What Capitalism Means To These Renowned Economists & Academicians

A ready reckoner on four thinkers who, through their works, have infused fresh insights into money, markets and modern society.

Capitalism with a heart. Is that the new world order or just an enduring paradox? At a recent literature festival held in Mumbai, a panel comprising former Mckinsey & Co boss, Rajat Gupta, businessman Nadir Godrej and Arun Maira, a Tata Group alumnus, debated and discussed just that. During their conversation, they referenced thinkers and economists who have spent much time theorising the role of business in society. Here’s what these thinkers have said of capitalism in the past.

This Harvard professor of political philosophy has been called the “most famous teacher of philosophy in the world”. Sandel has explored the impact of capitalism on the moral values of society. “Without being fully aware of the shift, Americans have drifted from having a market economy to becoming a market society ... where almost everything is up for sale,” Sandel has said. And in a world where everything is a commodity, inequality breeds fast. Life is harder for those of modest means.

This French economist has deliberated extensively on the subject of inequality. In his 2014 book Capital in the Twenty-First Century, Piketty warned that if the already rich were able to accumulate wealth faster than economies were able to grow, inequality would skyrocket in the coming decades, potentially destabilising societies in the process. Those starting off with millions in inheritance have a natural headstart on those earning their way up through jobs.

He is considered to be the most prominent 20th century advocate of free markets. Friedman’s famous doctrine — “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” — is a hotly-debated subject in a world where corporate social responsibility or CSR is considered essential for businesses to actively give back to society.

(Photo from the Nobel Foundation archive)

An American academic of repute, Porter differs from Friedman in his view of the role of business and has spoken of the need to rethink capitalism. In his view, the purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. It will also reshape capitalism and its relationship to society and legitimise business again as a powerful force for positive change.

(Image: www.isc.hbs.edu)