A few years ago I penned a number of articles on what I perceived were needed changes at the heart of capitalism. The Great Financial Crisis of 2007-2008 clearly evidenced that capitalism as we knew it had to update its modus operandi. For this reason, when I saw the list of available books to review, Professor Hart’s work caught my attention.
Capitalism at the Crossroads has a narrower focus than I would have liked as it centers its argument almost purely on sustainability via a “green economy.” Prof. Hart starts by tracing the history of socially responsible corporate behavior from its early days in the 1970s when such behavior was imposed through regulations and fines; he then transitions to the 1980s and 1990s strategies of pollution prevention and eco-efficiency, to end with the policies of eco-effectiveness of the last ten years.
In essence, in his new book Prof. Hart makes the case for two major strategic drivers: technology and Bottom of the Pyramid (BoP) approach.
Naturally, no one can argue with the merits of technology as a pillar of progress; however, technology is the result not only of strategic and flexible thinking but mostly of quality educational frameworks. This book focuses solely on the corporate strategy aspect and therefore does not deliberate on the subject of education but I would have liked to see this issue integrated in the analysis. In terms of technology as a disruptive weapon, Prof. Hart ponders at length on the concepts of “creative destruction” and “disruptive innovation” by economist Schumpeter and tries to adapt this classic capitalism model to his newer “sustainable” paradigm.
As far as the BoP approach, Prof. Hart mentions winning examples such as micro-financing to stress the need to include the four billion people sitting at the bottom of the pyramid in any winning economic model. The BoP debate sees two factions, those that see these four billion people as potential producers and eventually customers and those like Prof. Hart that see them as customers, producers, and partners simultaneously.
I found Prof. Hart’s book intellectually challenging albeit occasionally utopic. It is a must read for all interested in making an impact in business and in the global economy. While it is easy to disagree with a number of the book’s directives, Prof. Hart’s work is a useful spark for forward social thinking.