BY CHRISTIAN SARKAR
Has capitalism taken us over the cliff? And why can’t we stop?
Marjorie Kelly‘s most recent book, Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises is one of the most important explanations of how wealth and power have created an unlivable world and sacrificed the future for the greed of a few.
Why aren’t the SDGs working? Why can’t our politicians do the right thing?
The first answer: wealth supremacy.
Wealth supremacy is defined as the cultural and political processes and attitudes by which persons of wealth accumulate and maintain prestige, privileges, and power that others lack.
The impact of wealth supremacy is everywhere. Kelly explains:
It’s about status, in a culture where the wealthy are revered as the possessors of godlike powers. It’s about influence, including the power to control philanthropy. It’s about political and legal power-including the power to finance candidates, to influence lawmaking through lobbying, and to escape the justice system that ensnares those without wealth.
(And, in case you were wondering, Kelly shows us the link between wealth supremacy and white supremacy).
The second answer: capital bias.
Capital bias is defined as the idea of making as much money as possible, which primarily benefits those who are already wealthy.
Kelly explains that this bias is present in the systems and institutions that allow money to wield significant influence. Capital represents the active side of wealth. It’s the money that’s expected to keep growing endlessly. Capital is what drives wealth, and it does this through various means like making profits, setting the rules of accounting, and blurring the line between speculation and investment.
When you put wealth supremacy and capital bias together, you have the “DNA of our capital-centric economic system.” These intertwined biases shape how the system operates, grows, and sustains itself. The goal is to keep the rich at the top, safe and comfortable, and capital bias is the way they achieve this. Capital bias is the essence of the system, and this system is what we call capitalism.
The Root Cause of the Polycrisis
Kelly shows us that systemic wealth extraction has become “the deep force sapping the resilience of our society, driving, exacerbating, or profiting from the largest crises of our day.”
The interconnected world of systemic risks–climate change, biodiversity loss, deepening inequality, and rising authoritarianism are converging into what’s being called a polycrisis. Kelly explains that while ecological overshoot is one root cause of the polycrisis, equally implicated is financial overshoot: the accumulation of too much financial wealth, even as the system remains intent on a limitless more. US financial assets are five times the size of GDP, a ballooning since the 1950s, when assets and GDP were roughly equal in size.
Kelly spells out the connections:
The long rise of irresponsible consumption has been driven by the corporate drive to maximize profits. Our efforts to tackle climate change have been blocked by the misdirection of fossil fuel companies and the capture of politics by monied interests.
As a global food crisis has unfolded, corporations have been out there using inflation to hide outsized price increases.? The white working class, left adrift by the loss of good jobs, finds its anger misdirected into racial and misogynistic hatred by the conservative forces determined to retain or reinstate the social order governed by wealth, by men, by whites.
Many of us don’t fully grasp how the complex, obscure, mathematical rules and norms of our extractive system lie behind these crises. It’s rarely explained to us how expanding pools of great wealth create and rely upon the precarity and indebtedness of the rest of us. Instead, our culture tends to view “wealth creation” as benign and wonderful. This bias toward wealth makes it difficult for us to digest the warnings of economists that the world is awash in far too much financial capital, just as the atmosphere is awash in too much carbon.
Naming the Disease that Ails Us
Kelly’s expose shows us the way out: the first step must be to name the disease, to in see how wealth supremacy lies at the very core of our economic system, and our mental map of reality itself. The narratives we are taught perpetuate wealth supremacy – Kelly calls theme the myths of wealth supremacy.
The relentless financialization of everything leads to the decimation of workers, as capital drives labor income – and labor itself–out of the economy. She adds: Even more frightening is how the hard right, fueled by plutocratic dark money, now seeks to eradicate democracy in its quest to keep powering the machine that supports … the “unseen ruling class.”
The 7 Myths of Wealth Supremacy
Kelly maps out the seven myths of wealth supremacy—the bias that institutionalizes infinite extraction of wealth by and for the wealthy and is the hidden force behind the polycrisis:
- The Myth of Maximizing—No amount of wealth is ever enough.
