The Value Creators Podcast Episode #36 Aberrant Capitalism: The Decay and Revival of Customer Capitalism

Capitalism fosters widespread prosperity. But we must acknowledge a set of emerging hazards associated with corporate management practices, and take proactive measures to mitigate such risks.

The hazards that have transformed capitalism over time are vividly described in Aberrant Capitalism: The Decline and Revival of Customer Capitalism, authored by Hunter Hastings and Steve Denning and published by Cambridge University Press. In this episode of The Value Creators podcast, Hunter shares capitalism’s journey from an external orientation, where customers and their needs were the focus of business activity, to a more internalized orientation, where management processes, methods and measures became the focus. The customer-centric approach of the first great corporations of the nineteenth century reflected the vision and purposes of owner-entrepreneurs using their own capital. But over time, these entrepreneurs left, and a debt and equity finance model took over in the twentieth century. Success became synonymous not with happy and satisfied customers but with stock market performance and shareholder value. This shift represents an undermining of the original animating spirit of capitalism. However, Hunter expresses guarded optimism about the emergence of new business models in the twenty-first century, embodied by companies like Apple and Amazon, which prioritize direct customer engagement and long-term growth over short-term financial gains. 

Despite this optimism, the conversation acknowledges the challenges and risks associated with contemporary capitalism, including dehumanization of labor, data privacy concerns, social media’s impact on mental health, and the rise of monopoly power. Hunter emphasizes the importance of preserving the positive aspects of capitalism while addressing these issues, calling for a reassertion of the values that underpin the system. 

Hunter concludes with a call to action for readers to engage with the ideas presented in the book and work towards a capitalism that prioritizes customer value, innovation, and societal well-being while remaining vigilant against its potential pitfalls.


Connect with Hunter Hastings on LinkedIn.

Check out the book Aberrant Capitalism.

Buy the Book on Amazon: Aberrant Capitalism (Elements in Reinventing Capitalism)

Aberrant Capitalism on the Cambridge University Press


0:00 | Intro

02:40 | Why Hunter Hastings Wrote Aberrant Capitalism?

5:35 | Journey: Customer Capitalism to a Distorted Managerial and Financialized Capitalism

08:06 | Mass production: What was the Breakthrough?

09:35 | Beginning of Customer Capitalism

11:25 |  Myth: Robber Barons as Exploiters and Unethical Businessmen

14:32 | Value Creating Companies: Nineteenth Century Set Stage for Economic Boom

17:38 | How the Objectives of Entrepreneurship and Management Different

19:07 | Dominance of Management Over Entrepreneurship.

21:39 | Transition: Central Planning to Private Industry Planning

24:21 | Post-War American Companies Success

26:01 | Big Twist: Financialization 

30:08 | Current Corporate Landscape: Is There Any Hope for Future Change?

33:29 | Conclusion: Hopeful OR Fearful about Corporate Capitalism

35:56 | Wrap-Up: Warning

Knowledge Capsule:

Overview of “Aberrant Capitalism”:

  • Hunter Hastings explains the book’s title: the capitalism we know today, characterized by dominant corporations whose behavior is often questioned for its ethics and benefit to society as a whole, is an aberration of the original system.
  • A major concern that results from this aberration is the decline in young people’s confidence in capitalism.
  • Analysis indicates that the real target of young people’s criticism is not capitalism itself, but today’s corporations.

Evolution of Capitalism:

  • Historical journey from “customer capitalism” to “managerial and financialized capitalism.”
  • Examination of capitalism in the eighteenth century focused on companies like Wedgwood and Bentley.
  • Introduction of limited liability corporations and their role in scaling up businesses.

Customer Capitalism in the Nineteenth Century:

  • Hunter shares characteristics of customer capitalism, focusing on innovation, customer orientation, and individual entrepreneurs with examples of successful entrepreneurs and their contributions to improving customer lives.

Misconceptions about Nineteenth-Century Entrepreneurs:

  • Debunking myths of “Robber Barons” as exploiters and unethical businessmen.
  • Hunter shares examples of entrepreneurs like John D. Rockefeller and Henry Crowell who contributed positively to society.
  • Their purpose was to improve lives for as many customers as possible.

Contributions of Nineteenth-Century Capitalism:

  • Discussion on how nineteenth-century capitalism led to economic growth, improved lives, and lowered prices.
  • Transition from entrepreneurship to management and its impact on capitalism.

Shift to Managerial Capitalism:

  • Explanation of the shift from entrepreneurial orientation to management control and managerial efficiency.
  • Introduction of central planning techniques during wartime and their direct migration to corporations after the war.
  • Negative consequences of central planning on customer orientation and market responsiveness.

 Success and Decline of Post-War American Corporations:

  • Hunter shares how the initial success of post-war American corporations was due to central planning and capital investment.
  • Challenges faced by these corporations include competition from Japan and failure to adapt.


  • The rise and eventual dominance of the financial sector and the emphasis on maximizing shareholder value further shifted focus away from customer capitalism towards short-term financial gains, leading to concerns about the impact on long-term value creation and societal well-being.
  • Corporations now work to serve the financial sector not the customer sector.

Hope for Change:

  • Despite the challenges, the discussion points to the emergence of new business models driven by digital companies like Amazon, and Tesla, which have a direct connection to customers and the potential to revive customer capitalism.
  • Hunter Hastings warns about the continued dangers of bureaucratic management, accelerating financialization, and government entanglement.
  • There’s a need to resist forces that distort the true purpose of capitalism, by reasserting the customer value focus that brings societal well-being.
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