Capitalism 2.0

Yesterday, Klaus Schwab, the Chairman and founder of the World Economic Forum, the annual meeting of business and political leaders in  Davos Switzerland called for a complete overhaul of the Capitalist system.  To that I say; it’s about time!

 Capitalism that includes a sense of social responsibility, reinforces the common goal of prosperity and resonates with the greater population needs to be found and found quickly before our system slides into further disrespect and disgrace.  We are a nation that is based on the rule of law but clearly the laws have not kept pace with the erosion of morels and ethics in the current version of our capitalist system.  Examples of poor judgement and personal greed agendas are global by nature but that should not keep us from looking at options to impede with the continued occurrences that imperil the very nature of our economic system. To this I say; it can no longer be buyer aware.

Mike Krieger of KAM LP recently wrote the following;

“The reason I don’t write about markets so much anymore is because I don’t believe there are markets any longer.  Sure there are flashing prices on the screens for various assets and those can be addicting to look at on a daily basis, but I think these “markets” are now merely a mechanism for government propaganda and a  method to ultimately fleece more money from the uniformed masses that play in it by the casino operators and their puppets in government.  It’s basically a hologram.  I have alluded to this in recent interviews, but I myself feel extremely uncomfortable being involved at this point in a way I have never felt before.  For now, I am still willing to play the game with some of my own capital but I fear I may regret this decision and that the smart thing would be to pull out completely and go entirely into hard assets as well as real estate abroad.  This game is not safe.”

I could not agree more with Mike and there are many of us that feel the same way.  The problem of course is that there is no law or regulation that can’t be side stepped by a creative thinker  looking for the edge to further an economic agenda: aka greed.  The opportunities to circumnavigate the law are endless, and as lawyers know there is always a loop hole that can be found, if one has the wrong attitude. My conclusion is that you need a real time ethics and social mechanism right in the middle of the action of running and managing a company.  That’s right, we might need to define a corporate position that is embedded in the Board structure and management of any company large enough or critical enough to affect the prosperity of our Nation. If this sound to much like corporate big brother , well that’s because it is.

I saw something in China in 2009 that recently gave me pause to consider if our Communist friends might have some good ideas  that we might borrow.  When I led a trade mission from Ottawa to sell products to private companies in China I met with a major Chinese company that was considering a purchase of Plasco technology.  I met a Board member who had a position I was unfamiliar with.  The normal executives were present and they had their normal roles; the President and the CEO ran the operation, the Chairperson oversaw the strategic planning but the third person was a mystery to me at first — he was the Party Secretary.  OK… before you stop reading and react like I did the first time, remember that the Chinese have their own unique brand of entrepreneurship and they are getting pretty good at it.

The Party Secretary at the corporate level has the  job to make sure that the company was aligning their corporate goals with the goals of the Central Committee meaning that any major decisions, acquisitions or marketing activities required him to confirm that the activities were in line with the Government Objectives. The two objectives they were most concerned about were standard of living and the environmental threats as these were the two main public discontents that the Government knew needed to be addressed as part of their leadership of the Country.  The Party Secretary is there to make sure corporate management not only built a good company but also was responsible to build a company in a manner that was in the public interest.   What is our current public discontent all about anyways?

The public discontent we see in the free world right now is centered on the  greedy nature of the big banks and large financial institutions, all of who rely heavily on Government, either through funding or regulatory support for the operation of their business.  If these companies had another position on the Board of Directors with the title of Ethics and Social responsibility Chair and this position had the can influence the Federal and Provincial Government on the status of the company on key issues, we might be heading in the right direction.  If it was a self regulating body, it would even be more satisfactory to many of us with a libertarian mind set, and a social conscience, but regardless it is time we put some teeth in the process to control certain types of companies that from time to time earn their nick name “ the banksters”.

To this I say, bring it on; time to open our minds to different models that can improve capitalism and democracy in our society and time to address our public discontent.

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