Born-Again Capitalism (Part 2)
“This is not the capitalism I signed up for!” The shriek of Rebecca Henderson’s attack on corporate globalization and her emphatic appeal to change the system are an attention grabber. It is not just the quiver in her voice that invites my curiosity , it is also the fact that she is a Harvard economics professor berating the status quo of corporate America during her TED Talks video (which is more of an advertisement for her book, Reimagining Capitalism in a World on Fire than a real TED Talk). I quickly rewind the video to make sure I heard her correctly. Yes, she really said that. All I can think is, “Well, Rebecca, you may not have signed up for this brand of capitalism, but for someone who has a net worth of over 30 million, you have benefitted from it handsomely.”
There is a an mounting multitude of top five-percenters who are just like Henderson in that they want to reimagine, rename or at least rebrand capitalism. This “new capitalism” has already arrived and it is a kinder, gentler, friendlier, greener capitalism that vows to preserve and protect our natural resources. (That is important because as it turns out, ruining the environment is actually bad for business. Plus, there is money to be made from natural resources!)
The Old Brand of Capitalism
|“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.” Adam Smith, The Wealth Of Nations, Book IV, Chapter II, p. 456, para. 9.|
Henderson is not alone in her claim that a new brand of capitalism is a solution (perhaps “the solution”) to the environmental woes and social injustices that the “old brand” of capitalism has heap upon us. Japan’s Prime Minister Kishida refers to a new capitalism in his policy proposals to move away from the recent era of Abenomics. In doing so he criticizes the old capitalism’s neo-liberal policies initiated by Yasuhiro Nakasone in the 1980s that continued during the reform era with the support of Junichiro Koizimi.
In the US, Barrack Obama (net worth: $70 million or so) and John Kerry (net worth: $250 million) have been preaching the good word about how spending more money will save the planet as we transition to green energy. And, every global investment company is touting socially responsible investing – a.k.a, Environmental, Social and Corporate Governance (ESG). Many investment firms and analysts now provide special ESG ratings of companies so that investors can decide if a company is green enough for investment dollars. A high ESG rating for a stock or exchange traded fund (ETF) can help investors feel their investment choices are righteous and that they are now part of the fight against climate change, environmental degradation and social injustice.
The idea of reinventing capitalism is enticing, but is it possible? Would capitalism even be capitalism if people were using their savings and investment dollars in a socially responsible manner that would be good for the environment as well as promote social justice? Would this new brand of capitalism mean that everyone would actually have savings and be able to use money to invest in ESG corporations with high ratings from financial brokers?
These questions highlight the conundrum of Rebecca Henderson’s book. In short, her thesis claims that if corporate CEOs, in unison with politicians and governments, make decisions based on social responsibility rather than short-term profits, the corporate world can create a utopia for the whole world. Sounds a bit like the meaningless tautology, “A hamburger is a hamburger.” A utopia is a utopia. If capitalism were to exist in a world in which everyone put social responsibility first, it would not be creating the utopia, it would be existing in a utopia. Communism or socialism or any other form of economic policy bonded to community government would have the same utopian outcome provided all members of a community made decisions absent of selfish greed and that they, in a community spirit, made decisions dedicated to a proposition of altruism and social responsibility. Even an autocracy would be a utopia if the autocrat were benevolent, selfless and altruistic in governing.
Note: The word “utopia” entered the English language via Sir Thomas Moore’s Latin book in 1516. The Greek word translates into “no place” and was the name of the island community as the setting for Moore’s book. However, the current nuance of the word may differ much from Moore’s Utopia, a place where slavery was a feature of life.
It is easy to agree with Henderson’s claim that unchecked capitalism destabilizes the environment and harms human health. However, her rationale for a new brand of capitalism grows murky as she reasons, “Business is screwed if we don’t fix climate change.” All I am hearing is, “Oh no, we screwed up the environment so bad, it is going to hurt business, Now, we need to fix the environment because that will be good for business. Oh, and we can make it a marketing campaign to sell more goods and do more business.” This is what I call “born-again capitalism”.
What is Born-Again Capitalism?
Born-again capitalism is the green-washing of neo-liberal economic policies that encourage globalization to benefit the rich at the expense of the poor. Born-again capitalism is the belief in and practice of using marketing campaigns that claim products and companies are environmentally friendly and socially responsible in order to sell products and attract investors.