Covid-19: A Clarion Call for Conscientious Capitalism


Care for people and the planet must be embedded in business models such that profits are generated responsibly and in a manner that helps lift all people, as opposed to benefiting only a handful.

A century from now, historians would see Covid19 and the year 2020 as a turning point in human history; a moment of reckoning when the philosophy of human progress itself would have evolved to dismantle the ‘God of GDP’ and seek reconnection with Nature. In a sense, 2020 marks the year the world completes the full circle. Unfettered predation of natural resources by humans led by the ‘greed is good’ economic philosophy of the late 20th century has wreaked havoc on earth’s geological balance, necessitating a strident call for a ‘cold-reboot’ of the human mind in pursuit of common prosperity, not at the expense of the planet, but in a symbiotic partnership. If not this, then alternately, these very historians would be writing the obituary of life and civilisation on our blue planet.

This is not fanciful. “The modern world as we know it would not have existed without the epidemics that swept through the Americas in the 16th and 17th centuries. These epidemics created the modern world. In the wake of Christopher Columbus’s voyages of exploration, Europeans arrived in the Americas in ever-increasing numbers. They brought with them a range of viruses, such as smallpox, influenza, measles, mumps, and chickenpox, to which Native Americans had no prior exposure and no immunity. Historians call the resulting epidemics “virgin soil epidemics”… Studies now suggest that the population of the Americas may have been as high as 100 million before contact with Europeans. In many regions, within a century of exposure to these diseases, 95% of the population died….in the 16th century, Europeans saw the virgin soil epidemics as proof of their moral and biological superiority. They were evidence that God intended Europeans to take control of the Americas….The epidemics themselves helped to rationalise colonialism – it was God’s will, after all. They allowed Euro-Americans to appropriate native lands while abrogating them of any blame, and to view their imperialism as some divinely preordained “manifest destiny”…. The absolute ownership of people – chattel slavery – justified by concepts of racial superiority was, in many respects, a result of these virgin soil epidemics.”[i]

We inhabit a world today that is deeply unequal, remorsefully uninhabitable, unjustly designed, and inexorably unsustainable for life to exist. “We stand at the threshold of future. ‘Nature is richer, more unexpected and more complex than had been imagined at the beginning of the twentieth century’.” In this Anthropocene geological era in Earth’s history, “humans are the defining geological force and the first in which that force is ‘actively conscious of its geological role’.”[ii] Covid19 is as much a stark reminder of how impactful is the role of humans in changing, within a matter of decades, the planetary balance that evolved over millions of years, as it is a warning bell of how the tilt in this balance- ‘overshoot’ meaning resource use beyond the carrying capacity of the earth- could wipe out centuries of growth and endanger human species itself.

The good news is that people are heeding to this warning bell. An online survey of 21,104 adults (aged 16-74 years) across 28 countries shows that 86% of the ‘want the world to change significantly and become more sustainable and equitable rather than returning to how it was before the Covid19 crisis’. People who strongly disagree with this constitute only 4% globally. This distribution is spread fairly across 28 countries.[iii]

We are in the midst of ‘complex of problems troubling men of all nations: poverty in the midst of plenty; degradation of the environment; loss of faith in institutions; uncontrolled urban spread; insecurity of employment; alienation of youth; rejection of traditional values; and inflation and other monetary and economic disruptions. These seemingly divergent parts of the “world problematique,” … have three characteristics in common: they occur to some degree in all societies; they contain technical, social, economic, and political elements; and, most important of all, they interact.” This is an apt description of the contemporary challenges we face today. However, this description was actually made half a century ago, in the Project on Predicament of Mankind issued by the ‘Club of Rome’ which published the seminal volume The Limits to Growth in 1972.[iv] Complexity of global challenges, their long-term nature, and interconnectedness across multiple disciplines were key highlights of their global equilibrium model based on system dynamics. It is interesting that all of the fundamental principles of that approach- as much as the human aspiration- are perhaps more relevant today, except that our analytical tools have evolved much, and we have much more data and information than we did then. The limits to growth that Meadow et al advanced have become more real, as our natural resources dry up and get irreversibly polluted in the service of the insatiable greed of humankind. Covid19 exposes this more than all of the data, stories, and evidence on climate change that scientists have amassed and disseminated in the past several decades, and that presents an unprecedented opportunity- and excruciating need- to reset our ecological balance.

