The Creative Capacity of Capitalism?

These past couple of years, I have found myself more and more keen to find “facts” with which to advocate the objective constructiveness of the Caux Round Table principles of moral capitalism.

I presume that we have, in fact, passed into a “post-truth” global epistemology for the human endeavor. Facebook and Twitter decide on what facts are true to them. Xi Jinping thinks in terms of facts which will validate and extol his “China dream.” Intolerant Muslims will kill to impose their narratives on the rest of us. Joe Biden tells Americans to “follow the science.” But which scientists does he consider unimpeachable? Same with other ideologues. Intellectually and emotionally, we are drowning in narratives created – might I say, fabricated? – without respect for realities which do not yield themselves to the cause of human willfulness and narcissism.

To swim through the great waves of this inhospitable, post-modern geist, I look for stubborn facts, hard facts which resist any reframing to subordinate them as proof-points for our self-referential narratives.

So, I was delighted to read on the first day of 2022 some facts which point to an appreciation of capitalism.

What excited Adam Smith about the new economic system of wealth creation he saw emerging around him in the late 18th century was its capacity for innovation, disruption and bettering of the human condition. Since then, many advocates of capitalism have also looked to the creative destruction drive of free markets and rich-taking by private capital.

A corollary observation has been that small enterprises employ the majority of workers and new firms are the source of most innovation. The big firms are not always the best and the brightest when it comes to innovation and effective response to change and customers.

Now, in the U.S., it has been a worrisome concern for some social economists that large firms have taken on more and more market share and that the number of startup firms has been declining for years. Now, most industrial sectors in the U.S. are dominated by 3 or 4 big firms.

However, something to the contrary has happened in the US.

According to the U.S. Census Bureau, more than 4.4 million new businesses were created in 2020 – the highest total ever recorded. It’s also a 24.3% increase over 2019 and 51% higher than the 2010 through 2019 average.

While the 2021 numbers aren’t in yet, more than 500,000 businesses were started in the first half of 2021 alone and this during a pandemic.

I would hazard a guess that it was the very threat of, the disturbances created by the pandemic which provoked some Americans to, on their own without elite direction or government patronage and reduction of risk, to start a private business seeking to serve the needs and wants of others.