Secret #1: Humans are a Cooperative Species
Secret #2: Self-Importance is the Enemy of Kindness
Secret #3: We are a Part of Nature
Secret #4: We Can End Capitalism, and Build a Better Economy
For
most of my life, I have assumed that capitalism was an economic system,
and that if we didn’t like it, we had to replace it with something
else. And that’s where the wheels usually fell off the bus, for as
someone once said, “It is easier to imagine the end of the world than
the end of capitalism.”
I must admit to some nervousness in
publishing this Substack essay, since most people have a knee-jerk
response that says it’s okay to want to modify capitalism, but not to
end it entirely. So please bear with me. I invite your thoughts to
critique it or improve it.
In the ten years of research for my forthcoming book The Economics of Kindness,
I have noticed that most authors either address the shortfalls of
neoliberal capitalism, followed by a final chapter in which they list
some proposals for change; or they focus on the emerging
wellbeing/social solidarity economy, without paying much attention to
how we might end capitalism.
Clearly, we have to do both - to stop the multiple harms that capitalism is causing, and build a new economy based on new values.
I now understand that capitalism is not an immutable economic system that we are stuck with forever. It is a cultural
system that has been assembled over thousands of years by people who
were primarily motivated by “the ceaseless accumulation of privately
controlled capital” (Sven Beckert). From this perspective, a capitalist
is someone who seeks the growth of their capital above all else,
regardless of the cost to Nature, workers, or the communities where they
invest. I’m not alone in thinking this way, that capitalism is
primarily a cultural system. I share this perspective with several other
critics of capitalism, including Max Weber, Karl Polanyi, Antonio
Gramsci, and David Graeber.
This perspective makes it much easier to imagine the end of capitalism, and to analyze how it can be done, piece by piece.
Across the democratic world, dissatisfaction with capitalism is no longer marginal. The 2020 Edelman Trust Barometer found that 56% of people globally believe that “capitalism as it exists today does more harm than good.” A 2025 Gallup poll
found that 61% believe the system is unfair, and that it serves
primarily the wealthy and powerful. In the United States, only 54% of
people view capitalism positively. Many believe that capitalism is no
longer working for ordinary people.
It’s not the market
economy that’s the problem. When it is well regulated it works really
well. Its intricate dance of cooperation and competition creates
innovation and jobs, while constraining prices. Socially responsible
businesses, whether private, cooperative, public, or social enterprises,
also work really well, providing meaning and purpose for millions.
It’s
the system we call capitalism that’s the problem. Under its protective
canopy people give themselves license to destroy Nature, disrupt the
climate, and enrich the few at the expense of the many, causing
inequality, distress and anger. If we tolerate it for much longer, it
will bring climate catastrophe, ecological collapse, financial collapse
due to its burden of private debt, and the collapse of democracy. For a
deeper dive into the origins of capitalism, I recommend the 1,000-page Capitalism: A Global History, by Sven Beckert.
My
analysis tells me that capitalism rests on ten pillars: eight around
the edge, two in the middle, and a canopy on top to provide a cover
story.
The change we need is not an overnight revolution, but a
steady transition. And by ‘transition’, I’m not thinking 100 years. I’m
thinking 10 years, if the majority of people in the world’s democratic
nations can be inspired to support the transition, and their leaders get
behind it. The longer we delay, the greater the danger that
capitalists’ predatory behavior will cause climate, ecological, and
financial catastrophe.
There’s no reason to fear economic
collapse if we transition to a democratically-guided mixed market
cooperative economy: evidence shows that it will be more successful, more fair, more stable, and more resilient than capitalism, not less. So let’s get to it: We need ten new pillars, and a new canopy.
The
first pillar was built long ago, with the transition from communal land
stewardship to private land ownership. In England, less than 1% of the
population owns half of all the land,
while 38% of the people own none. My own ancestors were thrown off
their land in Scotland during the Highland clearances. In almost every
country, a minority of people own the majority of the land.
We
should leave this pillar in place. It does enable capitalism, but it
also enables millions of people to enjoy the security of home ownership.
We need to extend it so that it includes everyone,
and no longer excludes a third or more of the people in any given
country. Even in Denmark, 40% of Danes don’t own a home, and have little
to leave to their children. This is how inequality grows.
