Director logo
| More
OPINION

Capitalism? It's our survival kit

By Iqbal Wahhab
  • Let's reclaim the word and show that business is a force for good. After all, everyone benefits when company owners and employees collaborate towards a common goal

  • Commenting on Facebook founder Mark Zuckerberg's decision to give $500m (£315m) worth of his company's shares to charity, the editor of a rival publication said: "It's good to see that not all businessmen are red-blooded capitalists."

    The term capitalism is used more by followers of Karl Marx rather than us – the people who are alluded to as the greedy creators of inequalities. Because we generate and hold on to wealth, they say, a weaker class of have-nots is automatically created as a by-product.

    Many countries that lived by Marxist principles have now swung so far the other way that younger generations will be hard-pressed to imagine what China and Russia were like a few decades back.
    So while nobody really cares about Marxism any more and Ed Miliband can't seem to say the word socialism, the business community must reclaim capitalism from voyeuristic academics and make it a term we're proud of and want to reinvent in the process. Marx's Das Kapital was written in 1867, so we're due an upgrade.

    Capitalism was defined before the welfare state and when landed gentry deemed charity a noblesse oblige activity. The worldwide failure of governments to adequately provide for those who are incapable of doing so for themselves has been a trigger point for the Gateses and the Zuckerbergs but also for the likes of us more humble business folk.

    The rise of social enterprise and social enterprises (one is a best-practice aspiration and the other is a formal structure for businesses that commit, say, 25 per cent of their profit to charitable or community-based causes) has made many more conventional companies look again at their own model. If they don't do this often their customers and, increasingly, their employees will.

    Bolting on words like ethical in front of capitalism is placing a tiny plaster over the issue and implies that capitalism in itself is unethical, which it isn't. Ethical is not a bad word but must be used appropriately. In our restaurants, for example, we will purchase ethically, which means from sustainable and fair sources. That means serving only fish that aren't facing extinction, coffee that is produced where workers aren't exploited, and vegetables when they're in season here rather than shipped or flown in from abroad.

    It also means we don't indulge in sharp practices such as taking the service charge to allow us to reach minimum-wage levels for employees. You no doubt have examples in your own businesses. Like me, you probably do these things for more reasons than because it is "the right thing to do". We're also aware that if we don't, we won't attract as many customers or be able to recruit the best staff. In other words, there is perhaps no new morality coming into play in our commercial decision-making processes but – more simply – market forces are driving us wittingly or otherwise.

    When was the last time you heard the term corporatism, last witnessed in Britain in the 1970s when businesses, unions and government would foist their own interests on each other through "beer and sandwiches" meetings in Downing Street? Generally, it's public sector unions that strike these days; in the private sector we embody employee expectations into our corporate strategic thinking not because we're nicer people but also because we want to avoid reputational risk. That applies even more to our customers; witness the grovelling apologies that Tesco issued over the horsemeat found in some of its burgers.

    Out of tripartite corporatism, only the private sector can drive us forward. And we would do much better if successive governments didn't mess up managing the economy. The hostility between employers and unions is waning thanks to sophisticated management tools and techniques. Capitalism has its regular MOTs and we know we're all better off if we see each other as one entity – the company – rather than owners and workers.

    Employees want to work for companies that don't just pay them well but also use part of their profits for wider social benefit. It's simply no longer the case that capitalism means greed but when it does manifest itself that way – think of Starbucks and the tax storm – the customer rebukes and the market punishes. Undoubtedly, we could
    do better at presenting ourselves;

    Sir Martin Sorrell's comment that paying tax was a good example of CSR wasn't helpful. But capitalism is not the devil – it's our survival kit.

    Iqbal Wahhab OBE is the founder of Roast
  • www.roast-restaurant.com