Common-Good Capitalism

Both President Biden and Republican Senator Marco Rubio subscribe to “common-good capitalism.” What then is preventing it from being our reigning model of capitalism?

Last week I touched on the shortcomings of the Protestant Work Ethic. Max Weber said it’s mostly about organization and efficiency, squeezing as much as possible out of time and space, trapping workers in an “iron cage” of rational calculation and control.

It’s our reigning model of capitalism. And it’s done much good. But modern western capitalism tends to narrowly focus on maximizing shareholder value, elevating personal choice while dissolving ties of community. The mantra is the market determines value. But this often comes at the cost of social wellbeing (what the Bible calls shalom).

We see this in the K-shaped recovery coming out of Covid. The two arms of the letter K depict the diverging paths between the wealthy (upward) and workers (downward). For instance, this past year, 2020, pay surged for 206 of 322 CEOs. The median raise for CEOs was nearly 15 percent.

This had been a trend for a while. CEOs now earn 320 times as much as a typical worker (as opposed to 40 percent in 1980). I’m all for the people who take the big risks that generate wealth reaping the big rewards. But Biden and Rubio sense something’s off here.

Rubio described it in a 2019 address at the Catholic University of America. He said we need to “restore common-good capitalism.” This model of capitalism is based on Catholic social teaching, a pre-Enlightenment work ethic that President Joe Biden also subscribes to.

That’s promising. What then is preventing it from being our reigning model of capitalism? Well, for starters, few Americans can imagine what Catholic social teaching looks like. Try this image, a figure-eight of two interconnected spheres. The right depicts social wellbeing. The left is economic prosperity. In this model, the right sphere drives the left.

This happens to align with how the brain’s two hemispheres interact. The right is broadly vigilant. It sees a larger picture, thinking both/and. The left hemisphere is narrowly focused, good at organization and efficiency. It thinks either/or. Today’s capitalists tend to bias the left hemisphere, focusing on economic prosperity while neglecting social wellbeing.

This is evident in tech and social media. Ask anyone who’s done well financially in social media or tech if they feel they’re destroying a generation. You’ll typically hear: Not my problem. This blindness defines too much of modern western capitalism.

Before the modern era, before the Enlightenment, Catholic social teaching yielded a capitalism that’s both/and, social wellbeing driving economic prosperity. I’m not Catholic, but I think it’s correct. My concern is that few Americans, Protestant and Catholic, seem to be familiar with Catholic social teaching.

Some of this is due to Protestants often being allergic to anything Catholic. But it’s more the result of 95 percent of the western world biasing the left hemisphere. We “narrow-frame” capitalism.[1] This is evident in Democrats demonizing capitalism for ignoring social wellbeing. It’s evident in Republicans applauding capitalism for maximizing individual shareholder value.

But the biggest problem might be the fact that only 0.1 percent of organizations in the US have the infrastructure to think both/and.[2] This means 99.9 percent of our institutions, including our political parties, think either/or. So Biden and Rubio can subscribe to common-good capitalism, but they’ll most likely be pulled by their respective party’s institutions toward a narrow focus on social wellbeing or economic prosperity—not both.

The way forward is restoring institutional thinking. Good ideas (like common-good capitalism) don’t succeed because of their inherent truthfulness, wrote Peter Berger, “but rather because of their connection to very powerful institutions.” Restoring common-good capitalism requires our political institutions institutionalizing it. Can this happen?

Of course it can. But how likely is this to happen? I don’t know, but it’ll never happen apart from institutional thinking. We just happen to have written a little book on the subject. You can download it for free. It might make for good reading on this Memorial Day.

 

[1] Chip Heath and Dan Heath, Decisive: How to Make Better Decisions in Life and Work (Currency, 2013)

[2] Charles I. Stubbart and Michael B. Knight, “The Case of the Disappearing Firms: Empirical Evidence and Implications,” Journal of Organizational Behavior, 27/1 (February 2006): 79-100

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4 Comments

  1. It isn’t their problem. You’re overlooking FREEDOM (it’s that important to capitalize) in your equation. It’s like you’re left-braining your moral outrage: “destroying a generation”? That’s a left-brain judgment. You have organized their moral choices – that’s not your job.

    My freedom to raise myself as an adult and raise my kids is not usurped by social media. No one likes to be told what to do or how to think. If you want institutions to be involved, to mean something, remind the institution of parenting to parent – it’s not your job, it’s their job. If social media falls into “un-use” it’ll be because good kids from good parents made that choice. And good kids from good parents can use social media for good purposes.

    I think if you right-brained this you’d see the big picture. The light pressures of respect and honor not the draconian pressures of force and shame matter more. Respect parents and responsible people and their right to do the right thing.

    You won’t get CEOs to take less money from the draconian pressures of force and shame. The light pressures of respect and honor for CEOs doing the right thing will attract others to give up their greed voluntarily. You cannot force the giving up of greed. Just like I cannot force you to see this my way.

  2. Makes me wonder if you and I have invested our retirement funds thoughtfully in common-good capitalism companies or merely looked for the best return.

  3. Yep, I ask myself the same question. It’s a good question, which causes me to wonder if I’m more like Pontius Pilate than I care to admit. He too asked a good question (“what is truth?”) but didn’t stick around for an answer.

  4. I am not sure about left brain/right brain activities, but with the advent of social media we are exposing a selfishness that is permeating this culture. If something is good for me, then it is “good”. Otherwise it is “bad”. Common-good capitalism will only work when we determine that life is not a zero sum game.

    I have been reading a book by John Eldredge called “Get your life back”. He talks about how today’s social media society is consumed with envy and guilt because we can’t help comparing ourselves with others and either trying to even the score or being bitter because we are left behind. It is insidious and a work of the devil who invented envy.

    Only through convincing institutions and society that the Common good is best for all, can we turn this country around.

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