Over the past few decades, it has been a globally well established fact that free market capitalism and globalization have given the world many benefits in terms of driving innovation and entrepreneurship, bringing new products and services to the market, fostering global competition, lifting millions of people from poverty and into the middle class, and generating wealth all around.

Yet, possibly as an unintended consequence and side-effect, we are undeniably seeing unprecedented levels of income and wealth inequality and also a growing trend of protectionism and nationalism worldwide, with many now, even questioning if free market capitalism can ever bridge the gap caused by rising inequality. What is more telling, is that this view is not just coming from the socialists or the so-called left, but even from those that have touted capitalism for long and have benefited from it.

I recently came across the views of three eminent people who have addressed this issue and I briefly list them below:

1. Philip Kotler the renowned marketing and management guru wrote a book “Confronting Capitalism” in which he lists 14 shortcomings of capitalism as he sees them, and suggests several remedial strategies. He believes that “capitalism is better than any other system”, but advocates that we fix its shortcomings, to balance things up. I read this book and found it to be insightful to say the least. ( http://www.confrontingcapitalism.com )
2. Raghuram Rajan, the Economics Professor at University of Chicago, former Chief Economist of IMF, and former Governor of the Reserve Bank of India, has recently published a book called “The Third Pillar – How Markets and the State Leave the Community Behind” in which he essentially says that capitalism may have done great things for the Markets and the State, but may have left out the third pillar the Community. From the sleeve notes on the book – “As markets scale up, the state scales up with it, concentrating economic and political power in flourishing central hubs and leaving the periphery to decompose, figuratively and even literally. Instead, Rajan offers a way to rethink the relationship between the market and civil society and argues for a return to strengthening and empowering local communities as an antidote to growing despair and unrest.” (https://www.penguinrandomhouse.com/books/566369/the-third-pillar-by-raghuram-rajan/9780525558316/ )
3. Ray Dalio, the Founder and Chairman of Bridgewater Associates, one of the largest hedge funds in the world, and a man whose net worth is $16 Billion, wrote a two-part article recently titled “Why and How Capitalism Needs to be Reformed.” He too believes that “capitalism is a fundamentally sound system that is now not working well for the majority of people, so it must be reformed to provide many more equal opportunities and to be more productive.” I read this article and would suggest that those interested in this topic definitely read up his views. (https://economicprinciples.org/Why-and-How-Capitalism-Needs-To-Be-Reformed/?utm_medium=adwords&utm_source=GS&utm_content=341819909261&utm_campaign=60minutes-search) 

Whether one agrees with them or not, these three luminaries do make us pause and ponder over the issue. I guess there may be many more who concur with them in principle, even though they may differ on the details. To be clear, they are not advocating that capitalism be abandoned. They have just highlighted the flip side of it, and have voiced their educated opinions on how it may be addressed and reformed.

Perhaps just as everything in life is cyclical, a prolonged trend might invariably give rise to a diametrically opposite trend over time.  Perhaps it is time to not dwell only on one-sided views of capitalism, but to consider a balanced approach to chalk out a good path forward that consistently produces equitable growth to more people across the world. Perhaps it is time for capitalism with a heart.