Reimagining Capitalism in the Shadow of the Pandemic

Belle tribune de Rebecca Henderson dans le Harvard Business Review – Economics & Society : « Reimagining Capitalism in the Shadow of the Pandemic » (28 juillet 2020). a mise en perspective est intéressante et l’exemple de l’entreprise Kodak très parlant…

Extrait :

Instead, I want to reimagine capitalism, or at least our current version — the one that is obsessed with the short term and that doesn’t believe that business needs to care about the health of our society or our institutions. Doing so is the best way to ensure both businesses and our society prosper in the decades ahead.

The Pandemic’s Challenges — and Opportunities

Capitalism is one of the great inventions of the human race — an unparalleled source of prosperity, opportunity and innovation. We won’t solve the problems that we face without it. To solve inequality, we need good jobs — and lots of them. To solve climate change, we need (among other things) to transform the world’s energy, transportation, and agricultural systems. Only the relentless pressure of the free market can drive this kind of transformative innovation at scale.

In this context, the pandemic is both a massive challenge and an opportunity. A challenge because more than a half a million people have died, the global economy has been massively disrupted, and tens of millions of people have lost their jobs. A challenge because the combination of deep economic disadvantage — at the beginning of May nearly 61% percent of Hispanic and 44% of Black households had experienced a job or wage loss due to the corona virus, for example, compared with 38% percent of whites — and the killings of George FloydAhmaud ArberyBreona Taylor and countless others have brought anger and calls for justice to our streets. The world will almost certainly be poorer, more divided, and more fearful in 2021 than it was in 2019.

It’s an opportunity because it has also shown us so vividly what is wrong. Inequality is no longer simply an abstract idea. It’s a reality that many “essential” workers must show up even when they’re sick because they have no savings and no paid leave. That racism is not something that was solved by the civil rights movement. As the skies clear and early research suggests that the reduction in fossil fuel pollution is saving lives, the costs of continuing to rely on dirty energy have become much more tangible. Watching states bid against each other for vital medical equipment while the federal government fumbles its response to the virus has made the reality of our broken politics very clear.

The pandemic has reminded us that we stand and fall as a society and that the welfare of the poorest among us is integral to everyone’s welfare. It has shown us that planning for the future is essential and that, when the chips are down, a capable, responsive government is a necessity, not a dirty word. We’ve learned that when we must do something, we can: Fundamental change no longer seems impossibly out of the reach.

We can do better. We already have the resources and the knowledge we need to build a more equitable, sustainable capitalism. But to get there, business will have to change how it understands its role in the world (and in the U.S. in particular) — and how it thinks about government.

A New Path Forward

While free markets are an unparalleled source of prosperity and freedom, the free market can only take us where we need to go if externalities such as carbon pollution are properly priced, if there is genuine freedom of opportunity, and if the rules of the game are such that competition is free and fair. Markets do not police themselves; they must be balanced by transparent, capable, democratically accountable governments.

Today — in large part due to the rise of shareholder primacy, the increasing role of money in politics, and the systematic attack on government as a necessary or effective institution — that balance is largely absent. As a result, one of the fastest routes to profitability is often to persuade politicians to write the rules in your favor. Firms feel free to dump greenhouse gases into the atmosphere, for example, while spending hundreds of millions of dollars to lobby against carbon regulation. We’re even seeing this dynamic in the U.S. government’s response to the pandemic: It’s increasingly clear that an uncomfortably large share of the benefits from the recent stimulus has gone to very large firms and to very wealthy individuals.

I’m not suggesting that firms neglect their duty to their shareholders. Focusing on profitability is essential if a company is to thrive in today’s brutally competitive market. But profit maximization has always been a means to an end, justified by the idea that when markets are genuinely free and fair, there’s good reason to believe they lead to both prosperity and freedom.

But when markets are no longer held in check by governments that can police the rules of the game, appropriately control externalities, or provide the public goods necessary to support real opportunity, they become too powerful for their own good. The chaotic and uneven pandemic response we are experiencing today flows directly from 30 years of treating government as something that should be “drowned in the bathtub.”

Now more than ever, I believe firms have not just a moral duty to contribute to the health of the institutions that keep our society strong and our capitalism genuinely free and genuinely fair, but also an economic interest in doing so. We need to rebuild our democracy, strengthen our public conversation so that it’s firmly based on facts and mutual respect, commit with everything we have to building an inclusive society for everyone, and yes, find ways to rediscover the importance of democratically accountable, capable, responsive government.

