capitalism

Andrew Hill

As part of my investigation into benefit corporations – a new legal corporate form springing up across the US – I asked early adopters a simple question: “Are you a capitalist?”

It put some of them on the spot. Benefit corporations are set up to serve a “triple bottom line” of social, environmental and economic objectives and their backers don’t fit the capitalist stereotype of cigar-chewing plutocrats running smoke-belching industrial behemoths. (Gary Gerber, who runs Californian solar energy company Sun Light & Power, is the first chief executive I’ve interviewed who apologised for coming to find me in his hybrid Toyota Prius because the two electric cars he uses were unavailable.)

I tend to agree with Christopher Meyer and Julia Kirby, whose book Standing on the Sun points out that capitalism is “only a term for what capitalists tend to believe and do”. They suggest that in time “puzzling exceptions to the pursuit [of financial profit maximisation] – corporate social responsibility, venture philanthropy, sustainability – will be recognised to have a logic consistent with capitalism”. Which would mean that even contrarian “reluctant businessmen” like Yvon Chouinard, the surfing and mountaineering founder of Patagonia, the biggest benefit corporation, are capitalists. 

Andrew Hill

Politicians continue to demonstrate a fierce desire to be seen to be doing something – anything! – about excessive executive pay and corporate tax avoidance. Nick Clegg, UK deputy prime minister, used a BBC radio interview on Thursday to step up the verbal assault on such practices. He said:

Look at this debate about irresponsible capitalism, what I call crony capitalism. It’s Liberal Democrats [Clegg's party] who’ve led the debate on clamping down on bankers’ bonuses and we must be just as tough this year in the bonus season that’s coming up as we were last year, if not more so.

It’s for him and his colleagues to prove that these threats can be turned into effective action, but in the meantime I’m struck by his terminology. What Mr Clegg calls “crony capitalism” is not what most of us call crony capitalism. I have always assumed the term applies quite specifically to unsavoury, over-cosy relationships between businesspeople and politicians