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mentioned in the financial news, and shapes political and economic dialogue. The Dodd-Frank Act is certainly the poster child for this debate. Many believe it is a case of government overreaching to regulate the economy. Others argue the intervention is necessary to protect the economy from overreaching capitalists. When the country suffers an economic setback, there’s usually a lot of fingerpointing between these two groups. To be financially literate, you should be aware of this issue, know a little (or a lot) about it, and form your own opinion. Many argue that capitalism itself is not the problem. After all, it’s just an economic system. Corruption, fraud, abuse, wealth inequality, worker and environmental exploitation, the relentless pursuit of material goods and accumulation of debt, points not to the shortcomings of capitalism, but to a failure of democracy, morality, education, or other underlying social problems . The New Breed: Socially Conscious Capitalists A new approach to capitalism is on the rise. It’s called Socially Conscious Capitalism (“SoCap”). The tenets of SoCap hold that there’s more to good business than profit maximization, and that capitalism can and should be a force for good in the world. SoCap is not corporate charity or community service. It’s a business, economic, and social philosophy and movement which holds that the environment, profitability, sustainability, and achieving good can co-exist . SoCap businesses seek to align and fairly serve the interests of the entire business ecosystem , which includes customers, employees, investors, communities, suppliers, and the environment (collectively referred to as “stakeholders” ). SoCap business practices include offering competitive wages and comfortable working conditions, utilizing sustainability and green strategies in operation and production, providing time off for employees to volunteer in the community, refusing to stock products harvested from endangered species and habitats, or produced with questionable labor practices, and supporting fair trade in developing nations. SoCap investors direct money only into companies with track records of ethical investment and operation in order to make a positive social impact. Investments are made in companies with sustainability strategies and practices and fair labor records, and which produce products or services that are socially beneficial. Investing in markets and industries engaged in making products or providing services that are unethical or environmentally harmful is avoided. Some SoCap businesses you may be familiar with are Patagonia, Ben & Jerry’s, Etsy, Seventh Generation, The Honest Company, People Water, and Survey Monkey. Emerging Markets Despite its faults, capitalism is here to stay. It drives innovation and the global economy. In fact, capitalism is expanding . The previously communist countries of eastern Europe have fairly healthy and thriving capitalist economic systems and are attracting investment from around the world. Many Asian and African countries have budding capitalist economies. In the world of commerce, newly capitalist economies which present opportunities for investment are called emerging markets . Currently, economic growth is very strong in some emerging markets, such as China and Brazil. Other emerging markets include Chile, Peru, Côte d’Ivoire, Vietnam, Sri Lanka, and many more. Because emerging market nations are not yet as politically, judicially, or economically stable as older capitalist countries, there is an increased risk in doing business there , but often there is a greater profit to be made . SLIDE 7J SLIDE 7K PRODUCT PREVIEW
117 THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY
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