There is a hardy breed of activists who have set themselves the rather lofty goal of civilizing capitalism. This renaissance of capitalism will be achieved by reinventing businesses and corporations, transforming markets, recreating Wall Street, and humanizing investments.
Capitalism’s purpose, they contend, will shift from excessive profits and growth at any cost to achieving social impact, justice and equity. Furthermore, this can be done while still making a profit. It’s a seductive proposition.
I’m glad talented folks are taking this challenge on. Corporations must definitely take responsibility for degrading our planet, perpetuating inequity and unethical behaviour. Besides, there is, according to the Rockefeller Foundation, $200 trillion available for social purpose investment. If only a percentage of that was diverted it would be worth the effort.
However, I’d feel a lot better about this bold pursuit if these social finance/impact investing enthusiasts:
- Recognized that reform of capitalism has never been done before. And there is no data to suggest it is close to happening anytime soon.
- Watched their language. The language of business (growth, efficiency, profits, productivity, marketplace, shareholders) overshadows the good intentions of these social finance aficionados. Sadly, market language is distorting the social change discourse. There is a big difference between competition and cooperation. What needs to be nurtured is an ethical worldview that makes caring for people, the environment and indeed all life a priority. And an economy that serves that purpose.
- Built on what’s already working. Cooperatives and credit unions have a proven economic model. Reciprocity, trust and the common good are embedded into the fabric of their economic relationships. Canada has the largest per capita Credit Union membership in the world. 17 million Canadians (4 out of 10) are members of co-ops, credit unions and caisse populaires. That’s a great place to start.
- Supported social entrepreneurs and community economic developers who are democratizing the economy by creating, for example, alternate investment vehicles and generating “no dividend” business models.
- Spent as much time transforming government as attempting to transform capitalism. Government has immense resources to be redeployed, the best distribution system in the world and regulatory power. Power that can be used to curb capitalism’s excesses.
Here’s a suggestion …
During the renaissance, painters often painted a miniature skull in a corner of their canvas. Its purpose was to remind people of their humanity, that they might die tomorrow, to pay attention to what makes them human and to not become arrogant or delusional. The phrase they used was, ‘memento mori.’
How about something like the adjacent icon to remind us of the true purpose of our social finance and impact investing initiatives. I call it, “Memento Cooperari” – Remember to be human is to cooperate and to care for each other and the planet.
Just like any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself. All ideologies are prone to extremes. Capitalism loses its sense of moderation when the belief in the power of the market enters the realm of faith. (Mark Carney)