A culture war on ‘woke capitalism’ is the last thing we need

At the other extreme are those who proselytize for a radical libertarian vision of capitalism. They include the Adam Smith Institute, which fears that the whole movement of stakeholder capitalism poses an existential threat to prosperity.

“Wake capitalism could undermine economic recovery,” he said.

In this age of culture wars, these extremes risk opening a new front within companies that should have better things to do.

In some ways, the emergence of stakeholder capitalism is just a pendulum swing. Milton Friedman’s worldview that a company’s sole responsibility is to increase its profits has become the norm. Through the wrong prism, it can absolve a company of any social responsibility.

Stakeholder capitalism, at its best, articulates and restores some balance between corporations and the rest of the world.

You can trace the roots of its current expression to the financial crisis, when insularity and irresponsible banking plunged the world into recession and a decade of wage stagnation.

The consequences for the culprits were considered far too light.

This sense of injustice was later compounded by small business blowouts such as BHS where regular workers, retirees and creditors suffered, but wayward owners and incompetent administrators repeatedly got away with it. light.

Meanwhile, board compensation has drifted away from salaries, with mediocre figures such as former Persimmon boss Jeff Fairburn receiving huge sums. Worse still, rewards for failure have seemingly become commonplace, with corporate bums handing pots of cash as they walk out the back door.

These are all issues that have largely gone unaddressed and fueled the idea in some quarters that free market capitalism has gone wrong, so it needs to take a softer, more inclusive approach.

There are worse ideas. Jeremy Corbyn’s proposed response to the concern was to nationalize swathes of industry, introduce much stricter regulation, employee representation on the board and a tax on the wealthy. Fortunately, most voters instinctively know that such brutal socialism is a path to economic ruin.

Away from student politics, there is a risk that embracing social causes will become a corporate distraction from doing business. There’s nothing wrong with a CEO striving for sustainability, but it shouldn’t come at the expense of the board’s fiduciary duty to shareholders.

The final point was made by veteran Terry Smith about Unilever, who said that in their quest to uncover the mayonnaise goal, management took their eyes off the ball.

With a cull of 1,500 workers suddenly proposed, Smith may feel vindicated.