Overcoming the highly problematic lack of control on free markets fivefold: First, Henderson propagates the popular paradigm of Created Shared Value developed by Michael Porter and Mark Kramer (2011), where the purpose of business is not exclusively about generating money, but to increase prosperity and freedom for a livable planet and a healthy society. Secondly, this holistic sustainability approach is coupled with a paradigm of purpose, meaning the creation of purpose-driven organizations. Thirdly, a prerequisite is the rewiring of finance, building a new ecosystem for investment by creating auditable and replicable accounting metrics, which capture the costs and benefits of addressing environmental and social problems (ESG metrics). This is meant to tackle the lack of information on “soft” factors and set them on one level with economic metrics. Thus, investors understand the importance of shared value. Additionally, the influence of investors should be reduced by replacing corporate governance with a benefit corporation creating public and private returns, or with employee-owned firms similar to the proposal of Democratic Economy. Fourthly, this needs to be coupled with the creation of a cooperative economic eco-system built on efficient self-regulation (e.g. code of conducts, build sustainable supply, investors as enforcers), to tackle free-riding in the provision and consumption of public goods by private companies.
Fifth, and most important: all the aforementioned factors will only prove effective if institutions that have eroded under neoliberalism are rebuilt, and governments are fixed (Henderson, 2020a, 2020b), as only government can tackle the negative externalities of free markets like environmental degradation, inequality, monopolization, uncontrolled globalization, or a decline of labor. Therefore, free politics and free markets need to be considered as complements being dependent on each other: both need to be inclusive instead of extractive.
Proponents: Rebecca Henderson
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