We all lose out when politicians ignore what business leaders have to say
This article first appeared in the The Sunday Telegraph on Sunday 16 July 2017
There may be little public sympathy for senior business leaders who complain that the voice of business is not being heard. However, the absence of this voice in today’s political discourse — which in turn means that business’s messages are not cutting through on Brexit, for example, or on the UK’s economic management — should worry us all.
You might say that private enterprise has had a seat at the top table for long enough, and that the interests of those who have been under-represented must now be prioritised. But that response misses a critical point. The voice of business is important not because policymakers’ focus should be to help the private sector maximise profitability or deliver for its shareholders. Rather, it is the bigger picture that matters: democratic capitalism is a tide that lifts all boats — managed properly, it improves the living standards of society as a whole.
Right now, we are risking a failure of explanation that becomes self-perpetuating. Opponents of capitalism are rushing to fill the vacuum created by the absence of the voice of business, condemning private enterprise to the margins of politics as an interest group increasingly seen as malign rather than as a force for good.
The consequences of this double failure are all around us. You see it in the way young people have largely tuned out of the political discussion, at least until June’s election, when they supported what was perceived as an alternative ideology. You see it in the older generation’s rejection of the EU in favour of isolationism, which represents a retreat from globalisation. And you see it more prosaically in the demonisation of the private sector and its “fat cat” bosses.
A system that locks an entire generation out of the housing market is not sustainable
None of which is to argue that business deserves a free ride. Democratic capitalism means securing the benefits that free market competition can undoubtedly deliver — including the innovative technologies that continue to transform our lives for the better — while managing excess and mitigating the downside. That might, for example, mean regulation — witness the fine for Google allegedly misusing its power in online search to the detriment of consumer choice. We must also recognise that while automation can generate huge productivity gains for the economy as a whole, it will also deprive many individuals of their jobs; some of the gains must therefore be redirected into ensuring the losers are able to find rewarding new ways to earn a living.
Similarly, we must recognise that a system that locks an entire generation out of the housing market is not sustainable. However, as things currently stand, no one is even talking about these ideas. What we want from our political leaders, above all, is vision and leadership. We want to know where we are heading and why. In choosing to ignore the private sector’s contribution to political debate, our leaders are losing the ability to set out a cogent argument for democratic capitalism. They no longer seem to know how to articulate the benefits of free markets, competition and technological innovation, while acknowledging the potential disadvantages and explaining how they can be managed.
The longer we continue to ignore what business leaders have to tell us about how they can deliver growth and prosperity — which politicians can then manage to maximise inclusivity — the worse off we will become.
Haakon Overli is founding partner of venture capital firm Dawn Capital