Prince Charles, Prince of Wales talks to Christine Lagarde, Managing Director of the International Monetary fund, before the start of the Inclusive Capitalism Conference at the Mansion House on May 27, 2014 in London, United Kingdom. Photograph: WPA Pool/Getty Images
Yesterday’s Conference on Inclusive Capitalism co-hosted by the City of London Corporation and EL Rothschild investment firm, brought together the people who control a third of the world’s liquid assets – the most powerful financial and business elites – to discuss the need for a more socially responsible form of capitalism that benefits everyone, not just a wealthy minority.
Leading financiers referred to statistics on rising global inequalities and the role of banks and corporations in marginalising the majority while accelerating systemic financial risk – vindicating the need for change.
While the self-reflective recognition by global capitalism’s leaders that business-as-usual cannot continue is welcome, sadly the event represented less a meaningful shift of direction than a barely transparent effort to rehabilitate a parasitical economic system on the brink of facing a global uprising.
Central to the proceedings was an undercurrent of elite fear that the increasing disenfranchisement of the vast majority of the planetary population under decades of capitalist business-as-usual could well be its own undoing.
The Conference on Inclusive Capitalism is the brainchild of the Henry Jackson Society (HJS), a little-known but influential British think tank with distinctly neoconservative and xenophobic leanings. In May 2012, HJS executive director Alan Mendoza explained the thinking behind the project:
“… we felt that such was public disgust with the system, there was a very real danger that politicians could seek to remedy the situation by legislating capitalism out of business.”
He claimed that HJS research showed that “the only real solutions that can be put forward to restore trust in the system, and which actually stand a chance of bringing economic prosperity, are being led by the private, rather than the public, sector.”
The Initiative for Inclusive Capitalism’s recommendations for reform seem well-meaning at first glance, but in reality barely skim the surface of capitalism’s growing crisis tendencies: giant corporations should invest in more job training, should encourage positive relationships and partnerships with small- and medium-sized businesses, and – while not jettisoning quarterly turnovers – should also account for ways of sustaining long-term value for shareholders.
The impetus for this, however, lies in the growing recognition that if such reforms are not pursued, global capitalists will be overthrown by the very populations currently overwhelmingly marginalised by their self-serving activity. As co-chair of the HJS Inclusive Capitalism taskforce, McKinsey managing director Dominic Barton, explained from his meetings with over 400 business and government leaders worldwide that:
“… there is growing concern that if the fundamental issues revealed in the crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results.”
Among those “damaging results” – apart from the potential disruption to profits and the capitalist system itself – is the potential failure to capitalise on the finding by “corporate-finance experts” that “70 to 90 percent of a company’s value is related to cash flows expected three or more years out.”
Indeed, as the New York Observer reported after the US launch of the Henry Jackson Initiative for Inclusive Capitalism, the rather thin proposals for reform “seemed less important than bringing business leaders together to address a more central concern: In an era of rising income inequality and grim economic outlook, people seemed to be losing confidence in capitalism altogether.”
Lady Lynn Forester de Rothschild, who co-hosted yesterday’s conference, told the NY Observer why she was concerned:
“I think that a lot of kids have neither money nor hope, and that’s really bad. Because then they’re going to get mad at America. What our hope for this initiative, is that through all the efforts of all of the decent CEOs, all the decent kids without a job feel optimistic.”
Yep. Feel optimistic. PR is the name of the game.
“I believe that it is our duty to help make all people believe that the elevator is working for them… that whatever the station of your birth, you can get on that elevator to success,” de Rothschild told Chinese business leaders last year:
“At the moment, that faith and confidence is under siege in America… As business people, we have a pragmatic reason to get it right for everyone – so that the government does not intervene in unproductive ways with business… I think that it is imperative for us to restore faith in capitalism and in free markets.”
According to the very 2011 City of London Corporation report which recommended funding the HJS inclusive capitalism project, one of its core goals is undermining public support for “increased regulation” and “greater state” involvement in the economy, while simultaneously deterring calls to “punish those deemed responsible for having caused the crisis”:
“Following the financial crisis of 2008, the Western capitalist system has been perceived to be in crisis. Although the financial recovery is now underway in Europe and America, albeit unevenly and in some cases with the risk of further adjustments, the legacy of the sudden nature of the crash lives on.”
