As someone who is so strongly passionate about economic, social and environmental sustainability but a staunch economic conservative, I find myself never really fitting in with my friends when it comes to political persuasion. For my right-wing friends, I am too left, and for my left-wing friends, I am too right.
I’m not a socialist, and I’m not a traditional capitalist.
While writing a recent article on the Accountable Capitalism Act, the right words to describe what I believe in suddenly dawned on me.
I am a democratic capitalist.
I love capitalism. Capitalism inspires people to work harder, strive to be their best, accomplish more and inspire others.
However, I do not believe in corporate greed. I do not believe that companies should be working purely to further the interests of their shareholders.Yes, a company needs to be economically sustainable in its own right, but it does not need to be so at the detriment of the wider economy, our global society and the environment.
This is where the democratic side of my argument comes in. The more voices we have involved in capitalist decision-making, the more we are operating for the greater good of our entire economy, society and environment. We want to move away from this system where we constantly face the tragedy of the commons, in which individuals act independently in their own best interest, and into a system where we are working collaboratively.
The tragedy of the commons is an term coined by economist William Forster Lloyd in 1833 but popularised by philosopher Garrett Hardin in 1968. The term speaks on the idea of a shared-resource system, a commons, in which individuals harvest the fruits of this resource according to their own self-interest, not the interest of the wider community. This causes what is known as a tragedy of the commons as the question of the sustainability of harvesting said resource is not considered.
Given a large proportion of our economy right now is based on non-renewable resources, it is only a matter of time before no one will be reaping the reward of any of our resources and we will experience this tragedy of the commons.
In my exploration of the Accountable Capitalism Act, I found one of the most interesting proposals to be based around employees selecting board representatives. The Act outlines that companies in the US with a revenue of more than $1 billion per annum must ensure at least 40% of their board is made up of representatives of employees. Upon an initial reading of the bill, I questioned whether or not this would actually be beneficial. However, after reflection, I believe there is quite a strong argument for this proposal — and it all ties into democratic capitalism.
Walmart employs an estimated 1.5 million people across the United States. For Australians, that is around the entire population of Adelaide. The Accountable Capitalism Act would empower these 1.5 million people to have their say around decisions made in the company. If legislated, this would move the power from the hands of 11 board members into a shared capacity with the employees. Five members of this board will be appointed by the employees, and the decisions will be made in the best interest of these employees.
At first, my concern was around the danger of corporate boards being taken over by unions. This is even more of a worry in Australia in light of the findings of the 2015 Royal Commission into Trade Union Governance and Corruption. However, the majority of the power remains in the hands of the board members who have not been appointed by employees. With the board needing a majority vote to pass a motion, this allows those with the experience of sitting on a board and the running of a company to ensure the company remains economically sustainable.
Ultimately, all companies’ priority should be their economic sustainability. However, the only way to be economically sustainable is to be socially and environmentally sustainable also.
My ideals are not some outlandish hippy gibberish as some of my right-wing friends and colleagues might suggest. Nor are they some capitalistic greed-fuelled objectives as my left-wing friends and colleagues might suggest. I believe my democratic capitalist values sit in the middle of the road: merely wanting what is best for our economy, our society and our environment by shifting the power from the one percent and into the hands of many. Capitalism and greed do not need to go hand-in-hand when everyone is working together for a common good.