What to Do About American Capitalism
We use the results of our survey on generational attitudes about the America economic system as a starting point to discuss what to do about American capitalism from a product management point of view.
TL;DR: Older generations feel better about capitalism than younger ones, but nobody feels great.
American capitalism has an image problem, and it crosses all generations. In July of 2022 Fortune’s’ Path conducted a survey to learn how attitudes about the United States’ economic system vary by generations. We collected 50 responses across four generational categories.
Here’s who completed the survey.
Baby Boomers – 7
Generation X – 18
Millenials – 15
Generation Z – 10
Results
The statement “Capitalism encourages people to act morally,” had a Net Promoter Score (NPS) of -90. 50 is considered a good NPS; – 90 is outlandishly bad. “I believe my children or grandchildren will live as well as I do,” scored -72. If capitalism was a product, it would have a very hard time getting referrals or repeat business.
55% of respondents disagree that capitalism as it’s practiced in the U.S. works well for most people. 30% strongly disagree. Only 14% strongly agree.
The older you are, the better you feel about your economic situation. 70% of Baby Boomer respondents say they have all the money they want. 10%–15% of Millennials, GenX, and GenZ respondents say the same thing.
57% of Baby Boomers believe their children and grandchildren will live as well as they do. 40% of respondents from other generations believe the same. GenX and GenZ are more pessimistic with 33% of respondents saying they believe their children and grandchildren will live as well as they do.
No generation believes capitalism encourages moral behavior.
Faith in government to better one’s economic situation varies by generation with younger people having more faith than older people. 55% of all respondents agree that government has a lot of power to help the economic situation of people like them. 78% GenZ respondents agree. Only 29% of Baby Boomer respondents agree.
27% of respondents strongly disagree that the U.S. would be worse off with a different economic system. 16% of respondents strongly agree.
Mini-Conclusion
If there was a viable competitor for our economic system, American capitalism would be in trouble.
Methodology
While not a statistically significant response rate, results from 50 responses are still fun to think about. Our results line up generally with other research on the topic, so we don’t think we’re wildly off the truth. In business, you always have to make do with imperfect data.
We allowed respondents to choose their preferred term for the economic system of the United States: capitalism, free enterprise, or a write-in. Capitalism was the preferred term across all generations, chosen by 40 of 50 (80%) respondents. Seven GenX respondents selected free enterprise, two millennials had write-ins, “corporatism” and “oligarchy,” and one GenZ wrote-in “regulated capitalism.”
After asking respondents what term they preferred, we asked questions designed to measure the respondent’s faith or skepticism in capitalism/free enterprise and to measure how respondent’s feel about their own economic situation. We used a ten point scale (1 = strongly disagree, 10 = strongly agree) to measure agreement/disagreement with a statement so we could calculate a Net Promoter Score (percent of answers of 9 or 10 minus percent of answers of 6 or less) for each statement.
The Questions
The _____ in each statement is where the respondent’s preferred term appeared.
_____ as practiced today in the United States works for most people.
_____ encourages people to act morally.
_____ is the best economic system to protect our freedoms.
_____ is the best economic system to ensure our well-being.
America would be worse off if it had a different economic system than _____.
I feel good about my economic future.
I believe my children or grandchildren will live as well as I do.
Government has a lot of power to improve the economic life of people like me.
Select the answer that best describes your economic situation.
Responses
_____ as practiced today in the United States works for most people.
NPS = -65
Median = 4
_____ encourages people to act morally.
NPS = –90
Median = 3
_____ is the best economic system to protect our freedoms.
NPS = -53
Median = 5
_____ is the best economic system to ensure our well-being.
NPS = -59
Median = 4
America would be worse off if it had a different economic system than _____.
NPS = -51
Median = 4
I feel good about my economic future.
NPS = -29
Median = 7
I believe my children or grandchildren will live as well as I do.
NPS = -72
Median = 5
Government has a lot of power to improve the economic life of people like me.
NPS = -22
Median = 7
Across all questions, capitalism/free enterprise/oligarchy/corporatism has an NPS of – 60. Despite this negativity, respondents felt relatively good about their economic future. 63% of respondents felt good about their economic future. Only 20% did not. 55% of respondents felt they could afford some luxuries, and 20% said they have all the money they want. Only one respondent reported they were struggling.
What this means for people leading a business
Just because you are the incumbent system/product/service does not mean you are loved or even liked. Sometimes you have good renewals and repeat business only because customers can’t think of alternatives.
Big changes require honest dialog and some kind of truth and reconciliation process.
It’s nearly impossible to make big changes like modifying a country’s economic system or transitioning from being an oil company to an energy company through a democratic process.
The kind of agreement required to make big changes is very dangerous. Putin’s Russia and Xi’s China have a lot of agreement. We imagine Enron did, too.
People tend to be more optimistic about their personal situation than the general situation; “It’s bad for others, but I’m OK.” This makes building momentum for change around a general issue such as “Capitalism does not encourage moral behavior,” more difficult than building it around personal issues such as “You were cheated by your bank.”
Final Thoughts
If we’re skeptical of capitalism, why do we stick with it? It may be that it’s difficult for us to envision alternatives.
Our political discourse is less than honest about how we practice capitalism. We’re closer to corporate socialists than to laissez-faire capitalists. Our government is actively involved in our economy, encouraging some behaviors and discouraging others, often through tax incentives and subsidies. We don’t make many direct payments to individuals.
It’s hard to make big changes when there’s no consensus on what it is that’s being changed or what needs changing. Unless we get honest consensus, we’ll continue to tweak the system we have. We’re unlikely to do our tweaking in an honest way because we’re not honest about what we’re tweaking.
If capitalism was a product managed by Fortune’s Path, what would we do to improve it?
Research other systems. This article presents two fascinating alternatives, neither one of which we’d would give up our iPhone for.
Define success criteria. Our straw man might be, “In a successful economic system, everyone in the U.S. has all the food, shelter, and medicine they need to live. No person has so much wealth that they could become a danger to others. The system supports innovation while discouraging behaviors that harm others.”
Develop measures for the stuff in our success criteria. What does “everyone in the U.S.” mean? Does it include non-citizens? How much food, shelter, and medicine are enough to live?
Find the simplest thing to change to achieve some of our desired results. Then make some changes and measure results. Maybe start with tax policy: no more billionaires. Go onto Universal Basic Income – no one has less than $24,000 a year. Since we aren’t printing money, just redistributing it, we might be able to avoid inflation. At any rate, we’d make changes and monitor results to make sure we’re not causing more harm than good.
Sell our changes to everyone affected by them. This is always a lot of work, and never ends.
Making big changes is easy in the abstract. Political environments make them much harder to carry off. That’s a good thing. If decisions only affect an individual or small group, the individual or group should be able to make them easily. If decisions affect millions or billions of people, they should require a formal, rigorous, democratic process. Total agreement is dangerous because we can’t maintain agreement and freedom together.
Business is politics, and philosophy, and economics, and art, too. That’s what makes it so much fun.