The endemic nature of modern day capitalism – Brutal, Pervasive & Uni-Dimensional
What defines Modern Capitalism – Accumulation of power, extraordinary influence on decisions, monopoly over resources and sharing benefits with a limited few. From the basic defining principal of what capitalism stood for in the early 30s to how it has been systematically brutalised and manipulated to support the chosen few in the “big boys club” is there for all to see. Sounds familiar?
Influencing policy makers, focusing on short term goals, willing participation of Boards, establishing cosy relationships with section of media and propagation of Celebrity CEOs has created a gigantic cess pool of greed, power and control that has fueled this vicious cycle. The 2008 crisis conclusively established what happens to storied institutions that move away from the core Purpose of their existence.
The genesis for this debacle began with the shift in the center of gravity away from purpose, trust, community focus that embodied the true spirit of capitalism – connecting capital to entrepreneurship that fuels economic growth and prosperity. Instead, this has given way to the spin doctors and capital managers who by proxy are now managing business enterprises.
Boards now stand compromised and the single biggest factor that we keep witnessing at several institutions is the “Conspiracy of Silence” at the highest level. Unless this fundamental change takes place, there will not be much to talk about. The key is what is being done to rein in these machinations.
Return to Old World Capitalism – A form of capitalism that was designed to enable Public-Private Partnerships to collaborate and co-create sustainable economic models for the larger community good. In the process, also seek to generate reasonable and fair returns to shareholders through profits.
Leadership is about Trust, Integrity, Governance and Character – you take away these and what is left is a shell that seeks to actively promote “conscious deception”. Business and Leadership need to go back to the roots of capitalism to connect “ethics to economics” and promote a culture of Purpose Led Business Architecture that rewards and values long term sustainable growth of enterprises. That means aligning incentive and compensation structures at the highest levels to encourage ethical practices and behaviour.
Redefining Capitalism – Retaining balance between community good, value creation and the need to generate profits lies at the heart of a redefined capitalist model – that is connecting Purpose (Social Equity), Sustainability (Existential Equity), Value (Leadership Equity) and Profits (Shareholder Equity) of an enterprise. For the lack of a better phrase I wish to call this “Capitalism With Conscience”
It is imperative Boards & Leadership team design, practice and exhibit ethical and meaningful business behaviour for the collective community good. This means having the courage and conviction to move away from naked, unbridled profiteering and embracing greater economic good for the society at a large level.
The role of our gladiators (read market specialists) is to ensure they willingly accept and promote a market order / structure that puts premium on “Capitalism With Conscience”. And the sooner we change these mental models, the better – it is always desirable to bring in voluntary change rather being forced to make changes – and it would pay to remember that we are all under tighter community watch.