Is Capitalism Broken?

Private owners might be the only ones who can fix this

Who knows what GDP stands for?

Gross Domestic Product. The number politicians point to when they want to prove things are going well. Up? We’re winning. Down? We’re in trouble.

It’s the same with the stock market. Market up? Champagne. Market down? Panic.

GDP measures the total monetary value of goods and services produced. It tells us how much money is moving. What it doesn’t tell us is whether we’re building anything that actually matters.

Over the past 20 - 30 years, we’ve doubled down on this way of thinking. Markets have soared. Financial engineering has become a sport. Institutional investors and trading firms dominate ownership. And income inequality has widened at a staggering pace.

To be clear, capitalism is an incredibly effective engine. MBA programs (including the one I proudly completed 30 years ago) are built around it. Executives are hired to increase profits. Boards are elected to protect shareholder value. Quarterly earnings drive stock price. Stock price drives dividends. Dividends drive returns. It’s clean. It’s logical. It works.

But here’s the uncomfortable question: Is it working for society?

In most publicly traded companies, there is one overriding imperative: maximize financial return.

Not make great products.
Not create fulfilling workplaces.
Not serve communities.

Those things matter, but only if they lead to higher profits. And if a CEO decides to prioritize something other than maximizing shareholder value? They often don’t remain CEO for long.

Over time, the centre of gravity in business has shifted from serving customers and communities to serving capital markets. That’s not accidental. It’s structural.

Now, before I’m accused of heresy, profit does matter. Without profit there is no business. No jobs. No investment. No innovation. But profit was meant to be the outcome of doing something valuable. It was never meant to be the sole purpose.

That’s why I have such respect for private and family-owned businesses. Over the past 30 years, I’ve worked with both public corporations and private firms. I far, far, far prefer the latter. Because when I sit down with a family business CEO, the conversation is different. We talk about:

What do you want this business to stand for?
What kind of impact do you want to have?
What do you want your employees to say about working here?
Where do you want to aim this company over the next decade?

Yes, they want to be profitable. Of course. But profit is a constraint, not the purpose. Private companies have something incredibly powerful: the freedom to choose to do what is right, not just what will generate cash this quarter. They can think in generations, not quarters. They can protect culture over margin. They can invest in people without immediately asking about ROI. They can decide not to pursue a lucrative opportunity because it doesn’t align with their values. That flexibility matters.

Because when the system over-optimizes for financial return, we get distortions. Extreme wealth alongside basic insecurity. Overconsumption as status. Short-term wins at long-term cost. That imbalance erodes trust. And trust is the oxygen of any healthy economy.

Family and private businesses aren’t perfect. But they have something many public companies don’t: freedom.

Freedom from quarterly earnings calls.
Freedom from activist investors.
Freedom from having to justify every decision against next quarter’s EPS.

Which means they have the freedom to lead. And this moment in history needs leadership. We’re living through rising inequality, political polarization, institutional distrust, technological disruption, and environmental strain. Whether you believe these are crises or cycles doesn’t matter. They’re real. And they’re reshaping how people think about business. If business becomes synonymous with extraction - take the profit, move on - society will eventually push back. Hard.

But if business is seen as a builder of jobs, of communities, of opportunity, and of dignity, it remains the most powerful force for good we have. Owners of private and family businesses sit in a uniquely important seat. You can decide:

To invest in people even when it trims margin.
To stay in a community instead of chasing the cheapest jurisdiction.
To think in generations instead of quarters.
To measure success in more than just cash returned.

Profit is essential. But it is not the point. Somewhere along the way, the scoreboard became the game.

It doesn’t have to stay that way. If you’re an owner, you don’t just run a company. You shape a small part of the world. The culture inside your walls spills outward. The way you treat suppliers, employees, customers - it ripples.

And at this moment in history, that ripple matters. You may not control GDP. You may not control markets. But you absolutely control what your business stands for.Stand for something worth building.

Until next time,

Andrew