Capitalism is about to save us all. Here’s how I know. | Matthew Weatherley-White | TEDxBoise

Capitalism is about to save us all. Here’s how I know. | Matthew Weatherley-White | TEDxBoise


Translator: Lisa Rodriguez
Reviewer: Rhonda Jacobs So, you have an idea,
and it’s actually a great idea. And if the stars all line up, one day you might find yourself
standing on one of these big red dots, sharing your idea with hundreds, or maybe millions, of perfect strangers. But before you do, you will likely
want to scrub the internet, just to make sure that
your brilliant idea worth sharing hasn’t already been shared. And so you do. And you very likely will discover that there are already
a lot of smart people in the world who are very busy thinking about
and exploring your idea. Well, this is pretty much
what happened to me, and after a few
panic-fueled sleepless nights, I made an unexpected discovery: that most of the people
who spend their time thinking about and exploring money, and the future of capitalism, tend to orient towards pessimism – why capitalism should operate differently, how it could be more sustainable,
more resilient, more inclusive, less extractive,
less exploitative, more just. In fact, some people even recommended
that we should be working collectively towards an entirely new form
of economic organization, a replacement for capitalism. Now, I’d like you to hold
that architecture of failure for a second because we’re going to take
a huge tangent together, detouring into our collective
misunderstanding of evolution and why that misunderstanding
gives rise to the sense of pessimism that seems to wrap itself
like a giant squid around so many conversations about money. Okay, so, evolution. We all understand the basic principles
behind evolution, right? It’s adaptation. Now, I’m not an evolutionary geneticist, but I happened to have a conversation
with one a few weeks ago, and he encouraged me to see evolution
through a very specific lens, this concept called selective pressure, which is an invisible force that interacts with the millions
of tiny manifestations of genetic individuality
that we all exhibit, to create the changes
that we see in the world, sort of fins to feet, as it were. But the problem is that most people,
when they think about evolution, they think about it in one of two ways: it’s either a hyper-logical
genetic progression, or it’s a form of hand-to-hand combat, and neither of these narratives
actually capture that essential process. And this misunderstanding matters. A lot. Well, why? Well, I believe it matters
because this misunderstanding shapes the essential characteristic
of modern capitalism – this illusion of a merit-based system predicated upon a false analog to warfare. Now, I need to say something for the record. Actually, I’m being filmed so I’m very much
saying something for the record. (Laughter) That’s great. (Laughter) While some have argued that we should be working
towards a replacement system, I don’t agree. In fact, I do not advocate
for a dismantling of capitalism in favor of some other -ism. We have all seen capitalism
and the social, cultural and political structures that surround it
offer up surprising solutions to some of the great
challenges that we face: clean energy, affordable housing,
remarkable medical advances. I’ve been a professional investor
for about a quarter of a century, and I have seen capitalism do this. Definitely not all the time,
but often, and over, and over. So here is a spoiler alert: I’m an optimistic capitalist. And I’m going to say something
that might make some of you in this room a little bit squirmy. I think you’re all, we’re all,
optimistic capitalists. What do I mean when I say that? What do I mean when I say
we’re all optimistic capitalists? Well, we all probably agree that markets, the place where we go
to buy and sell stuff and services, generally work pretty well. I mean, we’ve been attending
them for centuries, trading sea shells for coffee beans,
and goats for chickens, whatever we had in excess
for whatever we thought we needed. I think if they didn’t work, we probably
would’ve stopped going to them. We probably also agree
that giving people the opportunity to raise money to start businesses,
to hire people, to make things, to pay taxes, and yes, to fail, it’s a pretty good system. I mean, even today’s economic environment
in China looks a lot more like capitalism than any form of communism that Marx or Engels or Mao
might have imagined. And I also bet that we agree
that there is a relationship between work and risk and reward, and although that relationship
seems to have broken down recently, that core idea still holds. And that, this intersection
of markets, and capital flow and the opportunity for reward,
that’s the basic framework for capitalism. And I doubt anybody
would disagree with that. But where it starts to get complicated
is when we try to define our own role within this capitalist system. And it gets complicated for two reasons. First, because when we think
about capitalism, and let’s admit it to ourselves, we do, probably more often
than we would like to admit, it gets really abstract. So let’s think about capitalism
as an operating system. While it might be impossible
to describe how an iPhone works, I think we all understand
the need for a periodic upgrade. And then second, most people tend to think of capitalism
as a static system, this fixed framework. And here, here is where we loop back
from this extended detour into evolution because capitalism evolves, relentlessly. It is continually reflecting and informing
