Have you ever come across the comment: “the system is broken”? Yet the person who is saying this works as a CEO at a large corporation. If “business rules the world”, our future is in their hands. A different way is possible and this is how we can design the roadmap of a new economy, together.
You may find this a bold statement, but the truth is that most CEOs, entrepreneurs or directors have realised capitalism is no longer the way. Problem is, they don’t know where to start. It can be scary to not have a roadmap and do not have an established structure, but in their favour, what most of them don’t know is that it all sparks with a mindset.
And before you freak out, thinking I am a socialist or a communist… this is not the case. What I stand for is social and eco-preneurship. Slightly different.
If capitalism is based on private ownership, the operation for profit, capital accumulation, wage labor and competitive free markets, it seems to me we can still play the game but to some extent only. Social enterprises are still operating in a free market and also want to make profits, but (here is the difference) they want to serve a larger mission. They are bringing a long term solution that is prosperous, and most importantly, inclusive of all.
Social enterprises are no longer creating crappy products and marketing them well so consumers find these could solve a problem in their lives. The new trend is, instead, to make a business out of a social or environmental problem.
Steps towards a system change
In this context of system change, I am also excited to talk about the Third Industrial Revolution by Jeremy Rifkin. If you haven’t heard of it, it is a new economic era that moves from ownership to sharing, from profit-driven to purpose-driven; from economy to ecology.
This digital-ecological-collaborative-sharing economy will revolutionise every commercial sector, disrupt the workings of all industries, bringing with it unprecedented new economic opportunities and mitigate climate change.
The Third Industrial Revolution is like taking the crisis we are living in as a huge opportunity to slow down our reliance on fossil fuel resources, get people back to work, and supporting a circular economy. In this case, the Ecocide law would also be likely to move forward.
For now, the results of this our capitalist system has left us with huge debt (economist and author Santiago Niño Becerra says the planet owes to itself 225 billions of dollars; translated, each of us owes 30,000 dollars – including babies and elder). Another important fact is that our production capacity has gone to the roof, and now not even consumers can catch up. Yes, it can be profitable in the short-term, but truly unsustainable in the long-term.
Capitalism is not serving our current needs
How I see it, is that capitalism has served us in the past, but it’s not serving our current needs.
Capitalism was born because a bourgeoisie needed a type of freedom that absolute monarchy could not provide. And also because there was the need of a juridic system that would protect the private property of goods produced, which were becoming every time more complex. Today it seems clear to me that this is far from what the current society demands (and probably more important, what our planet can stand).
Some actors have used capitalism for “growth at any cost” and solely “profit-driven”, which has destroyed the lives of millions of people. And it will keep doing so while only large corporations making money out of taking resources that belong to us all, including the beautiful species on our planet. You name it: fossil fuels, lands, forests, palm oil, water resources… In this capitalist system, we have accepted behaviours that turned out to be self-destructive, lacking purpose and soul. Truth is that our current system is not meeting the needs of the majority of the population.
The conversation that inspired me to dig deeper was the podcast of Christine McDougall and Phillip Ullmann, who is the Chief Energiser at Cordant Group. This company is the UK’s second largest recruitment and services firm with revenues of £840 million employing 125,000 people. Ullmann shifted to transform Cordant into a social enterprise because even though they always had been quite philanthropic, he realised that it still was operating in a capitalist system which, in its essence, has no mechanism to distribute wealth.
Once Cordant became a social enterprise, other things happen naturally: it moved from a contractual way of building relationships to a convenient way – which basically means it treats each individual as a human being, not a transaction. It also achieved moving away from “competition for my own sake towards collaboration for the common good.” It also helped to adopt a stewardship role, going away from hierarchy, which “doesn’t give people the scope to innovate.”
“Business is the only mechanism on the planet today powerful enough to produce the changes necessary to reverse global environmental and social degradation.”
Inc. Magazine April 1992 by Paul Hawken
(this quote was also taken from an e-news sent my Dr. Christine McDougall – her work in this space is amazing)
Social enterprises leading the economic change
So by now, you would have realised that business is not “the bad guy”, in fact, if used properly, it has the power to drive change and positive impact. Watch for brands that true pioneers of this new way of making business:
Who Gives a Crap, with just toilet rolls they are providing clean water and building toilets around the world while producing it more sustainably (saving water, trees, oils)
Regain, a fashion recycling app that rewards a sustainable behaviour of consumers with discount codes.
Ecosia, a green and sustainable search engine alternative that plants a tree every time you search
Fairphone, the world’s first ethical smartphone that is mapping out the supply chain to address unfair practices to the electronics industry.
Plaine Products, Zero Waste and vegan bathroom products creating a circular program making it easy for us to move to a plastic-less life.
Piñatex, plant-based, versatile & innovative material made of pineapple leaves, also a circular business model using the leaves as a by-product of the agriculture industry.
noissue, sustainable packaging, compostable mailer and tissue for small businesses planting trees with their Eco Packaging Alliance program.
Théla, upcycling trash plastic bags to create luxurious accessories.
Porze, recycling coffee grounds to create body scrubs & soaps.
Moving away from the capitalist system is like going from fear and scarcity to trust and abundance. We have the technology to use the waste and convert it into new beautiful products; to better understand our supply chains and make efforts to make them a bit more green while getting more people to live under fair trade conditions.
Why we should move start the foundations of a new economy
Many CEOs are scared of shifting their business model, but what they should be more scared of is the thriving generation of millennials, or even younger (look at Greta Thunberg).
Consumers are trying to be responsible citizens of the world, and they expect the same from corporations, which is why we’re seeing rapid growth in the ethical and sustainable market.
Today 91% of global consumers feel companies should act responsibly and put ethics over profit. And 81% of millennials believe that businesses have a key role to play in achieving the SDGs.
Social entrepreneurs are leaders to a ‘post-crisis capitalist system’ and CEOs, even if they haven’t said it out loud, “they know that they know”. But system change can only happen if we recognise it and is widely accepted that our current system is failing us. So I would encourage all those people reading to start a conversation because a new way of making business is here. What do you think about “capitalism with a purpose”?
Are you also going to be part of this transformation of our socio-economic system?