A proposal by the Omidyar Network, the philanthropic investment organization created by eBay founder Pierre Omidyar, “Our call to reimagine capitalism in America” (pdf) outlines a five-pillar conceptual framework for rethinking capitalism, which includes grounding the economy in new ideas, shared values and inalienable rights, along with the construction of an explicitly anti-racist and inclusive economy that takes into account the realities of 21st century America, a place where technology plays a central role but that is also in the grip of a global pandemic, an environmental crisis, globalization, suffers from declining trust in politicians, and is riven with hate and fear mongering. None of these factors carried the same weight when the current iteration of capitalism was forged in the 1940s and 1950s, and some of its later revisions, specifically Chicago School neoliberalism, accelerated many of its problems. In short, markets don’t correct the problems, in fact, they don’t even correct themselves. Markets are not an unchanging, sacrosanct entity: they can be reimagined or further regulated by the same societies that created them.

Few would argue that the current economic framework is still capable of responding to the problems of this century. The failed experiment of neoliberal capitalism ends in Chile, the country that most rigorously applied its doctrines, and which has experienced its limitations hardest and fastest. It is worth noting that these proposals to reimagine do not come from capitalism’s enemies on the far left, but from organizations such as the Business Roundtable, which represents the CEOs of America’s biggest corporations, as well as investment funds such as BlackRock or the Omidyar Network itself, and that are being published in magazines such as the Harvard Business ReviewFortune, the World Economic ForumThe New York Times or Forbes, confirming the assessment of just about everyone except a few recalcitrant old men: the neoliberal interpretation of capitalism just isn’t up to the job anymore, and reimagining it is essential, not only if we want capitalism to survive, but if we are to respond to the existential challenges we face.

The problem, of course, is how to move from theory to practice. Can capitalism, a system fundamentally oriented towards its own preservation, with its own metrics and decades of experience, be reimagined? How to move from the phase of recognizing the problem to the urgently important phase of implementing solutions?

The first major obstacle, in fact, comes from a duality: in the collective imagination, capitalism is the opposite of collectivist doctrines such as communism or socialism. In practice, this duality disappeared with the fall of the Berlin Wall, and now exists as little more than a bogey man to scare children. None of the above-mentioned organizations and individuals believe that central planning or collectivization is the way forward, but they do believe that capitalism can be calibrated to correct many of the problems it has created. At heart, a very important part of society recognizes the merits of capitalism in having created unparalleled wealth and stability in much of the world, far beyond what communism or socialism achieved. The problem is that capitalism is unable to offer a solution to growing inequality, nor has it ever taken sustainability seriously. If it were not for a few brave souls, Volkswagen would still be doing what it did and would still be considered a model company.

The second obstacle comes in the form of the powerful lobbies created by capitalism itself. Everything in our society, from business to politics, is entangled in vast, self-serving client networks determined to defend shareholders’ rights, when what we need to defend are stakeholders’ rights. Reimagining capitalism implies more than just calibration, and instead radical change to many key sectors, as energy, construction, the automobile industry, livestock or agriculture, among many others. For most people, it is still very difficult to imagine a society not driven by the need for constant growth but one that is fundamentally responsible and sustainable: this will require a lot of education, regulation and enforcement.

The third major obstacle is technology, particularly the development over the last two decades, of surveillance capitalism, which has reached its maximum expression in China — would anybody still call China a communist country with a straight face? — and which in the West is also evident in lobbying, consolidating its advantage, even with the evident differences between the European Union and the United States.

The last, but arguably most important obstacle comes in the form of international borders. The division of the world into nation states whose supposed mission is to provide a higher level of well-being to their citizens in direct competition for resources with other nation states has turned our planet into a living hell desperately in need of supranational control mechanisms. This will be the biggest challenge in reimagining capitalism: countries that claim what they believe to be their historical right to produce more carbon dioxide to drive development, others that refuse to reconvert their energy matrix or modify their tax schemes, tax havens that offer refuge to capital that should be taxed in their countries of origin, more or less proactive or inactive environmental policies… in short, a wide variety of strategies that are completely impossible to agree upon and that lead many skeptics to state, simply, that the problems of the planet, even those that are leading us toward our own destruction as a species, have no solution.

Could capitalism be reimagined? We created it, so yes, it could. In fact, there have been many attempts over the years to do so from within. Will it be reimagined? No, or at least not without fierce resistance from vested interests. The Omidyar Network has limited itself to addressing America’s problems, aware that any reimagination is practically impossible at the global level, presumably hoping that if it can succeed in the cradle of modern capitalism, this new model could be exported to the rest of the world. But reimagining capitalism will be a battle, not with the outdated ultra liberals — a task the next generation will take care of — but with the obstacles that capitalism itself has created. Until we are clear about where the enemy is, we will be unable to negotiate its surrender.


About the Author

This article was written by Enrique Dans, professor of Innovation at IE Business School and blogger at enriquedans.com.