Capitalism moves on

From Newman’s Own to Liverpool’s Furniture Resource Centre, are companies becoming more aware of their broader responsibilities?

From Newman’s Own to Liverpool’s Furniture Resource Centre, are companies becoming more aware of their broader responsibilities? Georgina Peters detects change in the corporate air.
Capitalism moves onAt the beginning of the 1990s, Germans stood on top of the crumbling remnants of the Berlin Wall and proclaimed the end of Communism. With minimal bloodshed, market forces appeared to conquer most of the world. By stealth, capitalism ruled.

After the euphoric headlines, capitalist triumphalism speedily gave way to navel gazing. The victory parade was marred by anti-capitalist protests, vague talk of a “third way”, socially responsible capitalism, and general disquiet about the nature and future of capitalism.

“Back in 1996, when there were newspaper headlines announcing that capitalism had won, I warned that if the business community wasn’t attentive the headlines would be soon announcing that socialism is back. Then there was a backlash,” reflects Rosabeth Moss Kanter. “To save capitalism it needs to be inclusive and to pay attention to people at all levels. The global economy needs to work locally.”

In his new book, Capitalism at the Cross Roads, Stuart Hart warns: “Every major living system on the planet is now either overused or in decline - fisheries, forests, soils, watersheds, and atmosphere, just to name a few. Yet, with only 800 million of the wealthiest people accounting for well over three- quarters of the current resource use, the impacts could multiply further if the four to five billion poor emulate the development path of the rich. Make no mistake: global capitalism truly does stand at a crossroads. Without significant change, the future of globalisation and multinational corporations appears increasingly bleak.”

There has, of course, been talk of inclusive, socially responsible capitalism for decades. But, like the much vaunted leisure age, it has not made the leap from theory to reality. In the same way as we work as many hours as ever, companies can appear cavalier about any notions of having broader responsibilities than recording a profit.

And yet, there are reassuring signs amid the question marks. Quietly, surreptitiously, corporate social responsibility has secured a place on the corporate agenda and, in many different organisations, is changing the behaviour of individuals, corporate cultures and corporate performance.

Consider the growth of social enterprise, businesses which put social goals before financial ones. Social enterprises invent commercially viable trading activities in order to achieve their social purpose. Before you avert your eyes in horror, the best social enterprises manage to achieve both their social and financial objectives. There’s money in your conscience.

Social enterprise is not, as yet, on the radar of corporate giants. It will be. Harvard Business School’s business plan competition is a bellwether for what’s in and what’s out in entrepreneurial bright ideas. At one point, dot-com plans dominated the entries – 85 per cent at their peak. More recently, there were so many social enterprise ideas that Harvard created a social enterprise track. Of course, as the dot-coms eventually discovered, having a plan is one thing, making it work quite another.

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