Everyone can spot an unacceptable face of capitalism. But we’re not so good at recognising chief executives that do well by doing good. Here I argue that capitalism needs business leaders who can see the bigger picture.

Friedman’s legacy

There was a time when any activity detracted from financial success. Investors weren’t interested in the nicest corporate citizen on some nebulous do-goodery metric. Not that it would have pleased the Milton Friedman. The late Nobel-winning economist argued in the 1970s that business leaders who talk about corporate social responsibility are:

preaching unadulterated socialism.

And generations of chief executives embraced his message. It was that shareholders, as the owners of companies, had primacy. In other words, the only duty of chief executives was to provide them with profits:

free markets would look after everything else.

Well, the markets haven’t held up their end of the bargain. But the doctrine of shareholder supremacy which has reigned for half a century is now dead.

The shifting priorities of capitalism

Priorities are shifting, for some key reasons.

Social media

This can inflict reputational damage on bosses hitherto able to control the message.

Intergenerational inequality

Most companies now have a millennial and Gen Z workforce trying to get on the housing ladder. They don’t respond well to an employer obsessed only with financial targets.

The rise of remote working

The purpose of an office is to bring people together. Instead, they’ve become a source of division. There are two types of employees:

• those who can’t wait to see colleagues in the flesh and establish boundaries between home and work, and
• those for whom the office is nothing but pointless travelling and greater health risks. Many factors influence which camp you belong to. But one stands out specifically: seniority.

Senior management, in general, are far keener on getting back to the office than other employees. The cynical explanation for this is that executives like the status that the office brings. A kinder one is they genuinely believe that in-person interactions are better for the company and individuals. This may be because that’s the environment in which they achieved their own success. But whatever the reason, the upshot is that bosses are less likely to investigate the actual effectiveness of the office.

To tell the truth, a hybrid future is likely, and managers need to improve both environments. However, it may not bode well that most return-to-work policies have been designed with scant input from employees.

Shifting priorities

An example of how priorities have shifted is Rupert Hogg. He resigned as CEO of Hong Kong’s Cathay Pacific airline. And the reason: Chinese authorities ordered him to submit a list of employees who’d taken part in the Hong Kong protests. So, he sent a list which had only one name on it: his own.

Hero in Taiwan-Hogg was asked by the CCP's Civil Aviation Administration to hand over a list of employees who had participated in the anti-extradition bill protests. He reportedly only responded by providing his own name "Rupert Hogg" on the list. #HKexit https://t.co/mWbTYi4o17

— 🇺🇸Kyle Bass🇺🇦 (@Jkylebass) August 21, 2019

Now, this is a welcome contrast to other Western business leaders. As they tend to all toe the Beijing line to preserve their flow of profits.

Has Britain got its priorities right?

I’m sure we all work with people who look at relaxation and the desire to have a life outside of the office as suspect. It doesn’t help that politicians urge us to work harder:

…. Britain’s low paid should work as hard as the Chinese

Should we?

The enforcement of China’s work-safety measures has lagged behind the growth of its economy, now the world’s second-largest. Industrial workplaces boast dire safety records. Last month 33 people died in a blast at an explosives factory, while another 28 workers died in a coal mine. In 2012 workplace accidents killed over 70,000 people, approximately 200 people each day. Fatal mining accidents are so common that they rarely make newspaper splashes.

And:

The US is still the only developed country that doesn’t guarantee paid maternity leave

Also:

Four in ten Americans do not use all of their paid vacation days and overall leave about 169m days on the table each year.

A desire to control

Is this what we want? The lack of not being able stop working comes from a desire to feel in control of how things will turn out.

Often, it’s not such a helpful way to be.

For starters, I don’t think we ever control how things will turn out. We might think we do, but how often do things turn out the way you planned? Life is a series of unexpected outcomes, despite my best intentions to get to certain goals. Even the goals that I reach turn out to be much different once I achieve them than I had planned.

What’s more, I’ve found that when I want to control the outcome of things, I become more anxious, more tense.

Stoic guidance

Let’s look to Marcus Aurelius for guidance:

Display those virtues that are wholly in your power — integrity, dignity, hard work, self-denial, contentment, frugality, kindness, independence, simplicity, discretion and magnanimity

Man’s joy is to do man’s proper work. And work proper to man is benevolence to his own kind, disdain for the stirrings of the senses, diagnosis of the impressions he can trust, contemplation of universal nature and all things thereby entailed.

So, while demanding work is important, you can still be virtuous. Realise that you can’t stop yourself from wanting to control things, you must just notice the desire to control things, and let the urge happen. Just sit there and see the urge, feel it, be with it.

I don’t need to control things to enjoy them. I can just let things happen.

Still act

That said, I still act. I still do work. But the action is not to control the outcome. Act, and trust that things will turn out fine, even if you don’t know what that outcome might be.

To conclude

At a time of huge change (in Hong Kong and elsewhere) capitalism needs more chief executives Hogg. However, has the new mood spread to investors? Unfortunately, there’s not much sign of it yet. Businesses have the power to transform society. Yet too many think only of maximising returns at the expense of wider society. In other words, they still prefer profit over purpose. Moreover, the work-until-you drop philosophy may excite high-flying professionals for whom the appearance of chronic overwork is a status symbol. But remember that being a cog in a capitalist machine is not the highest human calling. If aspiration means anything, it should be the desire not just for an excellent job, but for a good life.

No wonder capitalism is in crisis.