How To Reform Capitalism

06 Nov 2017 | Research & Business Knowledge

Simon Riley reviews The School of Life's essay 'How to Reform Captialism' and muses on what this means for the future development of businesses and their relationships with different generations of consumers – how can we address our 'unattended' needs?

The School of Life essay How To Reform Capitalism, (available at The School of Life shop), is worth a read for anyone engaged in the commercial world but who wonders about its values.  Most of us then.

Here’s the blurb:

It is normal to feel frustrated and sad about aspects of modern capitalism. At the same time, realistic hope of change can seem either utopian or demented. In fact, the way that capitalism works is inherently open to alteration and improvement. This is because the problems of capitalism are, in their essence, not about money, law, or politics, but about human psychology – the field of expertise of The School of Life.

As this bold essay argues, the path to a better sort of capitalism starts with a clear-eyed understanding of our emotional functioning and the workings of our psyches. What follows is nothing less than a blueprint, revolutionary yet utterly practical, for a wiser and better kind of capitalism.

The main argument of the book is a simple but powerful one.  It is that capitalism as practised so far has been good at getting the things it set out to do – but it set out with too little ambition.  It’s not so much the tackiness and emptiness of brand communications that are the bane of modern life – though they are a bit – it’s that we haven’t yet created big markets in products that actually meet the emotional needs of modern life.

I love this critique of the emptiness of much of business culture, in a chapter wonderfully entitled The Depression of the Business Community:

Throughout history, when business has been harshly judged, criticism has focussed on the idea of greed; business is bad because it is an activity driven by greed.

However, this badly misses the point. If one were to accuse business of any single flaw, it should not be greed but pessimism … Hard-headed managers have rarely been outright corrupt or unnaturally avaricious: but they have very often suffered from a curious kind of melancholy, a distinctive sadness about the world and its inhabitants.

Vice-chair of Greater Manchester Chamber of Commerce, 1983

They set out six depressive beliefs that pervade business culture:

  • customers will never care about workers
  • customers have low appetites that can’t be improved
  • the only way to sell is through deception
  • you can only make big money from the bottom of Maslow’s pyramid
  • you can’t afford to care about the psychology of your staff
  • the only legitimate role for surplus wealth is philanthropic donation (not, for example reinvestment in the people involved in the business).

Read the book for more explanation, it is I think entertaining and thought-provoking.  A book coming from a Marxist point of view?  Well, no.

I verge towards the left these days, but I’ve never been attracted to Marxism.  While I admire the passion for fairness that runs through it, and I agree that every human being is ultimately of equal value – and some cats too – it’s always struck me as based on misconceptions about what makes people tick.  So, for me, a communist utopia wouldn’t actually make people more fulfilled or happy.  People want to do their own thing; they have their own ideas, ambitions and needs; they have their own dreams for life.  In a Marxist system, innovative ideas get their head if the Party agrees with them, but otherwise get stuck somewhere in a Kafkaesque maze of petty officials with their own agendas.  I heard a probably apocryphal story of a Russian official visiting London in the Soviet era and marvelling at the lack of queues for milk.  “Who’s the minister in charge of milk distribution?” he is reputed to have asked.

The idealism of the far left also seems to me to suffer from a belief in the perfectability of humankind.  It is a dangerous thing to believe in, no less so after reading Yuval Noah Harari’s Sapiens and Homo Deus (Harari Q&A in The Guardian ) – in which he posits that a growing ability to make ‘software improvements’ to ourselves may lead ultimately to a transhumanist future, in which our minds no longer reside in our bodies.  To see what that could be like, and to get rather freaked out, watch Charlie Brooker’s brilliant Black Mirror, the episode called San Junipero (The Atlantic on Black Mirror’s San Junipero).

But it’s not as if capitalism is exactly pulling up trees at the moment either.  Which is why I was interested to read How To Reform Capitalism. It’s not a book about economics, but a book about what a better society might look like.  It takes as read, as I do, that commercial and consumer life is realistically always going to be part of what we’re dealing with.  It proposes a shift in the way we think about it.

