Real-World Solutions Making Capitalism More Equitable

If you ask one hundred Americans about capitalism, you’re likely to get one hundred different answers. Some will say it’s evil. Others will say it’s gloriously good, or it’s flawed but fixable, or that it’s designed to enrich the owner class and cheat the working class.

Maybe all of them would be right, in their own way. But I think one thing we can all agree on is that in the past four decades, capitalism as we practice it in the United States has produced two irrefutable outcomes:

1. More wealth and productivity than at any other time in human history.
   Capitalism can be credited with uplifting societies and sparking innovations that demonstrably enrich and extend lives, from Ford Motor Company’s Model T to Medtronic’s pacemaker to Apple’s iPhone. This is a good thing.
2. More income and wealth disparity than we’ve seen in a century.
   Social and wealth inequalities have become mainstays of capitalist economies. Governments and special interests have wielded their power to enrich and empower their own, not just through corruption and injustice but through laws and customs that have fueled unregulated free markets—where wealth and power beget more wealth and power.

The rich are getting proportionally wealthier than ever, while the middle class has been hollowed out. For our nation, this is a very bad thing.

Capitalism’s great challenge is to create a healthy balance where the market can lift all boats without causing deepening generational cycles of poverty. The good news is that it’s beginning to happen now.

The rise of socially conscious capitalism

Attitudes toward wealth and inequality are highly cultural and not likely to shift drastically, particularly in highly polarized societies where political rhetoric, instead of a desire to find common ground, drives all discourse.

With politicians locked in a stalemate of their own making, we must look to private-sector businesses, investors, and entrepreneurs to take up the cause. By bringing new, for-profit business models to market that challenge conventional approaches, socially conscious capitalism can be a powerful tool for equity and social justice.

We’re seeing change. Socially conscious entrepreneurs across many sectors are already bridging social and wealth disparities. Through technology, novel thinking, and disruption, they’re developing solutions that empower those whose resources are limited by a lack of wealth or education, race or gender discrimination, immigration status, disability, mental health, or other factors. Market-led ideas are helping to close the gap in many areas of life where the needs are most acute.

The 7 guiding principles

Here are the seven guiding principles that inspire and motivate today’s socially conscious capitalists.

1. Access to capital and credit must be democratized.
   For those who live by the paycheck, an unexpected medical bill or home repair can become an existential crisis. The ability to take out small loans for short time periods isn’t easy when your options are usurious payday lenders or traditional banks with strict lending guidelines.

   Emerging peer-to-peer lending platforms now enable transparent and user-friendly loans between friends and family members, and many are creating a real-time marketplace that matches borrowers and individual lenders.

2. Financial wellness education must expand its reach.
   For people of color and other historically marginalized groups, basic financial literacy has been a roadblock to wealth creation. We’re seeing many profitable companies bringing down these barriers through community and culturally relevant education and resources.
3. High-paying job skills must be accessible and cost-efficient.
   An expensive college degree shouldn’t inhibit early career professionals in software development and IT, as proven by online coding boot camps that cater to individuals with limited means. Upskilling across many other professions can be delivered just as affordably. One company offers adult vocational programs in entrepreneurship, trades, fashion and beauty, wellness, gastronomy, and hospitality to Spanish-speaking immigrants.

   For those who are neurodivergent or disabled, a new class of business enterprises offers skills training and matches individuals with inclusive employers looking to hire from this pool of untapped talent.

4. Childcare must be convenient and affordable.
   Startups are now offering innovative approaches to childcare by partnering with families, employers, and daycare providers so that more able-bodied parents can fully participate in the workforce.
5. Communities must rethink affordable housing.
   Accessory Dwelling Units (ADUs) are laying the groundwork for low-cost housing in otherwise out-of-reach middle- and upper-class neighborhoods. Several companies are providing the infrastructure for the mass adoption of ADUs, which allow homeowners to utilize their properties for supplemental income while breaking down zoning obstacles and residents’ “not in my backyard” attitudes.
6. People of all income levels deserve affordable, nutritious food.
   Food insecurity isn’t a problem limited to developing countries. Both inner-city and rural residents across the U.S. face food deserts with drastically reduced food choices and higher food costs. Investor-friendly startups are forging community-based buying cooperatives to help eliminate this challenge. One company is taking subscription meal plans to the next level by positioning food as medicine for underserved communities and partnering with health insurers to bring down the cost of supplying healthy meals.
7. Investors, government, and the public must make capitalism more equitable.
   Socially oriented enterprises are enabled by investors who believe that a true ROI includes benefiting humanity. The willingness to invest in and provide mentorship to determined founders—who may not have a traditional pedigree—is critical for bringing innovations to market.

Similarly, governments and the public sector must foster environments that are conducive to entrepreneurialism by minimizing regulatory barriers, accepting new business models, and providing opportunities for founders with big ideas for social change.

There’s no shortage of scalable, profit-driven ideas that will make society more equitable and inclusive. Indeed, the many excesses rendered by capitalism can and should be resolved by capitalism itself. It can truly be a “win-win” situation for investors, managers, employees, and customers alike.

Written by Ron Levin.
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