The problem with capitalism

I think capitalism right now is pretty screwed. Yet I’m still a capitalist.

Huh? Speaking earlier this year, Nick Clegg, the UK’s Deputy PM said that:

“We don’t believe our problem is too much capitalism – we think it’s that too few people have capital”

He then went on to talk about creating a business environment with much more employee ownership. This is something I’m massively behind, but sadly (and please correct me in the comments if I’m wrong) the government doesn’t seem to have followed up with anything substantial following this statement.

The problem with capitalism runs far deeper than (financial) capital distribution. This is because money is just one form of capital, yet pretty much the only thing that’s valued in our current capitalist system. What’s ignored is human capital, social capital and environmental capital.

For example, consider an employee-owned company that unsustainably cuts down rainforests or monopolises natural water supplies in order to make a profit. This may lead to a fairer distribution of financial capital, and probably builds human capital to a degree by treating workers more fairly. Yet it is still destroying environmental capital that has taken thousands of years to build. As a secondary effect, it also destroys social capital as communities that rely on the environment lose natural resources that they need.

In comparison to financial capital, there is very little reporting or attention paid to these other equally important forms of capital. So Nick Clegg is right that capitalism as a concept is not the problem. More employee ownership is a great first step because employees, unlike stock markets, have much wider concerns about the world, but we need to go much further and fix the whole capitalist system.