Blog

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.

Notice of Caux Round Table 2022 Global Dialogue at Mountain House in Caux, Switzerland

In partnership with the Initiatives of Change Business and Economy Program, we are planning on a Global Dialogue at Mountain House in Caux, Switzerland, for July 30 and 31, 2022.  Most participants have, in the past, arrived on Friday before the meeting and then leave the following Monday.

If you have never been to Mountain House, travel is quite easy.  At the Geneva Airport, (or train station if you arrive by train) you buy a train ticket for Caux and then catch a train for Montreux. The trip is about an hour, as I remember, or less.  Once at the Montreux station, you walk via an underpass to another platform to catch a cog wheeled train up the mountainside to Caux, a small hamlet.  Then, you walk 2 minutes to Mountain House.

Alternatively, the drive from Geneva to Caux is easy and well-marked.

Mountain House has been the setting for many sessions on reconciliation since opening as a conference center after WWII.  The first sessions brought former enemies from France and Germany together and laid a moral foundation for the European Union.  In 1986, Mountain House welcomed business leaders from Japan, Europe and the U.S. to confront and rise above trade rivalries in the first gathering of the Caux Round Table.

Today, as we shift from one era – the post-WWII order seeking international comity and peaceful idealism – to something, as yet, undefined, but, perhaps, a return to the realpolitik of nation state willful self-assertion and geo-political rivalries among economies and cultures – dialogue and reconciliation is still most needed.

Please join us to make your personal contribution to the legacy of Mountain House.  You may find the proposed agenda for the Global Dialogue here.

We will confirm the agenda, conference fee and accommodation costs later.

Please do save the date.

Christmas Stockings and the Morality of Capitalism

A somewhat off the wall article in the Wall Street Journal makes a case, by accident, for the value of capitalism.

The article was a short note on the history of Christmas stockings, part of the Christmas holiday ritual developed in the 19th century in Europe, especially in England.

One part of the innovative middle class celebration of Christmas was for children – Santa Claus, who brought gifts to children who had been nice, not naughty, during the year, then ending. Small gifts were put in stockings, hung from a mantle over the fireplace.

Stockings used for that special purpose evolved from stockings made for daily wear.

The first modern stockings were knitted by hand and by a machine invented in 1589 called a stocking frame. Foot-powered stocking frames evolved over time. By the mid-18th century, England had some 14,000 stocking frames. Stockings were no longer only for the aristocracy. Very ordinary people could acquire such status coverings for their legs.

In mercantilist France, stocking frames were restricted to protect hand workers.

In 1758, Jedediah Strutt invented a way of incorporating the purl stitch into the making of the fabric, resulting in ribbed stockings. With his profits, Strutt financed the first spinning mills built by Richard Arkwright, whose invention of the water frame transformed cloth making from a low-productivity craft to an industrial product. Arkwright’s invention took only minutes to make enough wool yarn to make a pair of knee socks, when previously that task would have taken five hours.

Cotton hosiery, more desirable than wool, was one of the first consumer products made from the newly abundant thread. What could be produced in quantity could profitably be sold at lower prices and so could become more affordable to more people and so also more abundant in the lives of the many.

And Christmas stockings, too, could become part of most every English family’s Christmas celebration.

Thanks to the capacity of capitalism to evolve technology, expand and expand productivity, new wealth, including ownership of stockings, was created, which could more inclusively devolve to the people.

Your Support is Most Appreciated

Our thanks to those of you who recently contributed to the work of the Caux Round Table during the Give to the Max special day of fundraising for non-profits here in Minnesota.

During the last two weeks, I have surprisingly received many emails from all kinds of organizations asking me for a personal contribution.  These requests seem here in the U.S. to be a new part of our holiday season, perhaps encouraged by increased use of Zoom and internet relationships over these past 18 months.

It is the end of our fiscal year and so I presume on your goodwill and concern to ask again for your financial support, particularly to defray the costs of our monthly newsletter, Pegasus.

From its inception in 1986, the Caux Round Table has provided its thoughts, reflections, principles, metrics and commentaries to the global public domain without charge.

We rely upon donors to contribute with hope and courage in the midst of trials and disappointments.

You can contribute by PayPal, check or wire transfer (for wire transfer instructions, please respond to this message).

Our mailing address is 75 West Fifth Street, Suite 219, St. Paul, MN 55102.

I wish you all the best in the New Year.