Over the last decade, the degree of income and wealth disparity in the United States has become increasingly evident as the aggregate wealth created through our economy concentrates in a smaller portion of the population, while the majority of our  country functions in a system that constrains personal financial growth and independence. The result has been a growing social backlash that attacks the wealthy, corporations and institutions that feel like a constant reminder of systemic inequity. Indeed, there is a growing cry against the underlying framework of our economic system – capitalism. Yet, capitalism per se is not the problem. It is capitalism only measured by financial gain – extractive, exclusive and destructive. Capitalism that only benefits a small portion of humanity is financial aparthied. CityCraft offers a community-centric alternative for a regenerative and inclusive way forward.

As defined in Investopedia, “Capitalism is an economic system in which private individuals or businesses own capital goods.” As simply defined, capitalism in the United States does exactly what it is designed to do; it encourages the accumulation of goods, whether physical or financial. Indeed, recent information suggests that the GDP of the United States has increased relative to the global GDP and the U.S. has increased and has a dominant role in managing capital through the global financial system. The United States has led the most robust and globally dominant economic and financial system in the world, but our domination has not resulted in a fair or inclusive democratic society that values the individual, protects our environment and strengthens our social fabric.

Now is a time to ask ourselves and our society hard questions and prepare ourselves for even harder answers – How is it possible that the dominant U.S. economy fails to produce enough resources to distribute opportunity and financial security to a majority of the resident population? Has capitalism failed, or is it something else? Are we willing to accept an accelerating deterioration of our humanity and our environment? Are we willing to collectively invest in our future for the sake of our future generations, knowing that our immediate futures will be less convenient and comfortable?


The current problem is easy to measure. If we examine the percentage of domestic wealth controlled by the most affluent Americans, clearly the disparate nature of the inequity is obvious and growing, but it is not at all a phenomenon exclusive to the United States. At the end of the year 2000, American individuals were almost exclusively listed as the wealthiest people across the globe. Now that distinction is held by people living in almost every major continent. Even more interesting, a survey of currently serving political leaders finds that almost one-half of the wealthiest politicians live in countries governed through monarchies, dictatorships, or communist political systems. So, wealth disparity is not only a construct of capitalism, but its existence is perhaps most shocking in a country founded on equality, freedom, and opportunity but has become the rife with inequity, 

A few weeks ago, news was reported that the income tax information of numerous prominent, wealthy Americans was leaked, providing confirmation that many of them had paid little or no income tax. While most working adults and employed minors dutifully pay a portion of their income into our social security and tax systems, wealthy Americans and large corporate entities avoid tax liability. Is anyone surprised? None of this is news. Our system is biased towards those who extract the most from our economy at the expense of those who are least able to defend themselves from inequality, but on whom our actual economy is dependent to operate and grow.

Nor should it be surprising that policy changes to numerous institutions through which financial capital flows does little to alter the overall financial landscape impacting Americans. The institutional and regulatory oversight of insurance companies, pension plans, philanthropy, banking systems and capital investments are all built on a foundation of profit making and risk avoidance, or perhaps risk transfer. Those who have ownership or access to capital assets are the prime beneficiaries of a system making them richer. Those with fewer assets struggle to grow and flourish against systemic financial headwinds and uneven competition. If institutions followed a CityCraft model, financial investment in underserved communities would not be an regulatory requirement or afterthought and philanthropy would seek to make large, transformative changes in communities rather than rationing resources to organizations who become dependent on an ongoing stream of donations.

Ignoring scams, cheating or tax fraud, corporations and individuals with substantial assets exist in a system no longer capable of promoting broad opportunity and prosperity, but is instead specifically designed to perpetuate the concentration of wealth, and by extension, social and financial power. Those in power use their financial strength exactly as the system is designed for, aggregating assets, consolidating wealth, and leveraging every tool available to them in the system. As the world approaches a global environmental, social and financial crisis, history suggests that this massive inequity is pushing society to a point of collapse.

This raises a variety of questions – Is Capitalism itself the problem? Or is it something else? How do we address the broader societal issues in a country that has never enjoyed more financial means and technical abilities to correct problems, but does not succeed in implementing programs that meaningfully mitigate our systemic issues? Is socialism the alternative or is its troubled history an indicator of its faults? Should we break our system or recalibrate it to achieve social, environmental, and financial health in equal measures? The natural order of our existence does not tolerate imbalance well. Nature seeks balance. Physics speaks to the relationship of action and reaction. Voids always find a way to be filled. I would therefore suggest that the problem is not capitalism per se. The problem is that unfettered capitalism has driven a warped perception of personal success, loss of community values, and a lack of understanding for the broader needs of a healthy society.

A financial system that continues to extract everything possible, without an appreciation for the broader impact of grossly imbalanced impacts on human, environmental, social, and physical capital, could result in creating dire conditions that could bring on sudden and potentially uncontrollable consequences. It could be in the form of a social upheaval or the rapid deterioration of our environment. The total cost of the endless extraction and consumption of the Earth’s resources has never been accounted for in economic, social or environmental terms.  Our current system is no longer sustainable, so we must now lead a massive redirection of our economy to regenerate our environmental, social, physical, and human capital systems so that they are valued equally. 

The urgent need to shift our priorities needs to begin in the area in which we have the greatest control – ourselves. Every capital system functions directly as a result of our actions or inactions. Our leadership in and governance of our systems makes a big impact on the outcomes. In order for us to thrive in a balanced world, we must have human leadership and strategic governance systems to guide our future, driven by broad and holistic considerations of societal health. The focus of our future must shift from extraction and consumption to regeneration and maintenance. Nowhere else is this true than in the oversight of our financial capital systems.

Since my CityCraft colleagues and I began this blog at the beginning of the year, I have focused mostly on the current conditions that illustrate the need for a wholesale shift to a regenerative systems-based model. As I now shift to solutions-focused writing, I will speak to the state of our current systems, a vision for a regenerative model and underlying need for modified governance and leadership oversight. I will explore the fundamental state of key financial systems and suggest how we bring them back into balance, not to undermine our fundamental financial system or capitalism itself, but to recommend how we think about a society that honors human, environmental, and social systems in concert with our financial capital foundations.

Michael A. Ibarra

Michael Ibarra is an Executive Vice President at CityCraft Community Partners (“CityCraft”), responsible for regenerative capital strategies. CityCraft has as its sole mission the restoration of the...

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