It should not come as a surprise that 2020’s major national events from the COVID-19 pandemic to the resulting economic recession to America continuing to grapple with racial equality have been accelerants for the steady decline of Americans’ trust in institutions. Liberal democratic capitalism has unfortunately been one such aspect of American life that has borne the brunt of this new wave of cynicism, and it is especially prevalent among young Americans.
I have previously argued here that young Americans’ interest in socialism has more to do with rejecting a particular view of capitalism than an actual affinity for class revolution in the streets. Speaking as a young American who is happy to defend free enterprise, I do not think they are mistaken to hold this view.
One reason young Americans are eager to jettison capitalism is because many of capitalism’s popular defenses suffer from what I call a “Bobby Axelrod problem.” For those of you not familiar with the Showtime series Billions, the premise centers on the career of hedge fund manager Bobby “Axe” Axelrod and his clashes with U.S. Attorney Chuck Rhoades’ investigations into the extralegal and illegal methods employed by his company, Axe Capital.
Throughout the series, shades of grey could cast Axe as either a shrewd investor who earned his path from poor boy in Yonkers to billionaire at the top of his industry or a greed-fueled monster who made his fortune through all manner of morally dubious deals (one notable example brings to light that Axe financed the growth of Axe Capital by profiteering off the 9/11 terror attacks). From my viewing, I tend to take Axe at his word. “I don’t pretend I’m an ordinary guy that got lucky,” Axe says in a Season 5 response to more altruistic billionaire Mike Prince. “I am a monster.”
Prince’s story arc is still a mystery this season, but for the purposes of this discussion, he would be right at home among the signatories of the Business Roundtable’s “Statement on the Purpose of a Corporation.” “Each of our stakeholders is essential,” the statement reads. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
We can assume what a real-life Axe would say to that, and it is likely similar to a Wall Street Journal editorial by financial services executive Richard Shinder batting away the Business Roundtable statement as “worthy objectives, [but] they are either derivative of the objective to maximize shareholder value or a distraction from it.” Axe might have put it more bluntly than Shinder, but the distorted message heard by free enterprise skeptics is the same; there is no distinction between a good bottom line and the good of the consumers themselves. In an age of intense skepticism of even the basic goods of free enterprise, we need more Prince and less Axe.
The Darwinian assumption baked into the Bobby Axelrod problem is not just a branding issue. It is also fiction that actually undoes public faith in capitalism’s unique ability to maximize consumer freedom and market efficiency. Two contemporary examples from the tech industry paint a clear picture of why money-making and morality cannot exist apart in free enterprise.
In a recent essay for The Atlantic, Committee for a Responsible Federal Budget President Maya MacGuineas warns that some tech firms’ behaviors at the foundation of “Americans’ growing reliance on technologies […] have become predatory and are quickly becoming more so.” She points out that the manipulative business tactics these companies now exploit an “asymmetrical exchange of information” that gives them the patina of being free choices when, in fact, they are carefully engineered by firms to maximize their profitability with little consideration for how these practices affect consumers.
The Bulwark Executive Editor Jonathan V. Last has a similar point about microtasking, a novel practice that involves splitting large processes into small tasks that are virtually distributed to multiple people. While granting that there is “probably no better way to organize large industrial concerns and make them as efficient as possible,” Last raises practical questions on how meaningful an occupation can be if broken down into mundane component parts and how this destabilization of the concept of work affects the social networks of society.
None of this is a wholesale indictment of a business’s natural desire for more efficient production methods or maximizing profit. After all, making money is how they stay in business, grow, and innovate to the benefit of all.
But the questions raised by MacGuineas and Last speak to the need to balance the above concerns. As Last puts it, “Americans have loved commerce since the Founding and they give these wondrous gifts to business freely. In return, they have traditionally asked only one thing: that business owners participate in the life of their communities.” Put another way, the social and moral components of business are minimized at their own peril.
If you are seeking to convince a free enterprise skeptic, is Bobby Axelrod’s appeal to narrow self interest or Mike Prince’s emphasis on voluntary social responsibility more likely to resonate? More to the point, which is a version of capitalism you would want to participate in? Denying any such communitarian dimension is the Bobby Axelrod problem’s fatal conceit.
Any system based upon free choice needs buy-in from its participants. Arguing that we should all be — to use Axe’s word — monsters singularly concerned with our narrow self-interest is the surest way to both erode the benefits of capitalism and render the idea toxic to future generations of Americans. Instead, praising capitalism’s unparalleled freedom to earn your success while emphasizing the equal importance of caring for those around you as a result of that success gives both a more powerful and more truthful account of free enterprise to meet the skepticism of the moment.
