Earlier this month I took the brilliant economist and author Ha-Joon Chang to the Wilderness Festival in Oxfordshire. He gave a barnstorming (or should that be tent-storming?) performance where he decried our current economic system and urged us all to educate ourselves on the economic myth-making that goes on across the political spectrum.
There is growing consensus across the political spectrum that our current 'growth-at-any-cost' economic system needs serious modification. No longer perceived as a wishful cry from the left-out left, the push towards 'conscious', 'responsible' or 'green' capitalism now comes from sources as orthodox and establishment as the Financial Times and Ernst & Young. Cultural and spiritual leaders have also lent their voices to the chorus - and the tectonics of unchecked capitalism are shifting and creating new landscapes.
The corporate outlook is duly changing: many of our largest global companies have adopted some sort of 'giving back' strategies, and even investment banks have established social impact portfolios of some sort. Whilst often criticised as grudging nods to corporate responsibility as a reputational fix for much more egregious flaws, they are also acknowledgement that publicly responsible corporations perform better financially.
Millennials represent a growing proportion of spending power, and have very different values and consumption patterns to their Baby Boomer and Generation X counterparts. They are conscious of resource scarcity and planetary boundaries and are well-versed in the social and environmental impacts of the manufacturing and provision of their goods and services. They consider a company's shareholders to include the wider community and environment and by 2030 their perspective will hold even more sway. Regardless of whether it is the bottom line or cultural recalibration that is motivating the corporate titans, progress is gradually taking place.
The political debate, too, has shifted with leaders of all stripes making positive sounds about value-driven, human-centred economics. Campaigns like the Robin Hood Tax have made tentative in-roads elsewhere in Europe, and there is growing condemnation of corporate tax-avoidance across the political piece.
But what isn't so clear is how to bring some of these more fundamental, systemic changes about, and how to move beyond mere lip-service when it comes to condemnation of certain anti-social behaviours. Why, for example, is a Tobin or Financial Transaction Tax still viewed as being somehow slightly undergraduate and naive in the UK, rather than a practical and efficient way of curbing private excess and generating social good? How can politics escape the power of big business when it comes to issues like tax havens? As ubiquitous as the calls for responsible capitalism are, we still face many conceptual and practical barriers when it comes to modifying some of our most entrenched economic processes.
Here at the RSA, we want to clarify and contribute to this already raging debate, and really get to the heart of new ways forward. With renowned academic Anat Admati addressing financial reform in our first event back in the autumn, we’ll be sure to have some great fodder for this ongoing discussion. Watch this space!
Hari Mann David Pitt-Watson
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David Pitt-Watson Hari Mann
David Pitt-Watson FRSA and Hari Mann FRSA set out why the finance industry needs to act urgently to support companies and individuals during the pandemic – and how it should build a better economy once it is over.