The Role of Business in the Post-Pandemic World

In this world of misinformation that we live in, it is easy to believe those that claim that life will return to “normal” once the pandemic is controlled.  I argue the contrary; the post-pandemic world we will collectively construct will represent a new reality for all humans in this planet.  This new era will inevitably be engineered by Millennials and those from the Generation Z.  It will not be western-centric but global, integrating the social and environmental visions of these younger generations who see the post-pandemic world as an opportunity to rebuild the world around them and correct the mistakes that were perpetuated by previous generations.  Capitalism will continue to be the driving force of economic development around the world, but it will be a new version of capitalism that will be spearheaded by social and environmental justice.  For some, it will be hard to believe that such will be the case, but changes are already taking place.  Younger generations see in our current realities an opportunity to abandon the old way of doing things, and some are convinced that change will be accelerated if it is pursued outside of the political world.

Gen Z and Millennials have realized that politics are an impediment and not an avenue for change; just consider the age of the two political candidates that will be making decisions into the third decade of the twenty first century here in the United States.  They strongly believe that change must happen within oneself, and that this transformation should then be reflected in the capitalist institutions that are constantly transforming the world.  At the end, we must accept that we live in an era where business powers dictate to local and international governments what, when, and how production and consumption should be conducted and regulated.  But we also live in a world where businesses have to be more and more accountable to younger consumers (the future base of the global economy) that demand social and environmental justice as part of their purchasing decision-making processes.  They want to buy from local and global companies that represent positive social and environmental change.  They’re not interested in just cheap products and services dependent on old models of labor and environmental exploitation.

Throughout the first two decades of this century we have seen an incremental dialogue between producers and consumers where the consumer has slowly started to rewrite the book on how products and services should be produced, delivered, and ultimately disposed of.  As I tell my students, in a global capitalist system, long-term sustainable change may only be generated through the transformation of the business culture.  The post-pandemic world, and the rest of this century for that matter, will be defined by the business decisions made at all levels of the organizational structure of each small, medium, large, domestic, and international business.  Social and environmental justice will rest in the hands entrepreneurs, workers, managers and private decision makers, not politicians. 

As a Gen Xer, I was educated to believe that change happens through the democratic process, and that influence on legislation and policies are the only avenues for change.  I am now fifty and things have not changed much, the status quo has been perpetuated as the generation in power continues to promise what it cannot fulfill, knowing well that the true power of transformation lies in the hands of the business sector.  Since the global implementation of neoliberal ideas in the 1980s (that centered on privatization, free trade, deregulation and a systemic decreasing role of government) business has dictated how society is shaped and how its relationship with the natural environment is conducted.  Politicians, at all levels of government and in every corner of the world, have become the decoy that has allowed the business sector to construct the global economy in which we live in today.

As a consequence, systemic change lies in the hands of the private sector.  Here in the United States, local, state, and federal politicians claimed tremendous victories because they were able to raise the minimum wage a few dollars after a political battle of more than thirty years.  Meanwhile last year, Dan Price, the CEO of Gravity Payments, made the executive decision of paying each of its employees a livable minimum wage of $70,000, while taking a million dollar pay cut himself.[1]  Future social justice and wage justice, in a post-pandemic world, will rely on a business culture driven by leaders like Dan Price who understand that long-term sustainability of any business depends on a financially healthy consumer society that does not depend on lending instruments in order to satisfy its material needs.  The old model of debt and financial burden will inevitably be replaced by livable wages and a Universal Basic Income, as the business culture transitions toward long-term sustainable objectives that place value not only on profits but on workers, community, and quality of life. 

This might sound utopic to some skeptical readers, but this type of change has already begun.  Rachel Carson spearheaded the environmentalist movement here in the United States back in the 1960s, but the dependency on the old model of change through policy and regulation only went so far, and as the current administration has shown, all progress can be reversed in less than four years.  Meaningful systemic change and environmental justice, under our current capitalist system, may only be achieved by changing our own business culture, and not through politicians.

In Europe, German car manufacturers have dictated the path toward sustainability, taking on the leadership role, and ultimately transforming the auto industry and the way consumers interact with the product.  Here in the United States, Elon Musk has led the transformation of the industry, slowly contributing to the global transformation of the culture of the automobile industry.  Tesla, a clean energy company specializing in the manufacture of electric vehicles, is leading the way into future, while becoming the most valuable car company in the world.[2]  In a few decades the automobile industry will be completely gasoline-free, the aesthetics will be beyond our imagination, and our consumer behavior will have been transformed without us even noticing.  None of this would have resulted from the political world, where we continue to insist on finding engines of change.  As Tesla, Mercedes Benz, BMW and others have shown, transformational change comes from business vision, innovation, and culture.

Political actors do not have long-term visions, they are not driven by innovation but power, and the internal political culture in which they live is based on bureaucratic dynamics that are not designed for change but for the preservation of the status quo.  It is true that the current business culture in the West is also focused on short-term thinking, its organizational culture has traditionally been hierarchical, and its disdain for change has come from those in positions of power that also want to preserve the status quo.[3]  Nevertheless, that business culture is quickly dying out.  Vertical organizational structures are being replaced by horizontal organizational structures that empower the worker, generate creativity, and are quickly adaptable to change.  Financial reward as a social motivating factor is being replaced by intrinsic motivators that represent a greater value to younger generations.  At the end, the pandemic has shown that money is relatively important, but not as important as freedom of mobility and social justice.

