Reimagining Capitalism

By Abhilasha Dafria|17th Apr 2012
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The opening plenary at The Sankalp Summit 2012 focused on the revolution of Capitalism. It raised the questions: Is capitalism working? What might the alternatives be? What is the role social enterprises can play? And is there a new economic order emerging?Richard Weingarten, (Managing Director, Intellcap), Vijay Mahajan (Group CEO and Chairman, BASIX), Pravesh Sharma (Managing Director, Small Farmer’s Agri-Business Consortium), Ravi Reddy (Chairman and CEO, Quest Industries) and angel investor, Jayesh Parekh were the panellists in this discussion. Mr. Weingarten set the context for the panel stating that although capitalism has resulted in an exponential growth over the past four decades, it has also created a large degree of inequity. Mr. Sharma noted an often unheard historical perspective that “capitalism has a unique DNA and it can re-invent itself.” He opined that capital has reinvented itself many times and the current shift is an example of the re-invention. Like the emergence of the welfare state, a social/profit hybrid is a continuation of regeneration.

Mr. Mahajan suggested an ambitious task, re-imagining the analytical framework of economics. He proposed that economics is fictional in so far as it does not accurately describe economic realities. For example, exchange rates are the worth of the Indian rupee in contrast the worth of the American dollar. An American dollar is exchanged for 50 Indian Rupees, however the purchasing power of a “one-dollar” product in theUS, is worth Rs.12 inIndia. So is one dollar Rs. 12 or Rs. 50? And which analysis holds greater utility? The true cost of products and services are unclear to many people, as prices are either over inflated or under-valued. He further added that farmers in Uttar Pradesh are unaware of the true-costs of seeds, fertilizers and even their own produce!

In order to solve this discrepancy, a triple-bottom lined analysis of a product can provide a clearer understanding. How many kilometers did this product travel to reach me? What is the environmental effect of this product? What is the social impact of he product I am buying?

Mr. Reddy expressed the importance of being responsible to your community. A community-minded business, he said, will naturally have a social element as opposed to a business-minded community. Being aware of how our business affects our community is the first step in a responsible business model, he concluded.

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