For
home ownership, the transition requires the construction of millions of
units of cooperatively owned housing for those who can’t afford to buy;
‘right-to-buy’ legislation for tenants and mobile home owners; taxes
and restrictions on multiple home ownership and absentee owners; and a
ban on Real Estate Investment Trusts buying up homes. We also need
community ‘right to buy’ legislation for cherished properties and land.
To create the money that will be needed, we need public banks, supported
by central bank underwriting.
Many nations also need land
reform, as Taiwan, Korea and Japan achieved after World War 2, and as
Peru has recently demonstrated. It’s a bumpy road, as Michael Albertus
shows in Land Power: Who Has It Who Doesn’t, and How That Determines the Fate of Societies (2025), but we can’t have a true cooperative economy without it.
For
major assets that private equity firms are buying up, such as water, we
need a return to public ownership. For minor assets, such as pubs and
veterinary services, we need community and worker buy-outs. (See Pillar
#5)
The
second pillar arose when people lost their land. Deprived of the means
to support themselves, they had to seek work from others, becoming
employees, dependent on landowners and business owners to hire them - or
not. Capitalists prefer some people to be unemployed, so that workers
will take whatever wages are on offer. They also need a welfare state,
to make it less likely that angry workers will rebel. Historically, as
well as paid workers, capitalism has also depended on the brutality of
slavery, and other forms of coerced labour.
The
transition that’s needed here is to far more worker ownership, whether
through cooperative or employee shareholder ownership, or indirectly
through enterprise foundations,
common in Denmark. Governments need to support the right of workers to
become owners of their place of work, and set a goal that 50% of workers will be employee-owners by 2050.
In
Spain, the 80,000 workers in Mondragon’s cooperatives share the wealth
they create, with pay-gaps no greater than 5:1. In America, it’s 632:1. At Starbucks, where a typical worker earns $15,000, in 2024 the CEO was paid $96 million. We need a future in which Starbucks workers can vote both to form a union and to become employee-shareholders.
The
second need is stronger labor unions, including for gig economy
workers, so that workers can stand up for their rights without barriers
and objections.
The third need is community wealth
building, creating a solid structure in which cooperatives and social
enterprises can thrive. Scotland is leading the way with the Community Wealth Building Act,
passed unanimously by the Scottish Parliament in February 2026, which
requires every local government to produce a Community Wealth Building
action plan. The local economy champion Michael Shuman has also proposed
ten state policies and ten local policies to support local job creation.
The
third pillar of capitalism is the private creation of money. In
non-monetary relationships, debts are invisible “I owe you’s” that float
in the air between people. Digitalize them, and you have the origin of
money. It is the expression of reciprocal social trust. New money is
created whenever someone offers you a kindness (or a loan), and is
cancelled when it is repaid.
When Italian bankers began storing
people’s wealth in the 14th century, they soon realized that they could
lend more than they managed, since only very rarely did everyone ask for
their money back on the same day. They also realized that they could
charge interest on the money they created. This is more or less how
banks still operate today.
It’s not the process of debt
creation that’s the problem. It is a powerful extension of trust that
enables people to achieve great things, whether it’s building a solar
utility or buying a home. It is the way money is created without concern
for social purpose that’s the problem. To a private equity banker, it
doesn’t matter whether a loan is to trawl the ocean floor or to build a
liquified natural gas plant that will make the climate crisis worse. All
that matters is the return, ideally 15%. It’s the indifference to
ethics and morality that creates the rot in the heart of the
money-creation pillar. It’s the Golden Rule of Capitalism, which is to
treat others worse than you’d like to be treated yourself, if it enables you to generate a capital gain.
Knowing
the disasters that the climate crisis is lining up for us, creating
money to invest in fossil fuel extraction in 2026 should be as
unthinkable as creating money to manufacture tanks for the Nazis in the
1940s.
To
end the disconnect between investment and ethics we need legislated
Red-Amber-Green standards to distinguish between beneficial and harmful
investments. Green-listed loans that build a new ecological civilization
could be offered 2% lower interest. Red-listed loans would be banned.