The dynamics leading to the post-pandemic world indicate that change, adaptability, and transformative long-term vision are essential strategies being adapted by the business sector, and not the political world.  The government, here in the United States, struggles to manage the public outcry against racism while businesses, domestically and internationally, quickly respond and implement transformative change that will impact the future to come.  The two presidential candidates have no solution to the urgent problem, but businesses do because they can transform society and quickly construct new social ideas.  Their collective support for the Black Lives Matter movement indicates that they support social change, and in a global capitalist market system, this change will be reflected in their internal and external decisions that will become engines of social justice. 

Some might argue that these are capabilities only available to large domestic and international corporations, but it has been the small business sector that has spearheaded social and environmental justice throughout history.  For example, here in Maine, the “buy local” movement was a small business initiative that now defines the business models being implemented by those private agents spearheading the economic development of the state.  The lobster industry, the microbreweries, farmers’ markets, and even community banks promote the “buy local” movement.  These private initiatives are the true engines of change as we move forward in this century, and more so, as we begin to reconstruct our economy from the bottom up.  In the end, it was the small business sector that built our communities and our early economic machine, the same business sector that will lift us from this unfolding economic crisis.

The global and local dynamics geared toward social and environmental justice rest in the hands of local, national, and international business enterprises.  Government at all levels will become less relevant; they will observe from afar the conversations between consumers and the private sector, serving as facilitators but not as engines of change.

What drives the very successful apparel company Patagonia is not money but environmental conservation and justice.  Their mission states that their reason for existing is to build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.[4]  Like Patagonia, there are now close to 3,500 Certified B Corporations in the United States and Canada that, as part of their mission statement, balance “purpose and profits,” meaning that they are not designed just to satisfy the needs of shareholders but also the needs of workers, customers, suppliers, communities, and the natural environment.[5] These will become the normal priorities of the capitalist business culture as humanity incrementally faces the consequences of the old business model.

Those nations whose business culture quickly adapt to the new realities of the post-pandemic world will leap forward and prosper and those that stick to the old models of doing business will stay behind.  For example, those private-public partnerships that use present and future technologies to transition away from an oil-based economy will be prepared to compete and prosper in this century while building self-sufficiency and resilience as they eliminate their dependency on oil and implement sustainable energy models for their own economic development.

Those partnerships that mend the weaknesses of their health care system as exposed by COVID-19, will be prepared to lift their societies to a more competitive level while ensuring that the next pandemic will not devastate their national economy, communities, and society.  Nations that transform their urban and rural centers, using private-public partnerships to develop and construct the physical human space for this century will move forward while those that stick to the status quo (sprawl, suburban dwelling, traffic congestion, pollution, etc.) will fall behind.  

Business will have to be reinvented.  Social and environmental justice will become part of the DNA of corporations.  Stakeholder management strategies will replace old ways of doing business that no longer fit with the present and future realities. Today, we are not just citizens that vote for a miracle to happen, we are consumers that shape business, culture, society, and the natural environment.  We are constituents, consumers, activists, and advocates.  We are also workers, managers, entrepreneurs, inventors, innovators, and business leaders; we determine what the business culture will look like in the future.

No matter how hard nationalist leaders try to advocate for a return to the past, humanity will continue to move forward through its capitalist engine.  It has been and will continue to be a catalyst for change, particularly now that younger generations are in a position to transform the world that was left by older generations.  The pandemic has forced us to reflect on the fact that the old model of capitalism is just not sustainable for humans on this earth.  At some point the social tensions resulting from systemic inequality will explode domestically and internationally, resulting in irreparable chaos and failed states that will alter and perhaps bring to an end the global market system, together with our national economy.  Moreover, if we do not alter our present model of production and consumption we will inevitably alter our own natural environment to the point where human life will not be sustainable.  The only option is change.

[1] Lauren M. Johnson. “CEO Who Cut His Pay, Raises Workers to $70K Now Promises Same Deal at New Office.” Wratechwire.com.  September 29, 2019. Accessed July 28, 2020. https://www.wraltechwire.com/2019/09/26/ceo-who-cut-his-pay-raised-workers-to-70k-now-promises-same-deal-at-new-office/

[2] Sergei Klebnikov. “Tesla is Now the world’s most valuable car company with a $208 Billion Valuation.” Forbes, July 1, 2020. Accessed July 22, 2020. https://www.forbes.com/sites/sergeiklebnikov/2020/07/01/tesla-is-now-the-worlds-most-valuable-car-company-with-a-valuation-of-208-billion/#649e4c515334

[3] On the short-term thinking of American companies see, for example; Alana Semuels. “How to Stop Short-Term Thinking at America’s Companies.” The Atlantic, December 30, 2016. Accessed July 20, 2020. https://www.theatlantic.com/business/archive/2016/12/short-term-thinking/511874/

[4] “Patagonia’s Mission Statement.” Accessed July 22, 2020. https://www.patagonia.com.au/pages/our-mission

[5] “A Global Community of Leaders.” Certified B Corporation. Accessed July 23, 2020. https://bcorporation.net/?gclid=EAIaIQobChMIxfXG-rPu6gIVE4bICh0cUAR7EAAYASAAEgKW0_D_BwE

 

 

Stefano Tijerina

About Stefano Tijerina

My name is Stefano Tijerina and this blog’s objective is to connect Maine’s social, environmental, economic, cultural, and political issues to the global system, centering on how the local impacts the global and how the global impacts the local or what is known in Global Studies as the "Glocal" effect. In our present era of globalization it is crucial for the general public to understand how the new dynamics of the international system impact our lives here in Maine and how our local decisions impact the earth. These are my personal views, and they do not express those of the University of Maine System or the University of Maine.