Is it naïve to think of CSR, sustainable development, socially responsible investment, cause-related marketing etc. as representing a new epic in the evolution of capitalism?
The question is prompted by nationally-syndicated New York Times columnist David Brooks, the highly respected social and political analyst and commentator. In a recent column Mr. Brooks comments that capitalism “doesn’t define an end to which you should devote your life. It nurtures the illusion that career and economic success can lead to fulfillment, which is the central illusion of our time.”
Aside from the observation that it’s a tall order for any economic system to generate total personal fulfillment — but especially the capitalist system that must respect the moral, legal, ethical rights of its owners/investors — there is this:
Ironically, in the same issue, the Times reported on one of the many creative innovations that daily undermine highly negative descriptions of 21st century capitalism. The story tells of the formation of a new hedge fund — yes , a hedge fund — The Cheyne Social Property Impact Fund, “that aims to balance financial and social returns. It is part of a growing trend of investing with an eye to improving society as well …” http://nyti.ms/1ryX2hr
The Chyne Social Property Impact Fund is just one of a myriad of recent developments in corporate social responsibility/sustainable development/corporate citizenship that are changing the face — and, arguably, the substance — of capitalism around the world.
A representative list of the many recent and current genuine CSR/SD commitments (intrinsic to mission and operations, not “bolt-on”, and simultaneously benefitting the company and society) would far exceed the space limits of this blog. So just one telling indicator: The United Nations Global Compact — in which companies pledge to operate in accordance with ten UNGC CSR/sustainable development standards clustered in environment, human rights, labor rights and anti-corruption — now has some 8,000 member companies around the world, including several dozen in China (the site of the “capitalism” on which Mr. Brooks based much of his column). Importantly, UNGC also has some 4,000 participants from academic institutions, civil society and sovereign governments www.unglobalcompact.org . The Compact mission and progress was summarized last year by Executive Director Georg Kell in a Business In Society interview http://bit.ly/M51RAk
Dr. Andrea Bonime-Blanc, “The GlobalEthicist” published at Ethical Corp, has pointed out http://bit.ly/1toMr9E fundamental, relevant developments: “We have witnessed convergent forces over the past 20 years (powered by the age of hyper-transparency and the stakeholder revolution) which is leading to the need for a more strategic, holistic and integrated approach” to corporate policies, performance and reporting on ESG issues. These force are introducing moral — societal — considerations into traditional capitalistic decision-making.
The result is moral — dare one say, “spiritual”? — satisfaction for a large and growing number of involved investors, employees and customers, not to mention management and members of corporate boards.
That may be the best a global economic system can do. No other economic model seems to have done better. (OK, maybe monasticism.)
At any rate, perhaps by indirection, this evolution seems to introduce a dimension of the “moral culture” Mr. Brooks seeks for 21st century capitalism. He writes: “to survive, capitalism needs to be embedded in a moral culture that sits in tension with it, and provides a scale of values based on moral not monetary grounds.” That tension, embedded in the very nature of capitalism, is quite real. But to miss the progress in addressing it is not helpful. Many corporate and financial leaders are innovating creatively at this interface.
Of course, none of this is to ignore capitalism’s many significant negatives — among them: boom-and-bust, anti-competitive outbursts and the mendacity of some of its players.
But some recognition should be given to today’s capitalists who are markedly improving the system. They manifest, once again, what has been true over several centuries, as reportedly articulated by the late American socialist Michael Harrington: “Capitalism’s most daunting characteristic is its ability to co-opt the reforms, even the radical changes, of the opponents of the system.”
Mr. Brooks has, once again, done us all a great service by raising a central issue of our time. There are, no doubt, many ways to address it.