I regularly receive messages from people who believe that capitalism is a corrupt economic system that can never be anything but corrupt. I believe these comments reflect a basic misunderstanding of capitalism, and that this misunderstanding developed because of the ways capitalism has been hijacked and perverted since the birth of the United States.
As I understand it, the corporate structure that the founders of the United States had the wisdom to create included three elements that were actually designed to mitigate against the perversion of capitalism that we have fallen into today:
- Legislative Approval: Prospective corporations were required to apply to a state legislature to receive a "charter."
- Eligibility Criteria: To be eligible for such consideration, a prospective corporation needed to demonstrate that it could provide goods and services that served the public good in a financially viable way.
- Time Limits: When a charter was granted, it was always for a limited number of years — usually less than ten. The corporation would then have the option of applying for an extension. In that application they needed to demonstrate that they were financially viable (that is, making a profit without incurring irresponsible debt to do so) and socially responsible (that is, the goods or services they were providing indeed did serve the public interest).
This system existed until the mid-1800s and completely vanished after the U.S. Supreme Court’s proceedings in 1886 erroneously reported that the court had determined that corporations were "people" with essentially the same rights as individuals. (For those details, see my "Brief History of the United States Banking System" IntegrityWatch Blog post.)
Since that time, capitalism has, in my opinion, become more and more perverted. Abandoning the charter system was one of the most socially irresponsible financial crimes ever perpetrated upon the citizens of the United States and the world.
In contrast, I believe that true capitalism remains as viable economic system for the free market sector as it ever was. The problem is not capitalism but the fact that capitalism has been hijacked through having extensively abandoned social responsibility (including but not limited to fiscal irresponsibility).
I have devoted many IntegrityWatch blog posts to describing how Debtism has replaced true capitalism beginning in the 1980s (sorry, the Reagan era was NOT all it’s been re-written to be!), and how this occurred without most people noticing this was happening. I have also written about how the root cause of greed is a fundamentally faulty formula for life fulfillment: a formula that has rendered us fat, dumb, and unhappy… and profoundly socially irresponsible as indiviual citizens, as businesses, and as a country.
I remain convinced that returning to socially responsible capitalism will go a long way in helping to free us from the "Five Big Lies" that I believe have destroyed the fabric of our society, including our financial sustainability. These five lies are in the areas of sustainable happiness, health, prosperity, patriotism and problem-solving. I will be writing about these Five Big Lies in the near future in this IntegrityWatch Blog, so stay tuned! (If you’re a member of the media or a meeting planner, I have begun to do interviews and keynotes on the "Five Big Lies That Have Rendered Us Fat, Dumb and Miserable". Please contact me to make arrangements: www.TheNewIQ.com/contact.)