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Renowned social theorist, systems thinker, and organizer, Marjorie Kelly, gives an early look at her new book: Wealth Supremacy. Speaking with Colin Bruce Anthes, she details the entrenched ways our current system is built around myths that make giving more wealth to the already wealthy seem necessary— even when we try to use our institutions for the common good. Kelly contrasts this with an outnumbered but successful democratic economy with many forms of democratized ownership and participation: public utilities, employee-owned companies, community land trusts, cooperatives, and more. We can create an economy that works for everyone, she argues, but only if we systematically discredit the moral status of wealth supremacy and turn towards a democratic economy paradigm.   

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Welcome to theAnalysis. I’m Colin Bruce Anthes. In a minute, we’ll be speaking with the renowned social theorist and organizer Marjorie Kelly on her new book about wealth supremacy and its democratic economy alternatives. Please remember to like, subscribe, ring that bell so you get notifications, and consider hitting the donate button to support our work. Stay tuned.

It’s been 15 years since the financial crash that brought the global economy into the biggest recession since the Great Depression. Despite steady outrage across the political spectrum, inequality, and concentration of ownership, the financialization of assets continues to skyrocket. According to the new book by Marjorie Kelly, that won’t change until we address the system-wide problem of wealth supremacy and begin bringing democratic forms of ownership and participation to every aspect of the economy. The good news is many of the alternatives already exist, are functioning well at a smaller scale, and are ready for prime time.

Marjorie Kelly’s own story and evolving career have included co-founding Business Ethics magazine in the 1980s, inspiring the creation of the B Corporation, and co-founding Fifty by Fifty, which seeks to see employee ownership reach 50 million American workers by the year 2050. She is a distinguished senior fellow at the Democracy Collaborative. Marjorie Kelly, welcome.

Thanks for having me, Colin.

Can we begin by contextualizing how you came to write this book because, in many ways, you’re one of the original canaries in the coal mine regarding what we might call “friendly capitalism.” You come from a business family, you worked at Business Ethics magazine for 20 years, you handed out Business Ethics awards, and you had quite a name for yourself there. Yet, you end up concluding, and I quote from the book, “Moral capitalism is as impossible as moral racism.” How do you end up at this point?

This book is a turning point for me, Colin. I have spent more than 30 years writing about and advocating the positive. I know so many progressive business leaders, socially responsible investing these days called impact investing or ESG [Environmental, Social, and Corporate Governance]. I’ve tracked these fields really since their infancy. Community wealth building is a new form of economic development that the Democracy Collaborative is advancing, and it’s catching on really widely. There’s so much happening. There are so many visionaries building out the positive. That’s what I’ve wanted to focus on. But I’ve become discouraged.

I see now that we’re losing ground faster than we’re gaining it. The reason is that we have yet to turn and morally discredit the existing system and its core value, which is wealth supremacy. We really live inside an economic system designed to make the wealthy wealthier. That’s not hand-waving.

I’ve been like a spy inside of business for a couple of decades. I ran a small company for 20 years, and I sold my dad’s business after he died. I know how business works. I’ve lectured at a lot of business schools. What I can see and what I do for the reader is to unpack the granular ways that the system is rigged.

We have this sense the system is rigged against us. It is in very specific ways. I call them seven myths. They really form the operating system of capitalism, which we accept is normal. It’s taught in business schools. It’s the fundamental corporate governance structure and investing aims. I mean, it’s really built in. This wealth supremacy is built in all over. Until we turn and challenge that, I think our efforts are going to fail.

Let’s get to the quick and dirty definition of wealth supremacy because it sounds like a concentration of capital. Of course, every day in the news, there’s something about terrible billionaires, and people are familiar with the huge amount of inequality that we see. But wealth supremacy, as you’re alluding to there, actually goes a little deeper. It goes into the quasi-invisible infrastructure of the system.

Yes, that’s right. I use two terms: wealth supremacy and capital bias. Wealth supremacy is the cultural ethos that admires wealthy people and empowers them. Wealthy people have power in philanthropy. There’s a power over government to political donations, and corporations are seen as the property of shareholders rather than as human communities, which is what they are. There are so many ways that our culture valorizes wealth.

Then, there are the very specific ways that wealth has power inside the economy. This is what I call capital bias. In corporate governance, only shareholders vote. Workers are not considered members of the corporation, which is odd. It’s very much like women at one time who were not considered members of society. You accept this as a norm. The income statement, which every corporation uses to guide its activity, says to pay capital as much as possible. That’s called profit. It’s good. Drive it up. Pay workers as little as possible. That’s called expense, and you need to drive it down. There are various ways that are built into the structure of power in our economy; it favors capital and disfavors workers, the community, and the environment.

That’s a very important point because it speaks to how quickly things that we know can become invisible. We all know that workers tend to get shafted by the economy. Most of us have experienced being the workers getting shafted. Yet when I am working at a company, I am, of course, thinking of myself as a contributor, not an expense. At the same time, that’s not the way the company is organized.

Yes. How we think of this as a corporation, as an object owned by shareholders, that has consequences. For example, when the big tech firms hit a downturn in their stock price a little bit ago, the first thing that they did was throw thousands of workers out of their jobs. This is so standard. What they were doing is they were saying, “Okay, our share price is down. Share price is related to your profit, so you need to boost your profit; that means you need to cut your expenses.” They’re basically transferring income from labor to capital very deliberately, and it’s very, very common. We just accept this as normal.

One of the examples that you give in the book that’s really concrete and shows how deep and how invisible the roots of wealth supremacy can be is Harvard College and Harvard University. One might think at first glance that Harvard is a registered charity, producing some of the best post-secondary education in the world, certainly in the United States. What could be wrong with that?

Harvard is about… 66-67% of its endowment is invested in private equity and hedge funds. These are the predatory bleeding edge of capitalism right now. When we try to regulate capitalism or enforce change, it flows around whatever barriers we put in place.

When there were Superfund laws saying you can’t dump toxic chemicals in waters, well, what did the chemical companies do? They moved to China. They’re like, “Fine, we’ll dump in the waters off of China.”

What’s happening here? There have been a number of investors who’ve said to the big oil companies, “You need to get rid of your dirty assets. You need to divest these dirty assets.” Some of the big oil companies have done this. But those assets, these dirty operations, are not going away. They’re being sold to private equity. What’s happening is they’re shifting into the shadows, and private equity, in some cases, is tripling production on these really dirty fossil fuel operations. Yet, private equity is opaque, it’s non-transparent, it’s non-accountable. I’m not even convinced that Harvard knows what’s going on inside the private equity funds that it’s investing in because what they’re focused on is the return. This is how the system… you could call it a willful blindness. You could call it an inadvertent blindness. But there’s a built-in blindness to the effects of what we’re doing.

Because some people are just being professionals, doing their job, making sure that the company or the organization gets what it’s supposed to get.

Yeah, that’s right. We have narratives that tell us this is seeking maximum returns for investors. That’s benign. That’s normal. That’s technically necessary. You have asset managers who are moving assets up the risk-return spectrum; that’s how they say it. We’re going from the public markets to the private markets. What they don’t say, what they don’t see is that we might be destroying jobs, we might be trashing the env