The Limits to Growth report identified five factors that ‘determine, and therefore ultimately limit, growth on this planet’, viz., population, industrial production, agricultural production (food), natural resources, and pollution. In their Global Stability Model, the report identifies the latter three as the ‘ultimate determinants of the limits to growth on this earth’. The trade-offs among these three environmental factors- food, natural resources, and pollution- were real essentially because ‘earth is finite’. The ‘apparent goal… to produce more people with more (food, material goods, clean air, and water) for each person’ will ‘eventually reach one of many earthly limitations’ in the finite earth. To the technology optimists who trust ‘the ability of technology to remove or extend the limits to growth of population and capital’- best captured in the predominance of GDP since-, the report argues that ‘the application of technology to apparent problems of resource depletion or pollution or food shortage has no impact on the essential problem, which is exponential growth in a finite and complex system. With finite earth, thus, there is no escaping the ‘natural’ limits to growth.

The Covid19 crisis has reconfirmed the underlying tenet of the warning that the Limits to Growth issued nearly 50 years ago- nurturance of ecology must go in symbiotic partnership with the human pursuit of economic growth for sustainable development. Like the low tide in seas, Covid19 has exposed the underlying ruggedness of economic topography as much as the ecological morass that our dogged pursuit of GDP in the hands of callous capitalism has wrought on entire humanity. In our tenacious pursuit of GDP growth, we celebrated growth in economies rather than focussing on enriching the lives of people living in these economies. In our pursuit of economic growth- measured by consumption standards of material goods and services-, we have overshot earth’s carrying capacity to our own detriment.

Persian terms Abadi (flourishing) and abad (populated, prosperous) – commonly used in Hindi too- have their etymological origin in the term ab which means ‘water’, underlying its fundamental importance to the survival and prosperity of humankind. When conflicts over access to water are forecast as a potential cause of the Third World War, we know the ‘natural’ limits to growth are breached.

The science of climate change in all its dimensions and scare is now well recognized. It is also now firmly established that the ‘overshoot’ on earth’s carrying capacity is a result of human activities on earth. Covid19 has now made this science a lived experience for every individual on this planet and each government and business that exists. Lives have been ruined, decades of progress on poverty alleviation has been reversed, one million species are at the threat of extinction, governments have become bankrupt and deep in debt, profits have nose-dived for most businesses just as many have closed down, and we are borrowing from the future generation to finance our current living and stimulate growth rates. It is estimated that India would take at least 17 years before it returns to its pre-Covid19 economic growth curve even under the heroic assumption of 7% annual growth rates from 2021-22[v]. Covid19 has issued a clarion call to pause, reset and reimagine our future. Stringent national lockdowns are an opportunity to reopen our minds that are locked down in economic models and pathways that have arisen as a result of short-term focus on financial returns in an era often defined as shareholder capitalism.

Covid19 has unleashed a war on the lifestyle of the world and humankind is desperately losing. And such times bring into prominence the role of science, most evident in the urgent search for a vaccine, in addition to all the health guidelines and protocols, which have commanded the highest attention and respect in 2020. Yet, as S. Radhakrishnan says in the preface of his translation of The Bhagavadgita, ‘ if we have to give largeness and wisdom to men’s outlook on life, we should stress on humanities also…The concepts of right and wrong do not belong to the sphere of science, yet it is on the study of the ideas centering around these concepts that human action and happiness ultimately depend. A balanced culture should bring the two great halves into harmony.’[vi]