We
also need to restrict short-term speculative loans where the sole
purpose is profit at someone else’s expense. A financial transactions
tax (Tobin tax) would be a useful start. Commodity futures trading
should be restricted to commodities dealers, as it was before America’s
2000 Commodity Futures Modernization Act gave banks the freedom to
speculate, causing inflation in food prices.
My personal solution
is that every bank be invited to adopt a Social Purpose Charter,
committing it to operate in a socially purposeful way, with various
sub-clauses. Banks enjoy three important public privileges: loan deposit
insurance; a central bank relationship; and a bail-out in the event of a
threatened collapse. After a ten year transition, these privileges
would be withdrawn from banks that chose not to adopt the new charter.
We
also need to change the way banks are taxed - or not taxed; and
regulated - or not regulated. The economist Gerald Epstein has a host of
recommendations in Busting the Bankers’ Club: Finance for the Rest of Us
(2024), including prohibiting deposit-taking banks from engaging in
speculative lending, and breaking up mergers that make banks “too big to
fail”. Elizabeth Warren has more changes in her 2021 Stop Wall Street Looting Act.
To
build the new cooperative economy, to replace capitalism, alongside
socially responsible private banks we will need public banks,
cooperative banks, and community banks, all of which have the ability to
create money. In Germany, the public bank KfW has created money to finance millions of units of affordable housing.
This
is capitalism’s central rule: that capital comes first. In corporate
law, market practice, and financial culture, the overriding obligation
of directors and executives, whether it is perceived, legal, or by
pressure from activist shareholders, is to increase returns to capital.
Companies
may speak of purpose, community, or sustainability, but when trade-offs
arise, the growth and protection of capital always takes priority. This
structural primacy creates a continuous competitive pressure imposed by
capital markets that drives firms to cut costs, suppress wages, weaken
unions, externalise environmental damage, pursue monopoly power, and tie
executive pay to share price performance. It is not profit that defines
capitalism - profit is essential. It is the elevation of capital gains
above every competing claim.
The
voluntary solution, already being practiced by 10,500 B Corps
companies, is to adopt a Benefit Corporation charter, giving directors
the fiduciary duty to fulfil a social or environmental mission, not to
maximize their capital assets. Much the same happens in the world’s three million cooperatives, and in social solidarity enterprises, of which there are 2,000 in New York alone. There are 300 million companies in the world, however. Voluntary reforms will never be enough.
To build a cooperative economy beyond capitalism we will need legislation that requires every
company and its directors to act in a socially and environmentally
responsible manner, with transparent verification and reporting.
Britain’s proposed Better Business Act, already supported by 3,000 businesses and organizations, is a big step in this direction.
New
legislation needs to affirm that a director’s fiduciary duty is to
prioritize social purpose goals, and require that executive pay is
linked to social purpose achievement, not share-price metrics.
Governments will also need to reduce capital mobility (see Pillar #9),
so that investors cannot punish a company’s social responsibility by
moving their capital at the drop of an index report.
How can we
make this universal, so that it becomes normal for the world’s 300
million businesses to pursue meaningful social purposes, and cease being
subject to capitalism’s capital-maximizing discipline?
In The Economics of Kindness
(Palgrave Macmillan, sometime in 2026), I propose that every business
be required to adopt a Social Purpose Charter within a set number of
years. Adopting the the Charter would commit the company to state its
social purpose; to declare that its fiduciary duty is to its employees,
communities, and Nature, as well as its investors; not to invest in
Red-listed activities (see Pillar #3); to commit to labor union
strength, profit-sharing, and worker representation, both in works
councils and on the Board; to require majority worker support for any
proposed take-over or merger; to give workers first right of refusal to
buy their company if it faced bankruptcy or sale; and a bunch of other
things.
Companies that adopt the charter would be rewarded
with priority access to government contracts, grants and loans, a
reduced borrowing rate, and a reduced rate of corporation tax. After a
set date, five or ten years ahead, companies that have not adopted the
new charter would be denied license to operate. We need to condition the
privileges of limited liability and market access on social purpose and
responsibility. This is how we can transform the selfishness of
capitalism into the kindness of a cooperative economy.
Capitalism’s
seventh pillar is the accumulation of laws that support corporations,. A
corporation has a legal existence separate from its owners, which means
it can own property, and a bunch of other things. In America, a note
written by a court reporter in 1886 stated that the Court accepted
corporations as persons for equal protection purposes, which has been
seized upon to expand the range of corporate activity.
