Capitalism is coming of age. It is nearing the end of its self-focused adolescence, and transcending into a wiser, wider-focused adulthood.
This article outlines the key aspects of this change, providing a rationale for a change in the nature of education that is able to keep up with the evolving needs of business and society.
Limitations to the benefits of capitalism
The economic benefits of capitalism are significant and well documented. Whereas the benefits are reduced by drags on progress such as corruption, the net rewards for innovation and efficiency have been sufficient to deliver dramatic improvements in material wellbeing over the last century. Economies that have shunned innovation have failed to accrue the available benefits, typically through an urge to protect the interest of the elite.
The question is not whether capitalism delivers benefits, but whether benefits exist beyond the current culture of capitalism is able to deliver. And it is becoming increasingly apparent that the answer is yes.
The present culture of capitalism rewards innovation and efficiency. But it rewards monopoly more. The ultimate objective of any successful industry is the elimination of its competitors. This can be achieved by fair means - innovation and efficiency, which increase productivity - or foul - manipulation, corruption or abuse of political or economic power, which reduces productivity. Either way, once a monopoly is established, the overall productivity is likely to decline relative to its exclusively competitive alternative.
An adolescence capitalism
As with adolescents, capitalist entities have had a very egocentric perspective. The world has revolved around their interests, and the interests of others have been of interest only where they have impacted on the organisation's short-term monetary performance.
But there is now compelling evidence that accommodating the interests of stakeholders other than management and shareholders advances the long term interests of management and shareholders (Conscious Capitalism). A good proportion of venture capital is sourced to satisfy long-term obligations, so long-termism is likely to resonate well once it is better understood. And the wider society is unquestionably better served when corporations act in the interests of a wider society.
It is not that competition is dead. It remains the case that competition is the mother of invention and renewed efficiency. But there is more than one type of competition.
Modes of competition
Exclusive competition propels organisations to kill each other off. Only the fittest survives. When the fight has become sufficiently bloody, and the sole, ever-so-fit organisation stands alone, the age of monopoly beacons. The short term gains are usually blown away by the long-term costs of absences of competitiveness.
Inclusive competition allows the benefit of competition to be shared equally between the competitors. The "losers" can join the "winners". And at any time, members of the winners who disagree with the way the organisation is directed, can break off to create their own competitive edge. Examples of inclusive competition include: the conceptual friends competing with each other to see who can fill the most envelopes, where both watch each other to learn from improved technique, and both stop earlier when the job is finished; and the actual emergence of open source software.
Inclusive capitalism, also called conscious capitalism is the adoption of inclusive competition, and accommodation of the interests of others. It is a maturing of capitalism, a cultural shift that delivers improved outcomes, not a change in the nature of capitalism itself. It is transcendence, in the sense that the organisation recognises its long term interests are inextricably linked with the interests of everyone with which it engages, and beyond.
Signs of the emergence of a maturing capitalism include the awareness of the contribution of the banking industry to the great recession of the early twenty first century; the introduction of non-monetary measures of economic success by the UN and OECD; the introduction of values-led leadership in so many multi-national corporations throughout the world; and the attention focused on our contribution to changes in the environment.
Requirements for cultural change
There are two core requirements for Inclusive Capitalism to succeed.
Firstly, society needs to re-examine its objectives. My proposal is that society's objectives are the maximisation of the aggregate quality of life (wellbeing) of its members. But the belief that the objective of society is to maximise its monetary economic output is to confuse the interests of society with the interest of its elite.
Secondly, society needs its members to develop the skills, attitudes and understanding needed to accommodate the needs of others, without prejudicing the needs of themselves. In this environment, individuals are freed up to create, explore and innovate, balancing their own needs with the needs of society. We refer to these abilities collectively as personal social capacity, the holistic competence an individual applies to multi-dimentional problem solving
A New Education
Business needs people who are versed in this evolving culture. Our education system needs to evolve to support these changes.
Values-based Education (VbE), along with a handful of other new, well developed systems of education, is at the forefront of helping students to develop their holistic personal competence (HC).
HC helps to develop an inclusive, cohesive culture. It nurtures an individual's natural inclination and ability to live and work successfully within a communal environment. It does so by helping children to become aware of their behaviour, and its impact on others; and by providing an environment where children experience the positive values that provide the environment conducive to successful long-term collaborative production, without having to subjugate their own interests below the interests of the greater good. It draws on positive human values such as trust, respect and patience; and helps minimise the limiting, entropic values such as greed and exclusive self-interest that diminishes the effectiveness of collaboration needed to deliver optimum progress.
VbE students are better equipped to collaborate in teams, and better equipped to lead. They are more aware of the impact of their behaviour on customers and suppliers, on employees and other stakeholders. They have better self-esteem, freeing them to explore their natural creativity. They have better self-motivation and more mature attitudes, understanding how their personal wellbeing it integral with the wellbeing of those around them.
Students who are brought up in a VbE environment are better equipped to handle the cultural demands of business in the new age of Capitalism.