I was recently invited to deliver a guest lecture to a group of university students, and one of them asked if I thought capitalism should be dismantled. The short version of my more nuanced response was something like, “it definitely needs some changes.”

It’s no secret I have concerns with how our economic system is working (or not working, as the case may be). You’ve maybe seen my earlier posts about the profits of large grocery chains and banks. More recently, there has been news in Canada about large-scale layoffs in multiple industries. 

I understand there are sometimes no feasible alternatives to cutting employees. When a market dries up, or an industry is beholden to commodity price drops, businesses need to make tough calls. Unfortunately, I’m not sure whether that’s the situation for what we’re seeing lately. I can’t help but wonder if some owners and shareholders have unreasonable expectations. In a mature economy, should investors expect consistently sizeable returns? Or would it be okay to steadily grow over time? More bluntly: how many billion dollars of profits per quarter qualifies as “enough”? 

I sometimes hear the phrase “healthy balance sheet” – usually in reference to whether something is profitable, has solid cash flow, and so on. But I wonder: should “health” also refer to the wellbeing of employees, the relationships with customers and suppliers, the impact on the land, water, and air? Surely, we’re smart enough to realize that a business doesn’t last without these things being healthy too. 

To go a step further…if a company ignores or de-prioritizes those aspects of business (and life), should we assume the company doesn’t actually intend to be around for the long haul? And if that’s the case – if the company only plans to exist long enough to win all it can – should governments impose additional taxes to get what they can reap in the short term? Should employees and customers forgo loyalty to the brand? How far do we take this race to the bottom? 

In an earlier time when people like my grandfathers and dad were in their prime earning years, folks could work really hard in ways that put them further ahead financially than previous generations. Unfortunately, we’ve now entered an era where that situation is far less common. People can work their butts off and see very little change. Wealth is increasingly concentrated in the hands of a few, which means that concerning ourselves with investors’ gains at the expense of others is a clear choice about whose health matters. As I said in an earlier post…who are we protecting? 

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