We have used it as a system for satisfying our physical needs, through feeding and clothing ourselves and providing (sometimes) a roof over our heads.  We then wonder why capitalism does not satisfy us spiritually, why we are unhappy; why its leading brands sell things that don’t really matter to us that much and don’t make life better.  And here, rather than despairing and decrying capitalism as inevitably a force to destroy happiness, The School of Life sees the potential for its future improvement.  Why not imagine a capitalism in the future in which more enlightened consumers buy products that meet needs towards the top of Maslow’s pyramid – that fulfil them spiritually (Maslow used Jung’s term “self-actualisation” for this)?  As the final sentence on the book says:

We don’t have to stop selling. We need to learn to engage commercially with our highest needs.

It imagines a future Times Square no longer advertising Coke or Nike but:

dedicated to the promotion of cures for loneliness, aids to forgiveness and those psychological ingredients that will help us be wise and kind.

This is what cathedrals once did. Is it so absurd to imagine a future age in which human activity focusses on meaning and purpose again?  The bigger things of life – real meaning and purpose – are still exciting to think about; they move us when they fleetingly come to our attention.  It’s just that our experience of them these days tends to be scatterfire. Churches brought focus on the deeper point of life (while unfortunately providing some misleading guidance on that).  In the secular age, we connect with these deeper feelings  through a hundred splinters: a charity donation, a moving experience watching a film, a look in your child’s eye.  The individual moments are satisfying but the whole is deeply unsatisfying, because we lack the help we need to join them up into coherence.  It goes against received wisdom to suggest that a future commercial world might be a place that helps put this jigsaw of purpose together for people, rather than offering them pointless objects to buy in a moral wasteland.  But actually, why not?

This is not, importantly, an anti-commercial book.  For example, it praises advertising for identifying what really motivates people and for talking to our core needs and desires.  It’s just that the products offered by that advertising – perfumes, clothes, cars – are unfit for purpose.  What is needed, argues the School of Life, is not better advertising but better products:

The challenge now is to narrow the gap between the fantasies being offered and what we spend our lives making and our money buying.

It’s not about minimising capitalism but extending it to our “unattended needs”.

I can’t treat myself to a new sofa now, so I’ll have to come at solving this “feeling deeply ill at ease with life” thing from a different angle …

I suspect they are onto something.  Because I do see a generational shift in what people expect from life, a greater insistence on living lives that are worthwhile and have meaning.  There is an impatience with the soulless.  It’s not just because getting by has got harder for most of us since the Great Recession – material comfort has been ruled out as a solution.  I think it started long before that, actually in my generation that entered the workforce in the 90s.  We were appalled by – but felt powerless against – long hours working culture and drear in the workplace.  Slowly, people more bold and inventive than me redesigned old workplaces, created new exciting ones, shifted attitudes and expectations.  But it’s been more gentle evolution than paradigm shift so far.

My generation are now in our late 40s.  While I “stepped sideways” into the freelance life – a whole other story – my peers are now business decision-makers.  They are, I think, a generation that is open to change but won’t do it on their own (we Generation X people are just too cynical).  What might bring the tectonic shift in business culture is the younger generation Y and Z people coming through, asking for it and needing it (Harvard Business Review on Generation X, Y & Z).  These are generations for whom finding meaning and a deeper satisfaction in life are important. Might Generation X become unlikely FW de Klerks, wising up to the iniquities we inherited then administered, and enabling others to take a fairer and kinder capitalism forward?

Generation X, my generation, is not heroic – it does think the old world is rubbish, it is just too shaped and beholden to it to overturn it completely.  Carrying on with our heart not in it is easier.  But generational generalisations are always a bit broad brush, aren’t they – and the truth is, there is an optimistic, thoughtful wing of Generation X, which the School of Life’s mission and values exemplify.  Here maybe is how my generation offers something for the Ys and Zs.  But we have left them the heavy lifting.

About Simon Riley

Simon is a qualitative researcher in the UK.  He listens to people from all walks of life and think about what it all means. He works for leading brands, media companies and government.  View all posts by Simon Riley →