The age-old practice of short-term thinking has created some very long-term problems
Spain goes to the polls on July 23, and I can say now that I’m worried about who to vote for, because none of the main parties seem interested in really doing something about the biggest problem facing this country and every other in the world: the climate emergency.
Deciding your vote on the basis of a single issue may seem simplistic, but in many ways, the attitude of some to the climate emergency resembles what, to me, is the biggest problem with capitalist democracies: short-term thinking.
In our economic system, businesses all too often see no further than the next quarterly results, meeting analysts’ expectations and maximizing shareholder value, despite this approach having driven a wedge between business and society. On many occasions, these objectives are shaped in the form of bonuses to executives, who align everything so that the quarterly numbers meet their targets.
However, this short-term analysis, with a three-month horizon, is usually incompatible with sustainability, and may indeed harm the company’s future. In an extreme example, running machines without maintenance could generate profits one quarter, but cause those machines to fail and result in significant costs down the road.
