Reshaping Capitalism for a Sustainable World

Abstract

A vision for reshaping capitalism for a sustainable world was implicit in the 2018 statement by BlackRock, the biggest investor in the world, wanting, “A new model for corporate governance” and that “companies must benefit all their stakeholders”. The idea of firms delivering benefits to all stakeholders was reinforced in 2019 by 180 other CEOs of the US Business Roundtable who had BlackRock as a shareholder. Corporations who delivered benefits for all stakeholders become what Ostrom describes as Common Pool Resource (CPR). Ostrom described how competing interest for shared life sustaining resources could become self-regulating by adopting a polycentric form of governance. Polycentric governance is illustrated by the bottom-up stakeholder-governed firms in the US, UK and Europe and also in sporting and civic organisations including two designed by the author. These examples are used, with the insights of system science, to reformat the Ostrom design principles for incorporated organisations. Self-funding tax incentives and other rewards are suggested to encourage corporations to introduce self-governance to best suit their specific operations while maintaining shareholder primacy. This new way to govern corporations reshapes and spreads both capitalism and democracy by providing citizens with benefits and voice from the bottom-up. These can provide contributions to a universal wellbeing income while enriching the quality of democracy. In addition, the size, cost and involvement of government can be reduced while enhancing the protection and promotion of a sustainable world.