It’s no secret that the American dream is now met with a little more skepticism than it used to be. The idea that hard work is always enough to attain your dreams is a lovely thought. But plenty of members of the working class can attest that such notions don’t always tell the full story and actually want to seek out anti-capitalist investing. Here’s what to know.
Don’t get us wrong, capitalism certainly has its benefits as an economic system. But few would argue that it’s not without its downsides. Over the past few decades, the wealth gap between the richest of the rich and…well, the rest of us, has only widened.
Just prior to the COVID-19 pandemic, it was estimated that the wealth divide between the 1% and the rest of the US population was greater than the obscene wealth divide that lead to the French Revolution.
As Inequality.org points out, in 2018; “Amazon founder Jeff Bezos, Microsoft founder Bill Gates, and investor Warren Buffett — held combined fortunes worth more than the total wealth of the poorest half of Americans.”
Realistically, they probably could have just said “all other Americans”. Ironically, the pandemic only served to widen the divide. According to data from Americans for Tax Fairness, America’s top billionaires enjoyed a collective 70% wealth increase of $2.1 trillion dollars from March 2020 to October 2021.
While most people agree that this is a problem, many are also at a loss about exactly how to solve it. One recent movement, largely led by a group of wealthy young people called the Resource Generation, has launched a new idea called anti-capitalist investing.
Also known as “transformative investing,” the movement is all about attempting to use money as a tool for more than just a means to generate more wealth. But how exactly does anti-capitalist investing work and is it even realistic? Let’s take a closer look at exactly what it is, the challenges it faces, and the best ways to approach it.
Table of Contents
- Defining Anti-Capitalism
- What is the Goal of Anti-Capitalist Investing?
- Can Transformative Investing Actually Transform Capitalism?
- The Challenges of Anti-Capitalist Investing In a Capitalist Economic System
- The Search for Realistic Approaches to Anti-Capitalist Investing
- Investing in Worker Cooperatives
- Consider Investing in a Sustainable World
- Investing Directly in Small Businesses
- Looking Into Web 3.0 Start-Ups
- Keep Your Social Justice Donations Coming
The term “anti-capitalism” may initially sound a bit alarming to those unfamiliar with the concept, and downright Marxist to those missing a brain. But the fact that anti-capitalists come in all shapes and sizes can make them a little hard to classify by any one set of ideas.
At the most radical end of the spectrum, there are anti-capitalists who believe that capitalism is too broken to fix and should be replaced by another system. But the majority seem less against capitalism as a concept and more against how it’s currently manifesting in the United States.
The thing is, capitalism works, and it can work to make sure no one gets left behind. In the United States, however, where most of us live paycheck-to-paycheck, where it’s possible to go bankrupt from unforeseen medical expenses, and student loans can financially cripple anyone who takes them out, capitalism only really works for people who are already rich.
These days many (notably Millenials and Gen-Zers who will never be able to afford to buy a home) are simply tired of seeing just a few people become obscenely wealthy multi-billionaires, receiving exorbitant government handouts and bailouts (ironically the LEAST capitalist thing in the world – who’s the real socialist here?) while the working class continues to struggle.
But it turns out that some rich people could be saved from eating. Anti-capitalist investing groups like Resource Generation are largely made up of young people from the ages of 18-35 from the top 10% of the wealthiest families in the United States.
Not sure if you qualify as one of these lucky few? Check out their website for a class consciousness privilege quiz which will provide some handy hints.
What is the Goal of Anti-Capitalist Investing?
Okay, so you’ve got a group of rich young people who are not necessarily socialists but are interested in ending the unsavory cycle of capitalism as we know it today – whether it’s out of self-preservation or not, who knows? And what exactly do they plan to do about it? That’s where anti-capitalist investing comes in.
The idea behind transformative investing is to figure out ways to use money as more than just a means to make more money. Some may pledge to put more money into socially responsible investing. Others might support various organizations dedicated to producing social change and equality.
One approach is convincing more affluent investors to rethink pouring more money into Wall Street with no other goal than making a profit. By diverting money from companies with questionable values, the hope is that these investors can serve as a force for disincentivizing unethical behavior.
Anti-capitalist investing ultimately hopes to redistribute financial power from major corporations to social justice causes, underserved communities, minorities, and the working class in general.
See Related: Capitalism and Homelessness: Is There a Correlation?
Can Transformative Investing Actually Transform Capitalism?
Will this surge of value-backed investments topple American capitalism? Unlikely. As you may have gleaned, dismantling capitalism altogether is not even necessarily the goal. In an ideal world, the average anti-capitalist would hope to see the money distributed more equally across all levels of society and controlled more democratically.
The real question is whether or not transformative investing actually helps produce the type of changes that these investors hope to see. Is simply taking money off of Wall Street and giving it away with no regard for profit enough to create real change?
The truth is that, under these conditions, anti-capitalist investing largely becomes less about investing and more about giving to charity. Even many of the Resource Generation’s investment guidelines seem more centered around redefining investing to mean investing in the community, people, or social causes.
Other members of the movement seek to find a fine line between making a profit and investing in socially responsible causes that they believe in. Unfortunately, there are a few inherent problems with both approaches.
See Related: Best Banks for Low-Income Earners
The Challenges of Anti-Capitalist Investing In a Capitalist Economic System
As noble as the thought of giving away wealth to help fix social issues may sound, it isn’t particularly anything new. The wealthy have been donating to charities for decades, but even this comes with its own disadvantages in terms of the concept of anti-capitalism.
