Capitalism must meet the challenge: Prosperity for all Americans

As world leaders from business, government and non-governmental organizations gather in Davos, Switzerland, for the World Economic Forum’s annual meeting, the quiet, stoic grandeur of the mountain tops belies the crumbling foundation of the international economic and political order that the U.S. built in the aftermath of World War II. 

The results of the recently released Edelman Trust Barometer set the stage for the opening of the forum. It found that a majority of people around the world believe capitalism is doing more harm than good. This is a stunning turn of opinion for the economic system that has been the basis of post war prosperity and stability.

In the U.S. slightly less than a majority of people, 47 percent, believe that capitalism does more harm than good. That’s a troubling percentage for the word’s most prosperous nation built on free markets and democracy. Millions of Americans are losing faith in the American dream of upward mobility and American-style capitalism itself. And among millennials, our next generation of leaders, capitalism has plunged in popularity, mainly due to the widening divide between the haves and have nots. Only one out of two millennials support capitalism, according to a November 2019 poll.

This crisis of confidence has contributed to the great divide infecting American politics. It has put the need for reasoned solutions that could provide prosperity for all Americans and make capitalism sustainable for generations to come front and center in the 2020 election.  

But the 2020 election cycle is falling far short of providing informative debates and workable solutions. To date, the discussion by political leaders in both parties in the world’s greatest democracy is stuck in a roundabout of expedient partisan and populist rhetoric that only stirs resentment and anger. 

While leadership is needed from all sectors of American society, American business leaders can and must help carve a path forward on the most critical issues. For starters, they have credibility. The Trust Survey found that trust in business outweighs trust in government. Their experience also brings a strong understanding of fiscal responsibility, the importance of free markets to ensure competition, innovation, economic growth and transparency, and the need for solutions not just talking points. These are all qualities very much needed in the public square.  

American business leaders are not new to this challenge. A prime historical example occurred in 1942, when America’s leading CEOs took on the challenge of creating a rules-based, post war economic order to ensure peace and prosperity. They formed the Committee for Economic Development (CED), and they have been referred to “as the capitalists who cared enough about the system to save it.” Their efforts to provide non-partisan public policy solutions helped give the United States and the world the Marshall Plan, the Bretton Woods Agreement and the Employment Act of 1946, which created the Council of Economic Advisers (CEA) and established the Joint Economic Committee. 

Today’s challenges to our economic principles and democratic institutions are equally as important. America’s top CEOs must not only provide leadership individually but also come together collectively and collaboratively to forge a prosperous path forward for all Americans by developing practical, real solutions in the nation’s interest. The private and the public sector need to work together to restore confidence in our economic and democratic principles. Business leaders can play a unique role in bridging the deep divide on public policy. Once again, it is incumbent upon them “to care enough about the system to save it.”  

Lori Esposito Murray is president of the Committee for Economic Development (CED) of The Conference Board. She is a former adjunct senior fellow at the Council on Foreign Relations and also previously held the national security chair at the U.S. Naval Academy.