Rethinking Capitalism

“Our economy is based on spending billions to persuade people that happiness is buying things, and then insisting that the only way to have a viable economy is to make things for people to buy so they’ll have jobs and get enough money to buy things.”
Philip Slater

With an ever-growing wage and income gap, there is no better time to talk about the future of capitalism than right now. Despite today’s disconcerting era of populism, protectionism, automation, and blockchain, there still remain many forces that could drive us towards each other. However, the capitalistic system we sustain and participate in has led us to a reality where we have an obligation to think about those imperiled at its hands, including the fragility of our common home.

At a recent gathering of the Global Shapers Community in Ottawa and Toronto, SHAPE North America 2017, a panel of brilliant corporate leaders explored the “Future of Capitalism,” and they jousted with current realities and attempted to envision a world where all stakeholders could succeed.

Acknowledging that the Milton Friedman model of unfettered free markets as incomplete while concurrently noting that the market system won’t and shouldn’t vanish, panelists from the Royal Bank of Canada (John Stackhouse), Deloitte (Robyn Seetal), and McKinsey (Tiffany Vogel) all championed a socially-minded, sustainable stakeholder model of capitalism as the way forward. Of particular interest, Ms. Seetal was one of the few to delve deeply into the actual word “capitalism.” She outlined a more robust and holistic metric to measure capital that includes not just financial capital, but natural and social capital too.

The “long-term” model of capitalism brought forward by the panelists foregoes short-term profits for long-term customer empowerment. Put differently, the stakeholder model encourages businesses to actively develop healthier internal work environments and customer loyalty through bespoke service, while also being good stewards of finite resources.

“Love all, trust a few, do wrong to none.”
William Shakespeare

In his 2013 papal exhortation, Evangelii Gaudium, Pope Francis writes that “an economy of exclusion and inequality” could inflict sincere harm on far too many innocent people:

“Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion.”

The Pope implores the world’s businesspeople to adopt a mindset of human dignity, one that sees all the players in a capitalist system as worthy of respect, from the smallest farmer to the largest banker.

He does not denounce profit, nor does he denounce business. He simply, effectively, and repeatedly argues that the economic system that we currently define as capitalism is a harmful and poisonous system that is in dire need to renewal.

He argues that the capitalism of today has created a culture of exclusion that is so segregated, we no longer have words strong enough to describe it. “Those excluded are no longer society’s underside, nor its fringes, nor its disenfranchised — they are no longer even a part of it.”

Imagine a world in which our capitalist institutions genuinely considered the well-being of those marginalized people.

“Growth for the sake of growth is the ideology of the cancer cell.” — Edward Abbey, The Journey Home: Some Words in Defense of the American West

Our social structures are broken. Ms. Vogel informed us that trust and confidence in government is extraordinarily low, and even worse, our confidence and trust is business is higher than our trust in government. And why should it be any other way? Our regulators are increasingly being accused of accepting corporate bribes in the form of “donations” in exchange for relaxed regulations and tax incentives. Our governments are ultimately run by a group of individuals, and the effective corporate lobbyist knows how to reward an individual in whatever way necessary to achieve their objective.

Our social structures were not always as destructive as they are today. There were days, for example, where an airplane seat felt like a chair, and less like a cage built for a small antelope. There were days, for example, when businesses cut down the number of trees they needed, as opposed to cutting down the number of forests they desired. Short-termism and the quarterly investor update have created a “more, now!” environment for businesses, and investors reward growth whenever possible.

The growth ideology has plagued us. It is damning when even the social entrepreneurs of our time quote the “big thinkers” who say things like “the day your business stops growing is the day your business starts dying.” Our obsession for growth and market share creates a non-collaborative competition that can only operate in a zero-sum environment. For one to win, someone elsewhere is almost destined to lose.

To keep up with the Joneses or the Patels, the Chans, or the Perezes has in so many ways defined our day to day life. We rampantly pursue wealth, material objects, and the company of numerous friends and associates, and yet the very foundations upon which so much of this is built is a house of cards.

Even the pioneers and profiteers of this economic system agree. In recent years, we have been exposed to the plans of the ultra-wealthy, preparing for the inevitable fall of the economic system. They are purchasing secluded properties, away from the reach of the non-wealthy. These properties are on their own independent grids, with specialized technologies and communications infrastructure.

There is something sinister about this; the wealth created thanks to the consumeristic behaviours of the relatively poor has empowered the relatively wealthy to prepare lives of survival, and prepare in such a way that it comes, most likely, at the expense of those same relatively poor people.

And yet this is where the evolution of capitalism has taken us. We must be motivated to make the necessary changes so that the system we enjoy so much can continue to enjoy it in the future, because as the wealth gap continues to expand, the margin moves further and further inward, affecting more and more of the world. Those who were once deemed to be “wealthy” may soon become the “marginalized” because they weren’t “wealthy enough” to sustain the pressure of the current capitalistic evolution.

“The best way to find out if you can trust somebody is to trust them.” — Ernest Hemingway

Business is now getting to a point of such sophistication that the world’s online data companies may know more about everyday citizens than the governments of the world. We have entrusted big business with so much of our private and personal information that any form of regret must also come with an acceptance that there is no turning back. As the world increasingly digitizes, and as more and more of our consumer devices get connected to each other, we create data profiles that we entrust to corporate entities. In our modern capitalist world, a government engaging in such activity would be labelled as “Big Brother” and communist.

And so we have made the choice to trust business. And in the midst of the Fourth Industrial Revolution, we are about to find out whether or not trusting business was the right choice. Sometimes that means we must also trust their vulnerabilities to hackers, and figure out how to forgive that. Other times, though, we fall prey to a business that proactively exploits the extremely intimate and sensitive information of its user.

The panel at SHAPE North America 2017 was both impressive, and short. I was most impressed by the work being done by Deloitte and McKinsey in natural capital and in trust, respectively. It is reassuring, as a young and global leader, to see the world’s large and influential institutions like the Royal Bank of Canada, Deloitte, and McKinsey taking proactive steps towards a better form of capitalism. Despite their positive steps, these institutions must be held accountable because they have been born and nurtured in the same capitalist system they aim to change. We must take our role as stewards of the future capitalist system seriously.

Japman Bajaj is a telecommunications executive with TELUS, based in Alberta, Canada. He is a Global Shaper of the World Economic Forum, and a former winner of the Youth Social Entrepreneur of the Year Award.

Global Shapers Ottawa

Ottawa Hub of the @GlobalShapers Community — an initiative of @WEF. Bringing together Ottawa’s best and brightest young leaders #Canada150 http://bit.ly/2lTGvg0

Ottawa Global Shapers

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Ottawa Hub of the @GlobalShapers Community — an initiative of @WEF. Bringing together Ottawa’s best and brightest young leaders http://bit.ly/2lTGvg0

Global Shapers Ottawa

Ottawa Hub of the @GlobalShapers Community — an initiative of @WEF. Bringing together Ottawa’s best and brightest young leaders #Canada150 http://bit.ly/2lTGvg0

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