Modern Capitalism is Broken

Modern capitalism isn’t the same capitalism that built the modern world in the US and Europe.

It’s broken.

How is it broken?

It has lost the morality that gave it direction and long term societal value.

It is now amoral.  It lacks integrity, trust, mutual respect, fairness, and all the virtues we expect in the personal lives.

Here’s a great example from the UK:

Phones4U was bought by the private equity house, BC Partners, in 2011 for £200m.  BC then borrowed £205m and, having saddled the company with vast amounts of debt, paid themselves a dividend of £223m. Crippled by debt, the company has now collapsed into administration. The people who crippled it have walked away with nearly £20m million, while 5,600 people face losing their jobs.

Unfortunately, lots of people seem to think that it is possible to fix this type of amorality with new laws or better incentive systems.

However, as we are seeing again and again, those methods don’t work.

What will work?

Good people willing to stand up for moral capitalism.

A critical mass of people willing to disconnect from any organization or individual who practices an amoral form of capitalism.

Don’t think that’s possible?

You might want to rethink that position.  It’s not only possible, but probable in a networked age.

The people that practice amoral capitalism are only able to do so because the economic system grew faster than the information systems needed to make moral economics possible.

That’s changing, and very quickly.


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Discussion — 3 Responses

  • BenK September 23, 2014 on 11:27 am

    There is currently a struggle among multiple parties who are attempting to co-opt the rule of law and co-opt mob rule; a range of potential moralities from sharia through to systems in which the only sins are sexism, ableism, etc. Needless to say, a consensus on what actually constitutes bad behavior is important – and the fighting is fierce for groups seeking to legitimize their claim to that power.

    • James Bowery BenK September 24, 2014 on 12:19 am

      Starting with the eusocial evolution of the campfire, story-telling has granted one normative power and it wasn’t so bad when those around the campfire were kin. Indeed it was so good that it evolved a genetic predisposition in people to respect those capable of occupying the position of story-teller. This was taken big time by priests early in the neolithic, evolving into what we know as “the mass” and was turned into a virtual nuclear holocaust by motion picture mass media which not only reached directly into the visual cortex and amygdala’s formation of emotional memory, but did so under the control of very small numbers of people thousands of miles from tens of millions of people for whose moral systems they provided the “narrative”.

      The Internet is a powerful antidote if the true nature of the disease is understood.

  • James Lewis September 29, 2014 on 10:19 am

    The speed of technological change, and the vast technological powers being in the hands of those with most capital enables business to become immoral at an increasing rate. For moral capitalism to grow, technological change needs to be subject to the same suggested morality as application of capital. Neither are likely.

    I do not disagree that moral technology and business are growing, and presumably this is what you’re referring to as growing quickly (decentralisation, distributed energy/manufacturing, focus on sustainability, etc.), but this can not grow at the same rate as immoral business simply because immoral business holds the capital and necessarily has influence over any system that is capable of affecting change.

    It would be interesting to develop a model that shows what it is that is ‘changing, very quickly’, to discover if it is changing quickly enough.