So there’s no misunderstanding the free market.

Marketing guru Seth Godin achieves something interesting in his recent post Misunderstanding the free market: He misunderstands the free market.

Seth’s article summed up his view of the free market:

“There’s a reason that there are no libertarian utopias. Left to its own devices, the market will fall apart, as a few race to the bottom and the pain of incivility takes over.”

That’s quite a dystopian view of free market capitalism. Happily, it’s also a misguided view. Here’s why:

Like most people, the legendary Seth Godin bases his opinion on an older “common law” definition of capitalism and free markets: The one that emphasizes profit motives, unregulated markets and unfettered self-interest. It’s the kind of economy that devolves into a Machiavellian, dog-eat-dog world; a world where government regulation is the only way to keep bad behavior in check.

But that’s the older incarnation of free market capitalism.

In case you haven’t noticed, the “market” part of free-market capitalism shifted beneath our feet. We are no longer a mass of customers ready to be manipulated, or individuals exploiting each other for profit. We are self-organized networks: interconnected, with coordinated behavior and collective intelligence. And the network responds with swift and powerful feedback — positive or negative.

Corporate self-interest can no longer be separated from “the interests of the network”. Bad actors who focus on self-interest and profits alone will trigger a backlash from the network.

Not that long ago, “the network” of consumers collectively began to care about the environment and responsible energy usage. Businesses were obliged to start building “green” and environmentally conscious features into their products. Their corporate values changed because the market’s values changed.

Today people are flexing their muscles with values like diversity, inclusion, treating people with respect.

Just ask Uber. The ride-sharing company narrowly avoided disaster when they alienated their market with repeated displays of bad behavior and a toxic corporate culture. Their network of customers, employees, and investors responded, and Uber changed.

In the older free-market economy, companies might get away with bad behavior and ethical lapses. Today the market expects and values ethical behavior — or else.

Look at the ABC television network: After Rosanne Barr’s racist tweet, it took them minutes — not days or years — to cancel her highly-rated sitcom. The older, bottom-line-centric, free-market, rules of capitalism would have dictated that ABC keep their cash-cow (the sitcom) on the air until there was a ratings dip or until advertisers pulled-out. Today, ABC realizes it has a responsibility to be consistent with the values of their market — or else.

In the modern free market economy, few are “left to their own devices”, and capitalism is no longer just about bottom-line profits. Today, it’s more about the triple bottom line: fiscal responsibility, environmental responsibility, and societal responsibility.

The market — the network of customers, employees, vendors, and investors — is now a powerful force for good. It’s a race to the top. It’s the new normal of free market capitalism.

So, now there is no misunderstanding. And maybe this is something that Seth Godin can get behind.

CJ Cornell is a serial entrepreneur, investor, advisor, mentor, author, speaker and educator. As an entrepreneur, CJ Cornell was a founder of more than a dozen successful startup ventures that collectively attracted over $250 million in private funding; created nearly a thousand new jobs; and launched dozens of innovative consumer, media and communications products — that have exceeded $3 billion in revenues.

He is the author of:The Age of Metapreneurship — A Journey into the Future of Entrepreneurship

Follow him @cjcornell

Free Market by Nick Youngson CC BY-SA 3.0 Alpha Stock Images