Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet by Klaus Schwab

Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet Reviews

• 
  Otto Lehto

  Stakeholder Capitalism argues that the only way to solve society's most burning questions, such as climate change, inequality, and political polarization, is to move away from Milton Friedman's model of narrowly profit-maximizing corporate ethics towards a model of socially and economically conscious welfare-maximizing corporate ethics. Although I think that Friedman's model can be taken too far, I vehemently disagree with the author's conclusion that the model should be abandoned for multiple reasons. I think that the best way to tackle such problems that arise from capitalism is to combine profit-maximizing business practices with effective government regulation and redistribution that minimizes the destructive externalities of unhampered competition. What is wrong with stakeholder capitalism, then? For one, I would not trust the Davos elite to act as a group of superheroes to save the world. Power corrupts and Davos power corrupts absolutely. I would prefer them to focus on more narrowly defined, but also more honest and straightforward tasks, including proft-maximization (within the enforcement of clear regulatory standards) and the advancement of concrete social and environmental aims through the political process, rather than trying to turn their businesses into deliberative vehicles for social and environmental activism. After all, either the embrace of corporate social responsibility of companies stems from a real desire to change to world or else it stems from a desire to put up a lucrative act that increases their brand value. In the first case, their well-meaning energy would be better served in the pursuit of more concrete political and social remedies, and in the latter case, it amounts to nothing but hypocrisy. Nonetheless, I found the book insightful. It is full of interesting (although rarely novel) data points that reflect Schwab's unprecedented access to the academic, political, and business worlds. But who, exactly, is this Mr. Schwab, to have such elite access?
  
  Klaus Schwab was a rather unknown figure until recently. He has acquired infamy ever since right wing conspiracy theorists like Alex Jones and James A. Lindsay have joined the chorus of left-wing critics of globalization like Naomi Klein and Rutger Bregman to condemn Davos, although for widely different reasons, as a corrupt seat of unearned power and privilege. But the real secret behind the World Economic Forum is NOT that it is engaged in an elitist ploy to control the world or that it already secretly controls it. (It does not.) The real secret is that WEF is a lucrative business model for Klaus Schwab an innovative political entrepreneur. I think it is pretty impressive how Schwab has turned Davos into a global hub of elite networking, brainstorming, and visionary conversations. Schwab is no dunce. In fact, he is a serious scholar with some undeniable skills as a facilitator of interdisciplinary meetings where people can discuss various "weak signals" (emerging policy topics) that most ordinary people know little about but will come to know in due time.
  
  I do not recount all this background to cast aspersions on Mr. Schwab, nor to deflect from the book's interesting contents, but to argue that the book contains many clues that it must be understood in the context of its author as the father of the Davos meetings: 1) World leaders are treated with sometimes embarrassing reverence and political correctness; which is explained by the fact that Mr. Schwab clearly wants to remain on good speaking terms - and indeed on good business terms - with all the world leaders in the global West, East, North, and South. For example, Chinese totalitarianism is downplayed while its economic successes are extolled. Likewise, there is little effort to highlight the importance of individual freedom in the Western sense. Indeed, the central message is tailored to appeal to broad constituencies and various ideologies. The reason is that the Davos elite does not want to hear that it should not be in charge of changing the world for the better. Indeed, it wants to hear that it is virtuous if it further tightens its grip on power. 2) As a result, the action agenda of the book is rather schizophrenic, because although it pays lip service to widespread citizen participation, including by environmental groups led by people like Greta Thunberg, most of the examples of meaningful social change towards stakeholder capitalism are taken from among the business elite and the political elite: we hear from the bold actions and visionary leadership taken by CEOs of big companies like Siemens, Google, and Maersk, as well as by the prime ministers and presidents of various countries around the world. Indeed, Schwab's vision of stakeholder capitalism borrows the language of the bottom-up vision of grassroots deliberative democracy (the left-wing definition of the term) in the service of a top-down vision of compassionate business ethics or "capitalism with a human face" which emphasizes, above all else, increased "corporate social responsibility" (the business school definition of the term).
  
