Capitalist leaders are called to account
17 August 2015 by Catherine Holdsworth in Business and finance, Current events, Nine visions of capitalism
Earlier this month, emerging political candidate Bernie Sanders called out the top CEOs in America and asked them to account for their actions. It’s a familiar story, the Fat Cats on Wall Street engage in illegal activity, make exorbitant amounts of money, and then let other people deal with the consequences (if you’ve seen The Wolf of Wall Street, you’ll know what we’re talking about). Why does this matter? We’re all aware that those with the biggest bonuses are not the ones feeling the pinch of the recession that we’re only just recovering from. Well, with Greece still in crisis, the UK threatening to leave the EU, and the American election on the horizon, these are very real issues that we need to grapple with.
In his letter to The Wall Street Journal, Sanders said that the ‘Wall Street leaders whose recklessness and illegal behavior caused this terrible recession are now lecturing the American people on the need for courage to deal with the nation’s finances and deficit crisis.’ In a two-pronged attack on the wealthiest people in America, Sanders published a report that shows how various CEOs and corporations have managed to evade $34.5 billion in tax. These people claim to want to close the deficit but are actively contributing to the problem. If the average person avoids tax, it probably won’t make that much of a difference to the government. However, to reach $34.5 billion in unpaid (or avoided) tax it would require a significant proportion of the population of America just refusing to play by the law. If it was the average man on the street, he’d go to jail. But because the top players on Wall Street maintain so much power, it would seem that they are beyond the law. It is time that we stopped turning a blind eye to this sort of avoidance. The capitalists that determine, by and large, our financial stability, are the ones who should be an example for the benefits of capitalism. America is perhaps the biggest capitalist country in the world, and yet it would appear that, rather than show how capitalism can be beneficial to the economy and help those all the way at the bottom of the pyramid, it is leading the way in demonstrating the worst aspects of capitalism: greed and the misuse of power.
When companies such as Apple, Google and Microsoft are now richer than the US government, one looks to them to set a positive example of how capitalism can benefit not just those who work for the corporations, but the government to whom they pay tax. These are global corporations but they all began in Silicon Valley. They are the very epitome of American capitalism at its best, highlighting how small start ups can become global brands. However, these companies should also be a marker for how all companies in the capitalist food chain can not only be successful, but create wealth and grow the economy. Not all companies will be as successful as these, but even small companies can take lessons from conscious capitalism. Charles Hampden-Turner and Fons Trompenaars in their new book, Nine visions of capitalism suggest that ‘Wealth is created when values are joined by meta-values, when for example workers receive higher wages for being more productive so there is money or value for everyone. Customers provide more revenue that is shared between employees and investors. Wealth is also created when products do not die and go to waste but become a cradle for another product.’
The iPod is an excellent example of a product which has evolved and grown, making way for better and smarter technology while maintaining the integrity of the original. So Apple is leading the way. You only have to look around you and you won’t be far away from an Apple product. This is demonstrative of capitalism being beneficial to the customer as well as the company. There are many people who are loyal to the Apple brand. However, with great wealth comes great responsibility. Apple and its chiefs must demonstrate a conscience in a world that is powered by wealth. Back in June, Taylor Swift called Apple to account when they said the they would not pay artists in the first few months of their music streaming service, ‘We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation’, she wrote in an open letter to the company. Recognising the backlash that this would cause, Apple quickly did a 180 on their policy and announced that they would pay royalties. Case closed. Nevertheless, Swift proved that large companies are not infallible and that it pays to be seen as a company that is doing good.
Capitalism and the companies that contribute to the growth of wealth are not infallible, but they are incredibly wealthy and powerful. It will take more than Taylor Swift to bring down Wall Street. Yet the conscious capitalism movement is growing and it’s people like Swift and Sanders who have the platform to call those to account who should be doing more to help the economy grow rather than contribute to the deficit. It is incredibly unlikely that the next President of the United States will be the CEO of Coca-Cola or Microsoft, but their influence is not to be ignored. Those with such influence and power should work alongside governments to help find a solution to the economic crisis. Paying taxes will be a drop in the ocean compared to what they stand to lose if the house of cards that these people live in decides to topple.