The report, written by the City of London’s director of public relations, continues to note that “the fabric of the capitalist system has come in for protracted scrutiny,” causing governments to “confuse the need for reasoned and rational change” with “the desire to punish those deemed responsible for having caused the crisis.” But this would mean that “the capitalist model is liable to have the freedoms and ideology essential to its success corroded.”
Far from acknowledging the predatory and unequalising impact of neoliberal capitalism, the document shows that the inclusive capitalism project is concerned with PR to promote “a more nuanced view of society,” without which “there is a risk that… we will be led down a policy path of increased regulation and greater state control of institutions, businesses and the people at the heart of them, which will fatally cripple the very system that has been responsible for economic prosperity.”
The project is thus designed “to influence political and business opinion” and to target public opinion through a “media campaign that seeks to engage major outlets.”
The Henry Jackson Initiative for Inclusive Capitalism is therefore an elite response to the recognition that capitalism in its current form is unsustainable, likely to hit another crisis, and already generating massive popular resistance.
Its proposed reforms therefore amount to token PR moves to appease the disenfranchised masses. Consequently, they fail to address the very same accelerating profit-oriented systemic risks that will lead to another financial crash before decade’s end.
Their focus, in de Rothschild’s words in the Wall Street Journal, is cosmetic: repairing “capitalism’s bruised image” in order to protect the “common long-term interests of investors and of the capitalist system.”
That is why the Inclusive Capitalism Initiative has nothing to say about reversing the neoliberal pseudo-development policies which, during capitalism’s so-called ‘Golden Age’, widened inequality and retarded growth for “the vast majority of low income and middle-income countries” according to a UN report – including “reduced progress for almost all the social indicators that are available to measure health and educational outcomes” from 1980 to 2005.
Instead, proposed ‘reforms’ offer ways to rehabilitate perceptions of powerful businesses and corporations, in order to head-off rising worker discontent and thus keep the system going, while continuing to maximise profits for the few at the expense of the planet.
This is not a surprise considering the parochial financial and political interests the Henry Jackson Society appears to represent: the very same neoconservative elites that lobbied for the Iraq War and endorse mass NSA surveillance of western and non-western citizens alike.
Indeed, there is little “inclusive” about the capitalism that HJS’ risk consultancy project, Strategic Analysis, seeks to protect, when it advertises its quarterly research reports on “the oil and gas sector in all twenty” countries in the Middle East and North Africa (MENA). Those reports aim to highlight “the opportunities for investors” as well as “risks to their business.”
Just last month, HJS organised a conference on mitigating risks in the Arab world to discuss “methods for protecting your business interests, assets and people,” including “how to plan against and mitigate losses… caused by business interruption.” The focus of the conference was protecting the invariably fossil fueled interests of British and American investors and corporates in MENA – the interests and wishes of local populations was not a relevant ‘security’ concern.
The conference’s several corporate sponsors included the Control Risks Group, a British private defence contractor that has serviced Halliburton and the UK Foreign Office in postwar Iraq, and is a member of the Energy Industry Council – the largest trade association for British companies servicing the world’s energy industries.
The “inclusivity” of this new brand of capitalism is also apparent in HJS’ longtime employment of climate denier Raheem Kassam, who now runs the UK branch of the American Breitbart news network, one of whose contributors called for Americans “to start slaughtering Muslims in the street, all of them.”
Perhaps the final nail in the coffin of HJS’ vision of capitalist “inclusivity” is associate director Douglas Murray’s views about Europe’s alleged Muslim problem, of which he said in Dutch Parliament: “Conditions for Muslims in Europe must be made harder across the board.”
Earlier this year, Murray’s fear-mongering targeted the supposed “startling rise in Muslim infants” in Britain, a problem that explains why “white British people” are “losing their country.” London, Murray wrote, “has become a foreign country” in which “‘white Britons’ are now in a minority,” and “there aren’t enough white people around” to make its boroughs “diverse.”
So abhorrent did the Conservative front-bench find Murray’s innumerable xenophobic remarks about European Muslims, reported Paul Goodman, the Tory Party broke off relations with his Center for Social Cohesion before he revitalised himself by joining forces with HJS.
Yet this is the same neocon ideology of “inclusive” market freedom around which the forces of global capitalism are remobilising, in the name of “sustainable” prosperity for all.
They must be having a laugh.
Dr. Nafeez Ahmed is an international security journalist and academic. He is the author of A User’s Guide to the Crisis of Civilization: And How to Save It, and the forthcoming science fiction thriller, Zero Point. Follow him on Facebook and Twitter @nafeezahmed. [Emphasis in quotes was added]