UnitedHealth is getting sued by shareholders for breach of fiduciary duty and a declining stock price due to allegedly engaging in a corporate strategy of denying health care coverage to boost its profits and share price.

Damned if you do, damned if you don't.

There is all kinds of backlash on social media and the press about how this case is the epitome of what's wrong with capitalism.

Here's the thing though, capitalism wasn’t created in a vacuum.

Adam Smith didn't descend from the clouds and declare that "From this day forward, capitalism is the new economic system of the world voiding all other past economic systems."

In order to understand why "capitalism" sucks, we must first look at history.

When we do, we'll see that there was an entire economic system prior to capitalism called mercantilism.

In capitalism, the means of production are in the hands of the country’s citizens.

In mercantilism, the means of production are in the hands of the country’s monarchy and their cronies concentrating wealth in the hands of the few (it’s also worth noting that colonization and the extraction of indigenous lands and people was how this wealth was created).

The capitalistic ecosystem was poisoned by the invasive mercantilist species of concentrations of wealth at the very beginning.

Don’t believe me? Look up the largest bank in the US (JP Morgan Chase) and see how JP Morgan got his wealth (his father was the head of a London based merchant bank).

It gets worse though. These large concentrations of wealth fueled the industrial revolution creating more concentrations of wealth (JP Morgan at it again).

And then the stock market crash of 1929 happened and the SEC was born to protect investors (socialism enters the equation).

Here is when good intentions went horribly wrong. The SEC made it so expensive to list on the stock market the only companies that could afford to, were large concentrations of wealth!

The SEC also mandated quarterly reports and fiduciary duty institutionalizing corporate profit maximization (corporations can be sued and executives fired for not increasing shareholder value).

The SEC wanted to make it safe for investors but their approach backfired in the worse possible way (see UnitedHealth).

For almost 100 years the only place the general public could invest was in the public stock and bond markets.

Our entire retirement system is based on it.

That meant it was illegal for the general public to invest in small businesses!

Furthermore, small businesses could not raise capital from the public leaving them the only alternative to get financing from the concentrated wealth of banks!

The economy isn’t broken. It’s functioning exactly as designed, to concentrate wealth, restrict access, and benefit a powerful few at the expense of everyone else.

This isn’t just unjust. It’s dangerous.

When economic power is concentrated in the hands of a few, it becomes easier to manipulate policy, suppress innovation, and undermine the collective agency of everyday people (see the present moment).

It erodes democracy itself, transforming money from a tool of empowerment into a weapon of control.

Sadly, this awful mix of capitalism, socialism and mercantilism is what people think of when hearing the word capitalism.

However, there is hope!

In 2016 the SEC reluctantly adopted regulation crowdfunding from a congressional mandate stemming from the Jobs Act of 2012.

For the first time in history the means of production are now in the hands of all of our country’s citizens, not just the wealthy elite!

This new crowdfunding approach to finance allows the general public to become our financial system and not just consumers of it.

It means people can crowdfund loans instead of the banks.

It means we can crowdfund small businesses instead of the large institutions.

It means we can dilute concentrations of wealth eliminating the invasive species stemming from mercantilism.

It means no one person is too big to fail.

It means we can have a market-based redistribution of wealth legally, ethically and without confrontation.

It also means that in order for capitalism to work, we need a large, independent, decentralized and diverse crowd engaging in our capital and consumer credit markets.

We need you.

Tired of sitting on the sidelines?

Ready to reclaim your financial power from the institutions that have failed us?

Become a crowd investor. You don’t need to be wealthy to do so ($10 investments exist!). You just have to start.

And if you’re still reading this I know you’re ready for something different.

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