  The book, in its essential, is an insightful and often nuanced but ultimately self-serving and politically dangerous call for the business and political elite to showcase leadership not just in business and politics but also in ethics and progressive social change. It reflects an impressive confluence of real academic and economic insights about coming disruptive social changes, including those caused by
  The Fourth Industrial Revolution (which is the title of one of his previous books), with more pragmatic interests of the business and political classes. Ideologically, it leans more on the centre-left agenda of morally guided capitalism, but even more than that, it caters to the pecuniary interests of the business world and the power interests of the political world, by selling them a vision where virtuous Davos billionaires save the world. The problem is not that it tries to make billionaires to do better; the problem is that it sells them a misguided vision that almost completely ignores the problems with central planning (as pointed out by people like F.A. Hayek and James Buchanan). It fails to understand that shareholder capitalism, whatever its flaws (and they are many!), has not proven so successful "despite" its narrow profit-seeking motive but precisely BECAUSE of it. The ability of capitalism to harness the unintended consequences of self-motivated actions is its greatest gift that is easy to misunderstand. And Schwab unfortunately contributes to this misunderstanding. Lastly, the book also fails to understand that problems like climate change, inequality, and political polarization are better tackled through effective government regulation and redistribution combined with civil society efforts. Stakeholder thinking may be occasionally useful but it often causes gridlocks that are avoided if local actors are granted autonomy to engage in free actions. So, I cannot recommend the book for its conclusions, but the historical analysis and future prognosis that it uses to reach its conclusions is sufficiently interesting, polymathic, idiosyncratic, and concurrent to be worth recommending for anybody who wants to understand what challenges lie ahead.
• 
  Szatmári Tamás

  I wanted to love this book so badly. But I expected something else. The history of our current neoliberal economic model is comprehensive and also easy to read with full of stories. I lack a more thorough comparison of the shareholder and the state capitalism. I fully lack the practical advices that a simple business can follow. This book is more for policy makers and economic enthusiast. I admire the initiatives of World Economic Forum, but for practical thoughts one should read Frederic Laloux or Jurgen Apello.
• 
  MoUz6

  a) the false belief that capitalism is the currently dominant economic order; de facto it is corporationism
  b) the author's attempt to reconstruct basic concepts
  c) one of the main causes of most of the economic suffering in the history of the World is the centralisation of power and wealth, which this book again urges
• 
  Seba

  This book doesn't really say anything wrong. At the same time, this book doesn't say anything new. It feels like the writers tried their best to reach a target number of pages to earn their "badge of seriousness," but other than that it is really a fairly generalistic, basic, and overall non-essential read. The whole book could have fit in a tweet.
• 
  Daniel Simmons

  The first two-thirds of this book felt like filler: superficial overviews of very important topics (income inequality, climate change, and the limitations of shareholder capitalism) that I have seen much better explained in other books. Schwab finally hits his stride in the last third of the book, where he focuses on companies and countries that are managing -- or at least attempting -- new models of holistic business and policy approaches that might, if we all somehow pull together (and that's a big IF), keep us from plunging over the economic/environmental cliff.
• 
  William

  Another entry in the genre of "here's my personal solution to all the problems in the world, which will save us all if everyone agrees with me and works towards my program". Yes, maybe. But we can't even get people to agree on basic facts, much less what a working solution is and how we should work towards it. But it's a little nice to hear someone sounding hopeful for the future sometimes. He didn't need to include essentially a whole history of the world before he gets to the particular axe he wants to grind.
• 
  Lori Mancell

  Not as good as I'd hoped. The book spent far too long covering history that is already well known, and when the book finally got to the key point, it seemed to be largely definitional fluff. I can summarise the book by saying: its core point is that the world would be better if all business leaders had an ethical, long term view and generous mindset.
• 
  David Nygaard

  Stakeholder Capitalism was an engaging and inspiring read. The first two-thirds can be a bit discouraging, as they outline the history and gravity of the economic, societal and environmental challenges that we face, but the last third is concrete, hopeful and constructive.
  
  Klaus Schwab, with the help of Peter Vanham, lays out an economic history of the past century, describing how “neither the neoliberal ideology nor the socialist one works well in our current era and that “protectionism and autarky” are not sustainable principles.
  
  My favourite parts of the book were in the latter half, where the authors provide examples of how the principles of stakeholder capitalism have been and can be successfully deployed to link innovation in both the digital and physical world. One of the best examples was that of the Danish shipping company Maersk. To quote Maersk CEO Jim Snabe: “If you add the latest technologies [of the Fourth Industrial Revolution] to . . . [companies operating in the physical world] . . . they can have a big impact, because without the physical world, we are nothing.” Maersk has linked its performance to the UN’s Sustainable Development Goals and in so doing, has breathed new life into the company’s purpose, and that of its employees. This made me think of Canada’s traditional strengths in its resource sectors, and the potential to bring “equitable prosperity” to all, another key concept in the book.
  
