Social Capitalism & the Millennial Mindset.

Social Capitalism & the Millennial Mindset.

The rise of So-Cap.

Social Capitalism in short can be described as the allocation of one’s capital resources (cash and other assets), invested into ventures with the intent of improved social outcomes. This in essence is fundamentally Capitalism, but with a major focus on societal gain.

The term ‘Social Capitalism’ is increasingly becoming more important in today’s demographical landscape, and here’s why:

Let’s turn the hands of time backwards, circa 1950’s to the Golden age of Capitalism.

After World War 2 took place the world experienced what was called the Golden Age of Capitalism (the 1950s — 1970s), where economies experienced surging growth, high employment, and inevitably, capital spend (mainly on iron, steel, coal, and textiles industries) in an attempt to regenerate the global economy following the previous catastrophe.

Although successful with the economic regeneration, much of the investments carried out by companies and individuals were placed in heavily polluting industries, which in turn resulted in some of the biggest issues faced by mankind today.

That my friends, would be pollution and global warming.

But it doesn’t stop there, the level of pristine Capitalism incurred in previous times has led to a mass increase in the wealth inequality gap, leading the rich to become richer, and the poor becoming poorer. This ultimately is the consequence of economic growth, high inflation, tax benefits favouring the rich, lack of regulations (2008 financial crash) and uneven wage distribution between ethnic and racial groups, in a very corrupted capitalists society.

In fact, in 2020 approximately 6% of the total American population remains unbanked, partly due to the implementation of Capitalist policy making it too expensive for ‘certain people’ to own a bank account.

In other-words, under a capitalist society, if you can’t afford it, get out!

Now, let’s take a Psycho-Demographic approach to this write-up: 
Since Boomers and Gen-Z were born into the golden age of capitalism, where cash is king and when societies were (still are) engulfed by a hyper-competitive mindset, it’s highly likely that people of this era adopted the same Capitalist mindset, and believe it or not, these people are the ones currently running the world in this day and age.
I mean, let’s be honest, in 2020 the world had no place for a president that believes global warming is a myth and praises the use of coal because it’s “good for the economy”;

let’s leave that one to the experts, orange man…

Luckily for us, younger people (mainly millennial’s and beyond) have a more socialist approach to life and a stronger sense of intergenerational equity. We also partly celebrate the fast-approaching expiration date of the boomer’s term in power and the rise of a younger outlook on life.

No offence boomers, but your negligence and lack of care to the greater good of the world irritates us.

In fact, studies show that in 2019, 70% of the American millennials are more likely to vote for a socialists party as opposed to the 36% of bab boomers. That’s almost twice as much. 
Therefore, as we transition into a newer updated world-view, we can only assume to see more socialist policies come into play in the fast-approaching future.

From The above graph, it’s easy to see that socialist views are definitely gaining traction in modern democratic society.

So, why are we saying this, and what does this imply for investors?

Ok, so now that we understand what the term Social-Capitalism refers to, and the age-demographic culture of upcoming generations, where do you think the Capital will flow to in the upcoming decades? And which industries stand to benefit?

Well, we’re kind of seeing it now.

So, from our unqualified view, younger generations were dumped with the daunting responsibility to serve a significant purpose, that is, to fix the problems we inherited by previous generations which in turn will bring about better good for the society we live in.

Given the socialist cultural mindset of Millennials and upcoming generations, we assume to see larger sums of capital to be allocated to industries that serve better purposes to society, such as:

• Green energy and cleaner transport, why? 
  We need cleaner air and less polluting forms of energy. Our survival may depend on it.
• Fin-tech, why? 
  Physical cash does not offer the same degree of transparency that digital cash would, in addition to this, Fin-tech companies are providing even the lowest income earners the opportunity to be banked and to send/receive funds via peer to peer technology (P2P).
• Blockchain and internet of things (distributed ledger technology), why? Transparency, deeper scrutinisation and democratisation of information, making it widely accessible.
• Genomic sequencing, why? 
  Because the world could always do with more effective cancer detection and prevention treatments.

The list goes on and on , and we’ll be covering emerging industries later.

To wrap it all up

Today we live in a time when anyone can invest in a company without the need to purchase shares directly through a brokerage, that in essence is a very powerful opportunity that people cannot afford to take for granted.

As more and more Capital floods the stock market on the side of the retail investors and institutions, we can expect to see a higher allocation of capital to industries that serve a greater purpose to society, based on the belief and inherent social traits of upcoming generations.

This may be the rise of a new era of — Social Capitalism. ‘The use of one’s Capital with the intent of improved social outcomes, whilst also experiencing financial gain’.

Cue, cheesy song to complement our outlook on a greener future :