Capitalism is always changing. No idea better encapsulates this than Joseph Schumpeter’s notion of “creative destruction”: the incessant innovation mechanism by which new products and services replace outdated ones is at the heart of the modern economic machine.
If we transfer this mode of thinking onto the public realm, we begin to understand that creative destruction is constantly transforming societal norms as new ideas replace antiquated ones. As Steven Pinker argues in Enlightenment now, we live in the most progressive and open era ever. Free trade led the way in creating this world. Yet, despite profiting greatly and playing a leading role in creating open societies, are businesses doing enough to defend them?
The Covid-19 pandemic is once again re-writing the rules which govern the relationship between society and business. Businesses increasingly need to provide social leadership, not just shareholder value. The social contract is being reimagined as corporations are increasingly required to conform to higher ethical standards.
Considering such developments, the zeitgeist of responsible capitalism may soon require companies to take a line on a much wider range of issues. It is often the case that universities are required to create “safe but critical” spaces for debate, but a quick examination of the average lifespan of human beings shows that time spent in the workforce massively outweighs time in education.
Up to now, the corporation has stood firmly in the middle on most public debates without recognising that it is often the fertile ground on where many people’s opinions are shaped. With a generation of more socially conscious employees soon to make up the ranks in the knowledge economy, it may become prudent for companies to act as a convener for free speech and debate.
There are two reasons why companies may consider doing so. Firstly, capitalism is changing. The neoliberal variety of the 1970s met its demise in the 2008 financial crisis and there has been a search for a new model since. In the first phase of this period leading up to the new millennium, private sector trade unions were destroyed while the second period has been defined by the rise of the gig economy. It has been hard for people to feel a part of an institution when individualism at any cost was the mantra.
This trend is now in reverse. Trade unions are springing up in Silicon Valley. Regulation of business is catching up with the forces of creative destruction that technology companies, in particular, have driven since 2008. Uber’s new settlement with the UK supreme court to entitle drivers with workers’ rights is a good example. Employees are increasingly empowered and want to work for value-driven businesses where they can express who they are. Providing an outlet for debate seems like a natural progression of these trends for empowered employees.
Secondly, the anomie experienced by the knowledge worker during the pandemic has demonstrated the important social function of business. With a full return to the office unlikely, it may be useful for companies to recognise that their socially conscious employees may benefit from a forum of debate. Dedicating some of the limited collaboration time to discuss matters close to their hearts may bring them closer together and avoid the building up of tension over sensitive issues which communicating via Zoom exacerbates.
The rules of the workplace are being rewritten, but there will always be a part of business that is inherently social. How effectively executives can work with the forces of responsible capitalism, may soon depend on whether they can facilitate a forum for expression.
