Capitalism may be at a tipping point. For too long, policymakers, governments and business leaders have done a poor job of helping those who have been left behind, and lost sight of how capitalism can create more opportunity for all.
It’s not hard to see why some are losing faith in our system, particularly the younger generation. Health care costs are excessively high and unpredictable, often causing financial distress. Students are too often graduating without the skills to get good jobs and saddled with too much debt. Infrastructure is rapidly deteriorating. And maybe most importantly, wages, particularly at the low end, have not been growing enough.
That might explain why some Americans and politicians are turning to the “hot” new trend of socialism as a cure-all for society’s ills. Of course socialism isn’t new, and everywhere it has taken root in the past it has failed. In a traditional socialist system the government controls the means of production, and often decides how and where the citizens work rather than leaving those decisions up to the private sector. Socialism inevitably produces stagnation, corruption and the specter of authoritarian bureaucrats maintaining power by interfering with the economy and individual lives. I believe this would be a disaster for our country. True freedom is inexorably linked with the free enterprise that capitalism guarantees, and we mustn’t forget that.
Most people want to be able to care for their families and to advance their well-being. They also want the security of a well-functioning social safety net that treats people humanely. It’s my belief that capitalism is the best system to provide these for our society. It has done an exceptional job of doing so in the past, and it will in the future. But unless we make meaningful changes, it could be irreparably damaged.
Capitalism must be modified to do a better job of creating a healthier society, one that is more inclusive and creates more opportunity for more people. That means meaningful changes like rebuilding our education system and providing skills training, affordable health care policies, substantial infrastructure investment, and sensible immigration reform and climate policies. That’s just a start.
I am optimistic that this is possible as we enter a new decade. In August, more than 180 CEOs of leading U.S. companies signed the Business Roundtable’s new statement of corporate purpose, committing to creating economic opportunity for all of their stakeholders: customers, employees, suppliers, communities and shareholders. It’s a call to action to do more for everyone who works for us, and society in general.
Many businesses are rethinking their role in society. For example, our company JPMorgan Chase has made a $200 million investment in the city of Detroit, where we’ve been in business for more than 85 years. Local firms, government and communities are pragmatically working together to ensure that the city’s comeback benefits as many residents as possible. Our investment is paying dividends as the city creates small businesses, good jobs and affordable housing. This is a win both for the people of Detroit and for our company.
There are hundreds of other examples like this; United Technologies has invested $1.3 billion through its Employee Scholar Program, helping workers earn more than 40,200 degrees. Oracle hosts a high school on its corporate campus to help teach design thinking and competency with technology. As we learn from one another, we should be able to accelerate these efforts. We also need strong advocates and partners in Washington, D.C., and at the state and local levels for sound policies that help more Americans share in economic prosperity. Good government is essential.
Americans are increasingly polarized in many areas of our lives, from where we live to whom we are friends with and how we get our news. This has manifested in crippling partisanship, especially in our nation’s capital. Yet there are policymakers in both parties who want to work together to advance real solutions. The business community is ready to build these bridges.
Capitalism has been the most successful economic system in history. But we can improve upon it to help solve society’s problems and lift up more people. Now is the time.
Dimon is chairman and CEO of JPMorgan Chase
TIME's Davos 2020 issue was produced in partnership with the World Economic Forum.