Food, Fashion, Forests, Finance, & More

Interesting to see this ‘responsible capitalism’ debate in the UK move in to discussions of preferences for employee-owned companies, cooperatives, etc. This is, I believe, a ground breaking development. Fingers crossed the conversations move in to some action / change / new or tweaked institutions.

And perhaps these conversations can be held meaningfully in Australia with similar concrete changes!

fairtradeblog:

by Toby Quantrill, Head of Public Policy, Fairtrade Foundation

Earlier this week Nick Clegg waded into the escalating battle among British politicians to lay claim to being the promoters of ‘responsible capitalism’. He has called for a ‘John Lewis economy’ and plans to find ways to increase employee ownership of large companies, thus ensuring that the interests of staff and shareholders are brought closer together.

The Fairtrade movement includes a wide variety of business models, but the cooperative principles have been one of the main driving forces. As well as the large number of workers cooperatives at the production end we have also seen the success of businesses such as the inspirational Divine chocolate, where the cocoa farmer cooperative in Ghana owns 45% of the whole company.

But such innovation remains the exception rather than the rule and without a strong and confident push from government, progressive businesses and the NGO sector it is likely to remain so.

Nick Clegg’s speech was followed up yesterday by both David Cameron and also Ed Milliband, battling it out over who is the most happy, smiley, shiny capitalist in the room.

Whether any of them can come up with practical ways to achieve their visions and (far more challenging) push such policies through against the powerful vested interests that will undoubtedly line up in opposition to such ideas, remains to be seen. But I am doing my very best to put my general cynicism aside and wish them all luck. The reform of our economic system is clearly going to be the most important political task of the coming years and will need all the political support it can get!

For me, the term ‘responsible capitalism’ can only be meaningful when it meets two key criteria:

1.    When it means a genuine shift in thinking away from the ‘growth at any cost’ mantra and towards a more balanced set of indicators, which must include reducing inequality as a critical measure of success.
 
2.    When it goes beyond rhetoric, voluntary codes or industry self-regulation and is backed by a commitment by government to act decisively against powerful vested interests through regulation, incentives or other measures.

With increasingly globalised supply chains, I see the need for a greater emphasis on inequality as critical not just at the national level but also at the global level.

There is an increasing interest in this area with organizations such as ODI and the New Economics Foundation tackling the issue of inequality from different perspectives.

One of my hopes for 2012 is that this will be the year when international development organizations can shift the core of our rhetoric from ‘poverty reduction’ to ‘inequality reduction’. With the role of the private sector in development one of the hot topics right now, an emphasis on ‘inequality’ could provide an interesting lens for analysis of success in this area.

Oxfam are stepping up their engagement. But organizations such as the G20 and the OECD are still more comfortable talking about ‘social cohesion’  rather than inequality.

Fairtrade certification has been a positive force in empowering farmers - the weaker actors in the supply chains – for greater equality in trading relationships but Fairtrade will never be enough on its own. Fairtrade supports the creation of the Groceries Code Adjudicator, which aims to protect suppliers from supermarkets with a groceries turnover of over £1 billion per year abusing their dominance in the market.

Initiatives of this nature will be key to any shift towards responsible capitalism and Fairtrade will continue to campaign on this issue to get the bill through Parliament this year. We would encourage Nick Clegg, David Cameron and Ed Milliband to give it their full support.

We’d be interested to know what ‘responsible capitalism’ means to you.