“It’s harder to imagine the end of the world than the end of capitalism,” wrote Mark Fisher in his 2009 book Capitalist Realism. This sense pervades our culture like a dense fog, helping to create the societal ethos that leaves our extractive economic system to its untroubled functioning—“metabolizing and absorbing anything with which it comes into contact,” as Fisher put it.
Many young people today are breaking the trance and challenging the system—supporting positive alternatives, like worker cooperatives, public ownership of water and electricity, B Corporations, impact investments, community loan funds, co-housing, community land trusts, and other models of a democratic economy.
Despite the growing movement for such alternatives, the depressing fact is we’re losing ground faster than we’re gaining it. We can see this in the ways in which the “gig economy” is replacing the once-stable employee relationship; in the high cost of living that is miring families in debt as they try to pay for housing, college, and retirement; and in our crumbling health care system, which is increasingly becoming a tool for private equity to suck wealth out of the the hands of ordinary people and into those of the already wealthy.
The economy is simply not working for the majority. A May 2023 Harris poll found, half of Americans—across generations and races—believe capitalism is headed in the wrong direction. This suggests we are at an important moment, one where capitalism’s legitimacy is beginning to be open for debate.
This moment provides an important opportunity to challenge our economic system, one that goes beyond building alternatives that capitalism promptly absorbs or marginalizes. We need to help each other recognize how our own mindset helps hold the system in place, and thus how a change of our collective mind could itself be the foundation of deep change. My point is this: We begin to change the system when we change our minds. How can this be?
We Can Change the System by Denying Its Legitimacy
First, consider the fact that we will never win against extractive capitalism if it’s a matter of raw power. But we the people wield a more subtle power—in the end, the ultimate power—which is legitimacy. When we withdraw legitimacy, we fatally weaken the system, turning its cultural foundation to sand. Why did apartheid fall? Because it lost moral legitimacy when people around the world denounced it as white supremacist, illegitimately favoring white people over people of color.
Second, recall the admonition of systems theorist Donella Meadows, who advised that the single most effective place to intervene in any system is at the level of mindset: the mind out of which the system arises, in other words, the paradigm.
What constitutes a paradigm, wrote Meadows, is society’s deepest set of beliefs about how the world works, the shared idea in our minds: “the great big unstated assumptions—unstated because [they are] unnecessary to state; everyone already knows them.”
We often point to “corporate power,” “inequality,” and “greed” as the problem. But pointing these out doesn’t help us get to the root of the system’s dysfunction. We need to challenge the system paradigm, which I call wealth supremacy—the bias that institutionalizes infinite extraction of wealth for the wealthy, even as it means stagnation or losses for the rest of us. Personal greed is certainly operating. But the system problem is how greed is mandated, rewarded, normalized, and institutionalized in the practices and institutions of the system.
It’s mandated in how investments are managed, how corporations are governed; the aim of both is maximum income to capital. In operation, wealth supremacy takes the form of capital bias—the way only capital votes in corporations, for example, while workers are disenfranchised and dispossessed. We see it in how a rising stock market is equated with a successful economy, even as the rising profits that drive stock prices often come from mass layoffs that feed the bottom line. This in turn drives a disaffected working class into the arms of the hard right, damaging democracy.
We see wealth supremacy and capital bias in the way that property rights are considered sacred and untouchable, while worker rights and environmental protections are constantly contested. We see it in the way Exxon Mobil’s stock price climbed 80 percent in 2022, as it followed the accepted norms of corporate governance (maximize gains to shareholders), even as those norms led to forests burning and cities flooding.
The very heart and soul of the system is the idea that our economy exists to serve the wealthy, to allow them to extract limitless, maximum amounts from the rest of us, and from the planet. Protecting and growing their financial wealth—called “capital”—is the aim of the whole system. As such, it is contrary to our democratic values. It means in a democratic society founded on the truth that all persons are created equal, we have permitted an economic system based on a directly contrary principle: that the wealthy matter more than the rest of us.
Paradigms may seem harder to change than practices or processes in the physical world, Meadows wrote. “But there’s nothing physical or expensive or even slow in the process of paradigm change,” she continued. “In a single individual it can happen in a millisecond. All it takes is a click in the mind, a falling of scales from eyes, a new way of seeing.”