In 2010,
America’s Supreme Court ruled that money was a form of free speech, and
that a corporation, being a person, could spend unlimited money to
achieve a political result. This has enabled wealthy people to interfere
in democratic elections and buy the influence they desire.
Corporations
also enjoy limited liability, introduced in Britain in the 1850s to
encourage capital pooling for big investments like railways. It allows
investors to wash their hands of harmful activities and keep receiving
their dividends. This builds the rot of selfish immorality into the core
of the pillar. The same limited liability is written into property law,
contract law, bankruptcy law, and trade agreements, giving privilege to
the needs of capital over labour or environmental claims.
Without
limited liability, however, most people would refuse to invest, fearing
that they could lose their homes. It is a useful financial innovation,
but also a public privilege, so it needs to be constrained in some way
and not be a license to plunder.
Another legal device that
upholds a corporation is the requirement that its directors have a
fiduciary duty to maximize the shareholders gains - and no other
purpose. Christopher Marquis explores this in detail in The Profiteers: How Business Privatizes Profits and Socializes Costs (2024).
We
need legislation that will require a corporation to behave in a
socially responsible manner, relieving investors of the need to
constantly check what it is doing. We probably need a limitation on
limited liability, such that if a company is found guilty of a crime the
fine will come out of the investors’ pockets, deterring investors from
companies with a record of costly lawsuits.
Overturning Citizens’ United in America could be done with a constitutional amendment, as 22 states
have called for, or with state legislation that “Every corporation
operating under the laws of this state has all the corporate powers it
held previously, except that nothing in this statute grants or recognizes any power to engage in election activity or ballot-issue activity,” as Robert Reich has pointed out.
Mutual
funds, private equity funds, exchange traded funds, pension funds,
sovereign wealth funds and institutional portfolios hold some $120
trillion under management - a quarter of the world’s $500 trillion of
wealth. Pension funds and sovereign wealth funds own much of the world’s
capital, but their voting control and portfolio execution is
increasingly being delegated to asset managers.
Asset managers
like BlackRock, with $11.4 trillion assets under management, Vanguard
($11 trillion), and State Street ($5.7 trillion) own 20–25% of the
shares in S&P 500 companies. For many firms, they are the largest
single shareholder. In the United States, these three firms alone
control a quarter of all corporate America. Globally, ten firms hold a
third of all publicly traded equity. They claim to be passive in their
investment strategies, but their shareholder voting influences executive
compensation, mergers, and positions on climate policy, all with
minimal democratic oversight.
Within the sector, private equity
firms increasingly own housing, energy systems, water utilities, nursing
homes, farmland, data centers, veterinary clinics, dentists, private
colleges, and entire corporations. Even prison phone services, where
they impose exorbitant rates on captive prisoners. They are creating a
rentier economy, where the funds own the assets and the people have to
pay inflated prices.
Much
of the asset management happens in the $250 trillion shadow bank
economy, where there is minimal or no regulation. The ease of money
creation enables speculation through the proliferation of hedge funds,
private equity funds, money market funds, and so on. As Brendan Ballou
says in Plunder: Private Equity’s Plan to Pillage America, private equity funds are creating ‘systemic risks for our economy as a whole.’
We need a government whose people have read and understood Ann Pettifor’s The Global Casino: How Wall Street Gambles with People and Planet. My diagram based on her book shows how damaging the shadow economy investments are.
As
we transition off capitalism we should limit private equity and other
forms of asset management to 5–10% of the ownership of any major
publicly traded firm, and of overleveraged companies in private equity
portfolios; prohibit cross-ownership and interlocking directorates in
competing firms; prosecute colluders; use antitrust legislation to
challenge monopolies and mergers; and require pension funds to allocate a
percentage of their funds to local productive investment. For Index
funds, where shareholder votes control the constituent companies, we
need to require pass-through voting to the actual fund holders, and
mandatory disclosure of their voting rationales.
Essential public
services such as healthcare systems, water systems, energy, broadband,
ports, airports, colleges, and hospitals should be protected against
private equity ownership. Public services that are under private control
should either be taken back into public ownership, or be required to
have majority public or cooperative ownership, golden share rights for
the government, and public interest tests prior to all major
acquisitions.
