In a column for the Autumn 2013 issue of Prism, “Bono on Capitalism with a Conscience,” Rudy Carrasco cites Bono’s defense of capitalism as a better means of lifting people out of poverty than aid. This shift seems to have surprised some folks given Bono’s famous campaigning for increased aid and debt relief, as if these endeavors are mutually exclusive to other forms of economic development. Regardless, Bono has become a vocal supporter of capitalism. In a 2012 speech at Georgetown University, he said, “Aid is just a stopgap. Commerce [and] entrepreneurial capitalism take more people out of poverty than aid.”
Carrasco explores some of the hesitations with embracing capitalism among justice-minded folks.
I know where the ambivalence comes from. We who consider ourselves justice advocates do not subscribe to a single bottom line, the financial bottom line. We desire a multiple bottom line, one that acknowledges people, purpose, and planet alongside profit as vital components to the “life that is truly life” (1 Tim. 6:19).
Carrasco then highlights a couple of businesses with a multiple bottom line, including Broetje Orchards, which pursues “people, planet, profit, and purpose.” Expanding the bottom line beyond mere profits is an important development, one I believe makes capitalism more just and humane. In a capitalist system, businesses will succeed and fail, but if those businesses which succeed are interested in the common good as well as their own balance sheet, the negative effects of failure and success can be better mitigated.
At the same time, I do not necessarily fault justice advocates for being hesitant about fully embracing capitalism as it currently stands. I would venture to guess the vast majority of large corporations and defenders of capitalism don’t espouse a multiple bottom line. Instead, they would likely agree with economist and Nobel laureate Milton Friedman, one of the most articulate and influential voices supporting a radically free market. In 1970 he wrote a seminal article in The New York Times Magazine entitled, “The Social Responsibility of Business is to Increase its Profits.” He criticizes the idea that executives of corporations have any responsibility to guide their businesses’ practices so that they might help society. His argument says executives work for shareholders and are playing with shareholders’ money. Friedman sees any use of shareholders’ money that does not maximize profits as essentially a tax and those who believe a business might have more than one bottom line are “preaching pure and unadulterated socialism.” (How it can be socialism when one may freely buy shares of a business and seek to fire executives or divest from the company if one is disappointed, Friedman does not say.)
What we then need is a capitalism where more businesses are encouraged to pursue multiple bottom lines. This means reforming capitalism and reclaiming it from those who see profit as the chief end of businesses. We need to pay attention to success stories of companies like Broetje Orchards or even high-end office furniture manufacturer Herman Miller, whose former CEO, Max DePree argued profit is only a means to an end. He writes in Leadership is an Art, “Corporations can and should have a redemptive purpose. We need to weigh the pragmatic in the clarifying light of the moral. We must understand that reaching our potential is more important than reaching our goals.” (69) We must remember humans create markets, they are not naturally-occurring forces like the tide. Our values and beliefs shape markets. We decide what the bottom line is. We must also remember that while our values shape markets, the markets return the favor. If we value monetary profit above all other things, our markets will primarily reward monetary profit and will shape us to only value profit more.
So let us ask, what do we value and how can we shape markets to reward excellence, innovation, and efficiency in areas other than profit?
I am of the opinion that it would be wonderful for a greater embrace of business and free enterprise among justice advocates. The successes of capitalism to bring communities out of poverty should not be diminished. Let’s not throw the baby out with the bathwater. We should remember aid is meant to address short term needs. The transformation of communities in poverty requires more than one-time assistance. A healthy economic environment is the result of many factors that aid alone cannot achieve—e.g., good governance, sustainable capital, etc. Equally important, I believe it would be wonderful if our business schools and corporations taught more about ethics and morals. We must measure the success of a business by more than the balance sheet. In order to reform capitalism, I believe we need to engage the system. Support and invest in businesses pursuing a multiple bottom line. Let’s change that bathwater.