Americans are losing faith in capitalism. The problem isn’t capitalism

Americans are losing faith in capitalism. The problem isn’t capitalism

Ravi Dhar, Jon Iwata

6 min read

The Problem Isn't Capitalism.

Gallup tracking data shows that positive views of capitalism have slipped to 54%, marking a 15-year low since they began tracking the metric. The finding reflects a zero-sum view of the corporation: that companies prosper by extracting value rather than creating it.

It is no surprise that the more than 200 CEOs we have interviewed over six years through Yale's Program on Stakeholder Innovation and Management reject this zero-sum view. Their reasons, however, may not be what most people assume. They see creating value for customers, employees, partners and communities not as an alternative to shareholder value, but as essential to creating it over the long term.

What may also be surprising is that many told us this was the discipline for which they felt least prepared before becoming CEOs. They understand the importance of the "and"—that these interests can reinforce rather than compete with one another—but struggle with how to make that happen at scale. The problem isn't ideology. It's know-how. Three examples show what that know-how looks like in practice.

1. Design the enterprise around the interdependencies that create value.

When Doug McMillon became Walmart's CEO in 2014, U.S. comparable-store sales were in decline, customer satisfaction had deteriorated, and the company was losing ground to Amazon. Employee turnover was high. Walmart's reputation as an employer was turning away some potential customers and contributing to community resistance to new stores. Its shares had made little progress for years.

McMillon and his team concluded that Walmart's problems were connected, so the response had to be, too. E-commerce would draw on its strength in grocery and its store network, which required stores customers wanted to visit and engaged, capable employees. Technology would support omnichannel commerce while improving forecasting, inventory and store operations. Productivity and closer supplier coordination would help sustain the lower prices on which customer trust depended.

That approach required billions of dollars of multi-year investments in employees, lower prices, e-commerce and technology, sacrificing near-term profits. When Walmart disclosed in 2015 how much these investments would depress earnings, its shares fell about 10% in a single day, wiping out more than $20 billion in market value.

Despite the market backlash, McMillon and his team stayed the course—and the payoff proved substantial. In February 2026, Walmart became the first traditional retailer to exceed $1 trillion in market value. Comparable-store sales, which had been falling, recovered and then compounded. In 2024, Walmart appeared for the first time on Fortune's list of the 100 Best Companies to Work For.

McMillon later described the management approach: "Over time, designing a business that benefits all stakeholders is the best way to provide returns to shareholders." The important word is "designing." Employee, customer and shareholder value do not become mutually reinforcing because management declares them so. The enterprise has to be designed that way.

2. Test management decisions against the value they create—and for whom.

Starbucks illustrates how seemingly rational decisions compound into value extraction. Charging 60 to 80 cents for non-dairy milk generated revenue. Removing amenities cut costs. An expanded menu and mobile business offered more choice and convenience. Each decision could be defended on its own. Together, however, they improved particular measures of performance while degrading the customer experience and making baristas' work more complex and burdensome.

When Brian Niccol became CEO in September 2024, he saw these choices as symptoms of a company that had drifted from what made it distinctive, so he reversed course. Starbucks restored condiment bars, ceramic mugs and comfortable seating, and eliminated the non-dairy surcharge, even as customization had grown into a business generating more than $1 billion annually. The surcharge change alone reduced North American operating margin by about 60 basis points in its first quarter—a meaningful near-term financial cost.

But Niccol's changes were not limited to the customer experience. Starbucks cut roughly 30% of its menu, simplified store operations and invested $500 million in additional labor and staffing. These changes created value for employees by making their work simpler and more manageable, while making it easier for them to create value for customers.

The early results are encouraging. Starbucks has reported four consecutive quarters of comparable-sales growth, with global comparable sales up 7.9% in its latest quarter. Since Niccol took charge, its shares have risen more than 22%.

3. Manage intangible sources of value with the same rigor as tangible ones.

Mining companies are expert at managing physical assets—ore bodies, heavy machinery, railways and ports. But their ability to create value from those assets also depends on something that never appears on the balance sheet: social license to operate.

In 2020, Rio Tinto blasted the 46,000-year-old Juukan Gorge rock shelters in Australia. The action was legal, but the backlash exposed how much the company had put at risk. Traditional Owners lost trust in Rio, governments launched inquiries and reconsidered heritage protections, and institutional investors challenged the company's management and governance. The scrutiny extended to the agreements governing Rio's access to and development of Indigenous lands. The reputational fallout ultimately forced the exit of three senior executives, including the CEO.

As the new CEO, Jakob Stausholm treated rebuilding trust as a capability problem. Rio invested in community engagement, cultural-heritage expertise and the governance that supports both. Over the five years through 2025, Rio generated a 66% total shareholder return. Sustaining that kind of value creation requires managing not only the assets on its balance sheet, but the intangible capabilities that allow those assets to be developed.

The lesson extends well beyond mining. The rapid expansion of AI data centers is a timely example of how community concerns can affect a company's ability to grow. Customer trust and workplace culture are different kinds of intangibles, but they too can affect a company's ability to create value.

Taken together, these examples show that the "and" is not simply an aspiration; it's a management discipline. Walmart, Starbucks and Rio Tinto still have to manage costs, grow profits and deliver returns to shareholders. What distinguishes them is not how they distribute value, but how they create it.

Whether the public experiences capitalism as value creation or value extraction depends in no small measure on how companies are led. Declining confidence in capitalism is, therefore, a challenge to the practice of management. The know-how exists, but it remains uncommon. The task now is to make it a core management capability. That may be the most convincing answer business leaders can offer a public losing faith in capitalism.

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