Future governments need to cap management fees;
prohibit the loading of debt onto acquired firms; impose long-term
holding requirements for a minimum of 10 years unless it’s for sale to
the workers or the community; require worker representation on the
boards of acquired firms; and ensure that workers have first right to
buy if the owners choose to sell. Brendan Ballou, quoted above, has a
full inventory of remedies.
Governments can also use their powers
of taxation to impose an annual wealth tax on institutional assets above
a certain threshold; financial transaction taxes; an exit tax to
discourage the rapid flipping of infrastructure or housing; and higher
capital gains taxes for short term investments.
Asset management
companies will need social purpose charters, with a legal framework that
defines their fiduciary duty to include climate stability and social
wellbeing. They will need to publish annual climate, ecological, and
social wellbeing reports, and have worker and community representation
on their Boards.
It
is their political power that enables the financial elites to protect
capitalism and oppose every move to restrict it. It is this that enables
them to fight labor unions, stop legislation to tackle the climate
crisis, prevent the break up of monopolies, and so on. In the 2020 US
election cycle, private equity funds inserted more than $200 million
into candidates’ campaigns.
Political power is also needed to
sustain the other pillars. This makes it the strongest pillar, if elites
can control political parties through donations, lobbying, cocktail
parties and think tanks, but also the weakest. A progressive majority in
government can give serious pushback, as it did in America in the
Progressive Era between 1901 and 1920; in 1932, enabling the New Deal to
happen; and in Britain in 1946, when the workers and returning troops
rejected Churchill’s Conservatives and voted Labour, enabling the
National Health Service and the welfare state to be created. In both
instances, the elites fought hard to stop these things from happening.
We
need to take back control of our democracies. We need to ban big
campaign donations, overturn Citizens United (in America), guarantee
fair elections, and rebuild public trust by using proportional voting,
Citizen’s Assemblies, participatory democracy, and regular referendums,
as they do in Switzerland, where trust in government remains high at 82%.
The
preservation of wealth is not just about tax avoidance. It is about
transforming wealth into legally shielded, self-replicating capital. It
is about dynastic trusts, philanthropic foundations, family offices, and
jurisdictional shopping to find the safest and most secret place to
store it. It is about the privilege of unrealized capital gains, wealth
that grows year after year without being taxed at all unless it is sold.
Political
power is used to ensure that wealth is protected, using weak campaign
finance laws, judicial appointments, stock buy-backs, lower taxes on
capital gains, and capital mobility.
Governments
need to continue working together to shut down the tax havens, whether
they are in Hong Kong, Switzerland, or the Cayman Islands. One path is
multilateral agreement. For jurisdictions that refuse to cooperate,
coordinated financial transaction measures could restrict access to
major capital markets.
Professional accountability also matters.
Lawyers, accountants, and private wealth managers who design or
facilitate illegal offshore avoidance schemes should face meaningful
penalties and professional sanctions.
Governments should ban
anonymous shell companies, require full beneficial ownership
transparency, tax inheritances fairly, close capital gains loopholes,
and ensure that corporations are taxed where their economic activity
actually occurs, not in a country such as Ireland where corporation
taxes are deliberately super-low.
This
is capitalism’s silent superpower. At the first hint of higher taxes,
stronger labour laws, climate regulation, or public ownership, capital
can move across borders and into tax havens, currencies, bonds, or
offshore funds, disappearing faster than an elected government can act.
This
gives investors huge leverage. Governments are warned not to “spook the
markets,” since bond traders can raise borrowing costs, and currency
markets can punish policy shifts. The threat of exit becomes an
unwritten veto that has become deeply embedded in economic life, making
elected politicians feel powerless.
In 2022, when the UK
government under Liz Truss proposed unfunded tax cuts, the bond markets
reacted within days. Yields spiked, the pound fell, pension funds
teetered, and the Bank of England had to intervene.
Allowing
capital mobility is a policy choice, which can be unchosen. Future
governments could tax short-term financial flows, require minimum
holding periods, and regulate foreign-currency borrowing. This would not
block productive investments, but it would slow destabilizing
speculation.
