–Brief– 
Capitalism
5 minute starting point 📖
7 questions that matter 💭
6 ways to get involved 💡
Spring 2020






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Background

We’ve traded rare and valuable goods and services for thousands of years.
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  • The first-known “coin” emerged 5,000 years ago: the “shekel” in Mesopotamia, or today’s Iraq. From then on, we used coins to trade for goods and services because they were easier to carry and keep track of than stones and shells. 🐚 















Merchants in Europe, by the late 1700s, got smarter about how to make and sell goods.
















Farms and factories in America, by the mid 1800s, started using money to describe success and measure progress.

 
  • We started assigning dollar values to goods and services based on how much money something could make from producing, how much money it could make from selling, and how much it could keep making from ongoing producing and selling. 📈















Then, by the 1900s, businesses and consumers gained more control over making, selling, and buying goods and services based on profit and desire. 

 
  • Competition between businesses would naturally stabilize, or control, costs because the buyers (an individual or business buying a good or service) could choose where and who to buy from. 📊














Capitalism, a social structure for organizing money and resources (economies), has nicknames. Here are the main ones:

  • Free-Market: private transactions occur between buyers and sellers with no government intervention influencing business decisions.
   
  • Neoliberal: private transactions occur between buyers and sellers with as little government intervention as possible influencing business decisions. This is sometimes called laissez-faire capitalism. 
 
  • Crony: private transactions occur between buyers and sellers with businesses influencing government laws by rewarding officials who collaborate in their interests. This is sometimes called political capitalism. 
 
  • State: public transactions occur between buyers and sellers with governments driving business decisions to benefit the government, the nation, and the political leadership’s agenda.
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  • Shareholder: private transactions occur between buyers and sellers with shareholders influencing decisions to benefit shareholders. Shareholders are investors in companies that provide money upfront to receive more money later as the company grows.
 
  • Stakeholder: private transactions occur between buyers and sellers with stakeholders influencing decisions to benefit stakeholders. Stakeholders are consumers, employees, investors, suppliers, business partners, and communities.















History tells us that capitalism came to life on the railroads, connecting sea to shining sea. Today’s historians point to something different: plantations. 
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  • Slavery as a “legal norm” ended in the 19th century, but the strategy of cheap labour and high productivity = low costs to buyers and high profits to sellers continued in the 20th century in places like mines and prisons and continues in the 21st century today in places like warehouses for e-commerce companies, factories for fast-fashion garments, and farms for plants and animals.














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What happened

The world got wealthier thanks to capitalism.

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  • This means bananas grown in Costa Rica can be bought, peeled, and put into a smoothie by a Canadian in the winter, a Dutch engineering firm can make money and hire workers to build bridges and highways in Africa, and teenagers living in Japan can enjoy American cheeseburgers at two in the morning. 🍔 















Governments protected capitalism from wars, recessions, and the rise of its arch-nemesis: communism.

 
  • Communism is a social structure for organizing wealth and resources, or economies, where businesses and properties are owned and managed by governments to bring stability, control, and equality to the masses.  
   












As competition between businesses and countries heated up, greed is good went mainstream and companies went: profits 🆚 everyone.

  • To keeps profits high ↗️ for investors and keep costs low ↘️​ for consumers, explains The Economist, businesses began to outsource, or hire workers in countries where governments loosen laws on working conditions to lower production costs. 
 
  • This way of doing business is called race to the bottom, which means businesses compete with each other by producing goods and services with the lowest-possible quality of materials, worker wages, and safety conditions. This has led to weakening worker rights, factories collapsing, and deaths on-the-job. ⚠️ 















Communist countries joined the capitalism club after their economy-organizing structures didn’t work. Sort of.

 
  • A country’s politics, or government leadership style, impacts the way capitalism is done, but certain measures of success are always used, like gross domestic product and employment rate. 
 











The search for money led to some lyin’ and cheatin’...

   














...and to a breakdown in trust between power and people.

 
  • By 2011, a month-long protest against “income inequality, corrupt politicians, and rigged economies that benefit the wealthy” happened in New York, motivating 951 cities and 82 countries to follow suit. ✊🏻✊🏼✊🏽✊🏾✊🏿











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Extreme inequality hurts everyone. Including the rich.

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What’s next

A not-for-profit that gets countries to get along on money is creating new measures of success.

  • The World Economic Forum (WEF) is proposing metrics to reward businesses that create long-term value and improve the state of the world, says WEF founder Klaus Schwab.

    ☝️But: this only works if the richest countries, currently America and China, participate.
    💡Or: if a group of countries lead as a coalition, or partnership of countries that work together to reach the same goal. 















