The system can and should generate more prosperity for more people. And to that end, the nation’s CEOs must help more Americans climb the economic ladder. Sustaining capitalism requires an America in which everyone has a fair chance. Trying to enforce equality through outcome-driven tax- and command-based redistribution schemes would stifle growth and innovation, leading to less wealth all around. True equality of opportunity would preserve and leverage free-market forces, expanding them down to every rung of the economic ladder.
One of the primary ways we can drive equal opportunity is to improve access to and quality of the nation’s education system.
Improve U.S. Education
Education is the key that unlocks robust opportunity in a healthy, dynamic capitalist system. It provides the tools for access to rewarding careers.
A stronger educational system would raise incomes for all and make communities and the companies within them more competitive. CEOs should champion reform across the education spectrum, from early childhood to K-12 to postsecondary education, and mid-career workforce development. Given that business is the ultimate consumer of education, CEOs are well positioned to make this case.
Consider early learning: Countless studies have demonstrated that children who get a strong start go on to lead healthier, more prosperous lives; this, in turn, improves the competitiveness of the nation’s workforce and its prosperity—an everybody-wins outcome that executives should explain to both policymakers and the public. Business can strengthen society and the sustainability of capitalism by calling for increased availability of high-quality early learning, particularly for children at greatest risk.
On the K-12 front, students are graduating from high school at a higher rate than ever before, but graduation rates are an inadequate measure of learning. Most public high school graduates’ reading and math skills, for instance, fall short of what they need in college or the workplace. Executives should explain that improving real outcomes would require boosting student readiness, improving teacher quality and raising the quality of what is taught.
Then there are post-secondary education and workforce development, the realm in which business has the most direct, immediate impact. Companies should advocate improving needed skills rather than simply increasing the number of post-secondary degrees awarded. Businesses should form alliances with higher education institutions. For example, FedEx partners with Western Governors University, which teaches through online, competency-based education. There, employees are rated according to their mastery of new skills rather than how much time they spend in the learning process. This can accelerate completion while enhancing learning.
Businesses can do only so much on their own, however. CEOs should urge public decision-makers to fund postsecondary education, training and retraining for America’s most disadvantaged individuals, including those who have lost their jobs due to global competition. They also should advocate dismantling regulatory barriers and disincentives to innovation in workforce development—for example, eliminating rules that make it difficult for students to obtain federal loan aid for programs that are not based on credit hours.
The good news, as mentioned above, is that some in the business community already are advocating policy reforms, enacting programs and forming partnerships. More companies should follow suit. Moreover, taking such actions would situate executives well to enter the public square and advocate for sustaining capitalism and equality of opportunity with conviction, backed by the confidence of practicing what they preach.
Focus On Fiscal Health
As the federal debt and the interest on it rise rapidly, they divert our nation’s economic resources from more productivity-increasing, opportunity-boosting investments—both private and public. If left unaddressed, this mushrooming national debt increasingly will diminish opportunity for all, particularly for the younger generations who ultimately will be saddled with financing it.
Business leaders know from close observation and experience that debt must be serviced, and that trust lost in the financial markets is hard to regain. Our nation, irrespective of ideology, has become inured to exponentially growing debt, apparently believing that “it can’t happen here.” It is never pleasant to deliver bad news; but the business community is the best equipped in this difficult time to do it. The nation must re-attain stable and sustainable finances, or it will meet an existential moment for capitalism; and the alternative is almost unthinkable.
The nation faces dramatic demographic changes with the baby-boom generation retiring and birth rates falling below replacement rates. We will have fewer workers to support more retirees for years to come. Washington must hold down spending, but there are limits to feasible spending restraint because of the cost of an aging population. But the federal Treasury will need even more revenue to achieve its expansive visions. Business executives must explain that the nation needs a tax system that is internationally competitive, incentive-efficient and revenue-sufficient. We also need an immigration policy that fills the needed labor and skill-set gaps.
Many Americans believe that the nation’s fiscal problems center on Social Security. Business leaders need to explain that though there is a Social Security challenge, the real problem lies in the exploding costs of healthcare.