Governments can reduce the incentive to flee. By
cooperating on international taxation, ownership transparency, limits on
offshore secrecy, and exit taxes, they can weaken regulatory arbitrage.
If profits can no longer vanish into hidden jurisdictions, capital will
become more accountable.
If nations are to have sovereign power,
some degree of capital control must be restored. This is not a modern
conclusion - it was Keynes’ conclusion in the 1930s. Even the IMF
accepts that managing capital flows is needed to protect stability. One
method could be a tax on financial transactions, to throw sand in the
machinery of capital selfishness and bring it to heel.
We need a
new global financial architecture to govern the oceans of speculative
money that slosh to and fro, beyond the reach of morality or financial
prudence. We will need to revisit Keynes’ 1946 Bretton Woods proposal
for an International Clearing Union that would harmonize imports and
exports, and stabilize currencies. It may take the shock of a financial
crisis to bring people to their senses, but at least we will know what’s
needed.
Central
banks were established to step in when the banks threatened to
collapse. They were a stabilizer at the heart of a nation’s economy, the
ultimate repository of financial trust. Having a monopoly on the
creation of currency, they can create the money needed to save the
banks, preventing unemployment, the loss of savings, and economic
depression. In practice, central bankers’ money creation works to the
benefit of the financial markets, and only later — if at all — for
society as a whole.
Central bankers should
work to protect the nation as a whole, but most work primarily to
protect their fellow bankers. Following the 2008 financial crisis, the
Federal Reserve created $2.5 trillion in emergency liquidity and asset
purchases to bail out the banks, not to help the nine million people who
lost their homes when the bankers’ risky bets turned bad. The banks, in
turn, lent to wealthy people, enabling them to get yet wealthier by
buying more assets in a rising market.
When COVID struck
the central banks intervened again, backstopping corporate bond markets
and financial institutions. The message was unmistakable: they would
have their back. By encouraging more speculative investments, they have
created moral hazard. The expectation of an emergency intervention
becomes structural, that central banks will always come to the defense
of capitalism.
In a future where purpose is set by a progressive government, the central bank should be given a mandate to protect against all
emergencies, including the climate crisis, the biodiversity crisis, the
housing crisis, and a pandemic, as well as a financial crisis. The
central bankers’ ability to create money is not inherently inflationary.
If the newly created money mobilizes idle labour and productive
capacity, it can save us from crisis. Only when there is no capacity for
growth within an economy will it cause inflation.
A future
progressive government can coordinate its monetary and fiscal policy.
It can revise its central bank’s mandate, and ask it to deploy
macroprudential tools including capital requirements, credit guidance,
and limits on destabilizing cross-border capital mobility. It can steer
new money away from destructive Red-listed investments, and toward green
regenerative investments.
Finally,
capitalism needs a cover story - a canopy. For this it uses the
imaginary laws of neoclassical economics, which state that humans are
always rational and selfish (‘homo economicus’); that markets are always
efficient; that growth will always bring progress; that competition is
natural; that profit is rational; that left to itself an economy will
always move towards equilibrium; and that government intervention should
therefore be minimized.
There are no such laws, however. They
were invented in the 19th and 20th century to persuade people that
economics was a complex science, and economists were the only people who
understood the laws. These myths have been reinforced by wealthy
people through their funding of right wing think tanks, and their media
monopolies.
We
need a new narrative, one that tells of the ancient historical tension
between selfishness and kindness, and how for 5,000 years most people
have been subjugated by wealthy, powerful elites. But not any more. We can end capitalism, and it will not
cause the collapse of the global economy. Quite the opposite - it will
enable us to craft a far better economy based on cooperation that works
for all humans, not just the elites, and also for Nature, for the world we love, and for a new ecological civilization.
That’s a lot, if you have got this far. The global economy is not a simple affair.
If
we have a vision that’s clear enough, and the determination to make it
happen, we can dig ourselves out from the mess that capitalism has
created, and build for ourselves instead a new economy based on
cooperation and kindness.
Secret #5: Coming up soon.
Guy
Dauncey works to develop a positive vision of a new ecological
civilization, and to translate it into action. He is author of The Economics of Kindness: The End of Capitalism, the Birth of a New Ecological Civilization (Palgrave Macmillan, sometime in 2026)
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