The world’s biggest businesses promised to care more about stakeholders.

 
  • Recap: Shareholders are investors in a company. Stakeholders are investors, plus employees, customers, suppliers, partners, and communities.
   
  • Ideas: keep capitalism but tax the richest more, reform the rules for a strong social safety net, spend corporate money to better society, and give employees stock to earn money with the company.















Philanthropy, or donating money to social causes, balances the problems with capitalism. And legitimizes them.

 
  • Donating money created from freedom in business “turns attention away from the disease and to its symptoms” with capitalism’s best parts for society, Ongweso says, being a result of labour movements, like protests and unions, and government social programs.















Social movements can change capitalism. But the environment might change it first.

 
  • “Socializing banking and finance,” or making it more accessible to citizens, “connecting town and country,” or balancing economics and environment, and buying local goods and services help, but Moore warns that history’s great powers didn’t give up their ways easily. 🙅🏽















Capitalism’s got a lesser-talked about problem: population decline.

 
  • Capitalism depends on spending and growth to be considered a valuable wealth-making tool, so if societies aren’t spending and growing, advanced economies will need to find new ways to create wealth. 💵















One theory says we should do wealth and economics like this: 🍩

  • Progress is measured as an ever-rising line of growth 📈 which means ever-rising profits and ever-rising consumption. Bending the lines ➰ says economist Kate Raworth for TED Talks, can keep societies thriving well into the future.
 
  • “Doughnut economics,” says Raworth, addresses two challenges: pulling and keeping people out of the hole (the inner circle) to manage extreme inequality and working within the boundaries of the living world (the outer circle) to protect the environment.















How America and China do business will shape the future.

  • State-owned economies like China have become stiff competition for free-market economies like America. This means state-owned economies could rely less on the United States, explains political scientist and writer Ian Bremmer for NPR, and more on each other, making the structures in place that encourage the world to cooperate to work less well. 🇺🇳 
 
  • China and friends (Russia, Saudi Arabia, Venezuela, among others) say businesses should be owned by governments so economies are successful by being stable and controlled. 
 
  • America and friends (Canada, Europe, Japan, among others) say businesses should be owned by anyone who wants one so economies are successful by being innovative and free.
 
  • Bottom line: everyone’s trying to protect their cultures, citizens, and societies.















Canada needs to care what happens in America because it’s the world’s biggest spender—and Canada’s biggest shopper. 

 
  • The makers of Canadian goods and services sold to other countries, or Canadian exporters, got used to “easy access” to the world’s largest economy, but recent political “uncertainty” is making selling harder. 🇨🇦 🇺🇸 
 













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Questions to research

* Would businesses and entrepreneurs stop innovating if they had to pay more tax on profits?

* Is philanthropy a band-aid solution or best-case scenario to capitalism’s problems?

* If the richest countries decide how the world does wealth, what’s the first thing that needs to happen to improve it?

* Should wealth-structures, or economics, be taught in elementary school?

* How can technology like blockchain improve how we make, sell, and buy stuff? How would it impact our freedom and security?

* How can election campaign fundraising be reimagined so that leaders can lead by vision and values instead of donor loyalty?

* If capitalism requires inequality to be successful, is it the right structure for the future? What could replace it?














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Ideas to participate

Get to know Certified B-Corporation companies. 💡

  • B-Corps are businesses required by law to meet criteria that measures their impact on workers, customers, suppliers, communities, and the environment. Search this directory for every B-Corp goods and services business in the world to buy from, invest in, or partner with.










Join a general assembly or virtual demonstration. 💡

  • Peaceful protests and grassroots movements can change the laws around money, wealth, education, and elections. Visit LeadNow.ca for Canada and Change.org for the world to find them. Or create one.










Get background information on owners and investors. 💡

  • Finding out who’s involved in producing a good or service is hard, but it’s possible. Search this directory for businesses operating in North America, find for journalists on Twitter who report on the company or industry you want information on, or @ the company on a social media platform they‘re active on (Twitter is usually most effective) to request information directly. 










Connect with small businesses by following BIAs on social media. 💡











Get to know community projects supporting local economies. 💡

  • Find and follow local innovation projects supporting local economies in southern Ontario with the help of government funding, or taxpayer money, and start following them on social media. Apply for or share government funding opportunities through FedDev Ontario.










Get ideas unique to your situation. 💡

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  • Ask they give specific examples for how you can be a responsible consumer. Call first, but follow-up with an email.









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The natural effect of commerce is peace.
–Charles de Montesquieu
​​​© proactive citizen 2017-2023