Some may consider it fashionable, but it seems that we are facing a new paradigm of capitalism. The way we conceive it at each stage is simply the response to the decisions and challenges of each era. Capitalism has been changing over the years: commercial capitalism, industrial capitalism, financial capitalism and now social capitalism. The way of understanding the system has been very diverse in the different periods, and now more than ever, social challenges are one of the priorities of organizations.
The Covid-19 pandemic has put the whole society in check for more than a year. This has made organizations rethink their objectives as an entity, and their mission and vision in relation to Corporate Social Responsibility. In recent years, and more specifically this last year, there have been different needs from society which has made capitalism adapt to become social capitalism, where not only the metamorphosis of companies is important, but also consumers, suppliers… all of them are important.
It seems obvious to identify the new concept of capitalism as social, since new organizational challenges such as environmental protection or social inclusion require it. But how can all these current problems be taken into account in the activities of companies? Well, it seems interesting to focus the orientation of decisions according to the will of the stakeholders of each company, orienting the current business model as a new business model, but more focused on people and the environment, reflecting in the business strategy the new purpose in relation to social aspects. Therefore, the role of private enterprise is fundamental for the transition to this new capitalism.
And it is not only the companies who define this concept of capitalism, but also the value that we, as citizens, place on things. In the past, capitalism was considered to be commercial, since traders’ transactions allowed them to have enough wealth to invest in new production systems; in the same way, it could be considered social capitalism, which arose as a result of the social challenges to which we, as citizens, attach so much importance today: climate change, inequality, information and communication technologies, poverty and social exclusion, among others. These stakeholder interests make private companies feel more incentive to invest in social welfare.
There are many countries with capitalist systems, but not all are founded on the same bases. This change towards a new concept of social capitalism is promoted by the living conditions in which each society finds itself. At the national level, we could say that, in Spain, we increasingly value lifestyle, and this has its implication in the social decisions of companies, although without forgetting others such as inequality, poverty or social exclusion, now more visible due to the effects of Covid.
This new paradigm of capitalism can call into question the profitability of the company taking into account these social aspects. However, strategies taken in line with the demands of stakeholders can, in the long term, lead to even greater profitability. Just as consumers, for example, are increasingly consuming more consciously and smartly, so it seems understandable that companies should adopt conscious practices that are not only profit-oriented, but also aim to increase stakeholder satisfaction, which will lead to tangible results in the future.
The change in the pattern of the capitalist system is not only due to the demands of stakeholders, but also to companies’ managers themselves who, through the enhancement of values, want to develop strategies oriented to achieve a greater social benefit. This leads to consider education in values for the new generations as one of the important aspects in the business environment, so that the new paradigm of capitalism is conceived as a system that promotes greater economic and social benefit.
Bibliographic references:
Fredes, F. M. (2020). Capitalismo social, ¿moda o cambio de paradigma? El Economista.
Ministerio, C. I. (2020). Portal español del Programa Marco de Investigación e Innovación de la UE. Obtenido de EsHorizonte2020: https://eshorizonte2020.es/retos-sociales