  The aim of governments, according to the authors, should be to “enable any individual actor to maximize his or her prosperity but do so in a way that is equitable for both its people and the planet.” They argue that over the past 50 years a narrow focus on GDP has led to declining growth, rising debt and growing inequality. They argue instead for a “a broader dashboard of metrics” which are already being adopted by the OECD and others. As examples they provide Singapore and New Zealand, the latter of which prioritizes intergenerational well-being in its world-leading Living Standards Framework (LSF). This provides the “clear compass”.
  
  What’s the impact? Stakeholder Capitalism Metrics developed by the leading global accountancy and consulting firms in conjunction with the World Economic Forum will be added to companies’ annual reporting in the next two to three years.
  
  My only major complaint would be that the authors tend to gloss over issues of freedom and human rights, especially when discussing China. The book would have been stronger had it made a more compelling defence of democracy, which is just as necessary for human progress as stakeholder capitalism.
  
  The book ends on a hopeful note, namely that “The state of the world isn’t a given but that we can improve it if we are all committed to a better world.” Agreed. Five stars.
• 
  Horng Jiunn

  Schwab argued convincingly, mapping his prolific journey with chronological challenges and megatrends, from post-war affairs into present landscape amidst the pandemic, and he also conversed about his preferred system going forth.
  
  I am intrigued with his ideas for a better global system, on policies framework and advance collaboration to help deal with the amplification of new technologies, and how to equitably share its values for a broader objective than profits, into the health and wealth of societies overall, as well as that of the planet and future generations.
  
  Being part of the tech branch from the container port industry in Singapore, his study into Maersk and Salesforce transformation by redefining their culture and core principles, carries a deep sense of purpose and is alarming inspiring to me.
• 
  Grant

  Whilst most of the stuff in here is on the right path, Schwab spends a lot of time pushing fluff around solid economic arguments with little ability to criticise the role of Davos in acknowledging that the meeting of those in control to solve problems that they create is a little ironic.
  
  There’s better books on fairer economic outcomes for all but it’s not like this isn’t worth the read, especially for those who are looking to get a basic understanding of the rise of inequality.
• 
  Sunny Flynn

  I have two opinions about this book:
  1. The title of this book is slightly misleading. Despite the title being 100% about “Stakeholder Capitalism: A Global Economy that Works for Progress, People and the Planet”, the actual writing about Stakeholder Capitalism didn’t begin until 2/3rds of the way through (approx 169 pages in). I understand how Prof Schwab wanted to give a history lesson as a preface to the concept, but it shouldn’t have taken up the majority of the book.
  
  2. Once we started reading about Stakeholder Capitalism, it was actually really interesting! I’d give this section a rounded up 5/5 ⭐️⭐️⭐️⭐️⭐️ I am excited to hold onto these grounded values as I pursue my “career” but also as a citizen of the world.
• 
  Ipshita

  Useful into to stakeholder capitalism with a few large corporation and govt case studies. Not super insightful and missing roles for broader private sector (incl. startups) and citizen leadership
• 
  Daniel Noventa

  Intriguing take on capitalism that works for people.
• 
  Simon Parent

  Well written and easy to understand.
  But.
  It's pure bullshit.
  At the end of the day, it's "what if Capitalism but less bad?"
  It's metrics other than GDP.
  Commitments from industries who opt in to be good we swear pinkie promise.
  He wink and nod to Andrew Yang's right to own our data, to unions, UBI, and other good-ish things while dismissing and misrepresenting socialist goals and the underpinning mechanism behind the problems.
  Klaus displayed either a terrible understanding of Marx, or a deliberate misrepresentation.
  
  At the end of the day, I'd be for Stakeholder Capitalism if it was implemented now.
  More worker representation and protection, more environmental protections, UBI, better taxation of companies and CEOs, sure, sign me up.
  But it lacks teeth. It's voluntary. And if there was a government entity that enforced it, would we not want it to be ran by the workers, not terms set up by the companies? Yes, ok. That's socialism. That's what I want. But Klaus insist on profits, on a mix of shareholders and stakeholders, on having businesses voluntarily be part of it. Lol, he even advocates for monopolies at some point, if I understood correctly, because smaller businesses had no choice but to focus on profits to survive, while monopolies could afford to have breadcrumbs allocated for social projects.
  The Pandora papers leaked a few days ago. Klaus was advocating for global tax enforcement. And sure, let's do it. But to me that showed how the power is incredibly lopsided toward the ultra rich, and how no measures short of direct worker control of means of production, in a direct democracy, can be successful to curb this kind of gross greed.
• 
  William Peace

  Mr Schwab makes the point that Shareholder Capitalism has failed. The form of capitalism which has been practiced throughout the Western World for the past fifty years is no longer fit for purpose. By focusing all the benefits of business on the owners of the business (the share holders), great injustices have been done to employees, the community, the general public, government and the planet.
  