- The Myth of Fiduciary Duty—Corporate managers’ most sacred duty is to expand capital.
- The Myth of Corporate Governance—Corporate membership must be reserved for capital alone.
- The Myth of the Income Statement—Income to capital must always be increased, while income to labor must always be decreased.
- The Myth of Materiality—Profit—that is, material gain-alone is real, while social and environmental damages are not.
- The Myth of Takings—The first duty of government must be the protection of private property.
- The Myth of the Free Market—There should be no limits on the sphere of influence of corporations and capital.
Kelly’s explanation of how these myths block us from doing the right thing for the future is a tremendous contribution to the growing debate around regeneration, and a regenerative economy. Kelly and Ted Howard defined the democratic economy in their book The Making of a Democratic Economy:
A democratic economy is an economy of the people, by the people, and for the people. It’s an economy that, in its fundamental design, aims to meet the essential needs of all of us, balance human consumption with the regenerative capacity of the earth, respond to the voices and concerns of regular people, and share prosperity without regard to race, gender, national origin, or wealth. At the core of a democratic economy is the Common Good, in keeping with the founding aims of democracy in politics.
The Steps towards a Democratic Economy
SO what must be done? Kelly offers a blueprint for the shift we need:
- Breaking the Trance: We Participate in System Change
When We Change Our Minds
- Pranks, New Naming, and Other Subversive Acts: Helping Others to Awaken
- The Democratic Economy: Imagining Its Design, Seeing Its Models Demonstrated
- Democratizing Finance: Pathways Toward a Next System of Capital
- Beginning Where You Live: Building Community Wealth
Each of these steps is explored in detail in her magnificent book!
I’m especially struck by Kelly’s clear explanation of the differing visions we see in the politics of our time, not just in the US. Here’s Kelly again:
“In the economic world envisioned by neoliberals, the rights-bearing citizens are corporations and investors. Democracy is about protecting human rights and the rights of nature.”
Which one do you choose?
Repurposing the Corporation
In our book on regeneration, we argue that the corporation is obsolete. Kelly agrees. Here’s her take on what needs to happen:
The challenge is to envision, and create, private enterprises and investing processes that remove capital bias. Enterprises may still be profit making; that’s an imperative of staying in business. What is dangerous, … is the unfettered aim of profit maximizing.
There’s much, much more. We’re running out of time, and Kelly’s timely book is a force for the change we so desperately need.
About Marjorie Kelly
Marjorie Kelly is a Distinguished Senior Fellow with The Democracy Collaborative and has authored several books before this one, including The Making of a Democratic Economy with Ted Howard, Owning Our Future: The Emerging Ownership Revolution, and The Divine Right of Capital: Dethroning the Corporate Aristocracy
Kelly argues instead for the democratization of ownership: public ownership of vital services, worker-owned businesses, and more. And she sketches the outlines of a nonextractive capitalism that would be subordinate to the public interest. This is an ambitious reimagining of the very foundations of our economy and society.
Kelly and her colleagues at The Democracy Collaborative played a pivotal role in advising and designing the launch of the Fund for Employee Ownership, now hosted at the Evergreen Cooperatives in Cleveland. Originally consisting of a network of three worker-owned firms, the fund has expanded to include four new firms through conversions. Additionally, Kelly co-authored research on the role of capital in scaling up employee ownership and conducted research and convening on the model of 50 employee-owned firms that are also B Corporations, which she terms “next-generation enterprises.” Jay Coen Gilbert credits Kelly with inspiring the creation of the B Movement of B Corporations through her book “The Divine Right of Capital.” Prior to her current role, she served as a Fellow at the Tellus Institute and co-founded and served as president of Business Ethics magazine.
Christian Sarkar is the co-author (with Philip Kotler and Enrico Foglia) of REGENERATION: The Future of Community in a Permacrisis World – IDEA BITE PRESS (May, 2023)