No, Capitalism Is Not Evil

There are dangers, but capitalism can be a force for change and progress.

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In this film publicity image released by Warner Bros. Pictures, Ralph Fiennes portrays Lord Voldemort in a scene from "Harry Potter and the Deathly Hallows: Part 2."

In his essay "Trouble in Paradise," in the July 18, 2013 issue of the London Review of Books, Slavoj Žižek explains that recent protests around the world are actually all about resistance to a common villain. This villain is not Lord Voldemort. Or even Obamacare. It is "global capitalism."

Žižek takes a few moments to acknowledge that, well, yes, um, protests in Brazil, Turkey, Greece, Europe and the Middle East (not to mention the 1979 Iranian Revolution, which he holds to be a precursor) have each had their distinguishing characteristics. And that within each of these protests there have been multiple issues.

But then he warns us not to focus too heavily on the particulars. "It is easy to see how such a particularization of protest appeals to defenders of the status quo," he writes.

Žižek focuses on recent Turkish protests in his article; what makes this distinctly ironic is the parallel between Žižek's rhetoric and that of Turkish leader Recep Tayyip Erdogan. Zizek speaks of "representatives of the ruling ideology" who "roll out their entire arsenal" to prevent certain conclusions. Erdogan has painted the protestors in Turkey with similarly broad strokes, denouncing them as rioters and looters driven by provocateurs.

[See a collection of political cartoons on the Middle East.]

Erdogan looks at a broad base of Turkish citizenry in protest and sees looters and rioters; Žižek looks at participants in the private sector worldwide and sees "global capitalism" and its "general tendency." Both seem hesitant to look too closely at their perceived foes, lest they be deceived by nuance and succumb to weakness and accommodation. And so they prefer to reduce these foes to representatives of simple ideological categories with general tendencies.

Žižek does this expressly: "The general tendency of today's global capitalism is towards further expansion of the market, creeping enclosure of public space, reduction of public services (healthcare, education, culture) and increasingly authoritarian political power."

Statements like these, that ascribe grand tendencies to activities involving millions of separate actors throughout the globe, tend to beg the question: when was the last time you dealt directly with the diverse goals and real challenges of those attempting to start, grow or invest in capitalist enterprises?

In practice, capital is as critical a tool for those who would expand the availability of space and services available to people as it is for those who would reduce that availability. And if those who wish to resist authoritarian power fail to use capital effectively, one may be sure that those who would expand such power will employ it to their ends.

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Let's take an example that played a key role in the protests Žižek discusses. Erdogan famously described Twitter and social media as a "menace." Many Turkish protestors have been avid users of capitalist innovations like Twitter, Facebook and Foursquare to enable political speech and assembly and to find out about events as they proceeded in their country. This became necessary at a time when traditional media had lost their independence – having become susceptible to pressure and influence by an inflexible government. (Turkish viewers were notoriously shown a documentary about penguins while police trained their water cannons and tear gas on the protestors.)

Without the tools of capital, would these new, competing modes of communication so threatening to Erdogan be available? Would they have been in the hands of protestors in Turkey? If you think the answer is "yes," take a close look at the capital these companies required to launch and to grow. There is a reason arguments like Žižek's include few concrete details and lots of theoretical abstraction.

To say so is not to dispute the narrative appeal of arguments like Žižek's and Erdogan's, especially to those of us who find struggles between good and evil appealing. But the Harry Potter series is available for loan (one book at a time) on the Kindle. Read it for the swell of righteous indignation you'll feel when the Ministry denies that Voldemort has returned. And with that out of your system, read descriptions like Žižek's, of the grand tendencies of capitalism (or government, if you're on the other side of the fence) with plenty of skepticism.

[See a collection of political cartoons on Congress.]

Capital is a powerful instrument that can be used in competing ways. If you care about improving quality of life for people, but disdain the use of this instrument – disdain even efforts to improve upon the rules that govern its use, as Žižek does – then you effectively cede the field to others who will employ it, or restrict its use, in ways that degrade quality of life.

The stakes are high for how capital gets used today, especially in the fast-developing world. In the balance lies access: to opportunities for personal and career fulfillment; to decent living space and working conditions; to pure food, air and water; and to education, culture and free political expression (not to mention to awesome new phones).

The great rallying cry of the ideological purist – that to work with existing systems and tools is to give in, to accommodate and to lose the opportunity to create a new regime – diverts our energies from the very real contest that is in progress. Down in the messy world of the day-to-day, entrepreneurial groups and individuals are learning to use capital in order to expand the space and increase the services available to everyday people. They are learning to use the power of capital to fight authoritarian power and mount challenges to bloated organizations that have lost connection with the people they serve, as those Turkish TV stations did.

[See a collection of political cartoons on WikiLeaks.]

Even awesome new phones have consequences, not merely for teenagers eager to reach each other, but also for those who are protesting authoritarian power or who are starting businesses that generate desperately needed employment and growth in places that previously lacked all connectivity and access to business tools.

Opportunities seem much less trivial when you don't have them. One of my colleagues is renowned for her work training an army of non-profit professionals to help the poor learn to use credit wisely and begin to accumulate capital of their own. She tells them bluntly, "I've been poor, and I didn't like it."

In many parts of the world, Turkey not least among them, capitalism has made attaining greater affluence and opportunity a real possibility for increasing numbers of people.

The fulfillment of that possibility is hardly a foregone conclusion, and one can go too far in the idealization of capitalist enterprise. One can lose sight of the critical importance of a level playing field marked by restrictions on incumbents, fair assignment of risk, enforcement of accountability for companies and checks on the political power of large entities. But to romanticize a break from capitalism is to idealize a world in which the possibilities in question could not be unlocked and the vast majority of human beings would be stuck without avenues for their aspirations.

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Capital unlocks possibilities by assigning resources to what has potential but is still unproven. It enables people to pursue solutions based on the case that can be made for the potential of those solutions, even when the people offering them are not the children of government ministers or the scions of old families.

It is a powerful instrument used not only by private ventures, but also by governments, communities and not-for-profits striving to learn from private enterprise how to make sure the grants they make and the services they offer generate specific types of financial, social and environmental return. 

To be sure, this instrument is difficult to use well. Capital requires no small measure of skill and guidance to manage effectively, and when it is employed injudiciously the results are often ruinous. At the leading edge of management practice, we have only begun to provide business owners and investors, not to mention managers of not-for-profits and other entities, the tools and training requisite for the effective use of capital in an increasingly uncertain world.  If we want to improve outcomes, we must broaden access to the capabilities required to attract capital and use it wisely. 

Moreover, the risks involved in the use of capital, as we have seen disastrously in recent years, have too often been regulated in ways that allowed a privileged group to enjoy financial wins while saddling others with the consequences of their risks.

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And even in leading global innovation ecosystems, access to capital is still too dependent on favor and privilege. When the best talent and the most innovative solution don't get the capital, the economic loss is incalculable. Our best institutions for investing capital still aren't that good. In fact, developing better systems for nurturing innovation and for matching capital with market potential holds enormous promise for unlocking economic growth and solving pressing problems. 

Žižek writes in swelling tones of revolutionary resistance to oppressive systems; but if there are revolutionaries today who can help bring about greater access to quality of life and freedom from tyranny, goals Žižek holds dear, these revolutionaries are the innovators striving to use the tools of capitalist enterprise to meet our pressing needs.

Alejandro Crawford is a senior consultant at Acceleration Group, and also teaches innovation, enterprise growth and digital strategy at NYU's Polytechnic Institute, the Fashion Institute of Technology and Baruch's Zicklin School of Business. He graduated from the Tuck School of Business in 2003.

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