The extreme and unjust duality within the models of our development- advanced as inclusive and then sustainable development- has clearly failed the humanity. Covid19 has exposed this duality where 8 men own half of the global wealth, where rich countries and wealthy people are most responsible for, and least affected by, climate change and environmental destruction. On the other hand, half of the world’s population own less than 1% of global wealth, have seen their real incomes hardly grow in the last four decades, and are least responsible for and most affected by the destruction of the environment and unsustainable lifestyles of the rich and famous. In India, visuals of migrants returning in hordes to their villages when the country shut down at four-hour notice in March 2020 brought home the income instability and social insecurity of 90% of India’s 460 million workforces who build our roads and airports, manufacture and service our cars, fix our broken air-conditioners and refrigerators and provide security to our homes and offices. There is greater unanimity in the world’s leaders that our global economic model is broken and ideology needs a reimagination.

While there are many factors responsible for our situation, modern corporations across the world owe the greatest responsibility for the sordid state we are in today. In 2012, 51% of iPhone’s selling price constituted profits, and only 2% was manufacturing cost, with wages’ share being only a portion of the latter[vii]. Notwithstanding the high moral ground Apple as a global brand espouses, the reality is they- like most other modern corporations- take little responsibility for the state of workers’ income and social security through their value chains; whose hard, invisible work generates their profits. It is therefore time that businesses change their practices. Business of business is no longer only business. Callous capitalism must be replaced by conscientious capitalism. Responsible businesses must urgently begin to treat the ecological dimension of sustainability as core business principles and not as a charity to be doled out from profits. Profits should be a result of sustainable business practices and responsible economic processes. Businesses need purpose-driven leaders rather than profit-maximizing wonks.

The good news is that there is now growing evidence that ‘Even in the short term, putting sustainability at the heart of decision-making makes good business sense. Since the beginning of the COVID-19 crisis, sustainable investments have outperformed the wider market, and the growth of investment in companies with the high environmental, social, and governance (ESG) ratings continues apace… At least 530 businesses havecommitted to taking action to reverse ecological losses, and at least 1,200 companies are already taking steps such as conserving forests or adopting regenerative agricultural practices… Science-Based Targets Network initiative- a framework to ensure that the action being taken will be enough to protect and restore nature, and to link initiatives in order to achieve maximum impact-, … has secured commitments from over 1,000 companies to set scientifically grounded emissions-reduction targets… The guidance has been produced and reviewed by scientists, as well as representatives from environmental groups, businesses, and consultancies. It describes five steps to protect and restore the global commons – the land, freshwater, ocean, biodiversity, and climate we all need to survive – while staying competitive. One example of potentially transformative action that some are already taking is nature-positive policy advocacy. More than 600 companies – with combined annual revenue of over $4 trillion – have signed the “Nature Is Everyone’s Business” Call to Action, urging governments to adopt policies now to reverse nature loss ecosystem loss by 2030. This is the first time so many businesses have come together in an effort positively to influence discussions on the post-2020 global biodiversity framework.’ [viii]

‘When Cyclone Amphan came barreling up the Bay of Bengal this past May (2019), South Asia’s first named storm of the year appeared to pose a massive threat to the people who live on the coastal floodplains and to the animals and plants – including many endangered species – that rely on these sensitive ecosystems. But nature came to the region’s rescue. The Sundarbans, the world’s largest mangrove forest, offered better protection than any man-made storm wall could have done. When Amphan’s 16-foot storm surge slammed into this 4,000-square-mile national park, the mangroves took the teeth out of it, just as they did with the two other supercharged cyclones, Aila and Sidr, that have made landfall in recent times.’[ix]

We can no longer continue to live with businesses generating short-term profits and then governments, philanthropists, and civil society cleaning up the economic and ecological morass they create in the process of profit generation. Care for people and the planet must be embedded in business models such that profits are generated responsibly and in a manner that helps lift all people, as opposed to benefitting only a handful. Ends can never justify the means. As Gandhi wrote, ‘The means may be likened to a seed, the end to a tree, and there is just the same inviolable connection between their means and the end as there is between the seed and the tree’.[x] The primary onus of cold-reboot lies on businesses, who must reimagine a new course towards an equitable, net-zero-emissions, empathetic world where just and fair means alone justify business profits. This needs unconventional partnerships, multi-disciplinary approaches, visionary leadership, and a continued conversation and dialogue amongst all stakeholders and rightsholders. In this context, it is worthwhile to recall John Locke’s justification of property. ‘God has given us all things richly. But how far has he given to us? To enjoy. As much as anyone can make use of to any advantage of life before it spoils, so much he may by his labour fix a property in; whatever is beyond this is more than his share, and belongs to others.’[xi]

