Value to Values: are democracy and capitalism past their sell-by date?

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After the financial crisis of 2008, the penny finally dropped for a lot of business people. A dawning realisation emerged that there was something seriously wrong with the mantra that companies exist solely to generate ‘shareholder value’.

Leadership commentator Steve Denning went as far as declaring Milton Freidman’s advocation of shareholder value as “the world’s dumbest idea[1]. This doctrine had effectively enslaved business and turned them into ‘Money Monsters’[2]

The corporate world started to acknowledge that some business leaders, who they had been dismissed as New Age evangelists, such as John Mackey of Wholefoods, Ben Cohen and Jerry Greenfield of Ben & Jerry’s, Anita Roddick of the Body Shop, may have been onto something.

Post 2008 the conversation changed. Established organisations started to talk of ‘triple bottom lines[1]’, ‘Conscious Capitalism[2]’ and ‘Conscious Business[3]’. The academic community got involved and we saw a rash of books exploring ‘Post Capitalism[4]’, ‘Full Spectrum Economics[5]; ‘Sacred Economics[6]’, ‘Caring Economics[7]’ and the ‘Circular Economy[8]’. Some authors went further to describe what happens ’When the Money Runs Out[9]’ and how this may exacerbate the current drift towards greater ethnocentricity in ‘Every Nation for Itself’[10].

The basic realisation was that there are significant problems with the idea that business exists solely to generate profit and shareholder value. One particularly influential paper argued that profitability was not the only criterion of importance and that shareholder welfare is affected by a broad range of factors including social and environmental conditions[1]. Obsessive profit focus can too easily foster ‘Greed Inc.’[2], and the pursuit of money can lead to fiscal irresponsibility and massive debt. America has been held up as the poster child for such short-termism and the corporate obsession with cash, to the exclusion of all else[3]

In 2013 John Mackey was interviewed by Sarah Green for Harvard Business Review’s Ideacast and said, “If you want to be competitive in the long term, your business needs to have discovered its higher purpose and it needs to adopt a stakeholder philosophy. And it needs to alter its leadership and culture. I think we’ve [Whole Foods] tapped into what I think is going to be the dominant paradigm in business over the next 50 years because it simply works better[1]”.

Mark Carney, in his recent BBC Reith lectures[1], powerfully argued that most developed nations are moving away from their obsession with financial value and towards social values. He suggests that capitalism, as it was conceived by Milton Freidman, is past its sell-by date.

I argued, in my 2016 book Crowdocracy: The End of Politics [1], that democracy was also past it’s sell-by date for exactly the same reason. Namely that democracy or Friedman’s capitalism cannot cope with the complications of the world today. I also suggested that the simultaneous cultural revolution[2] that is happening, particularly within the people practices inside most businesses today, is accelerating the demise of both models. The implosion heralds the birth of a new form of leadership, one that is more compassionate[3], collaborative[4] and pluralistic[5],.

At the heart of this revolution is a new form of decision making which unlocks the wisdom of the crowd and can help multi-national corporations and government transform their future. This Crowdocratic approach has been tested over the last five years in some of the biggest companies in the world and delivered tremendous social and financial value[1].

Healthy evolution must include the best capitalism and democracy has to offer but go significantly beyond both if we are to have any hope of resolving the multitude of wicked problems[1] we have created for ourselves. There is a way forward to a much healthier future, one that requires us to embrace the solutions that are already out there, adopt them widely and Step Change[2] how we work, how we relate to each other to build a future our children can be proud of.


[1] Watkins A. Wicked and Wise: How to Solve the World’s Toughest Problems. Urbane 2015.
[2] Watkins A. Step Change: The Leader’s Journey. Routledge, Nov 2021.
[1] Watkins A. Crowdocracy: The End of Politics. Urbane 2016.
[1] Watkins A. Crowdocracy: The End of Politics. Urbane 2016.
[2] Watkins A & Dalton N. The HR (R)Evolution: Change the Workplace, Change the World. Routledge 2020.
[3] Gilbert P Compassion: Concepts, Research and Applications. Routledge 2017.
[4] Sahtouris E.
[5] Watkins A. 4D Leadership: Competitive Advantage Through Vertical Leadership Development. Kogan Page 2019.
[1] Green S (2013) Whole Foods’ John Mackey on Capitalism’s Moral Code Podcase
[1] Hart O, Zingales L (2017) Serving Shareholders Doesn’t Mean Putting Profit Above All Else Harvard Business Review
[2] Rowland W (2005) Greed, Inc.: Why Corporations Rule Our World and How We Let It Happen Thomas Allen Publishers, Toronto
[3] Wiggin A Incontrera K (2008) I.O.U.S.A.: One Nation. Under Stress. John Wiley & Sons, New York
[1] Savitz AW (2014) The Triple Bottom Line Jossey-Bass, London
[2] Mackey J, Sisodia R (2012) Conscious Capitalism: Liberating the Heroic Spirit of Business Harvard Business School Publishing, Boston
[3] Kofman F (2014) Conscious Business: How to Build Value Through Value Sounds True, Boulder
[4] Mason P (2016) PostCapitalism: A Guide to Our Future Penguin, London
[5] Arnsperger C (2010) Full-Spectrum Economics: Toward an Inclusive and Emancipatory Social Science Routledge, London
[6] Eisenstein C (2011) Sacred Economics: Money, Gift, and Society in the Age of Transition Evolver editions, Berkeley
[7] Singer T (Ed), Ricard M (Ed) (2015) Caring Economics: Conversations on Altruism and Compassion, Between Scientists, Economists, and the Dalai Lama St Martins Press, New York
[8] Webster K, MacArthur E (2016) The Circular Economy: The Wealth of Flows Ellen MacArthur Foundation Publishing; 2 Edition
[9] King SD (2018) When the Money Runs Out: The End of Western Affluence Yale University Press, New Haven and London
[10] Bremmer I (2013) Every Nation for Itself: Winners and Losers in a G-Zero World Portfolio Penguin, London
[1] Denning S (2013) The Origin Of 'The World's Dumbest Idea': Milton Friedman Forbes [Online]
[2] Mayer C (2018) Prosperity: Better Business Makes the Greater Good Oxford University Press, Oxford

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