BOOK REVIEW
Santhosh Jayaram
Reading books written by authors with academic backgrounds is an altogether different experience from those written by practitioners, and this book confirms my postulate. The quantum of research that goes into the book’s creation is the main difference between books written by practitioners and academicians. Practitioners tend to reason what was done, what succeeded or what failed, whereas academics, through their research, try to establish the context, the current scenario and the consequence. In Beyond Shareholder Primacy, Prof Stuart L Hart navigates us through the past era of capitalism, the present evolution, and how the future world should orient capitalism for a sustainable future.
Fortunately, the book brings hope to otherwise gloomy and depressing setting in the world towards sustainability, especially after the COP 29 outcome and the initial signals from the Trump administration. Right at the onset, Prof Hart tries to prove that capitalism goes through reformations across time and ages, and we are entering the age of the 3rd reformation, which will counter the current shareholder capitalism. He uses history to convince that a polycentric counter movement countered every monocentric evolution of capital. It is so classical when he says that nature seemed limitless during the start of capitalism and that capital was scarce. Hence, rewarding capital made sense, but now we must reverse it. The book swings through history, economics, capital markets, philosophy, and even religion in some parts to discuss morality, ethics, and business responsibilities.
The book starts from the pre-capitalistic long-distance trade period, like that of the silk route, to introduce us to mercantile capitalism, which begins with the profit-seeking sea voyages of Christopher Columbus, Amerigo Vespucci and Vasco de Gama to the advances of the East India Company. Many of these can be very well related to our lives in India. From the mercantile period, capitalism evolved into the modern giant corporations that take capitalism to monopolistic levels. The concentration of economic power resides in the hands of a few. This power imbalance and the shift of power to control the economy into the hands of big business prompts the political leadership to push agendas of welfare capitalism. The book then traverses through the 1980s, which was the peak of the shareholder primacy philosophy, to the current times, where there are more discussions around stakeholders. The numerous examples the book quotes remind you of many closer to you.
The book’s second part was more of a validation of my thoughts around corporate sustainability, such as embedding sustainability in every stream of business and re-designing the corporate architecture rather than some minor adjustments to only capitalize on the so-called win-win opportunities. I really liked the way how the book goes to present that authentic purpose is paradoxical. Capitalism should be serving the people and society and not the other way and this discussion segues to the need for re-inventing the business education. Sustainability is a saddle bag in business education, and Prof Stuart gives us insights into his work as to how he has been taking initiatives to change this approach. While business education is more focused on the how he is trying to maintain focus on the why.
It is clear that never before has capitalism, in the current manner, threatened the life support system of the planet as we know it, and it is only prudent that we need to reinvent capitalism. Isolated pockets of excellence are in plenty, but still, there is a disconnect between sustainability and the core strategy of the business, with business leaders still asking about the “business case of sustainability”. The book clearly counters this by asking the business – What is your higher purpose?
Thanks to Prof Hart for keeping the hopes alive but very clearly articulating that fundamental change to the institutions that define, support, and enable capitalism is required to bring about change. He describes the book on his website as “a call to consciousness―and action―for individuals, organizations, communities, and nations.”
Indeed, I hope more and more individuals—whether working in the sustainability space, just interested in it, or possibly not knowing what sustainability is—grab a copy of this book and learn about consumerism, capitalism, and, of course, sustainability.
I chanced upon the book at the right time as I am transitioning into academia. This book will be an excellent reference for my future work.
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