Endnotes
[i]           Ward, Mathew, 23 September 2020, COVID-19: Just how important were early pandemics in shaping today’s society? World Economic Forum. Available at https://www.weforum.org/agenda/2020/09/modern-world-epidemics-america-europe/

[ii]           Verma, S., Social Science Research, Status, Emerging Trends and Inter-disciplinary research, Journal of Governance and Public Policy, ISSN 2231-0924 Volume 7, No 1, January-June 2017 pp.88-102.

[iii]          https://www.weforum.org/agenda/2020/10/this-business-leader-says-2020-is-the-year-that-could-save-us/

[iv]          Meadows, D.H. et al (1972), The Limits to Growth, A Report for the Club of Rome’s project on the Predicament of Mankind, Universe Books, New York

[v]           NCAER Quarterly Review of the Economy, Q2, 2020-21 In Coronavirus Times (Sept 2020). Available at http://www.ncaer.org/uploads/photo-gallery/files/1601440170QRE%20Report%20September%202020.pdf

[vi]          Radhakrishnan, S., 1993, The Bhagavadgita, HarperCollins Publishers India (First published by George Allen and Unwin, UK in 1948)

[vii]          https://www.hindustantimes.com/business-news/wistron-violence-lessons-for-indian manufacturing/story-yF8mwDUPgmq7K2j0ZTr96J.html

[viii]         The five steps proposed by SBTN are first, companies must produce a data-based estimate of their value-chain-wide effects and dependencies on nature and create a list of potential issues and locations that are amenable to target-setting. Second, companies must set priorities. Considerations should include, for example, the highest-value ecosystems – the areas where people rely most heavily on nature for their lives and livelihoods – as well as the areas where supply-chain activities are having the most impact. Once companies decide on key issues and locations for action, they must collect baseline data for those focus areas and use it to set targets – which they disclose publicly – that are in line with the planet’s limits, as well as societal imperatives. Step four is action. In pursuing their targets, companies should be guided by a hierarchy of objectives: avoid having a negative impact on nature, reduce unavoidable impacts, and regenerate and restore critical ecosystems. In pursuing these objectives, they should consider what could be transformed within their organizations, across their supply chains, and beyond. The final step in the SBTN framework is for companies to track and publicly report progress. https://www.project-syndicate.org/commentary/business-action-on-biodiversity-science-based-targets-network-by-erin-billman-and-eva-zabey-2020-10

[ix]          https://www.project-syndicate.org/commentary/conservation-yields-economic-benefits-by-robert-watson-2-2020-07

[x]           Gandhi, M.K., (1952) Hind Swaraj, p. 71. Quote available at https://www.gandhiashramsevagram.org/voice-of-truth/gandhiji-on-means-and-ends.php

[xi]          Locke, John (2002) The Second Treatise of Government, Dover Publications, New York, p 14

 

Biography: Samar Verma is a Program Officer at Ford Foundation leading the program portfolios on public interest technologies, Future of Workers, and Philanthropy. Earlier, he served as Senior Program Specialist at International Development Research Centre (IDRC) of Canada managing the multi-donor Think Tank Initiative (TTI) program in South Asia and Myanmar which provided core support and technical capacity building to independent, not-for-profit think tanks for strengthening institutions and informing policy-making. Samar holds a Ph.D. in Economics and an MBA. Views expressed here are strictly personal and not attributable to any organisational affiliations, past or present. The author can be reached at his personal email samarverma311@yahoo.com.

 

6th June 2021