The value of capitalism is not acknowledged everywhere in the developed world | Managing Leadership

Marketing capitalism

Some years ago I read an article, in a country where I resided at the time, about the problem of finding employment for all of its university graduates. One opposition-party member of parliament was quoted as not understanding why the government didn’t simply hire all of these young people as they graduated.

Unfortunately, that sort of thinking is rather more widespread than many of us might imagine. See, for example, this piece describing how the education curriculum in two of the most influential European Union countries acts to propagandize students about the putative evils of capitalism, and the benevolence of collectivist economic systems (thanks to Mike Wade, of Execupundit, for the tip). Indeed, it seems that among the interchangeably negative words for describing capitalism - as well as one of its sinister offspring, globalization - is to be found this one: “American.”

On the other hand, consider this article from the current Economist magazine; it describes how world class companies are rising from previously unlikely origins in places like India, China, Brazil, and Mexico. Turkish companies are doing this, as well - one, for example, recently bought Godiva Chocolatier from its American owner. Interestingly, the article describes the appearance of these large, competitive firms, and their purchase of Western ones, as flying in the face of how capitalism predicts investment cash should flow.

But that is wrong, and the phenomenon is perfectly consistent with theory - investment goes where it can produce the greatest returns. Western companies invest in developing economies in order to add high value at low cost to their products and services. Ultimately, the economic dynamics prompted by this inflow produce in those countries large, successful firms themselves looking for promising markets, and even good, inexpensive companies to buy - those are in the West.

Capitalism, free trade, and globalization have all played a role in the success of these companies, as they will ultimately in the health and welfare of their countries of origin as they struggle free of the mire of their essentially collectivist traditions. It is to be thoughtfully encouraged and, certainly, celebrated.

Curiously, the two European countries indoctrinating their students against this historically successful and beneficial system are themselves the homes of some of its most competitive firms. Hopefully, these great companies will help to market capitalism more effectively among their own students and managers.

All of us benefit from a thriving, competitive, forward-looking Europe. It will be interesting to watch the debate between economic capitalism and collectivism as it continues to unfold there. Moreover, it is useful to be aware that many of the concepts we take for granted are actually under siege in places where we would never have expected that to be the case.

We need not merely to practice capitalism, but to understand and market it. That understanding should span theory and application, so that we can identify and address the rough spots, refining our practice of it.

That touches on many of the corporate scandals that are the source of much of capitalism’s bad reputation, which simply continues to worsen as we blithely seek excuses for our own omissions. So, maybe we need to market capitalism more effectively not only to these two European powerhouses, but to ourselves, as well.

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Today’s tip: Steve Roesler, at All Things Workplace, continues his fascinating examination of the issue of change in the workplace. As is uniquely typical for him, he also draws in real debate and discussion from a broad range of informed and interesting sources. Please see this piece, and start exploring the whole series.

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