I listened to this conversation between Nathan Schneider and Marjorie Kelly this week, about her new book Wealth Supremacy and why simply trying to build more ethical economic entities is insufficient. It’s a retrospective look at the evolution of her own thinking, which has been very solutions oriented, and focused on bringing additional values into business, either through entities like B-corps or the recently much maligned ESG initiatives. One thing she seemed particularly regretful about was falling into the trap of using the framing of business to advocate for these kinds of changes: accepting that the profit maximization is the most appropriate metric, and then making the case that more sustainable, equitable, diverse, egalitarian etc. businesses are more profitable, and therefore those attributes should be more widespread, even within the very narrow logic of Actually Existing Capitalism.
On one level, it would be awfully convenient if that were true, and in the context of the Long Algorithm I think it should probably be our goal to create an economy where it is true by construction: through the laws, taxes, markets, policies and social norms we adopt. But in general it doesn’t seem like that’s the world we live in right now. Extractive, monopolistic, wealth-concentrating businesses still seem to have some pretty high margins, and many folks arguing for more ethical, sustainable, equitable business have said that a lower rate of return might be acceptable or even necessary.
Mathematically, I don’t think that works out.
Continue reading The Math of Ethical Growth
We have to let go of the idea of maximizing returns to capital. If a corporation will do something that’s beneficial to sustainability and it breaks even… why isn’t that good enough?Marjorie Kelly