Capitalism’s cage was swinging last week.
Larry Fink, of $8 trillion investment house BlackRock, put public companies on notice in his annual letter to “disclose a plan for how their business model will be compatible with a net zero (greenhouse gas) economy… or see their valuations suffer.”
The World Economic Forum held its 2021 Davos event centered on the theme, “Stakeholder Capitalism: Building the Future.” The premise is that the purpose of the corporation should expand beyond the traditional scope of maximizing shareholder returns, to one serving a broader set of stakeholders. This means serving customers, suppliers, employees and communities, in addition to shareholders — in the pursuit of a more sustainable, resilient and inclusive global economy.
These were heavyweights swaying the cage, rocking it from the inside. On the outside, a bunch of Reddit-inspired retail stock investors rattled the cage by pushing hedge fund short sellers of GameStop, the “Blockbuster of video game retail,” into a buying frenzy and multi-billion-dollar losses. The broader movements are quite different, but both are rooted in the assumption that businesses and markets should take care of everyone, not just the privileged few.
Despite recent events, economic inequality actually increased during the pandemic. While unemployment rates surged in 2020 as large sectors of the economy shut down, the total wealth of American billionaires jumped by more than $1 trillion in the 10 months between the start of the pandemic and January 2021. Amazingly, the top 15 of these billionaires saw a nearly 60% increase in net worth.
Money = Service Activated + Organized
Over the holiday break, I went down a philosophical rabbit hole, of sorts, on the topic of money. The journey started simply enough. I was in my car about to exit the parking lot of my local grocery store. Sitting by the exit lane was someone with a “Homeless, Anything Helps!” sign. I instinctively grabbed some money from my wallet and handed it to them, feeling alternately happy I could help, guilty I don’t do more and overwhelmed at the thought of the so many others I couldn’t possibly help.
This is where my descent began. There are people living exposed and hungry on the streets, at a time when the amount of food and clothes produced for the U.S. could easily feed and cover everyone. My thoughts turned to our “best and brightest” minds bringing COVID vaccines to market in record time and all of us in supply chain jumping in to keep society running, especially during the early days of the pandemic. So much latent capacity to help, feed and shelter, just sitting there. But what is the dam that typically holds or releases this flow of creative energies?
I fell further down the hole with the question, “What is money, anyway?” It’s high-tech pieces of cotton and plastic in our pockets and digital “ones and zeros” to which we’ve attributed value, as part of a social contract and the current 21st century matrix we inhabit. My plunge went yet deeper into the underpinnings of the banking system and modern commerce. But my more fundamental conclusion was that money, in any form, is really our way of initiating or activating service to one another and organizing markets so that complex services, requiring more resources and people, can be delivered effectively.
At its worst, money can serve exploitive and dangerous ends, but at its best, it might just be a means to an end where we’re all better supported. Which begs the question, if money really is a service enabler, why do we choose to keep it locked up in stagnant pools? This brings us to the realm of our belief systems. Fear that there is not enough. Drawing equivalence between wealth and self-worth. The belief that we’re not worthy of others’ service unless we somehow earn it, and so on.
Why Are We Here Anyway?
This was the last question at the bottom of my rabbit hole. I’m no more privy to the answer than the next person, but a good start is to love, experience and be of service to others.
If the sun suddenly flared, wiping out all the deposits, debts and cash in the world, we’d still be here with all our abilities intact, to create and be of service to one another.
It’s hard to imagine such a radical shift in our lifetimes. And after the events of 2020, I’ve also learned to not place limits on where this all goes. What I do know is that I feel privileged to be part of a supply chain community heading toward “stakeholder” models and possessing the know-how to solve massive challenges on a global scale.
VP Distinguished Advisor
Gartner Supply Chain