What is Compassionate Capitalism and Why We Need it in These Times of Planetary Crisis ?
What is Compassionate Capitalism and What Does it Entail for us?
In recent years, there has been much talk about Capitalism evolving into a model of economy wherein corporations ensure that communitarian and people oriented business models are embraced so that profit is not the only criterion or reason why they are in business. In other words, many prominent business leaders and experts are calling for Capitalism to move beyond the Profit at all costs paradigm and into a kinder and gentler variety that can place communities and people above the mindless pursuit of profit.
Indeed, this form of capitalism which is sometimes called Compassionate Capitalism or Capitalism with a human face is finding many takers both in the developed Western world and in the developing and emerging world in Asia and Latin America.
The Nuts and Bolts of Compassionate Capitalism
Compassionate Capitalism means that corporations have to account for the costs that they impose on the environment, the communities that lie in the vicinity of their factories and plants as well as offices, their employees whom they have to treat with more kindness, and the consumers and other stakeholders to whom they must be accountable.
In other words, corporations must practice a variety of capitalism that is more humane, compassionate, and just and fair. This not only entails a mindset change but also a movement away from the dominant philosophy of polluting the environment and refusing to pay for the cleanup, increasing pay for those at the top of the organizational hierarchy and letting those down the ladder high and dry, not compromising on quality and safety of their products and goods and services, and to be transparent in their dealings with regulators and the governmental agencies.
A Case for a Rethink and Retooling of Capitalism
Thus, Compassionate Capitalism not only needs a complete rethink of the existing paradigm of profit before people but also needs a retooling of the principles underpinning it to place people before profit.
The proponents of Compassionate Capitalism make a case for not externalizing the environmental and ecological damages that corporations which mean that such damages should no longer be treated as external to the costs of doing business and hence, not needing to be included in the costs of doing business.
Moreover, they also call for lesser gaps between the executive pay and the pay for the rank and file employees so that there is a sense of justice and fairness to everybody.
Utopia for Realists
While this might seem idealistic and Utopian, it needs to be mentioned that in these times of planetary crisis where the Climate Change is threatening the very existence of civilization, where gross income inequalities and the obscene wealth gap is leading to social unrest, and where the ever accelerating technological change threatens the social contract on which our relations with the world are based, Compassionate Capitalism is no longer an abstract and remote concept, but something that we need on an urgent basis.
Indeed, without sounding Apocalyptic, it needs to be mentioned, that unless we change direction and re-engineer our modes of doing business, we might not survive as a species which means that unless we change, the very survivability of humankind is in danger.
The Argument against Compassionate Capitalism
Having said that, there are those and who are in the majority at the moment, who dismiss all this talk of Compassionate Capitalism as Hot Air or Bombastic and Ideological nonsense that does not take into account the ground realities of how capitalism and business work.
Indeed, the late Chicago School Economics expert, Milton Friedman, laid the basis for such criticisms when he flatly proclaimed that the Business of business is business and hence, the Responsibility of business is business and nothing else.
Thus, in one stroke, the debate is dead in the water as the dominant view is that markets take care of all the problems that arise from capitalistic tendencies, and the self-correcting nature of markets is such that sooner or later, business finds a way out of the crisis.
A Need for a New Narrative
When one compares and contrasts the arguments for and against Compassionate Capitalism, we find that there is much Hubris among those who oppose this form of capitalism, and much Naivete, among those who support it.
In other words, there has to be a meeting point somewhere between the highest aspirations of humanity and the gritty ground realities that we all face. The point to be noted is that we are now at a stage where a New Narrative has to emerge that can hopefully reconcile the differences between the dominant model and the minority view that espouses Compassionate Capitalism.
This means that we need the case for Compassionate Capitalism to arise from within the ranks of those who practice capitalism and not from those who are well meaning but not in a position to change the Status Quo.
The Surfers of the Waves of Change
Already, this is happening to a certain extent in the West and East as well with prominent Technology Sector business leaders such as Bill Gates, N R Narayana Murthy, Elon Musk, and Mark Zuckerberg, espousing some or more of the strands of Compassionate Capitalism ideology and coming in support of Basic Income for All, Protecting the Environment, Reducing Inequality, and batting for more Gender Inclusivity.
This needs to pick up steam and include as many business leaders and rank and file employees as possible so that a consensus builds up that can lead us to a more sustainable future.
To conclude, the present Planetary Crisis is such that we owe it to the future generations to create a just and sustainable world for them to thrive as the saying that We have not inherited the World but have merely borrowed it from our Children sounds correct.
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