Capitalism is “one of humanity’s greatest inventions, and the greatest source of prosperity the world has ever seen.”
Capitalism is “a menace on the verge of destroying the planet and destabilizing society.”
Economists, politicians, journalists, entrepreneurs, historians – and capitalists – are expressing concerns over how capitalism has discounted global warming, placed profitability over all other concerns, exacerbated inequality, assumed immense political power, and overlooked violations of human rights in international trade.
The two opening quotes are from economist and Harvard Business School professor Rebecca Hendersen’s book, Reimagining Capitalism in a World on Fire. She writes that “It is going to be hard to make money if the major coastal cities are underwater, half the population is underemployed or working at jobs that pay less than a living wage, and democratic government has been replaced by populist oligarchs who run the world for their own benefit.”
Loaded with case studies, her book relates that firms most successful at mastering change are those “that had a purpose greater than simply maximizing profits;” working toward justice and sustainability “is squarely in the private sector’s interest.”
Chris Hughes is a co-founder of FaceBook and is the co-chair of the Economic Security Project. In an essay he wrote for TIME Magazine, titled “The Free Market Is Dead: What Will Replace It?” he wrote that capitalism is not the problem; “it’s the variety of capitalism that’s been practiced over the past 40 years.” His keys to managing the transition to a new capitalism lie in effective regulation, sizable public investment, and macroeconomic supervision. Enforcement of antitrust policies are essential.
Much of the shift in the thinking of corporations is attributed to public sentiment, and expectations of millennials in particular. Younger employees and consumers hold corporations responsible for focusing on social causes. A March 2021 Associated Press article highlighted $8.2 billion in corporate philanthropy earmarked for racial equity in the first eight months following the killing of George Floyd.
Larry Fink, the CEO of BlackRock, the largest financial asset manager in the world, writes an annual letter to the respective CEOs of the firms in BlackRock’s portfolio. In his 2021 letter he noted that companies that have adopted ESG profiles (environmental, social, governance) outperformed their peers in the 2020 year of pandemic. He emphasized the importance to the future of business in confronting racial injustice:
We are also at a historic crossroads on the path to racial justice – one that cannot be solved without leadership from companies. A company that does not seek to benefit from the full spectrum of human talent is weaker for it – less likely to hire the best talent, less likely to reflect the needs of its customers and the communities where it operates, and less likely to outperform.
Fink’s message to CEOs is, change is mandatory for businesses to survive, that society demands it. Companies must make positive contributions to all their stakeholders – shareholders, employees, customers, and the communities where they operate, and build a more inclusive capitalism.
An industrial worker among heavy steel machine parts
Kinex Bearings, Bytca, Slovakia, c. 1995–2000
Source ~ Capitalism, Wikipedia
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ABOUT THE AUTHOR
Keith Zeff has been a city planner and a commercial real estate researcher for many years. His education includes undergraduate degrees in architecture and a graduate degree in political science. Fifty Year Perspective is designed to address the longer-term concerns. The perspective of 50 years was chosen to respond to those in business, government, and private life who may have said: "I am doing this for my children and grandchildren." Two generations – fifty years.
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