The Disconnect between current Capitalism and Free Enterprise

I am a serial entrepreneur who believes that the free enterprise system is the best alternative for creating upward mobility, a growing middle class, the most efficient allocation of resources and the least costly production of goods and services to the benefit of society as a whole. But free enterprise is based on the principal of a free and open market. Theoretically the ease of communication today should create more opportunity and much greater competition. Free enterprise does not thrive in a monopoly or oligopoly both of which limit competition but in many cases that is what we now have. As a result the middle class in the west is in serious danger of backsliding into the poor class from which it came over the past hundred plus years.

Branding and Brand power are the main tools that are limiting competion, allowing capital to seize a much larger portion of the pie at the expense of labour creating the status of superrich and the growing disparity in the distribution of wealth. These are serious dangers because market control interferes with free enterprise and skews the results. Yes it is still possible to create a new brand but increasingly large organizations block the market and take advantage by acquiring up and coming companies and only then allowing them full market penetration.

On an individual basis it is now critical to become an entrepreneur allowing for self-determination and upward mobility that is in decline for employees. The most important skill anyone can learn today is the ability to create and manage your career. The problem is much bigger for society. We have created a society in the west with very high expectations and a philosophy of entitlement. A large percentage of the population will not put forward the effort and level of determination required to succeed as an entrepreneur – not without first experiencing serious pain and a major economic correction. We are vulnerable but collectively we remain in a state of denial.

The capitalist system which allowed the middle class to flourish in the west is broken. Rather than continuing to create opportunity it has begun to limit it. Rather than spreading the success to the developing world we are in danger of returning to a more rigid class system with the superrich having a disproportionate amount of economic power. Solutions are impossible as long as we remain in a state of denial compounded by governments which have become dysfunctional. A good start could come from consumers by becoming better informed and breaking the power of the brands. This should be happening through social media but it isn’t. Instead brand control of the market is being re-enforced by social media marketing.

I am very concerned that I have lived and worked in an era that has been optimum for the individual but is no longer sustainable. I am very concerned that my grandchildren will be denied the opportunity that my generation has enjoyed. One of the great challenges of capitalism is to moderate the influence of greed. If we don’t find a way to level the playing field it’s difficult to predict how social unrest will manifest itself in a society where expectations cannot be achieved.