American-style shareholder-first capitalism isn’t the only way to go. Some countries and companies practice “stakeholder capitalism,” which recognizes the interests of labor, customers and the community.
Now, due to the rise of nationalism and antitrade movements in the United States and Europe, more business leaders and policymakers are considering “sustainable capitalism”—an emerging concept that speaks to balancing value maximization and responsible long-term financial returns with social, environmental and governance factors.
In February, corporate executives came together at the University Club in New York for a forum on the topic hosted by the Conference Board, a nonprofit business membership and research group headquartered in New York.
The proximate cause was the launch of Sustaining Capitalism: Bipartisan Solutions to Restore Trust & Prosperity, a book co-authored by Steve Odland, a former CEO of Office Depot who is now CEO of the Committee for Economic Development (CED), a bipartisan policy group; and Joseph Minarik, senior vice president and research director at the CED. Odland is calling on corporate executives to embrace sustainable capitalism.
“Big companies should spend less time on tax restructuring and more time on how to help the nation as a whole,” he says. Other industry leaders, such as Roger Ferguson Jr, president and CEO of TIAA, a leading American financial services company, have endorsed this and similar ideas.
It may be self-preservation at work. Sustainable capitalism retains an emphasis on profits, yet pays attention to equal access to resources and inclusive finance, with such possible reforms as secondary education standardization or nonprotectionist corporate tax reform.
The pressure to improve long-term thinking in financial markets has grown since Thomas Piketty pointed out in his influential 2013 book Capital in the Twenty-First Century that concentration of wealth had led to economic and social unrest around the world. One of his policy proposals was a progressive wealth tax. “While Piketty’s focus is on equal outcomes and redistribution of wealth, we focus on equal opportunities,” notes Odland, who brings a more business-style approach to this academic and policy debate.