The Evolving Economy

Corporate America was founded by titans. The might wielded by men like John D. Rockefeller and Andrew Carnegie was truly olympian, their innovations in oil and steel, respectively, paving the way for America’s powerhouse status in the 20th century. But for all the benefit these giants contributed to the construction of modern American society, there was also a dark side to their immense power. Company owners had absolute control over wages, hours, safety, spending, and (in the era of rampant monopoly) over their entire market as well. Workers and consumers alike were completely subject to the whims and desires of the men in charge, which (big surprise) weren’t often in line with the best interests of either worker or consumer.

These captains of industry were enabled by the capitalist economic system into which they were integrated, a system which was initially designed as an alternative to the feudalistic and mercantilistic models that created so much inequality and instability through their top-down power structures. But as experiments in capitalism took shape, it quickly became apparent that the demons that plagued older systems could just as easily find their way into this one. Socialism and Communism were developed as response to this new shape of inequality, but there again the ravage of human greed managed to contaminate these theoretically utopian constructs once they were put into practice.

Each of these economic systems were designed in an effort to troubleshoot what may be one of the greatest and most complicated/difficult problems in all of human history: how do we engineer an economic system that compensates for our natural tendency to take advantage of each other for personal gain?

While no simple or ultimately effective solution seems to be on the horizon, we can take heart that, from our 21st century vantage point, we’re better equipped to solve this problem than our 19th and 20th century predecessors. Aside from having the advantage of hindsight, there is another surprising factor that’s come into play, an observation perhaps best illustrated by psychologist and cognitive scientist, Steven Pinker, in his book The Better Angels of Our Nature. His thesis is that humanity is, over time, becoming less violent and more cooperative and altruistic. This doesn’t necessarily mean that human nature itself is changing, he argues, but it does seem to indicate that certain factors like scientific/technological progress, historically low levels of wealth inequality, and the spread of reason as a virtue, have created a conditions more conducive to prosocial conduct than in any other time in our history. These developments, which one could argue contribute to a sort of collective maturation process, may also increase the potential for beneficent approaches to economics to be have more viability than they might have had a century ago.

This notion is substantiated in the Harvard Business Review report “Corporations and Society: Doing Social Good While Doing What’s Good for Business.” This report makes the case that, as the power and influence of corporations increase, so does their responsibility to contribute to the common good. And not only this, but the public demand for corporate responsibility is growing as well. “The more customers, employees, investors and local communities expect from companies to perform their functions in responsible ways, the more responsible companies will be rewarded and irresponsible companies will be punished.” (pg. 12).

In addition to corporations taking on more responsibility, it is also becoming increasingly profitable for businesses to build social good directly into their business models. Seeds is just one example of this concept, with other great companies like TOMS and Warby Parker also demonstrating how creating a business around giving back to those in need can be extremely profitable. This phenomenon has created a circumstance in which you no longer have to be a non-profit to make significant contributions to the greater good, and as more businesses like the aforementioned prove this thesis, the more common companies like these will be.

While we’ll never create a perfect system, or program selfish ambition out of human nature, if we continue to invest in factors that lead to a more balanced society and are intelligent and innovative in how we channel economic forces, we may very well live to see a day when we have a system that truly does work for everybody.