The standard-bearers of American capitalism are under siege. Multiple viable presidential candidates are campaigning primarily on the vilification of free markets and their participants, going so far as to promise to tax the richest citizens out of their wealth entirely. Some progressives assert that a free-market system may not be compatible with our democracy and even blame the fundamental tenets of capitalism for our deepening economic inequality.
The next generation of leaders and employees are growing increasingly skeptical that capitalism can cure what ails America. Even amid a sustained economic boom, they see persistent inequality and disruptive technological change as evidence of the private sector’s inability—or unwillingness—to act in the collective interest.
I understand their skepticism, but I believe they’re wrong. Capitalism is capable of righting many of the wrongs it has perpetuated. And capitalists, working collaboratively with the nonprofit and public sectors, remain our best hope for building a healthier, more equitable and just society.
I’m not talking about philanthropic efforts or contributing funds to nonprofits alone, impactful and well-meaning as these efforts may be. I mean deploying the private sector’s vast resources and powerful capabilities alongside academia and the public sector. Together they can do the big things that our government has failed to do to help those who have been let down and left behind.
For the Greater Good
That means putting our ingenuity and energy to work for the greater good of those who aren’t shareholders. It means rethinking at least some of our capitalist priorities.
Corporate leaders have already moved in this direction. Last summer the nearly 200 chief executives on the Business Roundtable publicly called for a more inclusive approach to long-term growth, expressing a commitment to not only shareholders, but to their customers, employees, and suppliers “for the future success of our companies, our communities and our country.”
That is a step in the right direction, with the potential to drive far more constructive action than much of today’s anti-capitalist rhetoric. The best way to defend capitalism right now is to unleash its tremendous power to do good. As business leaders we must work together to increase investment in our communities. We must direct our intellectual capital and ambition toward those in need. And we must track and evaluate the impact of our efforts with the same seriousness we apply to our financial returns.
Model to Follow
The law offers a model. My profession has for many years carried on the tradition of performing free, or pro bono, legal work in pursuit of fairness and in service of the underprivileged. It’s in our DNA. In 2018, the 128 law firms that have signed the Pro Bono Institute pledge performed over five million hours of pro bono work, the highest since the PBI introduced its Law Firm Pro Bono Challenge in 1995.
Firms like mine value pro bono work not only because it appeals to our social and moral consciences but also for its value to our business: The work exposes our attorneys to the world they work and live in and brings them fulfillment beyond billable hours.
We have seen the private sector collaborate to help wipe out polio. More recently, we saw business leaders and investors join the scientific community and public sector to fight the war on cancer. This is important work that must continue, but if we want to fix what ails capitalism, we must marshal the same will, resources, and ingenuity to combat the very problems that capitalism has helped create.
- The American food industry, for example, has created the most efficient, productive nutritional system the world has ever seen. If anyone could solve the problems of hunger and obesity simultaneously, those producers, processors, and marketers could.
- Even as technological disruption has contributed to income inequality, tech companies have built systems capable of acquiring, organizing, and analyzing volumes of data that are almost incomprehensibly vast. Think of the persistent societal ills that might be solved by putting that data analytical prowess to work to create greater connectivity to opportunities and training for those struggling economically rather than putting them out of work.
- Can we work together to rebuild our infrastructure? Can the large-scale planning and efficient capital deployment that US companies have pioneered and mastered drive to build better transportation systems?
The Final Word on Capitalism
Why did we stop doing big things in this country? When did we stop working together to do them? Whatever happened, it now falls to us to lead the way into a new era of grand ideas, conceived for the benefit of all Americans. The private sector can coalesce around that mission, using its intellectual and financial capital to take on the big ideas that lift society up rather than pulling it apart.
Capitalism will not be judged on our ability to talk about problems or celebrate our marginal contributions. It will be judged on our willingness to invest in big solutions and commit its resources and capabilities to fixing the problems it has helped engender.
We need to continue to do more because we can. The civilized, forward-looking and ultimately long-lasting society is not exemplified by those who have the most but by those with the means and skills to help those without.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Samir A. Gandhi is managing partner of the New York office of Sidley Austin LLP. The opinions expressed in this article are his alone.