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The idea of capitalism can evoke strong emotions. For some, capitalism is an idealistic concept that results in inequality, often due to human greed. For others, capitalism is an example of society doing things independently, with little need for government support and initiative.
Whether you support or oppose capitalism, it's been an economic system embedded in many cultures for more than half a millennium. In part, its ideas have changed with the people's will - and in part, questioned by others.
In recent years, the notion that a company will use its influence to reflect its ideology has been criticised in some circles as 'woke.'
For those who lead companies or have completed an MS in Leadership, how does the concept of consumer ethics interact with the systems of capitalism? Is it possible that the ideas of 'woke capitalism' reflect the true nature of some aspect of capitalism itself?
What's the point of capitalism?
What's the point of capitalism, exactly? Ultimately, it depends on who you ask.
For some, it's the idea that money must continue circulating around an economy and that profits must continue to increase.
For others, it's the idea that things must be consumed in ever-increasing proportions. Interestingly enough, though, philosophers, writers, and commentators have often tested the concept of capitalism across the decades.
In 1970, Milton Friedman wrote an article in the New York Times labelled a Friedman doctrine. In the article, he argued that a business's social responsibility lies in its ability to increase its profits - as a form of capitalism.
Interestingly, though, much can be said of how the business world does not reflect Friedman's comments. While he may have been a Nobel Prize-winning economist, the concept of capitalism may be more closely aligned with social responsibility than previously thought.
We've seen this mainly through examples of shareholder activism that seek to highlight a cause or drive change within an organisation - even if it's not necessarily profitable. Take, for example, the idea of shareholder activism and taking steps to enact change within an organisation.
This has been seen previously with billionaire Mike Cannon-Brookes' attempt to conduct a hostile takeover of major energy producer AGL.
Friedman's ideas of social responsibility present an interesting contrast to the concepts of capitalism. If the social responsibilities of a business rest in its capacity to increase profits, not to represent other shareholder interests?
The duality of profits and values
Looking back on the conflict that exists between profits and values, one must ask - does an organisation need to be profitable to be capitalistic? No, not necessarily - as we've seen with global powerhouses such as Amazon and Uber.
Making a profit is an ideal end goal, and businesses can only survive if they make a profit over time. But what's interesting to consider is that profits and values do, in many ways, have a symbiotic relationship - if a brand does not stick to its values, profits, and indeed the longevity of a business, can genuinely suffer.
Over the last decades, we have seen new companies bring in new ideas that have succeeded and failed based on their values. Amazon, for example, became a great success due to a dedicated business ethic. On the other hand, Blockbuster entered bankruptcy as its values began to diverge from the broader community's needs.
In part, it's not unreasonable to conclude that perhaps, in a way, a duality exists between profits and values - that's not simply just an altruistic vision. Perhaps, to survive, businesses need to find a way to reflect their communities - whether through their values, their product choices, or other things they can do to align with community expectations.
New generation, new expectations
There's also this idea that a new generation of workers is just getting started in the workforce - and with a new generation of employees and customers comes a new generation of expectations.
Generation Z is the new wave of young people beginning to make their way into the workforce. By and large, they're a generation that's been heavily exposed to rough and tumble of the world compared to the generations before them - they've experienced wealth inequality firsthand, as well as the disruptive impacts of climate change, pandemic, and technological innovation.
These young people grew up embracing new and emerging technologies and are using them to engage with businesses in new and innovative ways. Yet, they've been hampered by the changes of a rapidly digitising workforce. Today's young people will not work in the same ways their ancestors worked - because, by design, the workforce has changed.
Work is no longer simply about who can work the longest. Instead, for many young people, their values encourage workers to consider their own needs. They won't just spend money simply because their parents did - instead, they are put towards causes that they believe represent their ethical values.
Does this mean modern businesses are in for a shakeup? Is it possible that capitalism is at an inflection point where the commentators need to remember the long and storied history of values and their impact on capitalism?
Generation Z may represent an inflection point - a moment where capitalism is unmasked. Instead of simply being a tool for profits, as espoused by Friedman and other commentators, perhaps capitalism can be seen as a series of values that aspires to generate profit, not simply off the backs of workers but as a product of the aspirational values of the communities they sell to.
Shaping the future
As with any demographic - the behaviours and attitudes of generations change over time. How will those changes continue to shape capitalism as we know it today?
Perhaps, another fifty years from now, Friedman's depiction of capitalism will reflect even less of what it looks like today. It's possible that the next generation will continue developing increasingly inclusive and diverse views, and capitalism will continue to evolve.
The future of business is always uncertain. The way the world works, it is nearly impossible to predict the influence of demographics on consumption patterns.
However, it appears that one thing is true - that the values of a new generation of shoppers will continue to shape our capitalist-driven world - even if some believe that values have no place in the race for profits.