Better Capitalism or a Better Economy: Where are We Headed

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 A recent article in Nonprofit Quarterly by Steve Dubb raised the interesting question of whether we need a “better capitalism” or a “better economy”*.  Dubb was reporting and writing an opinion piece in regards to a recent 2021 Harvard Conference on Social Enterprise.  I like the thinking here and wanted to expand on it.  IE explains its overall goal of social provisioning versus resource allocation.  The economy should be assessed in terms of how it ensures that all economic agents have adequate social needs as opposed to simply the question of resource allocation and highest and best use.   A model of economics built on highest and best use is one where income inequality is perfectly acceptable and part of an efficient economy.  In fact, addressing inequality will come at the expense of economic efficiency.


I think the framing of a “better economy” is a good one to use and a good starting point as opposed to privileging the word “capitalism”. It appears that many want to say they are for a “better capitalism” or for “helping capitalism from itself” so as to avoid being labelled a sociaist or even a communist.  The problem is that the word capitalism gets caught up in all types of ideological baggage and in reality, as we discussed previously, there are many varieties of capitalism in the world today so as to make the generic use of the term “capitalism” meaningless.    


Many of the participants in the Harvard conference that was reported on by Dubb noted that they remain capitalism but are searching for a “better capitalism”.  Mazacutto who is well known for several books she has authored argues for several key points including: 1) government is a co-creator of markets, 2) government should not be run as a business and 3) government is an innovator as much as the private sector.  Other speakers also highlighted that the government needs to move beyond the strict role of externality resolution and public good provision to a broader set of roles and responsibilities.  This is a useful starting point for rethinking the role of economics and the economy.  Mazacutto in general does not rely heavily on the idea of enlightened capitalists but rather a more robust role for government and the public order.  


The future debate on the nature of our economic order may in part come down to the relative roles of the public versus the private order.  If so, the relevant questions are how social provisioning is impacted by these various different systems of order.  In some cases, a public order, as the one advocated by Mazacutto may be preferred from a more widely distributed economic value as opposed to one based on private ordering but this is just a hypothesis.  These are key questions that need to be investigated by future economists os we can understand where we are headed.  




*https://nonprofitquarterly.org/harvard-conference-searches-for-a-better-capitalism/


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