As the superrich gathered in Davos last week, business leaders polled by ‘Fast Company’ say capitalism exacerbates the wealth gap at its own peril.
Capitalism is at an existential crossroads, and figuring out how to make it work better for people who are not top earners will require focused cooperation from world business leaders and policymakers, according to a new survey from Fast Company.
The global survey of professionals ranging from early-career managers to C-suite executives found that favorability toward capitalism in 2024 is decidedly mixed, with 36% saying they had a positive reaction to the word and 35% saying their reaction was negative. Another 29% said they felt neutral.
Attitudes were slightly more positive when it came to "stakeholder capitalism," defined in the survey as a system in which "companies seek to serve the interests of employees, customers, suppliers, and local communities," as opposed to just maximizing shareholder profits.
Forty-one percent viewed stakeholder capitalism favorably compared to 15% who viewed it negatively. Respondents were even more favorable when asked if they thought stakeholder capitalism has the potential to make capitalism better, with a full 72% saying they thought it could.
The finding is notable given recent critiques of stakeholder capitalism from investors who believe it unfairly penalizes certain industries, not to mention vocal critics such as Vivek Ramaswamy, who has made attacks on "woke capitalism" one of the cornerstones of his presidential campaign.
Stakeholder capitalism has conversely been championed by high-profile financial CEOs, such as Larry Fink of BlackRock and Brian Moynihan of Bank of America.
Fast Company's Future of Capitalism survey was conducted in December 2023 and January 2024 and included responses from more than 25 countries, with about 60% coming from the United States.
Some Davos-bound executives said they were not surprised by the lukewarm response that capitalism received in the survey.
“The growing skepticism toward traditional capitalism resonates deeply with me as a woman of color and tech founder with Danish-African roots living and working in Silicon Valley," Soulaima Gourani, cofounder and CEO of the software firm Happioh, told Fast Company. "There is a broader crisis within capitalism, particularly evident in the tech sector where ethical and morale considerations often clash with relentless innovation."
Nigel Vaz, CEO of digital consultancy Publicis Sapient, added that a more holistic view of capitalism can also be good for companies' bottom line. “Today, companies are becoming increasingly focused on how they create value for customers, and customers are also asking how companies are contributing to society," Vaz says. "For business leaders, making the connection between these two ideas is key to creating a shared ‘why’ for the organization, which can be one of the most powerful contributors to growth, profit, and impact.”
Respondents were also asked to rank stakeholders (customers, employees, shareholders, community, suppliers, and government) in order of importance. While 21% said community should be the top priority for business, only 9% said it was the top priority in their own business, a detail economist Byron Auguste, cofounder and CEO of Opportunity@Work, said was "striking." "Stakeholder capitalism that truly delivers requires business models that transform more of the community into valued employees and priority customers," he says.
Greed is not good
The survey also revealed a variety of opinions about the future viability of capitalism itself. Asked what they believed was capitalism's biggest threat, respondents provided write-in answers that were as disparate as they were visceral, with people citing a range of perceived threats like far-left politics, DEI, the media, artificial intelligence, government, and greed. Others said that capitalism itself was the problem.
However, one common theme among the assortment of answers was income inequality, with at least 13% of respondents mentioning it or related issues as a potential threat to capitalism.
Gourani said concerns about the wealth gap have been reflected in other polls, and justifiably so. She points to data from the 2022 World Inequality Report, which found that more than half of the world's income is captured by the top 10% of earners.
"There's a clear call for reshaping economic frameworks to foster fairness and opportunity across diverse backgrounds," Gourani says. "To quote Nobel laureate Joseph Stiglitz, 'We have to rewrite the rules of the economy to make it fairer.'"
CNBC