  In the first part of the book, he describes in some detail evidence against Shareholder Capitalism. The focus on giving shareholders nearly all the benefits has resulted in a shift in power away from labour unions and into the hands of management. Employee pay has stagnated, while executive pay has dramatically increased over the last half century. Communities have been devastated by the closure of local businesses and the relocation of the business overseas in order to improve profits for the shareholders. The general public has been injured by unregulated risk taking and non-competitive behaviour of businesses. Government has been unable to collect the taxes to which it would be entitled by tax avoidance schemes which benefit only shareholders. And insufficient attention has been paid to pollution as a cost saving which benefits only the shareholder.
  
  Schwab argues that it is time to change our form of capitalism to one where the benefits are more fairly distributed, where employees have more of a say in their work and receive fairer compensation, where the needs of the community which houses the business are considered, where the government has a stronger regulatory role, and the life of the planet is given full attention.
  
  This change, Schwab argues, can be brought about by repurposing companies so that they benefit their customers, their employees, society at large and their shareholders. He says, “in September 2020, the International Business Council of the World Economic Forum – comprising 140 of the largest global companies -presented the Stakeholder Capitalism Metrics. They are a core set of metrics and disclosures on the non-financial aspects of business performance, including variables such as greenhouse gas emissions, diversity, employee health and wellbeing.”
  
  The book is well written and certainly persuasive. It is also timely. Although it is early days, I think that more attention should have been given to implementation of Stakeholder Capitalism. More examples of companies which have actually done it, and more about the actual metrics.
  
  Left unsaid – likely for political reasons – is the application of stakeholder capitalism to the Chinese version of capitalism, where the main beneficiary is the Chinese Communist Party and its ideals.
  
  The world would be a very different place if stakeholder capitalism were to be universally adopted.
• 
  Razi

  It is an interesting read. Davos crowd ditches Milton Friedman just in time to jump on to the next business bandwagon. It will be green and they promise us it wouldn't be mean. 4 stars for honestly admitting that neoliberalism has met its future and another world is possible. Honest admission that trade unions are a force for good and their destruction under Regan/ Thatcher neoliberalism was a mistake with bad consequences for all "stakeholders".
  The tide has already turned. They had no choice but to change and concern for planet is the can of Pepsi in Kendall Jenner's hand this time. The anger has to be chanelled somewhere as
  Mark Blyth said “the Hamptons is not a defensible position. Eventually, they will come for you.”
  I don't know why I gave it 4 stars but the Right Wing rhetoric is coming so thick and fast from all sides that even a changed neoliberal is a welcome sight.
  The tone is still technocratic (you can't change everything, can you?) and he talks down at his readers from a position of expert authority on things which have not come to pass yet (I "read" the audiobook version of books as I have a very busy life and very bad eyesight). So the audiobook sounds like bullet points. You can't take PowerPoint out of a technocrat even if you take the technocrat out of Davos.
• 
  Brian Blomgren

  This is an important book to read and understand the global forces behind many of the government policies and corporate initiatives that are changing society. Although several good merits are included in the book, there is a great danger to individual liberty and freedom in how the ideas are implemented. The premise is that shareholder capitalism is outdated and stakeholder capitalism that concerns itself with broader issues is better than only a profit motive. However, the broader issues that WEF cares about is not reflective of the issues many stakeholders, and in particular 1B Christians, care about. Also, as a US citizen, our constitutional republic is based on representative government and not on unelected corporate titans, academics, and bureaucrats. The sharing of ideas is great but the implementation of them through goals and scorecards for governmental leaders will have unintended consequences adversely affecting society. WEF breaks its own rules of stakeholder capitalism when stakeholders are not even considered when choosing a SDG for their locality.
• 
  Philip

  The message is clear - we have to stop the emissions of greenhouse gasses. We keep hearing the same message over and over, so what does this book actually tell you?
  
  Stakeholder Capitalism takes quite a while to get going, as the majority of the book is spent talking about the history of our current economic model. Going through the historical challenges in a chronological order, Schwab discusses how country leaders have governed up until the present time COVID-19 pandemic.
  
