. As big business and industries that rely on factory production are some of the biggest polluters, consumers are asking those businesses to take a stand and utilize their entrepreneurial skills to address the world’s most pressing problems.
The Caprock Group: Investing for Impact
One of the founding members of the B-Corp Community, The Caprock Group is an investment advisory firm that focuses on protecting and growing family wealth. Caprock advocates for their clients and serves as true financial partners in all investment decisions.
The Caprock Group is different because it operates on the assumption that capitalism can be a force for good. Caprock directs impact-oriented families and mission-driven foundations to allocate money and invest in companies that make positive change in the face of issues like climate change and social inequality. When impact investing supports these businesses, capitalism is leveraged to advance solutions to pressing problems and achieve positive social change.
Caprock is just one shining example of how capitalism is evolving to meet current needs and interests.
An “optimistic capitalist”, Matthew is a thought-leader and pioneer in sustainable impact investing. He co-founded The Caprock Group in an effort to do better for the planet he cherishes so much during his time biking, skiing, and hiking near his Boise, ID home.
Matthew has bold ideas on capitalism and argues that the concentration of wealth most opponents of capitalism focus on is actually a result of decades of policy, not the way capitalism was intended or should be executed.
“Every company has to be profitable in order to be sustainable. What you do with those profits defines you as a social enterprise or not.”
Matthew shared his vision for the future of capitalism on the TED stage and continues to elaborate on this work both at The Caprock Group and in his personal time.
Closing: What’s Next for the Evolution of Capitalism?
Some argue that we’re already in the next iteration of the economy: post-capitalism. The emergence of the sharing economy has shown that the traditional development of capitalism can be shaken up with innovative companies like AirBnb and Etsy. The market has seen the emergence of social enterprises that build on the foundation of capitalism to do so much more with their profit.
Socially responsible companies like Warby Parker, Bombas, and TOMS shoes who have a one-for-one model have skyrocketed in popularity because consumers like the idea that they can facilitate philanthropy while purchasing a product they love.
Many entrepreneurs are pushing the envelope to earn certifications that promote better for the world businesses that still exist in a capitalist economy. As many B Corps have shared, going through the B Impact Assessment process is a learning experience on how to do better business in itself, so isn’t that what all businesses should be pursuing? Even ranking outside the parameters of the certification can be beneficial in giving a company a baseline to work from and start disrupting traditional capitalism by innovating their profits and products to be what the world needs.
The evolution of capitalism has been subtle, but it’s happening!
To address climate change, thought leaders in the public, private, and nonprofit sectors must utilize their strengths and weaknesses to re-envision traditional capitalism.
We’ll never stop purchasing necessary goods, but in the 21st century, in a country as entrepreneurial as the United States, isn’t it time we start moving away from self-interest and into global impact?
Additional Resources & Links Mentioned from the Episode:
- Matthew on LinkedIn, Twitter
- The Caprock Group
- Matthew’s TED Talk in 2018
- SSIR Article on B-Corp Growth
- Capital in the Twenty-First Century by Thomas Piketty
- Capital and Ideology by Thomas Piketty
- Meditations by Marcus Aurelius
- Miyamoto Musashi’s writings
- The Anarchy by William Dalrymple
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