The Manifesto of Capitalism: Capitalism allows the individual to shape society for the better and must be protected

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Capitalism has created more prosperity and progress for more people than any other system in human history. On the 30th anniversary of the official end of the Soviet Union, join the National Post and the Financial Post in a series saluting the old-fashioned but awesome power of the free market system.

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I believe that capitalism in a liberal democratic society is by far the best system to promote human development. It is the best economic system for generating new wealth, which is why even authoritarian states like China have adopted it. Generating new wealth is a crucial first step in any debate on the redistribution or expansion of publicly funded social services.

As a tech entrepreneur who did not come from economic privilege, capitalism provided me with opportunities to generate public and private wealth on the global stage. 40 years ago, the shift from an industrialized economy based on production to one based on knowledge gave innovative individuals more power to establish themselves in existing markets or to create new markets.

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When entrepreneurs have access to capital, they can turn their ideas into products and services that can improve the lives of their fellow citizens, industry and even governments. No other economic system allows a single individual to deeply shape society for the best and simultaneously create public and private goods – which is why capitalism deserves to be protected.

Yet those of us who are on the front lines of economic activity know that capitalism does not exist in a vacuum, or as Karl Polanyi wrote in The great metamorphosis : “The laissez-faire was planned.” Despite its alluring simplicity, the notion of a free and inherently efficient market has always been clouded by inconvenient truths, starting with the fact that the global financial order lives at the mercy of government and that capital sometimes needs help. ‘massive government interventions to survive its own periodic crises. The so-called “invisible hand” of the open capitalist market is always tethered to the very active forearm of a policy maker.

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Despite all its destruction, COVID-19 has at least forced neoliberals to retreat. Even in Canada, market fundamentalists are finally abandoning the myth of the independent market and accepting the obvious: the way industries are organized and the markets allowed to function are not determined by inexorable forces beyond our control, but are within the realm of control. social and political choices. In capitalism, political choices are unavoidable because politics determines every part of the functioning of the markets.

No other economic system allows a single individual to deeply shape society for the best and simultaneously create public and private goods – which is why capitalism deserves to be protected.

Today, there is a renewed belief that government invariably shapes the economy, and that it must continue to do so effectively. This is especially critical now in the age of surveillance capitalism, which not only reshapes markets, but threatens to undo liberal democracy. As Professor Shoshana Zuboff has shown in great detail, surveillance capitalism leaves a trail of social wreckage: massive destruction of privacy, heightened social inequalities, creation of crisis. mental health among our young people, the poisoning of social discourse with disinformation, the demolition of social norms and the weakening of democratic institutions.

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If we want to preserve the best of capitalism and especially its ability to generate new wealth, we must bring this mutant form of capitalism under democratic control. Throughout the last century, production-based industrial capitalism has been tamed through labor rights, new social supports, mandatory environmental practices, and many other industry-specific regulations.

Today, in the absence of meaningful regulation of the data-driven economy, we have competition to control markets rather than competition within markets. Unlike physical assets, data has unique characteristics such as its “economies of scope and scale”, “network effects” and “information asymmetries”.

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In short, the more data a business collects, the more value it derives from it. Each new dataset makes all the pre-existing datasets in the hands of the same few companies more valuable, disproportionately enhancing the power of established data giants and their acquired assets. This is why the data-driven economy has, in less than 10 years, created the largest concentrations of market and wealth in economic history, reduced the rate of entrepreneurship, innovation and business dynamism. , and lowered wages.

For capitalism to survive this century, our policymakers must end abusive practices and develop market frameworks that compel companies to contribute to the productive capacity of the market. Only then can entrepreneurs make the most of what capitalism has to offer and continue to support and advance economic prosperity and shared democratic values, as they have done for centuries.

Jim Balsillie is a businessman and philanthropist. He is co-founder and chairman of the Council of Canadian Innovators and founder of the Center for Digital Rights.