A paradigm shift for our economy begins when we name and see the bias that lies at the heart of the capital-centric system. It begins when we see wealth supremacy clearly, in the same way that we’ve learned to name and see white supremacy and male supremacy. When we do so, we undercut capitalism’s legitimacy and challenge its standing as an acceptable cultural norm.
Many grassroots organizations are already practicing such paradigmatic changes, educating their communities, naming the harms of extraction, and building alternatives: the Highlander Research and Education Center’s populist community education programs in Appalachia, Boston’s Ujima Project, Downtown Crenshaw in Los Angeles, and Cooperation Jackson of Mississippi, to name just a few.
Wealth Grows Through Extracting From the Rest of Us
The need to infinitely increase wealth is what is leading the system to its most destructive behavior, which is the extreme financial extraction we experience today. The subprime mortgage crisis of 2008 was triggered by bankers trying to squeeze as much as possible from families with the fewest resources. Today, the homes foreclosed a decade ago are being bought up by private equity companies who raise rents and skimp on maintenance to advance earnings for shareholders. As a result, housing is increasingly unaffordable and more and more families find themselves houseless.
The bias of capital is built into the economic system at every level, yet its destructive force is hidden by language. We valorize so-called investing and the way it “creates wealth,” as if wealth can be created out of nothing. But much “investing” is really extraction; it’s a form of taking that undermines the resilience of families and communities.
This is obscured by the way in which portfolio gains are reported, depicted as pure numbers rising, as though these gains just fall from the sky, pristine and unblemished. It’s rarely explained to us how these gains come from squeezing ordinary Americans: private equity bankrupting companies, polluted air and water undermining health, stagnant wages and lost jobs, families losing equity in their homes, students accumulating crushing debt.
We’re not connecting the dots yet. When big tech firms’ share prices are lofty, we don’t conclude that this is linked to a post-truth society or the corruption of democracy. When we hear about the rising number of billionaires, we don’t think about the opioid crisis or local firms shut out by chains. We could, because these outcomes are the result of root causes found in the structures and practices of our capital-centric economy and in the power that this system creates for a wealthy elite.
This squeezing of ordinary people is what economists call “financialization.” It means financial wealth is so overblown, it’s come to dominate our economy, our culture, the natural world, even our ostensibly democratic politics. For decades, economists have been ringing alarm bells, telling us that financialization is destabilizing society. We need to see that the problem of too much financial wealth in too few hands is as much of an emergency as the climate crisis. Indeed, it is linked to the climate crisis.
Where Do We Begin?
Financialization is the logical, inevitable result of a system built on wealth supremacy. But it remains invisible. It’s time to start talking about it—about what it is, how it functions, how it’s driving or exacerbating the catastrophes people are experiencing in their daily lives: unrelenting storms, heat waves, and wildfires; insecure work; out-of-control health care costs; unaffordable housing.
When I was a kid in the 1950s, financial assets (stocks, bonds, debts of all kinds) were roughly equal to the national gross domestic product (GDP), which is the flow of income and spending in the real economy. Today, financial assets are five times the GDP. Yet the economic system’s goal is eternal growth of those assets.
To continue operating our economy based on maximum growth of capital is madness. In addition to talking about the rising number of billionaires, let’s also talk about the underlying rules and structures that create that obscene wealth. Let’s help each other understand that financialization is more than a collection of obscure charts in academic papers. It’s a force in our society—an extractive force of unprecedented power and unimaginable size, creating devastating effects: precarity, monopolies, and the capture of democracy.
Financialization and Wealth Supremacy Are Real
Deep change—that is, system change—can begin in earnest when society understands the problem of financialization and wealth supremacy and how it’s impacting our world. It is not an ideological shouting match. It’s a reality we need to face. Recognizing this is a prelude to the great task ahead: transferring wealth and power from the hands of the few to the control of the many, creating a democratic economy designed not to maximize financial wealth but to keep life flourishing.
To continue its dominance, capital extraction requires that we accept its normality, its technical necessity, its inevitability.
Where we begin to transform this system is in our own minds. This is where we stop accepting it as legitimate. This is where the system begins to lose its grip. This is where we begin to win.
Adapted from Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises (Berrett-Koehler, 2023).
