Unless It Changes, Capitalism Will
Starve Humanity By 2050
By
Drew Hansen
February 10, 2016 "Information
Clearing House"
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"Forbes"
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Capitalism has generated massive wealth
for some, but it’s devastated the planet
and has failed to improve human
well-being at scale.
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Even in the U.S., 15% of the
population lives below the poverty
line. For children under the age of
18, that number increases to 20% (see
U.S. Census).
How do we expect to feed that many
people while we exhaust the resources
that remain?
Human activities are behind the
extinction crisis. Commercial
agriculture, timber extraction, and
infrastructure development are
causing
habitat loss and our reliance on
fossil fuels is a major contributor
to
climate change.
Public corporations are responding to
consumer demand and pressure from Wall
Street. Professors Christopher Wright
and Daniel Nyberg published
Climate Change, Capitalism and
Corporations last fall, arguing
that businesses are locked in a cycle of
exploiting the world’s resources in ever
more creative ways.
“Our book shows how large corporations
are able to continue engaging in
increasingly environmentally
exploitative behaviour by obscuring the
link between endless economic growth and
worsening environmental destruction,”
they
wrote.
Yale sociologist Justin Farrell
studied 20 years of corporate
funding and found that “corporations
have used their wealth to amplify
contrarian views [of climate change] and
create an impression of greater
scientific uncertainty than actually
exists.”
Corporate capitalism is committed to
the relentless pursuit of growth, even
if it ravages the planet and threatens human
health.
We
need to build a new system: one that
will balance economic growth with
sustainability and human flourishing.
A
new generation of companies are showing
the way forward.
They’re infusing capitalism with fresh
ideas, specifically in regards to
employee ownership and agile management.
The Increasing Importance Of Distributed
Ownership And Governance
Fund managers at global
financial institutions own the
majority (70%) of the public stock
exchange. These absent owners have
no stake in the communities in
which the companies operate.
Furthermore, management-controlled
equity is concentrated in the hands of a
select few: the CEO and other senior
executives.
On
the other hand, startups have been
willing to distribute equity to
employees. Sometimes such equity
distribution is done to make up for less
than competitive salaries, but more
often it’s offered as a financial
incentive to motivate employees toward
building a successful company.
According to
The Economist, today’s startups
are keen to incentivize via shared
ownership:
The central difference lies in
ownership: whereas nobody is sure
who owns public companies, startups
go to great lengths to define who
owns what. Early in a company’s
life, the founders and first
recruits own a majority stake—and
they incentivise people with
ownership stakes or
performance-related rewards. That
has always been true for startups,
but today the rights and
responsibilities are meticulously
defined in contracts drawn up by
lawyers. This aligns interests and
creates a culture of hard work and
camaraderie. Because they are
private rather than public, they
measure how they are doing using
performance indicators (such as how
many products they have produced)
rather than elaborate accounting
standards.
This trend hearkens back to cooperatives
where employees collectively owned the
enterprise and participated in
management decisions through their
voting rights. Mondragon is the
oft-cited example of a successful,
modern worker cooperative. Mondragon’s
broad-based employee ownership is not
the same as an Employee Stock Ownership
Plan. With ownership comes a say –
control – over the business. Their
workers elect management, and management
is responsible to the employees.
