Burgess COMMENTARY

Peter Burgess

Has Capitalism been an “absolute disaster”? Thought Leader Wayne Visser Explains.

We are at a crossroads – the path that we’re on will lead to our collapse and the alternative is unknown – which is a better choice?

At the World Economic Forum in Davos Bill Gates, made the point: (also stated in his annual letter for the Bill & Melinda Gates Foundation): “By almost any measure, the world is better than it has ever been. People are living longer, healthier lives.” He also points out that fewer people are hungry, and more people have good nutrition and that nations are being lifted out of poverty.

What was most striking to me about these statements is the juxtaposition of ‘by almost any measure’ and then his detailing measures that focus exclusively on the social and economic pillars. Something that we know is not sustainable.

Mr. Gates (whom I have never met and with whom I have no association other than using products of his company) is right. We are on track to meet a lot of the Millennium Development Goals. That is remarkable progress but, there is an important caveat that must prevent us from celebrating too soon. While we have a development model that works at improving quality of life (longevity, health, financial prosperity) we must face the sobering reality that we haven’t figured out how to do that without sacrificing our planet (the environmental pillar) in the process. And if we do not find a way to lift people out of poverty, provide economic opportunity and improve health and longevity we will eventually run out of resources to continue to help people and, quite possibly risk passing a ‘tipping point’ at which we end up not only reversing the progress we have made, but reducing the standard of living for all of us.

To better explain this, I turned to one of the people whom I who have long considered to be a true thought leader in the area of sustainability, Wayne Visser.

In a conversation via Skype he put it in context:

If you compare the ecological footprint of countries with the human development index it becomes very obvious that we have a development path which successfully takes countries out of poverty but it is at the expense of the planet. We really haven’t figured out how to do development or how to do Quality of Life improvement without taking more resources than we actually have available to us.

Visser points out that the lifestyles associated with development are massively resource consuming: “The American lifestyle is ‘five planet living’, in Europe its ‘three planet living’, in Saudi Arabia it is ‘six planet living.”

But it is not only environmentally that we are falling short. We’re not building the social and economic pillars in a way that is sustainable either.

While we have generated a huge amount of financial wealth, the gap between the richest and poorest of us has not gotten better, it has gotten worse. The rising tide is raising only some of the boats and the others are being left further behind. That is not just morally ‘unfair’ it also is politically and socially destabilizing. The Occupy movement and the powerful ’1 percent vs. the 99 percent’ message is very effectively demonizing ‘excessive’ wealth as selfishness run amok and reflects growing frustration and resentment that can be a precursor to violent revolution (as in France in 1789 and Russia in 1917 to name just two).

When a system continues to produce the same results, one must conclude that the system, whether it was intended to produce those outcomes or not, is designed to produce those outcomes. Visser suggests that we must look at the situation systemically, and not just tinker around the edges.

What we’re talking about is a revolution in Capitalism — the next industrial revolution. You can’t think about it any other way when you’re talking about 80 or 90 percent less carbon in the atmosphere by 2050. That is a reinvention of the whole basis of your economy. What is also clear, especially in the wake of the financial crisis, is that the prototypical American, short-term, shareholder driven Capitalism is an absolute disaster. It has gotten us in trouble and (negatively) impacted people’s lives around the world.

But, unlike many who point out problems, Visser also offers solutions.

First, he notes, there are countries and regions all around the world experimenting with different kinds of Capitalism and “some, by the evidence of the last decade or so, seem to be working a lot better.”

Second, business leaders are recognizing the role that corporations can — and should — pay. He points to Dominic Barton of McKinsey advocating business take a new kind of long-term approach to Capitalism which was supported by the action of Paul Polman of Unilever moving away from quarterly profit reporting.

As with any market change, reinventing capitalism to extend its positive attributes and making it more applicable in a global context will create winners and losers. Visser believes that companies embracing a sustainable model will have a clear advantage: “We have a choice. The question is which side of history do you want to be on?

In my next blog I’ll explore further, including Wayne Visser’s thoughts on what has prevented CSR from being as effective as it needs to be and how it needs to evolve.

This article was originally published on Huffington Post

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