The Much Needed Return of Honest Capitalism

By Elaine Tsung

Do we want more ‘WeWorks’ ?

Capitalism is known to be an economic system where investments and the distribution of goods are determined by competition in the free market. As history has shown us, capitalism stands out as an effective system, as supply and demand in a free market should give consumers products at fair prices. Suppliers can also receive healthy returns as long as customers are happy with them.

However, things seem to have gone astray in recent years. Capital market mechanics have become skewed; the old school supply-demand equilibrium starts to malfunction when products and services are offered at unrealistically low prices or even for free. I call this practice ‘narcissistic capitalism’–a system utilizing capitalist infrastructures to create companies that monopolize the industry by unnaturally pricing out the competition. The enabler is the accumulation of capital, in vast abundance. 

With this capital, companies can first create the supply and then acquire customers by offering exceptionally cheap products. By employing a predatory pricing strategy, these companies can eliminate or buy out their competitors. 

So, what happens after the monopoly has been created? A price increase, of course. Consequently, a select few companies get bigger and bigger, and the smaller players disappear altogether–a narrative that is playing out with increasing frequency. 

The problem is perpetuated by the fact that investors continue to inject capital into these companies despite their already-outrageous valuations, knowing they possess mindshare and control over the market and their customers (looking at you, Facebook). Many companies have failed in this endeavor–WeWork being the most notable example in recent years–but more should and can be done to put an end to this trend. 

As a responsible stakeholder in the market–whether one is a customer or business owner–it’s crucial to support sustainable growth. Fellow entrepreneurs should focus on business profitability first. A proper valuation will come if you have a robust business model. Do not get distracted by achieving high valuation, or go down the route of creating unrealistic projections to get investment from VCs. What’s even better is to build businesses that deliver double (financial and social impact), or triple (financial, social, and environmental impact) bottom lines. 

As consumers, we should also support responsible companies by making smart purchase decisions. We should know to look beyond the price tags, marketing, and packaging; instead, taking the time to understand more about the vision and values behind the product. Be a smart consumer, and spend your money wisely by supporting causes that you believe in. 

As an animal lover, I have been buying cruelty-free products for years. Recently, I’ve noticed a broader trend in the cosmetic industry, where almost all brands are adopting a more ethical stance. This shift is a direct result of education on the part of consumers, and every industry has the potential to transform. 

If we all do our part and be more honest with ourselves, significant change can happen. 

About the Author

Elaine is the founder and CEO of Garage Society, a regional co-working operator founded in 2014, with 16 locations in Hong Kong, Singapore, India and throughout Southeast Asia. She was awarded ‘Entrepreneur of the Year’ by the American Chamber of Commerce in 2018. Elaine is passionate about animal advocacy. 

thegaragesociety.com

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

Elon Musk Buy Next

What Is Elon Musk Going to Buy Next?

There are moments in our lives—perhaps we are in the shower or struggling to sleep at 2 A.M.—when we think about all the ways we could influence the world. We find solutions to crypto volatility, world hunger and our neighbor’s ultra-dry plants.

5 Technologies

5 Technologies That Are on Stage in Russia’s Invasion of Ukraine So Far

On February 21, 2022, Vladimir Putin, President of the Russian Federation, declared the independence of the Donetsk People’s Republic and Luhansk People’s Republic. Arousing international outcry, this ignited the ultimate invasion of Russia on Ukraine three days later. While Ukrainians are still defying Putin’s covetous ambitions, new technologies have been floating on the surface to take advantage of each other.

Technology Joy Ghose

Technology Pioneers – Interview With Joy Ghose of FreeD Group

Over the past 15 years, the Chief Commercial Officer (CCO) of FreeD Group Limited, Joy Ghose, has accumulated plenty of experience in the travel and technology industry. Before joining FreeD Group, Ghose was involved in sales, marketing and management roles at companies like Merlin Entertainments and The Hong Kong Tourism Board.

Creamy Mattes and Beyond Reviewing GoPlay Cosmtics’ Custom Lipstick Maker

To Creamy Mattes and Beyond: Reviewing GoPlay Cosmtics’ Custom Lipstick Maker

While researching for our piece on personal color analysis, I came across the LIPSKIT, a custom lipstick-making tool created by GoPlay Cosmetics. GoPlay Cosmetics is a DIY (do-it-yourself) make-up brand that is looking to prioritize sustainability in the make-up industry without compromising the variety of your lipstick collection.

Ledger vs Trezor

Ledger vs Trezor: Where Should You Store Your Crypto Holdings?

As lucrative as the cryptocurrency world is, it comes with a high risk of losing your crypto because of hacks. To make sure that your crypto holdings stay safe with you, you must carefully choose effective storage solutions for them. One of the ways to keep your crypto secure is by holding it in a hardware wallet.

4 best companion robots to consider in 2022

Alone No More: 4 Best Companion Robots to Consider in 2022

The Covid-19 pandemic and the isolation that accompanied it has given many of us a healthy appreciation for good company. Over the long periods of self-isolation and quarantine, we have come to the realization that company can also come in many non-human forms, like pets, plants and… Roombas?