Inclusive capitalism, or stakeholder capitalism, is a theoretical concept and policy movement that seeks to address the growing income inequality and wealth inequality within Western capitalism following the 2008 financial crisis.
Contemporary understanding
Klaus Schwab, the WEF's founder, is considered the originator of theory of stakeholder capitalism. He first presented this theory in 1971 in a book named Moderne Unternehmensführung im Maschinenenbau (Modern Enterprise Management in Mechanical Engineering).
Robert Ashford argues that the concept of inclusive capitalism is rooted in the postulates of the binary economics.Robert Ashford. Why Working but Poor: The Need for Inclusive Capitalism, 49 Akron L. Rev. 507 (2016)Professor Robert Ashford’s 'Inclusive Capitalism' Gains International Support, Syracuse University News, September 27, 2017
C. K. Prahalad opens his 2005 book The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits by asking “Why can’t we create inclusive capitalism”.Prahalad 2005:xv He uses the term “inclusive capitalism” to invite readers to focus on underserved consumers and markets in order to create opportunity for all.Prahalad 2005:xvii
Implementation In 2012, the Henry Jackson Society created an Inclusive Capitalism Initiative task force in order to start a transatlantic conversation about the growing income inequalities and their threat to the capitalist system.Towards a More Inclusive Capitalism. By the Henry Jackson Initiative for Inclusive Capitalism
In 2014, Conference on Inclusive Capitalism, co-hosted by the City of London and E. L. Rothschild holding company, was held in London where the concept of inclusive capitalism was discussed as a practical measure.A movement to restore trust in capitalism, September 27, 2016 At another conference in 2015 the "Pathway to Action" was brainstormed.Marsh, P., Dimson, E. and Staunton, M. Inclusive Capitalism: The Pathway to Action. Thoughts from the 2015 Conference on Inclusive Capitalism. London: Coalition for Inclusive Capitalism, 2015. In the same 2015 year, the Coalition for Inclusive Capitalism was registered in the United States as a not-for-profit organization.Coalition for Inclusive Capitalism Lynn Forester de Rothschild became the founding CEO of the Coalition. At the 2016 Conference on Inclusive Capitalism in New York City, participants expressed commitment to promote inclusive economic growth.Global Private Sector Leaders Make Commitments to Investment and Business Practices That Stimulate Long-Term Value Creation at the 2016 Conference on Inclusive Capitalism in New York City, Business Wire, October 10, 2016 Members of the Coalition expressed a belief that all stakeholders, including business and society, should be engaged in the enactment of an inclusive capitalism agendaPaul Thanos. American Inclusive Capitalism: An Agenda for a New Business Activism, Wilson Center, April 26, 2017Actions to Achieve Inclusive Capitalism Mark Weinberger, EY CEO
In 2019, the Embankment Project for Inclusive Capitalism (EPIC) undertaken by the Coalition together with Ernst & Young reported its findings in a white paper. It was a pioneering effort to "develop a framework and identify meaningful metrics to report on long-term and inclusive value creation activities that heretofore have not been captured on traditional financial statements".The Embankment Project for Inclusive Capitalism (“EPIC”): A Better Way to Value the American Worker, Coalition for Inclusive Capitalism, 2019.
In 2020, the Council for Inclusive Capitalism, a partnership of the Coalition with the Vatican, was created.Council for Inclusive Capitalism launches partnership with Vatican, Angelusnews.com, December 9, 2020Anne Quito. Pope Francis is backing a new movement to redefine capitalism as a force for good, Quartz Media, December 8, 2020
Criticism John Kay claims that most of the 21st-century businesses are already inclusive.Moving Beyond “Capitalism”, March 13, 2018
Nafeez Ahmed describes the Inclusive Capitalism Initiative as a Trojan Horse assembled to pacify the coming global revolt against capitalism.Nafeez Ahmed. Inclusive Capitalism Initiative is Trojan Horse to quell coming global revolt: Henry Jackson Society's pre-emptive PR offensive seeks to popularise parasitic economic growth for the few, The Guardian, 28 May 2014
See also Community capitalism Humanistic capitalism Neo-Capitalism Progressive capitalism Green capitalism Pink capitalism Purple capitalism Binary economics Inclusive growth Creating shared value Corporate social responsibility Redwashing
References
Further reading
Hammond, Allen L. and C. K. Prahalad (2004). Selling to the Poor, Foreign Policy, 142:30-37. Hammond, Allen L., William J. Kramer, Robert S. Katz, Julia T. Tran, Courtland Walker (2007). The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid . Accessed April 25, 2008. O'Connor, Alice (2001). Poverty Knowledge: Social Science, Social Policy, and the Poor in Twentieth-Century U.S. History. Princeton, NJ: Princeton University Press. Prahalad, C. K. and, Allen Hammond (2002). Serving the world's poor, profitably, Harvard Business Review, 80(9):48-58. Yelvington, Kevin A. (1995). Producing Power: Ethnicity, Gender, and Class in a Caribbean Workplace. Philadelphia: Temple University Press.
External links Coalition for Inclusive Capitalism Coalition for Inclusive Capitalism—Press Inclusive Capitalism for the American Workforce: Reaping the Rewards of Economic Growth through Broad-based Employee Ownership and Profit Sharing, Center for American Progress, 2011 The State and Direction of Inclusive Capitalism, Saïd Business School, Oxford University—Deloitte Consulting, LLP David G. Green. Inclusive Capitalism: How we can make independence work for everyone, Civitas: Institute for the Study of Civil Society, 2017