Forty years of business reporting have led Alan Murray to some pretty optimistic claims about capitalism in the United States. Drawing mostly on interviews with CEOs, the books that CEOs and business school professors write about CEOs, and CEO speeches, Murray feels confident that “capitalism has proven itself the best system mankind has conceived to organize human activity, to create prosperity, and to eliminate poverty,” and that we are entering a new era of stakeholder capitalism in which CEOs are combining a zeal for profits with a zest for solving our epoch’s great challenges: climate change, police brutality, public health emergencies — you name it, the CEOs are on it!
Lest you think that any of this is the prerogative of government, “the size and complexity of the issues facing society require the innovation and skill and dynamism that only business can bring to bear,” Murray writes. Each of the core chapters of his book “Tomorrow’s Capitalist: My Search for the Soul of Business” illustrates a different venue in which chief executive officers are triumphing and performing as the one functional, reliable, pragmatic institution in our otherwise fallen society. The book concludes with a sequence of chapters and bullet points to illustrate core tenets of stakeholder capitalism, with gems such as: “In the long run there is no tradeoff between purpose and profits,” and “Purpose must be authentic.”
Before we can evaluate the merits of these claims, it might be good to familiarize ourselves with how capitalism actually works and then with the parable of the All-American Orphan Crusher.
For an author who is pretty keyed up about capitalism, Murray offers little definition or description and only potted history. The most we hear is that markets and competition are involved, that government regulation is bad and scary, and that capitalism creates innovation and societal progress.
I get this. Capitalism is complicated, varies from place to place, and can be hard to describe. The best definition that I’ve come across comes from anthropologist Hadas Weiss’s work on the middle class, where she suggests that we might understand capitalism as a form of unplanned surplus value accumulation.
What this means is that there is an endless, competitive search for profit, and this profit-seeking is not centrally coordinated. States may create things like courts and currencies and regulation that allow the game to go on with some guardrails and without self-destruction, but generally speaking and ideally, states don’t dictate the outcome of market competition and, in turn, wealth accumulation.
Basic as it is, this definition helps us appreciate some of the more repetitive things that go on with capitalism: Industry profit margins tend to go down, leading to lower aggregate wages and increased investment in technology; competition also leads to consolidation of monopolies and of fortunes; monopolies and hoarded wealth in turn lead to plutocratic distortions of political systems, which then prioritize lower taxes on wealth, limited industrial regulation, imperialist conquest and cheap labor.
All this is to say that capitalism has some fairly predictable tendencies. More to the point, Americans also tend to write about capitalism in fairly predictable ways. An illustration:
On Sept. 24, 2020, Twitter user @pookleblinky wrote:
“Every heartwarming human interest story in america is like ‘he raised $20,000 to keep 200 orphans from being crushed in the orphan-crushing machine’ and then never asks why an orphan-crushing machine exists or why you’d need to pay to prevent it from being used.”
The thread goes on, but the point of the orphan-crusher parable is that Americans often don’t think about the structural realities that create their problems but focus instead on the micro actions of individuals seeking to mitigate them. Think of any viral, heartwarming story about a community fundraiser to pay for someone’s cancer treatment. The story is generally about people coming together to overcome adversity and rarely about why someone should have to go begging to avoid dying of cancer in the first place.
Reading Murray’s take on capitalism, written with Catherine Whitney, is like an extremely grand version of Americans ignoring the orphan crusher. Let me show two core examples: the discussion of the pandemic and the discussion of climate change.
Simply put, the discussion of the pandemic is baffling. Murray spends most of his time talking about how some companies saw the value in their workers and sought to keep them on despite temporary dips in productivity. He also notes that pharmaceutical companies thought they were able to overcome their tarnished reputation for price gouging by collaborating on developing vaccines. None of this is bad, but it completely ignores the real story of the pandemic, which involves unprecedented government coordination and spending (not corporate action) to subsidize vaccine development (hence a competition detente), to prevent small businesses from firing employees (the Paycheck Protection Program), to send people direct cash payments, to prevent evictions, to subsidize the purchase of personal protective equipment, to subsidize local public health authorities and so on.
Another large chapter of the book is taken up by businesses seeking to reduce their emissions and climate impact. The chapter reaches something of a crescendo when Murray seeks to show that even the attitudes of oil company CEOs are shifting and softening. However, what brings this about is not really a change of heart on the part of executives, nor the sublimated will of employees, but rather governments and activists taking power away from corporations and CEOs. Specifically, at Exxon, activist shareholders waged a successful campaign to oust climate-hostile board members; at Royal Dutch Shell, a Dutch court ordered the company to cut its emissions by 45 percent by 2030; and at Chevron, shareholders voted to recommend that the company reduce emissions. If the point of the book is that capitalism is changing because of the shifting attitudes of CEOs, this chapter would seem to illustrate the opposite — that CEOs need to be dragged kicking and screaming, by hostile activists and justice-minded courts, to get their to companies stop acting like unrepentant, world-burning sociopaths.
This is a deeply weird book. Murray seems pathologically incapable of offering any sort of contextual analysis or historically informed and accurate opinion of what CEOs say.
Why do we keep creating situations where we need CEOs and billionaires to act to keep the country semi-functional? Why don’t we have a generous welfare state with national health insurance, universal child care, and guaranteed sick leave and vacation time? And, if CEOs care so much about employee empowerment, why don’t they voluntarily recognize unions (looking at you, Jeff)? Answers to these questions you will not find in “Tomorrow’s Capitalist,” for that would admit the existence of the All-American Orphan Crusher.
Daniel Souleles is an anthropologist and associate professor at the Copenhagen Business School. He is the author of “Songs of Profit, Songs of Loss: Private Equity, Wealth, and Inequality.”
My Search for the Soul of Business
By Alan Murray with Catherine Whitney
PublicAffairs. 236 pp. $29
