Longtime Seattle investor and entrepreneur Chris DeVore is a managing partner of Founders’ Co-op.
I have a confession to make. I am a Democrat. And capitalism. Both, at the same time.
This was not usually a position that needed to be defended. But during my adult life these two ideas have gone too far. The bond is now at an end, and when it breaks, the party I grew up with will relinquish its once-legitimate claim to America’s best idea.
The belief in free markets is shared by the majority of Americans, and while it may anger many people, embracing capitalism can appeal to centrists on both sides who are desperate for our future and hungry for a meaningful message.
Today, the group that worked so hard to protect and perfect the American research – on opportunity, justice and equal treatment under the law for all people – has lost its mind, or its memory, because of the driving force that made those ideas possible.
Take away the promise of a better life (immigration), the means to achieve it (capitalism), and the assurance that the fruits of your labor will not be arbitrarily confiscated (the rule of law), and the engine that has made America the richest, most powerful, and most admired nation on earth stops, and all great research ceases.
One can acknowledge all the historical mistakes that harmed the American project – immigration and genocide, slavery and Jim Crow, corporate government capture, the wealthy, the elderly, the list goes on – and we can lose sight of the three key ingredients that make our strange and complex country possible: capitalism, the rule of law, and accepting America as their home.
But if you listen to Democrats at both the state and national level today, capitalism is the enemy. Billionaires and their current avatars, AI and data centers, have become the goons asked by elected officials and party leaders to remove the wrath from the domain.
The alternatives offered don’t add up in economics (“tax the rich,” where the top 10 percent of earners already pay ~75% of all federal taxes; “data blocking agencies,” industrial-scale NIMBYism that simply drives development elsewhere), but the message behind the slogans is clear: America’s prosperity is not something to be preserved, much less promoted; it is a source of nature that we are somehow fortunate enough to harvest at will, a source of abundant wealth that will never run dry.
How did we get here? How has capitalism, the powerhouse of democracy, become an insult to the Democratic Party?
The apparent loss of faith today is rooted in capitalism’s history of invincible success, which has been accompanied by a necessary but now accelerating failure of our democratic machinery.
It is surprising that the importance of capitalism in our national project needs an explanation, but that is actually the best proof of its truth: we have been so rich for so long, so ashamed of our abundance of material things and our choice of experiences, that we have already taken it for granted. We casually think that the neighborhood business owners and global corporations that make abundance possible, deposit two-week checks into the bank accounts of millions of their employees and fill store shelves with the bewildering array of goods and services we enjoy every day, have always been, and always will be, like the air we breathe.
This is a terrible mistake.
I have made a career, or in fact, found a calling, in supporting entrepreneurs from their early stage. Every business that exists, from the humblest corner cafe up to and including General Motors and Amazon, only does so because a small number of idiots overcame extraordinary obstacles over the years to create something out of nothing.
Every paying job, every charitable gift, every nickel of tax revenue that funds the safe and simple world we all enjoy, comes from that impossible creative act. The machinery of capitalism works so well, allowing one person’s vision to be turned into millions of jobs and billions of dollars in tax revenue, that we’ve forgotten how miraculous it is, what a wonderful break it represents from thousands of years of totalitarianism, feudalism, injustice and inequality.
The engine of capitalism works so well that it also hides the deepest truth of all natural systems: companies, like people, are born, live for a short time, then decline and die. This is hidden by the unstoppable productive forces of well-managed automation: new companies emerge to fill the gaps and address the shortcomings of those currently in charge, fueling an endless and creative process of renewal. Every faltering company is replaced by two others, eager to serve customers no longer satisfied by the lackluster efforts of the previous wave.
To paint a picture of this renewal cycle, of the top 100 most valuable companies in America today, 15 were founded just 10 years ago, 30 did not exist 25 years ago, 45 did not exist 50 years ago, and less than one-third (30 of the 100) have been around for 100 years or more. Big companies may seem like they’ve been around forever, but they’re actually dying and being born every day. New companies have to come from somewhere, and that somewhere is the solar energy of the capitalist biosphere: the entrepreneur.
If capitalism, and its essential act of breeding business, is so great, how could we turn it around?
The answer is the great failure of democracy, and its most obvious path to redemption.
For at least the last century, Democrats and Republicans have been divided on their views on the role of government. Democrats see government as an important partner in the national project: providing essential infrastructure such as roads and airports, protecting national defense, providing basic education and health services, and ensuring that the law is applied fairly and equitably, both to the companies that help our economy grow and to its individual citizens. Republicans share many of these ideas, but where Democrats want more, Republicans have generally wanted less: lower taxes, fewer regulations, and less redistribution of national income to those at the bottom of the economic ladder.
But to gain the necessary power to advance their respective goals, both parties rely on the apparent lack of legitimacy to secure blocs of electoral support: farmers, labor unions, business owners, real estate developers, the list is endless and as diverse as the economy itself. The result is a regulatory and tax system so full of incentives, tax breaks and special protections that any citizen, even and especially those favored by one set of legal advantages, can point to those in the other group and cry “It’s unfair!”, “It’s unfair!”, “It’s broken!”
It is this general smell of bias and corruption, which has grown slowly over 250 years of back-and-forth elections on both sides of the aisle, that has brought us to our current crisis. Each party is captured by its own insane array of protected constituencies and aggrieved parties, and can so convincingly point out the injustices of the other side, that it becomes obvious to question the entire free market.
Great wealth now has the taint of theftwithout the fine distinction between business success and systematic looting of the Treasury.
Things tend to continue as they began. So the most likely, and most pressing, scenario is that we are witnessing the last throes of the American ideal. Two hundred years of bipartisan rule has so entrenched our legal and financial infrastructure that equal treatment under the law is now a sore key, not the proud desire that once held us together as a nation. Each party is now so completely tied to its base of donors, its electoral protection bought with gifts of control letters and dollars taken from the public purse, that there is precious little oxygen left of the promises on which the nation was built.
But to use this bipartisan failure of democracy to make a villain of capitalism, to paint as enemies of the state a few entrepreneurs who have made incredible profits in their businesses, when most were lucky enough to keep their workers paid and the lights of their low-level institutions on, is to eat the essence of the American project.
This is already playing out at the provincial level. Traditionally Democratic states like Washington, Oregon and California have pursued predatory tax policies that put business wealth at risk. The result is not a hoped-for increase in state tax revenue, but a visible and rapid flight of business wealth and power to capitalist states like Florida, Texas and Wyoming.
This is not to argue that the incomparable advantage of living in a society where one can acquire and retain great wealth does not come with serious social obligations. By all means use regulation to ensure fair and safe business operations and prevent abuse. Raising the taxes needed to improve our incredible public infrastructure, allowing entrepreneurs to build new companies from scratch without fear of being expropriated, either by criminals or the state itself. Undoubtedly they want companies to be active social actors, as if they were citizens themselves, with all the rights and responsibilities involved.
But as a lifelong Democrat, and a fervent believer in the fundamental virtues of the American ideal, I have one simple request for a party that I still believe is likely to advance our national quest: recognize capitalist entrepreneurship as the driving force that has made our extraordinary success possible, and restore capitalism as one of the main pillars of our national promise.
By continuing to take our unprecedented prosperity for granted, you misunderstand its source and its chances of survival. Worse, by demonizing the engine of our shared prosperity, he sows the seeds of our collective destruction.
Stop now, before it’s too late.
