Ideas and Views

Re-imagining Capitalism

A recent article published by McKinsey says

“Capitalism has not kept pace with evolving societal needs, leaving more and more of the world’s population behind with respect to wealth creation and prosperity. It may be time for a change.”

So true. We know that many of the current form(s) of capitalism are far away from delivering key benefits of capitalism – be it in terms of wealth distribution, inequality gap, impact on the environment, or long term sustenance. For a moment let’s keep external impacts aside. Let’s look at the people who are at the core of these ‘capitalistic actions’. Be it investors, major shareholders, managers, or even employees. Let’s look at their quality of life as measured by happiness. While we may have different views, the fact is that we are far below the desired levels.

As argued by the authors of the above article, if we are taking a ‘stakeholder’ based approach for capitalism, we should extend the definition of ‘stakeholders’. We should include everyone that is impacted (i) directly or indirectly (ii) in the short term or long term. The impact (positive or negative) should include wider measures including non-tangible ones.

Maybe it’s time to look beyond capitalism. Maybe time to think about a new system from scratch. No point in saying that ‘capitalism is still the best alternative’ while only looking at the systems that failed in the past. We should define a better one.