Davos’ Misunderstanding of Capitalism: The Radical Entrepreneurship Needed for the Future

The World Economic Forum is in session in Davos again, and it’s a rather different story this year. Even established magnates of business and government, after arriving on their private jets and moving in with their entourages, express concern about inequality and worry how capitalism can continue. The WEF’s founder even questioned whether it’s such a great system, as it currently functions, after all.

It would be all the more impressive if a realization finally dawned: There is an obvious need to change the ways we live and make a living, for infinite growth on a finite planet just isn’t possible. That does not entail a need for an alternative ideology, though. Nor will it get accomplished by adding slightly more concern for human rights and environmental protection, or about jobs in the productive economy, to the current system.

What it will take is radical entrepreneurship, of lives and livelihoods. (And that will come, either to change things for the better, or because things took a turn for the worse.) Interestingly, it may be more capitalist than many a person, even among the business people, seems to think.

Radical, the way it is intended here, has two concurrent meanings. It is very different from what is being done (or actually, what is most promoted) now, and it is so in going to the roots.

After all, what capitalism currently means is not so much the private ownership of the means of production, private decision-making, and competition in a free market, rather than a tragedy of errors: corporate control of the market, in the name of “the free market,” through lobbying for laws and subsidies, the takeover of cultural orientations and social goals by the singular values of (GDP) growth and (monetary) profit, and the “virtualism” presenting that system of never-ending growth and consumption as the only and true way.

This “autistic economics” is fundamentally based on an accompanying divorce from the reality of the nature of this world and us people: It fails to understand that the economy is but a subset of the ecology of this planet, and thus also only an emergent property of what we people do.

Radical entrepreneurship, then, is twofold yet again: it is human – whether individual or in cooperation – business in the service of human needs and necessities for decent lives, and it starts out from and for its place in the world.

Simply put, it comes to be at home in this world (as we all need to). It becomes local, first of all.

After all, human lives are intensely local. We always live in particular places, as members of societies and cultures, with other people surrounding us. There have been changes with economic globalization and global communications, but for security and sustainability, the local has to take precedence again.
Even the production of food and the manufacture of daily necessities only need a slight disruption of the current globalized economic system to get off track (and the global/ized economy could only handle disaster for a week) – and transport prices will rise with peak oil, anyways. (Freight truck drivers in Italy are currently on strike, and already, the supermarkets are emptying…).

Making food and basic manufacture local again will both create more jobs, increase security if handled well (local but interdependent), and also make the carrying capacity of the environments (or the sustainability of the business) a much more direct issue. Radical, rooted, entrepreneurship, being in and for a local community and environment, then becomes much more sensible, human and ecological.

In fact, it may be much more capitalist, for it is actually done by people, using their tools, skills, and resources, and it is taking place in a rather freer market where information is much more directly available – even as a talk with the producer and the comparison between the offers of different producers – and guiding buying and production.

It is not a back to the land in the sense of primitivism or mercantilism, though.
Goods have always been abundant in one place and scarce in another, and thus they have been traded – and the same should and would happen in a more sensible economic system. Trade, for goods that are really worth it, can still be wide-ranging, and would be so. The world can still be a village in terms of communications, even under such conditions.

If we are half as intelligent and inventive as we think, we should also be able to continue creating not only flourishing cultural lives, but also more decent living conditions than those of earlier times, as well as technological products that have been making lives more interesting and better. Just consider how much was possible at the beginnings of the Industrial Revolution (and how much better the current situation is).

However, with the end of the recent, cheap, over-abundance of resources, be they mineral (fossil fuel), ecological (ecosystem services and capacity of coping with pollution, destruction, etc.), or monetary (as created by debt, both public and private), such creativity has to work with local resources and start with the neighbors as first market, anyways. In a world of (still) ever-more people and fewer resources, inventiveness becomes all the more necessary.

Localized lives can become even better than lives are now, with jobs less of a problem to come by, even if harder work, less of a stupid running in the circles of the rat race, and with greater self-efficacy, community, and contribution, which will make them happier.

Of course, the ways we live and make a living will (need to) be different – but that’s exactly why it takes much more entrepreneurship, in re-designing our own lives to be multiply-better, and in re-creating businesses that make sense in manifold ways, from being a way of making a living to promoting the flourishing of the communities, human and non-human, they are a part of.

It’s time to look ahead, look around, and stop looking to politicians and pundits who profit too much from the “normal” of the last few decades that won’t be coming back. Much better to start creating the better – lives, businesses, and futures.


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