Silver lining around capitalist market cloud

Pamela Hartigan

September 18, 2008

Long-standing Wall Street institutions are collapsing overnight, the role of the US Federal Reserve is being transformed, investors everywhere are losing complete confidence in the US market and opponents of free market capitalism are pointing to the US situation as proof positive that capitalism without government oversight leads to disaster. It is in this context that entered my classroom in Uris Hall, home of Columbia University’s Business School, to a room-full of 45 MBA students who had signed up for my course, Social Entrepreneurship: A Global Perspective – an elective. Dean Hubbard, head of the Business School, had only hours before gathered the students and faculty to share his insights on the impact of the Wall Street earthquake on the Business School. After all, many of Columbia’s MBAs are recruited directly into Lehman, Merrill Lynch, AIG to name the most recent victims of the debacle.

But the justified mood of gloom and doom stayed outside my classroom. Instead, we talked about the huge opportunity the situation presents to revamp unfettered capitalism which has benefitted a few hugely, some to a degree, but which has excluded the majority of the world’s population from many of the positive aspects of globalization. And because young people are by nature optimistic – and because all people desperately want to believe that change from the current situation is possible – we engaged in an energizing discussion about the emergence of a new breed of entrepreneurs, managers and employees who want more from life than a fat paycheck. I bombarded them with examples from all over the world of individuals who have used their talents to create and run enterprises that are, as US entrepreneur Bo Peabody notes, “fundamentally innovative, philosophically positive and morally compelling” – infecting those who work with them with the belief that they, too, can be agents of change.

But the challenge now – and the chance we have – is to re-examine how these kinds of companies can grow beyond being inspiring classroom anecdotes. Unless we take advantage of the present situation to revamp the way our capital market ecosystem works, our corporate leaders, no matter how well-meaning they may be, will always be slaves to the tyranny of the market.