Prince Charles has opened a conference on "inclusive capitalism" in London. Institutional investors and business leaders discussed how trust in capitalism could be restored by making it work better for the majority.
The global financial crisis that began in 2007-2008 has led to wide-ranging criticism of the world's current finance-driven capitalism. A conference in London aimed at addressing some of capitalism's shortfalls has been organised by the "Inclusive Capitalism Initiative" (ICI), convened by a senior member of one of the world’s leading financial-capitalist dynasties, Lady Lynn Forester de Rothschild.
ICI’s aim is to adjust the workings of the capitalist system so that it works well for more people. Not incidentally, this is seen as necessary in order to restore trust in capitalism, and so head off possible threats to its continuing dominance as a social and economic model.
ICI’s web page says: "At its core, Inclusive Capitalism is concerned with fixing the elevator of the economist Larry Katz's famous analogy, portraying the American economy as an apartment block in which the penthouses have increased in size, the middle apartments are more and more squeezed, the basement is flooded, but what gets people down the most is that the elevator is broken."
Luminaries gather to talk about the future of capitalism
Lady de Rothschild assembled a cast of senior dignitaries to participate in Tuesday's discussions at Mansion House. The starting keynote speech was given by HRH Prince Charles. He was followed at the mic by IMF head Christine Lagarde. Former US President Bill Clinton, former US Treasury Secretary Larry Summers, and Bank of England chief Mark Carney were also scheduled to give plenary speeches. All the speakers were introduced with gushing praise, as is customary at conferences featuring high-level dignitaries.
One of the presentations was given by Michael Sommer, who this month retired from posts as President, German Confederation of Trade Unions (DGB), and President, International Trade Union Confederation (ITUC). Sommer discussed the German economic model - how labor, management and capital can work together to increase the benefits of capitalism.
It was claimed that institutional investors and business leaders assembled at the meeting represented companies that together control about 30 percent of the world's total stock of financial wealth under professional management. Lady de Rothschild suggested that the amount of influence in the room was sufficient to change the capitalist game, if those assembled could come together behind a common approach - but cautioned that developing a more inclusive capitalism would be a journey that takes time.
A long-term project
Several speakers, including Prince Charles, likewise expressed the hope that the conference would kick off a longer-term process of deliberations aimed at renewing capitalism toward inclusivity of social and environmental concerns.
Lady de Rothschild has high ambitions for "inclusive capitalism". She aims to help found a movement, not merely host a conference or two. The ICI project was originally launched in 2011 by the Henry Jackson Society, a neoconservative think-tank launched in Cambridge in 2005 and now based in London, before being spun off into its own non-profit organization.
In May 2012, The Task Force published a "founding blueprint" document, which suggested that the business community could focus its efforts on three pathways to ensure that everyone - all stakeholders, not just shareholders - derive benefits from capitalism.
The three areas identified were "Education For Employment", "Nurturing Start-Ups and SMEs" (mentoring of small businesses and improving access to credit), and "Reforming Management and Governance for the Long Term" (replacing today’s corporate and investor focus on short-term financial performance with a longer-term view).
This founding document for the Inclusive Capitalism Initiative was co-authored by a task force of British and American business leaders and senior policy makers, co-chaired by Dominic Barton, Global Managing Director, McKinsey & Company, and Lady de Rothschild, CEO, E.L. Rothschild.
The tone of ICI seems rather noblesse-oblige. Time will tell whether the "Inclusive Capitalism Initiative" bears any fruits other than more of the sort of conferences at which extremely wealthy people arrive at in private jets to spend a pleasant few hours together and reassure each other that they're doing their best for society.