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In our modern age, capitalism has become synonymous with amassing great wealth, being the king of the mountain, the winner who takes all. But as younger generations of leaders look around, their beliefs about capitalism are dramatically shifting. What could—and should—capitalism look like 10, 20, and 30 years from now? Could it be both profitable and socially responsible?
If you go back to the dawn of industrial capitalism, as an emerging economic system, it was astonishingly productive. Its rise in the early 19th Century in England coincided with the Industrial Revolution, and the private capital funding of machine-driven factories and transportation systems fueled an explosion of consumer goods never before seen in human history.
Within a century, much of the Western world became mechanized, and millions of households were equipped with electric lights, telephones, automobiles, off-the-rack clothes and shoes, mass-produced furnishings, and brand-name personal care products. Our collective standard of living — measured by how much stuff we had in our homes — soared to a level that would have been unimaginable to our ancestors.
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As the decades passed, however, it became clear that unrestricted capitalism brought wealth at a terrible social and environmental cost. Oppressive labor practices, pollution, the defilement of the land, and rampant fraud characterized the now-entrenched system. The first wave of capitalist leaders were men (all of them were men!) admired, at the time, for their ruthlessness and ability to usurp power. The second wave of digital technology capitalists in the early 21st Century were men (nearly all) who acted boldly and accumulated great personal wealth — but often on the backs of their millions of largely non-union workers.
As we work our way through the second decade of the 21st Century, capitalism has been around long enough so that we can objectively assess its attributes and liabilities. Judging by its results, it’s the best system we have — but it can be improved!
Over the past two centuries, we’ve learned three key lessons:
- Greed isn’t enough. As a motivating force to produce goods and services, greed alone isn’t what we want. It’s too short-term and narrow-minded, and it must be tempered with genuine empathy for others and a vision for a healthy world.
- “How” trumps “how much.” True leaders in capitalism are concerned not only with the size of quarterly profits but how those profits were obtained — and what that means for their reputation and legacy. Investors are beginning to turn away from leaders who are blind to their larger responsibilities as members of the communities that support them and their companies.
- Socially responsible capitalism is profitable. The myth of “profits at any cost” perpetrated by American economist Milton Friedman (and others) is wrong; an impactful, scalable business venture will produce strong financial profits, period. This is for several reasons: Employees and stakeholders of socially responsible businesses are highly productive and deeply loyal; investors are flocking to corporations that take a holistic approach to business; and consumers are becoming more discerning about where they spend their dollars, and they’re demanding a high level of altruism.
5 companies representing altruistic capitalism
Thousands of socially responsible companies are emerging across all industries. Here are five companies, each profiled in my book, Higher Purpose Venture Capital, that are seeking positive change while attracting top-tier investors and customers.
1.
|. Founded by Martín Claure in 2019, the mission of the Aprende Institute (that’s “Learn Institute” in English) is to help Spanish-speaking immigrants in the United States convert their interests into income by starting new businesses or launching new careers.
Its online platform offers adult vocational “upskill” programs in entrepreneurship, trades, fashion and beauty, wellness, gastronomy, and hospitality. The programs are practice-oriented, with the goal that students acquire the skills they need while adopting an entrepreneurial approach.
2. AllHere. Designed to help inner-city public schools reduce student absenteeism, this AI chat software is the brainchild of Joanna Smith, a former district attendance and family engagement coordinator. By the time students reach sixth grade, chronic absence becomes a leading precursor to dropping out. Smith saw the obstacles that can arise when trying to connect potentially absent students with the right support at the right time.
To tackle this costly problem, she and a team of experts collaborated with educators in Boston’s public and charter schools to build an AI-driven attendance intervention support system. In the old days, the school’s “truant officer” would have to try to track down absent students. With AllHere, automated two-way texting is handled by artificial intelligence, which acts nearly instantly and can handle a nearly unlimited number of students and families.
This innovative, novel, and evidence-based solution has increased student success in school, reduced the dropout rate, and built school engagement with families, all while reducing staff time so they’re able to focus on the highest-impact engagement activities.
3. Health in Her HUE. In the United States, Black women and women of color continue to experience excess mortality compared to white women. They also have shorter life expectancies, higher rates of maternal mortality, and more chronic conditions such as anemia, cardiovascular disease (CVD), and obesity.
Despite these racial disparities in health, spaces dedicated to Black women’s health and wellness are few and far between. The digital platform Health in Her HUE, founded by Ashlee Wisdom, who received her B.S. from Howard University and her Master of Public Health from New York University, offers Black women and women of color health information that centers on their lived experiences. By connecting women to culturally sensitive and competent healthcare providers, Health in Her HUE seeks to reduce racial health disparities by leveraging the power of technology, media, and community.
4. HopSkipDrive. This digital platform seeks to solve one of the most vexing problems faced by working parents and caregivers: finding safe, reliable transportation to schools for kids who live outside traditional bus routes or need a little extra help.
The HopSkipDrive platform connects parents and caregivers with a rigorously vetted network of CareDrivers. Pickup notes and multi-factor authentication ensure students and CareDrivers safely find each other. Thanks to GPS technology, parents can view the ride as it’s happening and get real-time alerts for each stage of the ride. Other stakeholders on the child’s account can also receive alerts for added visibility and safety.
Co-founded by CEO Joanna MacFarland, the service makes it easy to create, edit, and cancel rides in minutes. Users can build out rides with only eight hours’ notice, and on-demand rides for urgent needs are also available — for example, if the child has to go home sick or go off-site for an elective or internship.
5. EatWell. It may seem astonishing that in the United States, the wealthiest nation on earth, food deserts exist. These geographic areas have few to no convenient options for affordable and healthy foods, especially fresh fruits and vegetables.
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Over 13 million residents of U.S. cities live in food deserts. The inaccessibility of nutritious food, especially in low-income communities, is a driving factor in the rising rates of obesity, heart disease, diabetes, and other chronic diseases. Seniors and residents with disabilities living in food deserts are also at risk.
Co-founded by Dan Wexler and Kevin Hall in Boston, MA, EatWell sells affordable, nutritious meal kits that give families in food deserts an easy way to make dinner. Each kit includes the ingredients and a picture-based recipe that teaches healthy cooking skills. The meal takes only 30 minutes to make in one pot. This saves time and addresses the challenge of how to make a healthy meal. Using national wholesalers, the company accesses high-quality bulk ingredients at a 60% lower price than residents would pay at the local grocery store. Through its regional partners, the company can sell a five-person family dinner for just $15, and they’re food stamp-eligible. This is much cheaper than shopping at the supermarket — if you can even get to one.
Capitalism can evolve
Capitalism has been, and still is, the most powerful way to bring the most good to the most people. Two centuries of capitalism have shown us its strengths and weaknesses. Now, a new generation of leaders is forging a path for capitalism that’s both profitable and socially responsible.
These five companies are just a few of the thousands of emerging ventures proving that capitalism can be altruistic and moneymaking. Is it time to shift the balance in your own company?
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