Are "socially conscious" capitalists the only hope?

 Much of the discussion around capitalism and reform of the capitalist system seems to revolve around the idea that people, specifically capitalists, need to be more enlightened, more community oriented or think about other stakeholders.  This is interesting because we are generally taught that capitalism thrives by channeling peoples limited knowledge and self interest into a system that is mutually beneficial for all.  Now some will argue that in fact Adam Smith and others recognized the need for human behavior and emotions other than self-interest.  But in the end, it is hard to get around the fact that the mantra from the 1980’s movie Wall Street that “greed is good” is hard to ignore.

As this blog has explored these various reform ideas, we have been told that capitalists need to be socially conscious, enlightened or engage more stakeholders.  With these changes we are told, capitalism can be channeled in positive ways to address climate change, poverty and inequality and other social ills.  Another argument is that these social problems would be worse under other economic systems and that capitalism is just “the best of the worst out there”. So are we left with hoping that the capitalists will have a conscience and act better and this is the best shot for the future?

Another possibility is that consumers and consumer demand will force producers to change their ways and provide goods and services that are not environmentally harmful and that capitalist employer will be forced to deal with inequality, low wages and discrimination in society.  The problem here seems to be that enough consumers have to demand these changes form them to become system wide.  Consumers are notoriously hard to coordinate due to transaction costs.  But, the proponents will say we are seeing changes in society due to changes in consumer demand.  The question is are those changes enough and will they happen fast enough.

Again, we are left with a basic question, is capitalism the only real option to coordinate our economy? If so, is the only real option to hope for the benign behavior on the part of capitalists or perhaps the consumers? I have left off the question here as to whether there is one “capitialism” or we need to explore the many types of capitalism that abound in the world today.