Markets In Your Community

‘We Are All Capitalists’: Stephens Tells Stories of Free Market System

In 2016, a Harvard Institute of Politics poll of Americans aged 18-29 revealed an alarming finding: the brand of “capitalism” appears to be tarnished in the eyes of many young Americans.

Proponents of free enterprise laud the system’s ability to create jobs and economic growth, reward creativity and entrepreneurship, combat poverty and drive social progress. But that message is in danger of being lost on today’s youth, more than half of whom seem poised to reject that system’s strengths.

Warren Stephens, president and CEO of Arkansas-based investment firm Stephens Inc., thinks that development reveals a fundamental misunderstanding of the capitalist system—and suggests we need to communicate more clearly about the power of that system as a mechanism for creating value and growth.

That’s the impetus behind the “This is Capitalism” initiative Stephens launched in May. That begins with better storytelling. Rather than citing statistics and studies, “This is Capitalism” deploys compelling narratives about extraordinary Americans to illustrate the strength and possibilities of the capitalist system.

The aforementioned Harvard IOP poll is instructive in presenting how many young Americans view that system:

In addition, the Harvard IOP poll followed up on its April 2016 release, which found that less than half (42%) of 18 to 29 year olds supported capitalism, while 51% opposed it. 

In this July poll, the IOP asked young Americans to identify the “first word or phrase” that “capitalism” brought to mind. Twenty-seven percent (27%) of young Americans used explicitly negative words to describe capitalism, 15% used words construed as positive and a plurality used words that were coded as neutral (45%). 

In the 271 negative cases, young Americans most frequently described capitalism with: “greed” (59 mentions), “corrupt” (19 mentions) and “control” (12 mentions). 

On the positive side, 18- to 29-year-olds described capitalism with: “free/free market/free enterprise” (61 out of 152 positive mentions), “good/great” (14 mentions), and “profit” (11 mentions).

Part of the problem, Stephens writes in a May 31 Wall Street Journal op-ed, may be a lack of understanding. Stephens points out the “disconnect” that while many young Americans profess distaste for capitalism, they admire and celebrate entrepreneurs at the same time. He notes that the two go hand in hand—entrepreneurs would make little headway without the capital markets to fuel the growth of their ideas and businesses.

“Without access to capital, budding entrepreneurs see their ideas wither; without capital, there is nothing to fuel innovation,” he writes. “Capital is the lifeblood of our economy. It must flow freely to ensure the economy’s vitality and health.”

Stephens points to the rampant increase of regulation in capital markets as a contributing factor to the malaise of capitalism—perversely, while heightened regulation is intended to increase confidence in the markets, too heavy a regulatory burden can ultimately have the opposite effect, stifling growth and limiting opportunity.

The approach of “This is Capitalism” is to put a human face on the economic system that has done more to create wealth and progress than any other system. To that end, the site spotlights a “collection of stories of great American capitalists who embody the values of independence, innovation, and dedication. They inspire us to celebrate capitalism, its inherent social contract, and the good it can do for our society.”

Some of those stories are told through accessible and professionally produced biographical videos focusing on figures from the both the distant and recent pasts.

The initial videos focus on the achievements of Alexander Hamilton, the first U.S. Treasury secretary and a champion of the free enterprise system, and Madam C.J. Walker, lauded as the nation’s first African-American millionaire after launching a line of women’s hair care products that became a sensation in the early 20th century.

Future subjects will include Wal-Mart founder Sam Walton; cosmetics magnate Helena Rubinstein; Chuck Williams, founder of the Williams-Sonoma kitchen supply chain; and Jack Stephens, a founder of Stephens Inc. (and Warren’s father). The site also includes articles penned by young entrepreneurs discussing the challenges they faced in getting their ventures off the ground.

“This is Capitalism” could also be seen as an object lesson in the virtues of competition, since it offers an alternative storyline to the typical media portrayal of the system that undergirds the U.S. economy. While Hollywood films and television shows routinely present business leaders, corporations and the financial industry as standard villains, Stephens provides an antidote to popular media stereotypes that paint a malign picture of capitalism. As he writes in his WSJ op-ed, “By virtue of living in the United States, we are all capitalists.”

“Everyday transactions—putting gas in our cars, buying groceries—are just as much a part of capitalism as financing growing companies and investing in ideas,” Stephens writes. “I hope for a day when young people no longer reject that concept but revel in it. As a country, we need to reclaim our pride in capitalism and remember that the markets have the greatest power when they are free, and that free markets empower one and all, not just the few and the select.”