our prevailing social norms. I mean, it was in our lifetime
that child labor formed an important part
of the global labor pool. It was in our parents’ lifetime
that it was totally cool to dump toxic waste
into our rivers and oceans. It was in our grandparents’ lifetime
that colonialism prevailed. And it was in their grandparents’ lifetime
that the pursuit of whales forged the early links in what we now call
the global supply chain. But each one of these practices
generally became extinct, and they faded not because
they made no economic sense, they faded because at different times,
and for different reasons, and with different degrees of reluctance, they became unacceptable. And I believe that
the current form of capitalism ignoring, as it does, generally,
the social and environmental consequences of its own operating system,
will, one day, become unacceptable. And, I think that future version
of capitalism – it’s inevitable. And, it’s a lot closer than we think. Why do I think that?
What do I see that makes me so confident? What do I see that makes me
so … optimistic? Consider for a moment the relationship between
a suboceanic earthquake and a tsunami. The earthquake will pass almost unnoticed, well, except by a handful
of geophysicists, but the tsunami
will race across an entire ocean to wreak devastation upon landfall. That’s a pretty extreme analog, I get that. But I think that dynamic holds
in the evolution of capitalism. Invisible events which trigger material,
measurable, unexpected, perhaps even apparently unrelated changes
at some future time. So what are the suboceanic earthquakes
happening right now that will lead to this tsunami of change? Well, I could riff on this
for a few hours, but I’ll spare you. Instead I’m going to stitch together
six totally unrelated anecdotes, which, when presented as a group, I think offer an unexpected
and perhaps even compelling outline for what the future of capitalism holds. So, the first suboceanic earthquake:
the Norwegian Sovereign Well Fund. I know, pretty random.
What’s a sovereign well fund? So think of a sovereign well fund
like a giant government-run piggy bank that can be raided to benefit
the citizens of the country. Since 1970, Norway has pumped
about 20 billion barrels of oil from the oceans that line its coasts, and they’ve directed
a surprising amount of the revenue from that oil into their
sovereign well fund. And now that’s sovereign well fund
is worth over a trillion dollars. Trillion. In other words, oil has made Norway
very, very prosperous. But here’s where it gets interesting. Six months ago, the government
of Norway announced that they would no longer invest in
and would strip all exposure to oil, gas and coal from their portfolio. Now, there’s a number of reasons
that it could’ve made this decision. And I wasn’t in the room when they did. But it’s impossible to overstate
the symbolism of this. I mean, this is like Bill Gates
standing up and saying, “You know, I’m not going to invest
in technology anymore.” The second suboceanic earthquake: the pope. So historically, the pope
shepherded the church’s mission, and the Vatican bank
stewarded the church’s capital. And this arrangement worked
pretty well for, I don’t know, several thousands of years. But recently, this separation
of church and bank is starting to crumble. In his most recent encyclical, Laudato Si,
the pope issued a clarion call for capitalism to be
a more forceful defender and protector of those
in our global economy who are least able to protect themselves. And, a more active protector
of our environment. Now, this is the pope talking about money. It’s true, Pope Francis makes
no investment decisions. But I think it’s fair to say that he has
a fair amount of sway over church matters. (Laughter) Third: Larry Fink’s letter. Larry Fink, in some circles,
he’s kind of like the pope. He is the CEO of BlackRock, which is the largest
asset management firm in the world. So he sits on top of a pile of money
that’s six trillion dollars tall. So he recently wrote a letter
to his fellow CEOs, and in this letter he said, “If your business does not have a purpose
that contributes positively to society, we will not support you.” Now, it’s hard to predict
exactly how this is going to play out. And it’s impossible to know
exactly what he means by that. But what is clear is that he has put
the conventional way of doing business, ignoring the social and environmental
consequences of the operations, on notice. And perhaps more critically,
he has sent a shock wave though the corporate
board rooms of the world. The fourth suboceanic earthquake: 63 trillion dollars. We are standing on the edge of the greatest
wealth transfer in history, as an estimated 63 trillion dollars
passes from the hands of primarily aging white men
to their widows, their children, and the charities that they support. So I started advising families in 1993, and at the time, when the patron
of a family passed away, you just started working
with his wife or his children, sort of no questions asked;
it was a form of professional inheritance. But a recent report by J.P. Morgan revealed that 85 percent of widows and 93 percent of inheriting children expect to fire their advisor
within three years. The number one reason given? Because that advisor
either doesn’t understand or might be actively hostile to the idea that an investment strategy can pursue
more than simply financial gain. It might even seek to contribute
positively to society. I’m betting that Larry Fink
read that report. Fifth: the B Corporation movement. So think of a B Corporation
