The US economy is motoring despite all the challenges. Stock markets are hitting all-time highs. The much proclaimed hard landing has not materialised. Yet, Michael Strain, director of economic policy studies at the American Enterprise Institute, claims that both the previous and current occupants of the White House have it all wrong (“The Trump-Biden consensus is bad for business”, Opinion, January 30).
Strain seems stuck in the obsolescent world of the Washington Consensus, now superseded by the Cornwall Consensus following the G7 summit in the UK in 2021. There, world leaders prioritised a politics that moves proactively to shape markets to deliver a better functioning political economy, recognising the central role of politics in the construction of functioning markets.
At a time of significant, and increasingly perilous, local and geopolitical stress, the rise of China and others as strategic adversaries both politically and economically, and the considerable threats posed by rising inequality and environmental degradation, it is time to move beyond superficial notions like “free enterprise” (whatever that might mean) and realise that business is not just a moneymaking machine but a vital component of our political economy. It is time to accept that business has a political as well as a commercial role in that it has a big impact on the kind of society in which we live.
We have entered an era of heightened global tensions — both political and commercial. This requires the development of what I call a new political capitalism — a resilient capitalist system that is in tune with political and sociocultural mores and works to deliver sustainable long-term benefits for society as a whole. Where private and public sectors are aligned in delivering to common sociopolitical objectives.
It is time that we all broke out of the blinkered belief that the only role of business is to funnel as much financial wealth as possible to shareholders and senior executives and has no wider and more important roles in our political economy.
Only then can business build enough political capital to ensure that political leaders feel comfortable declaring themselves “pro-business”.
The tired old mantra that politics should just get out of the way so that we can just get on with the business of business today sounds like something out of the Pleistocene.
Joe Zammit-Lucia
Radix Centre for Business, Politics & Society, Amsterdam, The Netherlands
