Economic Inclusion: A new Millennium means a new definition of Capitalism
Finance. Capitalism. Technology. Inequality. Inclusivity.
On the one hand, together they have immeasurably advanced society. On the other, they’re held responsible for all manner of damnation.
From the left: Alderman Fiona Woolf, The Lord Mayor of London, Lady Lynn Forester De Rothschild, Chief Executive of E.L. Rothschild, Prince Charles, Christine Lagarde, Managing Director, International Monetary Fund.(Source: The Guardian)
Does “inclusive capitalism” sound oxymoronic?
Lady Rothschild, of E.L. Rothschild, held a conference at the beginning of this summer on that exact topic, aptly titled the “Conference on Inclusive Capitalism.” The IMF’s MD, Christine Lagarde, delivered the keynote speech echoing classic brand strategy wisdom, her point on purpose:
“In grappling with this, it helps to go back to the ancient philosophers. They would have raised the most basic question — what is the social purpose of the financial sector? Or, as Aristotle would have asked: “what is its telos?””
He answers his own question: “Wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.” Or as Oscar Wilde put it, “the true perfection of man lies, not in what man has, but in what man is.” From this perspective, we can identify the true purpose of finance. Its goal is to put resources to productive use, to transform maturity, thereby contributing to the good of economic stability and full employment — and ultimately, to the wellbeing of people. In other words — to enrich society.’
Reading back the transcript, the Grande Dame of Finance talking purpose got me thinking — while Lagarde demanded greater integrity from financiers and stronger civil watchdogs (all good things), I questioned the wider responsibility beyond the sector. Bankers are hardly the only ones reaping the rewards of market liberalization and economic boom times.
Yet inequality is today’s hot topic. Take for example Thomas Piketty’s Capital in the 21st Century causing a sensation in the press.
For all the apocalyptic visions, the world is more equal now than in centuries past. We have global economic indexes and people like Hans Rosling painting a more nuanced picture of economic reality. So why the derision?
Capitalism’s key drivers are markets, consumers and innovation.
Currently, many see technological innovation as the most exciting sign of our times. It might wreak havoc — displacing jobs with robots, but also betters living standards. From being able to connect with loved ones in distant places to solving humanity’s much bigger issues like energy and water, it is ultimately about people and the harnessing of technology and ideas to drive a reality that takes us forward into history.
Finance also began with entrepreneurial instinct. Going back in time to the Renaissance, the Medici’s were among the first to apply cheques and balances to their businesses. This marked the beginning of modern banking, which set massive social innovation in motion that changed the levers of power and the world forever.
(Source: The New York Times DealBook)
Today, the most obvious kind of innovation is in the form of digital technology, which is turning on finance in a sense. Bitcoin may render images of dodgy dealings on a silk road, however it is one brand in an emerging cyber-banking system that could radically change the status quo.
One of the most exciting brands of this crypto-currency revolution is Ripple. They allow you to change cyber-currency into FX, thereby articulating how the world gains. Essentially, a gross simplification of outdated systems: more connectivity, easier flows of money, making more opportunities for more innovation — especially when you consider mobile penetration into the poorest parts of the world. And most critically, easier access. Just because the definition of how money was transacted was changed.
And the times have changed. No longer can we look at markets, finances, and money as static, unchanging notions and concepts — the 21st century is showing us that the innovation in these fields is about flexibility and redefining what we consider “currency,” whether in the tangible dollar, Yen, pound or Euro form — and even power. True power now comes from institutions re-evaluating their operations and looking at the simplest, most effective way to enable people and society to flourish. That creates real, tangible, and inclusive value.