Why? We cannot decarbonize the world’s energy supply without government regulating fossil fuel emissions and providing positive incentives to embrace low carbon solutions. Yes, individual firms can provide better jobs — paying employees a decent wage and providing ongoing training, among other necessary steps — but we’ll only successfully address inequality and racism at scale through structural reform, if we can do things like: provide quality education and health care to everyone, no matter their parents’ income; raise the minimum wage; and find ways to give employees more power as they negotiate with increasingly powerful firms. Most fundamentally, we’ll only rebuild trust in the political system, and with it a government that is genuinely responsive to ordinary people, if we can get money out of politics and stop tolerating business’s attacks on government. These attacks are often framed in terms of defending the free market, but too often are simply attempts to block the action we need to build a more equitable society.

Collective action — a sustained effort by coalitions of firms — could make a huge difference in helping to drive this kind of institutional change. Firms are already working together to solve some of the world’s toughest problems. A third of the world’s invested capital is already committed to insisting that the firms in their portfolios plan for the challenge of climate change. Businesses across the world are increasingly coming to realize that democratically accountable, freely elected, capable governments are critical to long term economic health — and are willing to say so in public. But they need to do more.

A “Kodak Moment” for the World

I can feel your skepticism as I write. Can business really change — and help government change along with it? Can it embrace a version of capitalism that focuses on the longer term and the common good? Can it help to rebuild the power of the very institutions that are needed to keep it in check?

I believe it can. We already know that it is possible to make money by addressing the world’s social and environmental problems. Walmart saved a billion dollars in fuel costs by increasing the efficiency of their trucking fleet. Elon Musk has revolutionized the automotive business and built a company worth more than GM and Ford combined in the process. The most successful $200M+ IPO of the last 20 years was a company that promised to replace beef with a burger made largely from soy. At Unilever, so called “purpose-driven” brands are growing 69% faster than the rest of the portfolio as consumers increasingly vote with their wallets.

Change on a broader scale will be much harder. But not impossible. Think of this as a “Kodak moment” for the world. I spent the first 20 years of my career at MIT as a professor of innovation and strategy. For much of it I was quite literally the Eastman Kodak professor of management. My title was a coincidence — but a deeply ironic one, since I spent most of my time trying to understand why large, successful firms like Kodak had so much trouble responding effectively when the world around them changed.

By now the company’s story is well-known: Kodak was once one of the world’s most successful firms. The firm invented classic film-based commercial photography and used it to build one of the world’s most iconic brands. As one senior vice president and director of Kodak research noted in a 1985 Wall Street Journal article, “We’re moving into an information-based company…[but] it’s very hard to find anything [with profit margins] like color photography that is legal.” But Kodak went bankrupt in 2012, having failed to master the transition to digital photography.

The business community now faces a similar transition. As the Business Roundtable’s historic decision last year to “lead their companies for the benefits of all stakeholders” suggested, the vast majority of the world’s leading firms know that we must tackle the challenge of climate change, that we must find a way to ensure that everyone has a chance to share in the world’s wealth, and that it’s vital that we not let democracy lose out to either oligarchy or tyranny. We know that we need to change. But too often it’s tempting to emulate Kodak, claiming that change will come — but not now. Insisting that it’s more profitable to stick with the old ways, that if it’s really important we’ll get around to doing something new — later. Change is hard. It’s not surprising that we’re struggling to adopt new ways of thinking about the world and business’s role in it.

But I am hopeful. Not optimistic, in the sense that I’m sure everything will work out just fine — I’m not sure of that at all. But hopeful. As a species, we have a gift for problem solving. Kodak failed to manage the digital transition, but Nikon, Canon and Fujifilm continue to be billion-dollar companies. Thousands of firms and millions of people are even now exploring ways to solve our common problems — for example, firms are partnering with each other and with governments to search for vaccines and to bring people back to work safely. This kind of cooperation must continue beyond the pandemic. As recent data shows, trust in business has fallen during the pandemic, but trust in government has risen dramatically. There is no better time for business to see government as a partner, not an adversary, in helping to make society work everyone — not just the lucky few.

We can learn from the horrors of the pandemic. We must. We don’t need to go back to “normal” — we need to reimagine capitalism instead. We need to find a way to balance the energy of the free market with the power of competent, responsive government. Together, they can help us build a more just and sustainable world.

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Ce contenu a été mis à jour le 30 mars 2022 à 5 h 47 min.

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