Capitalism is ruining the world, and can save it, says economist

Business won’t save the world, but — according to Harvard economist Rebecca Henderson — it can help fix it. Henderson, author of “Reimagining Capitalism in a World on Fire,” became preoccupied with the harshness of the free market after watching manufacturing plants shut down in England in the 1980s, when they proved unable to adapt to evolving markets. Since then, she has been gripped by the question of how to build a more just and sustainable system.

Main Takeaways

• Henderson attributes the corporate world’s sluggishness in embracing green regulations to fears about hurting their bottom line. Even if CEOs acknowledge that “climate change might be a big issue,” concerns about not hitting quarterly earnings targets supersede it. Henderson also points to a fear of going it alone: why invest time and money into decarbonizing if “my competitors are not?”
• When it comes to saving the world, Henderson thinks “a huge political and social and cultural movement” is required. However, she believes businesses can have a positive impact by joining together to tackle problems and catalyze change in different industries. Henderson points to Walmart lobbying for a $15 federal minimum wage (the franchise raised its own wages and wanted others to do the same) as an example of when business interests and the common good can come together.
• Employees are increasingly pushing their employers to align themselves with social and environmental causes. Where you work is where “your identity is bound up,” says Henderson. Accordingly, employees who care about these issues seek out places that share their concerns, and CEOs and companies are being pushed to adapt, in order to hire or retain talent.