The New Capitalist Manifesto

Like it or not, we live in a world in which business wields enormous power. Corporations long ago super-ceded government as the dominant force in Western society.

Which is worrying because business is at its heart motivated by one thing: making a profit for its shareholders. As far as they can within the laws, the argument goes, they are required to do so, regardless of the wider consequences.

Even more worrying, thinking within business has become increasingly short-term, as the ability of shareholders to move their money to where the immediate profits are has increased, a trend bolstered by short-term incentives for executives within the corporations.

As we wake up to the fact that we’re living on a finite world with an economy that demands constant growth and that in developed nations our sense of fulfilment relative to ‘progress’ long since reached a plateau, this way of thinking seems increasingly unsustainable.

Business as usual is no longer an option. But the commercial world runs so much to the core of our way of living that it needs to be part of the solution. We desperately need a new business model. And Umair Haque, whose inspiring blog posts I have followed for some time, in his new book, The New Capitalist Manifesto, offers an inspiring vision of what that might look like.

Haque’s first great insight is in framing the problem. We’ve moved from a world that resembles a ‘game reserve’ to one that we now know is much more like an ‘ark’. It is small and crowded, with finite space and finite resources. That shift requires a dramatically different approach to how we think about our role and responsibilities.

Within this framework Haque then redefines what we need to think of as ‘value’. At the moment, we are too often creating ‘thin’ value - financial profit with no eye on the real social or environmental costs. In order to build long-term prosperity, we need to be creating ‘thick’ value:

“profits whose benefits accrue sustainably, authentically, and meaningfully to people, communities, society, the natural world, and future generations.”

The idea of ‘hidden costs’ or ‘externalities is nothing new – whether it be the health costs associated with the profits generated by fast food companies or the carbon costs of the profits generated by oil firms. But what makes Haque’s explanation so inspiring is the way he moves the conversation on from talking about ‘costs’ to talking about ‘value’.

This new perspective moves the goalposts. We are no longer talking about a problem to be solved but an opportunity to head towards.

Underpinning his vision, Haque highlights a set of companies that his analysis has identified are already, imperfectly and in different ways, trying to create more authentic value – from Google to Grameen, Nike to Walmart – and at the same time outperforming their competition.

Whilst none of the examples are perfect – and I would argue are not always creating so much more ‘thick’ value than their competitors in some important respects – they do show that successful, forward-thinking companies are increasingly beginning to think about value in a different way, to both their own advantage and that of society in general, painting a picture of a world in which business increasingly competes on the basis of creating real value that genuinely improves people lives.

Above and beyond the business case, Haque’s vision is one of ideals, as he himself explicitly states:

“Here’s the deeper, perhaps more fundamental belief underpinning them: think bigger. Change the world for the better.”

There’s obviously a long way to go before we live in a world where companies are truly competing on the basis of contributing to a wider societal prosperity. But at the core of the book’s argument is a strong and compelling case for business taking a longer-term view, pre-empting shifting consumer demand and government regulation.

Politics itself is notable for its absence here. This is obviously not Haque’s expertise and part of the book’s strength is in its single-minded intention to be a call to arms for business. But I can’t help wondering if there is something deeper at play too – namely the near sacrosanct modern-day division between business and politics.

Because without the political will to shape the regulatory and financial framework under which corporations operate, then I fear that business will never fully develop the new ‘institutional cornerstones’ that Haque envisions. And when even the conditions on which Haque predicates ‘thick’ value are themselves political hot potatoes (try telling some people their SUVs and Big Macs are actually worthless!) the case for the walls between economics and politics start to seem like a barrier in themselves.

As the clock ticks, and leading business figures reportedly talk in private about how they would like to change more quickly than they feel they feel able to, the need for them to create ‘thick’ value but also champion the need for it – via political lobbying if needs be – has never been greater.