I’ll admit that a lot of the finer details of micro- and macroeconomics drove me crazy in college. What did make sense, however, is the principle that (in a free market) supply and demand largely dictates what is produced, how it’s produced, and at what price it is offered. This principle puts the power of “dictating” in the hands of the consumer, but are we intelligently utilizing that power? Today, I want to take some time to explore some ideas for a compassionate capitalism definition.
Setting The Stage
As a graduate student studying Tourism Management, we talked a lot about terms like “corporate social responsibility” and the “triple bottom line.” If you’re not sure what these terms mean, let’s take a second to define them:
According to Investopedia, “Corporate Social Responsibility (CSR) is a self-regulating business model that helps a company be socially accountable – to itself, its stakeholders, and the public. By practicing corporate social responsibility, companies can be conscious of the kind of impact they are having on all aspects of society included economic, social, and environmental. To engage in CSR means that, in the normal course of business, a company is operating in ways that enhance society and environment, instead of contributing negatively to it.”
The Indiana Business Reviewdefines the triple bottom line (TBL) as “an accounting framework that incorporates three dimensions of performance: social, environmental, and financial. This differs from traditional reporting frameworks as it includes ecological and social measures that can be difficult to assign appropriate means of measurement. The TBL dimensions are also commonly called the three Ps: people, planet, and profits.” (Notice the order?!)
And while we’re at it, let’s take a second to define the words that we’ve used in the title of this blog:
Compassion is defined (by Merriam-Webster) as “sympathetic consciousness of others’ distress together with a desire to alleviate it.”
Capitalism is defined (by Cambridge Dictionary) as “an economic, political, and social system in which property, business, and industry are privately owned, directed towards making the greatest possible efforts for successful organizations and people.”
So, What’s The Problem?
So, we did all that work to define some seemingly arbitrary terms, but what’s the use? Why are we here today? Well, I’ll tell you why. I’m writing this piece because I think we can do better. I believe in the American dream, but I have reservations about the current state of our value system.
We are underachieving at cultivating a new era of forward-thinking, compassionate business entrepreneurs and thought leaders. These leaders need the necessary tools to create profitable businesses that improve the environment they operate in and invest into the betterment of the community to which they belong, from the local level all the way up to a global scale. They also need to care.
But Isn’t This Already Happening?
Yes! But why can’t we make it happen faster? According to Snews, the non-profit 1% For the Planetadded “338 new members to their global movement” in the first half of 2018 alone. Now that isgood news, no doubt.
But while the reported $175 million that 1% For The Planet has given back to the environment since they founded the company back in 2002 is undoubtedly having positive impacts, one can wonder why they haven’t been able to raise more.
According to Trading Economics, corporate profits in the United States alone reached an “all-time high of USD 2,007.5 billion in the second quarter of 2018.” This translates to total corporate profits of more than 2 trillion USD in just one quarter of 2018.
To put that in perspective, the 175 million USD that 1% For The Planet has raised over 16 years equates to .0000875 percent of total corporate profits in the US in one quarterof 2018.
To me, it begs questions. What if we truly committed a full one percent of total corporate profits to community improvement, environmental stewardship, and global education? For reference, 1% of the total corporate profits in just the second quarter of 2018 would equate to 20 billion USD to use for these types of initiatives.
That is just one example to illustrate the larger points I want to make: we need more leaders and entrepreneurs that create companies with specific initiatives in mind, initiatives that have real, meaningful benefits to people and the planet, not just their profit.
And, as consumers, we need to “vote with our dollar” to demand that companies are evaluating their triple bottom line and taking concrete action to improve their communities. The way you “vote” with your dollar is even more important than the way you vote in political elections.
Why Is Compassion Important?
While we have the ability to communicate across greater distances today than ever before in human history, there’s a valid evidence to suggest that our moral compass is perhaps further from true north than it has been in quite some time.
Daily news reports, if you subscribe to them, are enough to convince you of this fact. Senseless school shootings, consistently demeaning rhetoric from the White House, and a lack of global perspective make us afraid of the unknown. These patterns empower us to react with violence towards that which is “different”. And they make us culturally ignorant.
Following this model to its extreme may have serious cultural, environmental, and economic implications. We need compassion because, without it, we risk homogenizing our world to an ugly shade of sci-fi grey.
How Can Compassion and Capitalism Mesh?
Good question. Having more companies practice corporate social responsibility would be a great start. And motivating these companies to undertake real, actionable improvement projects in their communities seems like a great way to follow up.
Can we accomplish this through governmental mandates, city ordinances, and state laws? We can certainly give it a try, but I’ll argue that the motivation largely must come from the individuals that are behind those companies.
Compassion is a skill that can be taught and learned. Capitalism is a system that is “directed towards making the greatest possible efforts for successful organizations AND PEOPLE.”
The best way to create compassionate leaders is to invest in educating them. We must inspire the next generation of business leaders to reach new heights, and insist they bring the people and the planet with them as they go.
As consumers, the best way we can insist that this happen is by being more conscious about the companies we support. Those that don’t give back to our communities and care for our environments do not deserve our hard-earned dollars. Those that do are setting the examples we need for a new model of compassionate capitalism.
Share Your Feedback!
What are your thoughts on this article/topic? Do you agree? Disagree? Do you have any important points you’d like to add?
I’d love to hear from you if this post inspired you, made you angry, got you thinking, or otherwise altered your brain chemistry! I believe that we all benefit from sharing our thoughts and feelings in many forms, and I’m thankful that the Internet gives us the “power to publish” more than every before.
Whatever your form of ‘The Slow Life’ is, we need it! I’d love it if you take a moment and share how you slow down in the comments below. Sharing is caring, and the more we know, the more techniques we can try when need it most. I hope you enjoyed this post, and I look forward to your thoughts!