The Staus Quo is No Longer Working: Capitalism 2.0 is Emerging

Is our industrial society at a crossroads?

It seems that the social, environmental and economic woes we are faced with today are here to stay. Intellectuals¹ have inferred that these mutually reinforcing dilemmas can be induced and magnified by the underpinnings of our current system, Capitalism 1.0. Driven primarily by the motive for profit and ‘growth for the sake of growth’, the present model has brought with it incessant and uncompromising economic expansion at the expense of social and environmental considerations.

Feel free to sign up for our upcoming White Paper, “Capitalism 2.0: Strategies for the 21st Century Enterprise” to be released in May 2013 and/or join our new LinkedIn Group where we are actively discussing the ideas of Capitalism 2.0 in more detail.  We look forward to sharing these ideas with you – click here.

Today’s reality is characterized by growing levels of government, business and consumer debt. Living standards are dwindling in many parts of the world, and democratic deficit is more pervasive than ever. Unemployment rates have skyrocketed, and while a wealthy few are able to take advantage of the status quo, one cannot ignore the fact that the purchasing power of middle classes are eroding everywhere. Corporate interests have hijacked government decision-making, and over one billion people face hunger and starvation. Our continued reliance on fossil fuels is likely to cause irreversible climate change, threatening the existence of our entire species.²

Although I am not suggesting that our current economic model is the sole contributor to the existing state of affairs, it is nevertheless exacerbating these trends and realities.

A new paradigm for a world in crisis

Against this backdrop it is hard to ignore the need for a new narrative – one that is more suited for placing humanity on a trajectory towards an equitable and sustainable future.

Michael Townsend, CEO of Earthshine Solutions, notes that one possible course of action would comprise the restructuring of our current economic system. This would entail the reinvention of Capitalism 1.0 in such a way that it retains its ability to generate wealth, while at the same time expanding its realm to incorporate the social, environmental, and economic considerations of all stakeholders on our planet. He and other experts have come to refer to this new vision as Capitalism 2.0.

This concept will be explored further in a White Paper in partnership with TSSS to be released in May 2013: “Capitalism 2.0: Strategies for the 21^st Century Enterprise”.

The role of companies under Capitalism 2.0

In the table below, sustainability expert Bob Willard lays out some of the metrics that would be indicative of a gold standard for sustainable enterprises under Capitalism 2.0.

This progressive set of metrics was conceived from the notion that companies can no longer afford to do business in the same way as they did in the past. The world is no longer a stable and predictable place, and by continuing to conduct business as usual, companies are likely to reinforce the aforementioned realities.

In view of the fact that our modern civilization is at a turning point, we must move to a new model that is more adaptive to changing circumstances, one that embraces systems thinking, fosters creativity and innovation, and creates shared value for all stakeholders. This new paradigm calls for companies to implement these metrics on a micro scale.

To quote the words of Bob Willard, in order for a company to be truly sustainable under Capitalism 2.0, “it must create positive economic, environmental and social value…if it were to operate forever, it would not only do no harm, but it would also do well by doing some good.”

References

1. Joseph Schumpeter – Can Capitalism Survive? Creative Destruction and the Global Economy. New York, Harper Perennial Modern Classics, 2009.
2. Jeremy Rifkin – The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World. New York, Macmillan, 2011.