Capitalism needs a rebrand to win over Gen Z

Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning.

If capitalism were a global brand, it would be a candidate for a marketing makeover. Study after study (including a new survey by Fast Company) indicate that the youngest citizens deeply distrust capitalism. Recent research from the Center for the Study of Capitalism at Wake Forest University shows that only 62% of Gen Z Americans support capitalism as the best economic system for the country, compared with 73% of Baby Boomers.

Capitalism by any other name

But Christina Elson, executive director of the center, dug a bit deeper into the data. It turns out that young people actually support private property, profits, competition, pay for performance, and other distinctly capitalistic ideas.

To paraphrase the movie The Princess Bride, I don’t think the word “capitalism” means what Gen Z thinks it means.

Elson notes that some of Gen Z’s lack of confidence in capitalism reflects a dissatisfaction with their own economic standing and their sense of how others are doing. Anxiety about student loan repayments and lack of affordable housing and healthcare exacerbates feelings of unfairness or inequity. And they blame capitalism. Gen Z also has a deep mistrust of institutions—in particular, large corporations—which again, they equate with capitalism.

Raising the stakeholders

Business leaders have already sought to reposition capitalism: Stakeholder capitalism—the idea that companies can uplift workers, suppliers, communities, and other constituencies while producing long-term profits for shareholders—entered the mainstream in 2019 when the Business Roundtable issued a new statement of purpose for corporations. But stakeholder capitalism is under attack from traditionalists. And young people don’t think much of it either. When asked by Fast Company if they had a positive view of capitalism, only 24% of respondents under the age of 40 said yes; when we asked about stakeholder capitalism, the number climbed only slightly to 29%.

John Mackey, the founder of Whole Foods, for a time tried to promote the term “innovism,” which he attributes to the academic Deirdre Nansen McCloskey. She describes innovism as an ideology connected to “letting people have a go to implement … ideas for commercially tested betterment.”

Mackey and McCloskey may be on to something. According to Elson’s research, 90% of young people say they believe small businesses and entrepreneurship are forces for good in society.

Share your rebranding thoughts

Do you think capitalism needs a rebrand? How would you remake or rename it? Write to me at stephaniemehta@mansueto.com. We may share your insights in a future edition of Modern CEO.  

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