Putting Community Back Into Capitalism
IT WAS THE GREAT REVERSAL THAT WASN’T. Following the Great Recession there was lots of buzz about the financial community’s failures and the reforms that would be required to ensure such an economic calamity, like that of 2008, didn’t occur again. Stories of corporate greed, massive unemployment, bankruptcies, and mounting debt were everywhere. But what wasn’t sufficiently present in corporate or government communities was the actual desire to bring about the reforms. What people believe to have been a hopeful time of looking at our society in new ways eventually became the same-old, same-old.
American economist, Gary Becker, picked up the signs of decay early and went on to note:
I think you are not going to see a huge increase in the role of government in the economy. Economists will be struggling to understand how this crisis happened … but it will be nothing like the revolution in the role of government and in the thinking that dominated the economics profession for decades after the Great Depression.”
He proved to be correct, in large part because the governments of developed nations remained vulnerable to the hard lobbying of a financial system that just wanted to get back to business as usual. Or as New York Times writer Paul Krugman put it: “Powerful political factions find that bad economic analysis serves their objectives.” Right again.
Yet “business as usual” is how you could also describe the public’s response to both business and government – increasingly negative going into the recession and even more intense following the so-called recovery. Every instinctive politician now senses less trust from the electorate and it becomes clear that unemployment or environmental degradation show no signs of serious improvement.
That same instinct is making its presence felt in the business and financial communities as well. Just as politics attempts to talk about the middle-class as a means of recovering legitimacy, corporations refer increasingly to the importance of the customers and their lifestyles.
There is an outside chance that all this might be unlocking the key to a new capitalism in coming decades. Yes, it will about profits and the bottom line, but it will also be about increased investments in sustainability and social good. There is a sense where capitalist leaders comprehend that they live in a world of concentric circles unless they can broaden their connection with citizens, communities, and the planet in general. In other words, there is an emerging view, presently only in its fledgling stage, which reasons that success in the future must be a shared win between companies and communities.
The narrow management policies and short-term thinking have inevitably divided communities, countries, and the world in general. Citizens and their communities want back in, desire a share of the wealth that is supposedly being created but which seems to have passed them by. They look for wealth with jobs, profits with people, sales with sustainability, and capacities linked to community. Naturally, the overall financial order and manic culture of modern capitalism will press firms to continue with business as usual, but now communities are willing to fight and stand alongside those firms that will push back against this mindset.
It is always time to consider what value creation really means, never moreso than now. Social awareness is now expanding at a rapid rate and takes in that vast array of challenges each of our communities face. The days of the pitted battle between capitalism and community must be brought to within manageable limits if we are to work our way out of our present difficulties together.
Last month I wrote a London Free Press column on Tima Bansal, a professor at London’s Ivey Business School and Canadian Research Chair in Business Sustainability. You can read it here. Tima travels the world encouraging the business leaders of tomorrow to actually think about tomorrow – forego the short-term thinking and build your business as though the future really matters for everyone and not just investors or shareholders. People just like her are emerging from within the business/corporate ranks and are cultivating expanding relationships with community and societal leaders to forge a new consensus over what our combined and collaborative future could look like. It’s the Timas of the world that might help us to close that tortured gap between productivity and community.