Upon waking up from cryogenic freezing in the 1990s and discovering that the Cold War is over, the groovy title character of Austin Powers: International Man of Mystery exclaims “Finally those capitalistic pigs will pay for their crimes, eh?” before learning that capitalism has “won.” 20th century capitalism did in fact win an important showdown with communism and has been economically and politically dominant in the world ever since, but in today’s climate of financial uncertainty it is not so clear that it won the decisive battle.
To call our present economic system capitalism is just part of the story- the denomination more precisely refers to a parentage of economic systems which has gone through many reincarnations throughout the centuries. Significant changes in technology, infrastructure, politics, and culture have caused it to evolve from agrarian capitalism mixed with feudalism to Mercantilism, Industrial Capitalism, and Financial Capitalism, among other variants. Many business leaders and intellectuals believe that we are on the verge of a new tipping point in economics which will require a shift in our current variant of capitalism.
Conscious Capitalism is an ideology which promises to capture the essence of the new world order. A growing movement supported by eminent business leaders such as John Mackey of Whole Foods Market, Kip Tindell of The Container Store, and Doug Rauch of Trader Joe’s along with leading academics and intellectuals, Conscious Capitalism is “a philosophy based on the belief that a more complex form of capitalism is emerging that holds the potential for enhancing corporate performance while simultaneously continuing to advance the quality of life for billions of people. ” The underlying philosophy of the movement is that a successful business creates value not only for its owners and/or investors but for all people who in some way interact with the corporation.
Conscious Capitalism may sound a lot like Corporate Social Responsibility (CSR), which recognizes that beyond investors and clients, corporations have many different stakeholders– the employees, suppliers, community, environment that can in some way be affected by its actions- and assigns to corporations the responsibility to positively affect all of these stakeholders. But whereas CSR is a response to external pressures based on the idea that corporations grow rich at the expense of many others and therefore have an obligation to act in socially responsible way, Conscious Capitalism is an internal movement aimed at increasing competitiveness of corporations in the changing world. And it works: A study by David Wolfe, Rajendra Sisodia and Jagdish Sheth shows that companies oriented towards the creation of value for all of their stakeholders have had exceptional short and long-term market returns. Conscious Capitalism is not a pre-emptive move to avoid increased government control of large corporations, nor is it a publicity strategy to inflate a “do-good” image of corporations. It is simply good business.
The Conscious Capitalist corporation paradoxically achieves good profits by not having profits as its end goal; rather it sees profits as a means to achieving some other purpose- its Business Mission. The ideology of Conscious Capitalism elicits a final reflection- perhaps businesses don’t exist in order to make profits but rather profits are made so that businesses might exist. If Austin Powers were frozen for another 20 years he would probably wake up to find that the “capitalistic pigs” familiar to him are nowhere to be found. Of course only time will tell where the world is really headed, but smart- and successful- corporations are already on the path of Conscious Capitalism.