How capitalism and ethics can collide to create a better future for everyone
Ian Baxter, Chairman of Baxter Freight, recently shared his vision for a kind of capitalism that benefits everyone.
Writing in FlyBe’s in-flight magazine, the columnist and speaker on ethical capitalism argues that, despite the enormous breaches of trust that have dominated headlines in recent months, capitalism is a force for good – if it’s done right.
He says: “Those, like me, who believe capitalism does far more good than harm first need to remind people of its benefits and secondly to articulate strategies to address its weaknesses. We mustn’t allow people to attack the cornerstone of our nation’s prosperity without coming up with a strong and thoughtful response.”
And the benefits are manifest. A recent World Bank report revealed that capitalism is pushing incomes up around the world while cutting the real-terms cost of many items. The UK has never been more prosperous.
Welcome a safety net
However, inevitably, there will be some people to whom, through no fault of their own, capitalism deals a poor hand. Ian cites the workers at the Redcar steel plant as examples of those who need a safety net.
“Those engaged in capitalism should enthusiastically accept and pay for a safety net to help such people, not least because one day it may be them that need the help,” he adds.
Of course all business leaders should strive for the most efficient way of doing business, but not at the cost of ensuring a better tomorrow than today
“The starting point for a more ethical capitalism is an acknowledgement that business is only about people. It’s tempting to regard capitalism as the activity of faceless corporations. But it’s really the melting pot in which the needs and capabilities of shareholders, staff, customers and suppliers are joined.”
Therefore, Ian urges us all to be honest with ourselves – to understand the results of our actions and desires. We can’t simultaneously bemoan the closure of a local bookseller while at the same time choosing to shop for cheap books online. “Our wish is capitalism’s command,” says Ian.
Long-term planning will benefit more
He goes on to point out that responsibility for creating a better capitalism exists in many areas from the leaders – CEOs and company chairmen - to the shareholders and consumers. In particular, he targets fund managers who are driven by the need for short-term wins and increasing value above all.
“That’s not easy for them,” he says. “And it’s not helped by the fact that those people’s expertise is mostly in finance, not in the underlying sectors their investments represent.
“If I were to make one big change to the law to make capitalism work better, restoring (or bringing in) the principle that long-term investments are better than short-term ones would be it. And I would do it BIG time especially in the tax regime.”
I believe the majority of business leaders are good people to whom reputation matters
Looking to the future is crucial – and not just for return on investment. Ian believes reputation and relationships are just as important to ensuring the kind of economy where continued improvement on every level exists.
Ian says: “Of course all business leaders should strive for the most efficient way of doing business, but not at the cost of ensuring a better tomorrow than today.”
He urges CEOs to think of their futures too – the legacies that will show what they really stood for. “I believe the majority of business leaders are good people to whom reputation matters. It’s time for all of us to support and cajole them into building a better, more ethical capitalism, creating value in which all of us can share.
Ian Baxter founded Baxter Freight in January 2014. It is one of the UK’s fastest-growing logistics companies.