Current Debate On The Future Of Capitalism And India’s Role

General Studies International Relations 02: Stakeholder capitalism was a popular management theory in the 50s and 60s. This type of capitalism was different from the tradition capitalsim because unlike the latter, it focused on the needs all constituents, not just shareholders. The 2020 annual meeting of the World Economic Forum opened with the theme of “Stakeholders for a Cohesive and Sustainable World. ” Shareholder capitalism regards the purpose of the firm to be generating profit to its shareholders.

But, critics dismissed stakeholder capitalism as a gimmick to say nice things, repackaging old ideas, creating illusions without making any sincere efforts to reform capitalism.

Stakeholder Capitalism Makes a Comeback

  • Global economy is in the midst of deep crisis, hence there is talk about stakeholder capitalism once again.
  • WEF’s Survey On Global Risk has identified many challenges. Three of which deserve to be mentioned here.
  • These are: polarised politics in major industrial societies, trade wars and technological change.
  • US-led by Donald Trump figures in debates involving all three issues.
  • Trump’s politics is based on opposing Globalisation and WTO.
  • He is also accused of polarizing society in the US.
  • He is the very embodiment of toxic bled of nationalism and populism that have corrupted democracy in many countries.
  • Trump gets his support mainly from America’s working class. Like everywhere, America’s working class are struggling with low wages and less secure jobs.
  • Democracy in Britain experienced similar situation. Tory leader Boris Johnson got the support from unlikely quarters, working class being one such quarter.
  • It was hoped that Donald Trump’s pre-election anti-globalist rhetoric would subside once he was in office. But, this has not happened.
  • Anti-globalisation protests have become common over the years at the annual gatherings of Davos as well as the G-7 and G-20 summits.
  • But, nobody had ever thought the US would be at forefront of dismantling globalization.

The Global Risks Report 2020

General Studies International Relations (02)

Impact of New Technologies

  • The trade wars among the world’s big countries have been accentuated by the new technology revolution such as AI, blockchain etc.
  • The Global Risk Report has pinned its hope on the technological revolution that is happening digital domain. The report calls for full potential on new technologies.
  • But, instead of cooperation, “digital fragmentation” is staring in the face of capitalism.
  • Digital issues have come to the front and center of American arguments with both and Europe.

What Should India Do?

  • India should actively participate in the current debate on the future of capitalism.
  • It should find ways to take advantage of new opportunities that will emerge out of the ongoing realignment of the big capitalist forces of the world.