63 F
San Diego
Sunday, Oct 1, 2023

Capitalism, Community and America’s Future Social Capital

For more than 40 years, capitalism has been in triumph. America’s belief in freedom and free enterprise as the best hope for jobs and wealth creation is a message that has spread throughout the world.

The concept of a benevolent concern for one’s fellow man and the commonwealth has also been a hallmark of America’s success story. But all that could be history in the social and economic world that is rapidly emerging.

As Kirk Eichenwald of the New York Times observed after the fall of the Enron Corp., “Capitalism has been the hardiest contender in the global bout for economic supremacy. It emerged from the decades-long match with communism as the unquestioned victor.”

But, he added, “A staggering rush of corporate debacles is raising a disturbing question: Can capitalism survive the capitalists themselves?”

- Advertisement -

The concept of “community” is eroding as well. In the book “Jihad vs. McWorld,” author Benjamin Barber describes the Jihad as “the bloody search for bloodlines” and McWorld as “the bloodless search for markets.”

What is missing, Barber argues, is the call for “the commonweal” or the public good, the common goal at the heart of every free democratic society.

After Robert Putnam’s seminal work on the erosion of a sense of community codified in his well-publicized book, “Bowling Alone,” cities across America have been on a quest to renew civic participation and to build anew those organizations and institutions that would enable citizens to work together for a common purpose.

Downward Spiral

Evidence that we have somehow found a solution to this downward spiral in civic participation is nowhere to be found.

Belief in once cherished and respected institutions is dwindling. In the wake of sexual abuse and deception by the Catholic Church; increased disillusionment with government and politicians at every level, with the war in Iraq, and the war on terrorism, a profound feeling of a “loss of innocence” now permeates life in America.

Capitalism, some say, despite its faults, will in time prove once again , like democracy itself , that it still represents the best mechanism for ensuring economic growth, wealth and prosperity in the new “global” economy. Indeed, when speaking of globalism or globalization, Margaret Thatcher was fond of saying, “there is no alternative.”

Yet that is precisely where the debate seems to be headed. The almost daily scandals and the protests over globalization may be, as UC San Diego emeritus professor and well-known economist Laurence Krause believes, “two separate issues.” But some other heavyweight thinkers are seeing these issues converging.

Jeffrey Garten, former dean of the Yale University School of Management (and a former investment banker and Undersecretary of Commerce for International Trade during the first Clinton administration) and Joseph Steiglitz, a well-known economist and author of the book “Globalization and Its Discontents,” argue that global corporations need to be socially responsible and start “listening to their markets,” while governments need to be more interventionist.

Both they, and more recently many others, suggest the issues of globalization and the interests of the commonwealth are being joined on the world stage and that real changes are coming.

What this foreshadows is a business climate very different from that which American corporations have enjoyed. But business itself may not be to blame. Barber believes, “Business malfeasance is the consequence neither of systemic capitalistic contradictions nor private sin which are endemic to capitalism and indeed to humanity. It arises from a failure of the instruments of democracy which have been weakened by three decades of market fundamentalism and ideology and resentment of government.”

Some believe Nobel Prize-winning economist Milton Friedman’s 1962 treatise on social responsibility has run its course.

According to Friedman, “There is one and only one social responsibility of business , to increase its profit so long as it stays within the rules of the game.”

Standard Fare

Friedman’s message , “If we don’t have profits, we won’t have much else to worry about” , has been standard fare at American business schools for years. The single focus of profit above all else, however, is beginning to lose its appeal and a new brand of leadership is emerging.

There may be some hope. Some companies believe that the pursuit of profit alone cannot hold societies together and acknowledge we need to widen the focus of business and to embrace a new civic role for large corporations globally and locally. Business, while not the villain of a free society, may yet be its savior.

“Companies that are good local citizens,” said Goran Lindhal, former CEO of ABB, “will find it easier to hire and keep talent, obtain good financing and gain society’s approval, political support and regulatory consent.”

Qualcomm has publicly committed to bridging the “Digital Divide” and has supported local schools and universities with tens of millions of dollars to improve and enhance education in the region. It is clearly one of those new breeds of companies.

According to Fortune Magazine, which does an annual survey of the “100 Best Companies to Work For,” young people want to work at companies like Google, Genentech, Intuit, Nordstrom, Booz-Allen, Whole Foods or Qualcomm Inc. because, it is believed, they have a “social conscious.” This may be a new awakening of the role of business.

Indeed, what may be emerging is a new model of the corporation for the global digital age.

John M. Eger, the Van Deerlin-endowed chair of communications and public policy in the School of Journalism & Media Studies at San Diego State University, is a member of the Envision San Diego partnership, a media forum for discussing public policy issues affecting the region.


Featured Articles


Related Articles