Capitalism is a system that’s constantly evolving, that’s what’s good about it. And there was capitalism before the Industrial Revolution. But, when the technology of the Industrial Revolution got invented in the UK, there was already a dominant economic structure, the agricultural economy. So that technology came to the emerging economy of its day, the United States. And it was in the United States that we really developed a society built around an industrial economy.
Today the same thing’s happening again. The United States was largely responsible for the core development of information technology. Information technology has different economics and requires different business principles, different economic principles. It’s not going to happen in the United States because we have a very well-entrenched, powerful set of interests that like it the way it is. So, it’s going to be in the emerging economies that they discover the rules of the next form of capitalism. That’s the biggest idea.
Let me offer you a second perspective on that, and maybe it’s a little wonky. Based on work of Complexity Theorists and research at Santa Fe Institute, you can look at a system like capitalism as an adaptive system or a complex adaptive system. And that means that, like a biological species, it evolves. It’s made of rules the way a species is made, in a sense, of genes.
So, if you take a species and you put it in a new environment, its characteristics change. And that’s what we’re doing with capitalists. Capitalists are finding the place that they most need to go is no longer Boston, but Bangladesh. And so the emerging economies are an environment for capitalists, they will change their behavior, and that’s what will change the rules of capitalism.
In Their Own Words is recorded in Big Think’s studio.
Image courtesy of Shutterstock