Such donations come with great tax benefits, which in turn end up diverting money from public funding. In a way, these donations actually run counter to the ideas of a more democratic society by allowing wealthy donors to choose which causes they deem worthy of financial support.
Many of these well-intentioned donations end up funding political or social organizations, which isn’t necessarily a bad thing. The issue is that the rich donors behind them are still using their privilege to more or less buy influence, which is a complete contradiction of what anti-capitalist investing is all about.
Things are just as difficult when it comes to redirecting market investments to socially responsible companies. While directing capital towards companies or mutual funds with shared values is a great tactic for some, it doesn’t necessarily hurt giant corporations either.
Many stocks are sold on the secondary market, at which point they no longer directly fund the companies behind them. Not to mention the fact that owning a large number of shares in a company grants a rich shareholder far more influence over that company’s future than refraining from making an investment altogether.
Last but not least, it’s worth considering that creating massive social change requires a huge number of people to commit to championing the same idea. At the moment, if a wealthy young person tanks their family’s business empire by giving away their wealth, there will likely be another company waiting to step in and fill their shoes. In the process, the young heir in question could also destroy the jobs of everyone who works in their family’s business and negatively affect shareholders who had invested in the company’s future.
See Related: What is Corporate Socialism? Definition & Examples
The Search for Realistic Approaches to Anti-Capitalist Investing
Given the above considerations, it’s certainly worth taking a closer look at different approaches to socially responsible investing. The truth is that capitalism is incredibly hard to avoid for anyone who lives in a capitalist society.
Rather than taking an anti-capitalist approach, there’s a lot to be said for operating within the reality of capitalism in a socially responsible way. If you’re a wealthy investor who wants to use your assets to promote a sense of empowerment for people everywhere, then you’re already on the right track.
Here are some ideas to consider when it comes to using your funds to positively impact organizations that align with your values and interest.
Investing in Worker Cooperatives
Worker cooperatives are companies that are owned by their own workers. These businesses make an excellent addition to any community by allowing more people to enjoy the benefits of company ownership, regardless of their economic status.
Check out Grassroots Economic Organizing for examples of ways that investments in such companies have directly impacted workers. You’ll also find links to organizations that can help you learn more about how to get involved in future funding efforts.
See Related: What is Racial Justice Investing?
Consider Investing in a Sustainable World
With climate change becoming a major issue around the world, sustainability is certainly one of the major social issues of our time. In recent years, more people have begun to invest in funds dedicated to everything from green architecture to clean energy.
You might consider looking into wealth management firms like Schroders, which are dedicated to helping clients invest in a variety of different sustainable investments that match their interests. You might also look into organizations such as the World Green Building Council which offers great resources for supporting sustainable architecture.
See Related: Capitalism vs Socialism: What are the Differences?
Investing Directly in Small Businesses
Whether or not you can use your wealth to change the world, it’s highly likely that you can use it to change the lives of business owners in your community. Few small businesses or start-ups make it off the ground without having to raise funds to get started.
Be on the lookout for small businesses in need of a helping hand and speak to your financial advisers about ways you might be able to help. There are now also plenty of great crowdfunding sites like Mainvest that allow users to invest in small businesses all across America.
Looking Into Web 3.0 Start-Ups
When it comes to anti-capitalist ideals, blockchain technology is quickly reshaping the way that the economy has operated throughout history. Cryptocurrency is already changing how people control their money by cutting out the need for big banks to serve as intermediaries. When it comes to decentralizing finance, crypto may ultimately hold a great deal of promise.
Web 3.0 is basically attempting to do the same thing for the internet by taking the power back from tech giants and restoring it to ordinary users. Should Web 3.0 succeed in “democratizing the internet,” everything from apps and platforms to gaming content may someday be owned and monetized by its creators? Keep an eye on sites like Crunchbase for news on emerging start-ups that may align with your interests.
Keep Your Social Justice Donations Coming
Just because we pointed out that donations to worthy social causes aren’t necessarily an anti-capitalist endeavor doesn’t mean we aren’t all about them. If you come across a worthy organization that could use a hand, by all means, don’t be afraid to lend one.
The key is to realize that such donations should be made out of respect for the interests that these organizations are attempting to promote rather than out of anti-capitalist zeal alone. Okay, so donating to such causes may not erase the less flattering aspects of capitalism overnight. But if you come across the chance to help someone have a better life, there’s nothing at all wrong with taking it.
Kyle Kroeger, esteemed Purdue University alum and accomplished finance professional, brings a decade of invaluable experience from diverse finance roles in both small and large firms. An astute investor himself, Kyle adeptly navigates the spheres of corporate and client-side finance, always guiding with a principal investor’s sharp acumen.
Hailing from a lineage of industrious Midwestern entrepreneurs and creatives, his business instincts are deeply ingrained. This background fuels his entrepreneurial spirit and underpins his commitment to responsible investment. As the Founder and Owner of The Impact Investor, Kyle fervently advocates for increased awareness of ethically invested funds, empowering individuals to make judicious investment decisions.
Striving to marry financial prudence with positive societal impact, Kyle imparts practical strategies for saving and investing, underlined by a robust ethos of conscientious capitalism. His ambition transcends personal gain, aiming instead to spark transformative global change through the power of responsible investment.
When not immersed in the world of finance, he’s continually captivated by the cultural richness of new cities, relishing the opportunity to learn from diverse societies. This passion for travel is eloquently documented on his site, ViaTravelers.com, where you can delve into his unique experiences via his author profile.