Book Review: The New Capitalist Manifesto by Umair Haque
The New Capitalist Manifesto by HBR blogger Umair Haque is the third tract I’ve read recently on how to make capitalism work for everyone, the others being Conscious Capitalism by Whole Foods Markets boss John Mackey and Creating Shared Value by Michael Porter and Gary Kramer.
All three have the same underlying prognosis – that capitalism as it is now, while bringing many societal benefits, has been allowed to exploit nature and society for selfish ends, diminishing opportunities for all – The Tragedy of the Commons, in effect. And the solution put forward by all three is fundamentally the same – that the successful business of the 21st Century must nurture its societal, natural and economic underpinnings rather than depleting them.
Haque’s concept of ‘Constructive Capitalism’ is certainly the most meaningful of the three, acknowledging that capitalism has been destructive in its pursuit of what Haque calls ‘thin value’ – economic benefits that are outweighed by the societal and environmental costs that those benefits incurred. Thus a $3 hamburger may lead to $30 of wider costs.
Haque calls for a refocus onto ‘thick value’ – economic benefits which deliver net societal and environmental benefits too – in other words, Constructive Capitalism. He identifies 15 ‘insurgent’ companies who are pursuing thick value and throughout the rest of the book compares them to more traditionally-minded ‘incumbents’, so Apple gets compared to Sony, Nike to Adidas, Whole Foods to Safeway etc.
The book explores the five cornerstones of constructive capitalism, of which the insurgents have adopted at least one:
- Moving from value chains to value cycles to utilise resources by renewing instead of exploiting;
- Moving from value propositions to value conversations to respond to demand;
- Moving from strategies to philosophies to become more competitive in the long term;
- Moving from protecting markets to ‘completing’ them – ie expanding the markets;
- Moving from goods to ‘betters’ which enhance rather than deplete society.
Obviously points 1 and 5 have most relevance to the environmental arm of sustainability, looking up and down the value
chain cycle. It was great to see ‘green’ so deeply embedded into the concept rather than the lip service it so often gets.
Each of these cornerstones has its own ‘step’ to make the shift – in order they are:
- Loss advantage (as opposed to cost advantage);
And this leads to my sole criticism of the book. While all of this is described vibrantly and clearly, there are a few too many nested lists of five bullet points of principles/neologisms which meant a bit too much riffling back to remind the reader of where exactly they are at any point – and the definition of that neologism. Some of these, like ‘loss advantage’, aren’t entirely intuitive. This is a minor point, but it did dilute the message.
Having said that, of the three rebooting capitalism manifestos mentioned above, I found The New Capitalist Manifesto the most comprehensive, forward thinking and inspiring. My main take-away was the need to pursue thick value over thin value, and there is another whole debate about how Governments can encourage the former and penalise the latter to accelerate the transition. If you are interested in the big picture of where business should be going in the 21st Century, read this book.