If Capitalism is not an end in itself, nowadays, most of people must wonder if there is any other social economical model, better and safer. Capitalism is thought to be the good way to administer and organize society and its economy. Capitalism is thought to be the frame so that most people can live properly. Since the crisis began in early 2008, the Capitalist System (with big S) broke down. Once again! Isn’t it? There were frequent crises in Europe and America in the 19th and first half of the 20th century, specifically the period 1815–1939. Sismondi was one of the first economist to show that it exist economy-wide fluctuations in production, trade and economic activity over several months or years in an economy organized on free-enterprise principles. In « Nouveaux Principes d'économie politique », 1819 J-C L de Sismondi explained the existence of business cycles.
Sismondi's theory of periodic crises was developed into a theory of alternating cycles by Charles Dunoyer, or by Johann Karl Rodbertus. Periodic crises in capitalism formed the basis of the theory of Karl Marx. Then, later, different other business cycles theory had been described: for instance,; the Kitchin inventory cycle of 3–5 years (after Joseph Kitchin); the Juglar fixed investment cycle of 7–11 years (often identified as 'the' business cycle); the Kuznets infrastructural investment cycle of 15–25 years (after Simon Kuznets also called building cycle]); the Kondratiev wave or long technological cycle of 45–60 years (after Nikolai Kondratiev).
Nowadays, Key mechanisms of Capitalism have been undermined by politicians, from either left or right wing; by media, press, or even by Film industry; by traditional NGO or more recent and more spontaneous citizen movement such as “los indignados” in Spain or “Occupy”. Main critics say that over-extended banks fuelled a debt financed consumption boom as inequality rose. The social contract, if such a thing exists, has been broken: “companies became ever more short-termist and cynical about their customers, workers and core business purpose” (W. Hutton, The Work Foundation, 2013). In his essay “Does the economy need a new kind of business”, Hutton said that the crisis comes at many levels: intellectual, economical and moral.
 |
| (copyright) |
Regarding the intellectual component, Hutton wrote that “the idea that capitalism and free markets alone could not only allocate scarce inputs to deliver the most wanted outputs but also handles existential risk […].”
The economic reality is that there was an overestimated investment in the production of goods and services predicated on unlimited credit growth for which there is no longer any market. The over consumption of goods and services have drown the economic system to a profound debt… ending another the business cycle?
The crisis is also a moral one, because capitalism is based on apparently inconsistent values, and business leaders lost touch with the moral purpose and societal responsibility of their organizations (Hutton, 2013). Usually, companies need both flexible and adaptable workforces and committed, loyal and trained workforces. For decades, Capitalism and its invisible hand were more Darwinian-alike system: ‘homo [oeconomicus] homini lupus’.
But now, people are more and more informed by the media of the disproportionality of enormous bonuses being paid to employees of financial institutions that have emerged the entire society into that financial abyss. For the first time, there is widespread and growing concern about social fragmentation as a social apartheid; and about the short-termism of the financial markets and Capitalist decision process. The re-legitimization of capitalism requires more balanced and long-term decision-making on behalf of all its stakeholders, because business leaders have proven their incapability of regulation and moderation. Business decision makers and Capitalist strategist have to rediscover the role of the social and the public in the equation. Good Capitalism will emerge with more Corporate Social governance and responsibility.
 |
(copyright)
|
Hutton explained that “across the political spectrum, thinkers and leaders are now talking about the possibility of a new approach to managing and governing our economic system”. Today, work and organizations play an even more dominant role in defining our individual purpose and social status.
But the doctrines that have dominated our corporate discourse recognise no such obligation. Instead they stress the rationality of economic individualism as a moral proposition in its own right - but with no wider social context. Yet once companies and institutions deny any larger purpose, the vacuum is filled with incantations to efficiency, flexibility and the rationality of economic men and women - so creating alienation, disconnection and anxiety. It is a moral hollowing out in which the aggressive pursuit of material wellbeing is all that is left to provide meaning - resulting in a material arms race of being paid ever more extravagantly - from the CEO to the football star. Nobody at the top can now spend the many millions they are being paid; rather it is a signifier of worth that society cannot offer itself.
Corporate social responsibility is a form of corporate self-regulation integrated into a business model. The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact.
In Strategic management: a stakeholder approach (1984), R. Edward Freeman argued that corporations make more long term profits by operating with self-regulating mechanism inspired by the spirit of the law, ethical standards, and international norms. Corporate Social Responsibility is a process to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.
CSR theories and principles describe the organization like an operating ecosystem. The Crisis had shown that too many modern organisations fail to enable individuals to derive meaning from their work. Companies ought to create values and purposes, related and shared by workers and corporate values and objectives. It is a challenge - but also an opportunity. “More than ever, firms have a chance to regain their role as purveyors of purpose and as such become part of the solution rather than the problem. With the growing evidence for the practical value of responsible business, firms must learn new rules of the game that will enable organisations to operate in a way which promotes fairness, social cohesion and wellbeing - and not least, long-term sustainability” (Hutton, 2013).
To regulate the system, Hutton proposes that the model needs small businesses to be incorporated in the open innovation processes of large firms. As any ecosystem model, the complexity of global marketplace must be temporized by a higher degree of interdependence between organizations and civil societies. Cooperation must coexist with competition, but the renewal of regulation need a high degree of business consciousness and a deep analysis and more investigation on working conditions have not only to be realized, but to be taken into consideration by those who rule the economic system. CSR and good capitalism will emerge efficiently if there is more transparency. Good practices and performance means good publicity.
Today, at time of social network and free information, a growing number of firms understand the benefits of good corporate publicity and reputation.
“We need new leaders who are bold enough to demonstrate such ‘soft’ skills and connect individuals, organisations and communities in a more Meaningful way. Leaders should begin to innovate, create jobs and generate wealth responsibly”.
