Reimagining Capitalism in a World on Fire

by Rebecca Henderson

Work was lucrative and fun and often hugely interesting, but it was something I did before returning to real life.

Transforming the world’s firms will be hard. Transforming the world’s social and political systems will be even harder. But it is eminently possible, and if you look around, you can see it happening.

the three great problems of our time—problems that grow more important by the day: massive environmental degradation, economic inequality, and institutional collapse.

Markets have gone off the rails for three reasons: externalities are not properly priced, many people no longer have the skills necessary to give them genuine freedom of opportunity, and firms are increasingly able to fix the rules of the game in their own favor.

Profit maximization only increases prosperity and freedom when markets are genuinely free and fair. Modern capitalism is neither.

The problem is not free markets. The problem is uncontrolled free markets, or the idea that we can do without government, and without shared social and moral commitments to the health of the entire society on which effective government depends.

Everyone must breathe to live, but the purpose of living is not breathing.2 In today’s world, reimagining capitalism requires embracing the idea that while firms must be profitable if they are to thrive, their purpose must be not only to make money but also to build prosperity and freedom in the context of a livable planet and a healthy society.

You have to understand the spirit of the time. The spirit of the time is connected to the longer development of people—of entrepreneurs and how we will do business.

We use stories to make sense of the noisy, messy, complicated reality of the world, and stories need central characters—single individuals we can identify with and root for. The real world doesn’t actually work that way. Effective leaders ride the wave of change they find bubbling up around them.

The media tell us that change is dramatic, driven by individuals, and accomplished in minutes. But real change happens one meeting at a time.

Discover your own purpose. What is it you hold dear? What are you willing to fight for? What do you value above everything else? Whatever you choose to do, make sure that it aligns with the deepest part of who you are.

Taking a first step will lead to more. Doing something that’s even a little bit outside your comfort zone will change the way you think about yourself. Making even a small sacrifice will help you persuade yourself that you can make some difference and that your voice counts.

Get political. I know, the idea can be daunting. But it is absolutely essential. Take courage from the examples of others.