like a first cousin to the traditional C Corporations
that we all know about. But these businesses use
the power of business for good. To certify as a qualified B Corporation requires that the company
meet a rigorous set of standards related to community, environment,
employees and customers. So right now there’s about
3,300, give or take, Certified B Corps around the world and the roster includes
a list of the usual suspects: Patagonia, Ben & Jerry’s,
Seventh Generation. I’m even proud to say
that my company is a founding B Corp. But two weeks ago, Group Danone, a publicly traded, French, six billion dollar
consumer products company, announced that they had
successfully completed their B Corp certification. Now remember that
a publicly traded company, at the end of the day, owes its allegiance
to only one group: its shareholders. And its job is to increase
shareholder value. So for Group Danone
to go through the brain damage of becoming a Certified B Corp
means only one thing: that their board and their executive team
believes that embracing and embedding best practices in sustainable
businesses management will lead to higher share prices
than if they didn’t. And this is the first time
that a publicly traded company has ever said this. The sixth suboceanic earthquake:
my brother, Carl. (Laughter) So Carl is a classic Wall Street banker. He’s been on Wall Street since 1987. And he is now the CEO of a publicly traded
solar energy company, VivoPower. A few months ago, Carl told me
that in the markets in which he competes VivoPower is frequently
the lowest-cost provider of electricity, lower than coal, lower than oil,
lower than natural gas. And corporate America’s paying attention. Google right now generates
100 percent of its electricity needs from alternative and renewable sources. Warren Buffet, perhaps
the greatest investor ever, is now the largest owner
of wind power in the country. And Walmart is the largest owner
of distributed rooftop solar power maybe on the planet. And none of these companies would be
doing this if it weren’t profitable. So, where does this leave us? With a vague sense
that capitalism might be shifting? Sure. With a little window into the arcane world
of international global finance? Alright. With a handful of interesting anecdotes that you can haul out
at your next cocktail party? That’s my gift to you. (Laughter) But you’re probably sitting there
saying to yourself, “Well why? Why do I even care?” We should all care. We should all care because capitalism now touches
every single person on this planet. Because the largest corporations
are now larger than many countries. Because as governments struggle
to deliver the kinds of services that its citizens expect,
the private sector is going to step in. And we have to decide
what that looks like. Can we use the steering power
of capital to force, to shape this inevitable evolution? Well, I think that those six examples
that I just gave you – and there’s many, many more – are evidence that this
is already happening, in ways that are both surprisingly simple
and profoundly transformational. And this might sound like a call
to become an activist, “Go man the barricades!” And there are people who will do that,
and I totally applaud them, but capitalism does not require
that we all become activists to dial up the selective pressure. In fact, we don’t even need
all to be pessimists, but nor can we become complacent because capitalism needs engagement. It needs participation.
It needs choices acted upon. It needs us to determine how
this selective pressure will be optimized. And that might be
the best way to look at this. Because capitalism,
it’s the most powerful, efficient, optimization machine
that man has ever designed. And right now, it’s simply
optimized for profits. And there’s nothing intrinsically
right or wrong with that. So the question is not:
Is capitalism good or evil? The question is: to what end
do we seek to optimize? In addition to profits,
why not environmental resiliency? Why not gender and race inclusion? Why not opportunity equality? To say that it can’t, or worse,
that it shouldn’t … argh … that reveals a failure of imagination. I think that the pope, and Larry Fink,
and Group Danone, and my brother all offer in their own way, proof of the capacity for capitalism to evolve, and the solution is beautifully,
inevitably, intrinsic to the system. Capitalism as a system,
we must remember, was created by man. It wasn’t handed to us
on tablets, carved in stone. And so, capitalism can be recalibrated.
It can be re-engineered. It can be reimagined by … by us. So we have to ask ourselves
again that question: What aspects of the current form
of capitalism do we wish to survive to serve future generations? What adaptations do we want to see
embedded in the capitalism and in the world
that we hand to our children? A more regenerative, sustainable, perhaps even reflective form of capitalism is right there! Man, I’m telling you,
it is right there waiting for us, with the evolutionary character
of capitalism itself as the capitalist to bring it to life. Thank you. (Applause)

5 Comments on "Capitalism is about to save us all. Here’s how I know. | Matthew Weatherley-White | TEDxBoise"


  1. I was in complete agreeance with him until he talked about we should have capitalism pander to race and gender.

    Reply

  2. capitalism is a system of exploitation. Can we please move to a system when we no longer exploit each other?

    Reply

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