  It's only until close to the end of the book that we finally get to the core. Schwab gives the reader a lesson on how danish shipping company Maersk, Salesforce CEO Marc Benioff and other large companies are attempting to be innovative and implement new business models and policies. These models and policies are far more modern, ethical and sustainable when compared to the traditional economic model of shareholder capitalism that is dominant in the developed countries.
• 
  Michal Guzowski

  Amazing book about B2S (Business to Society).
  
  It awares that through activities of the enterprise, it contributes to the welfare of the entire society; supports the community in which it operates (ensures safe electrical and efficient use of data; plays the role of the manager of the environment and the material world for the benefit of future generations; Consciously cares for our biosphere and advocates a circular economy based on resource sharing and regeneration). It constantly pushes the boundaries of knowledge, innovation and technology to enhance people's well-being |
  
  An enterprise is more than just an economic unit that produces wealth. It fulfills the aspirations of man and society within a wider social system. Its activity should be assessed not only in terms of financial results and profits for shareholders, but also how it achieves its environmental, social and management goals. Management payment should reflect the level of responsibility towards all stakeholders
• 
  Douglas Baker

  Despite the fear, uncertainty and doubt around The Great Reset concept, it is developed and written by a qualified voice. Klaus Schwab has chosen to go beyond the norm of merely criticizing the dysfunctional ways of the interwoven political and economic ecosystems to suggesting a detailed solution to the clear imbalances and injustices that are inherent therein.
  
  Whether or not one agrees with all points or any points at all, it is a discussion that needs to occur and it is a move towards societal progression, like it or not.
• 
  Luke Brown

  Hey communist! Wanna see some capitalist apologetic try to polish a broken turd? Hey libertarians! Wanna see some big gov fan try to corrupt your mind with socialism? Hey everyone else! Do you want to take an honest look at what capitalism has done for us, good and bad, and try to learn some lessons on creating a more inclusive, resilient economy and world? Yeah me neither, don't read this book, broadening perspectives is lame.
• 
  Apisilp Trunganont

  หนังสือแนะนำแนวคิดทุนนิยมแบบที่คำนึงถึงผู้มีส่วนได้ส่วนเสียทุกฝ่ายว่าจะช่วยให้โลกเราดีกว่านี้ได้ ถือเป็นแนวคิดที่ดี แต่ก็เกิดคำถามขึ้นว่าแนวคิดนี้จะกลายเป็นกระแสหลักของโลกได้จริงหรือเปล่า เพราะโลกเราถูกขับเคลื่อนด้วยทุนนิยมผู้ถือหุ้นมาเป็นเวลานานแล้ว อะไรจะเป็นแรงจูงใจให้ผู้บริหารธุรกิจอยากทำเพื่อผู้มีส่วนได้ส่วนเสียมากกว่าแค่เพียงผู้ถือหุ้น และธุรกิจรายย่อยทั่วไปที่แค่เอาตัวเองให้รอดท่ามกลางการแข่งขันที่รุนแรงก็ยังยาก การให้คิดถึงผู้มีส่วนได้ส่วนเสียทั้งหมดด้วยก็ไม่ง่ายเลย
• 
  Simonas

  Ne viskam pritariu ir ne visuomet noriu, kad autorius būtų teisus, tačiau, akivaizdu, jog šitos tezės nupiešia, koks yra visuomenės lūkestis, koks šiuolaikinis (didelis) verslas privalo būti. Apibrėžimas "verslo tikslas - kurti vertę akcininkams" ekonomikos pamokose gali keistis, nes vaidmuo pasidaro gerokai platesnis ir "įtakotojų" dar daugiau.
• 
  Liudas Mikal

  Really inspiring concept and very relevant in today's world. Recommended for anyone who is taking any initiatives - commercial and non-profit.
• 
  Re Álvarez Parmar

  An introductory guide to investing in cryptocurrencies.
• 
  Giedrius Steponkus

  Knyga nepraturtino žinojimu. Priminė kai kuriuos girdėtus/ skaitytus samprotavimus.
• 
  Jarrad

  Vague, aspirational boilerplate centrist globalism. I don't see why so many people on the political right are suddenly frightened by it. It's nothing new
• 
  Andrei

  Low effort to convince us that corporations can transform in a way that cares about society, there are some OK facts about how inequality and greed are destroying the world and they are truthful but the solution in this book is not to redistribute power but to concentrate it even more by giving the corporation the power to practically govern us.
  
  Some ignorants think that somehow Schwab is a left-wing guy, but they could not be further from the truth, Schwab is just a marketeer that wants to put capitalism in a good light, let's be honest profit will always be the number one priority for corporations.