Program by silicon valley entrepreneur to teach innercity students learn how to install solar panels Gilles Mingasson/Getty Images

The Year Ahead 2017

Meeting the Populist Challenge

As the 2016 populist uprising made clear, private-sector executives can no longer celebrate the far-reaching benefits of global capitalism, while ignoring its costs. They, along with politicians and policymakers, have a major part to play in solving such problems as rising inequality, stagnant wages, and structural unemployment.

LONDON – Capitalism is the greatest engine for prosperity that the world has ever seen. But the democratic institutions that create the space for business leaders to operate have not kept up with accelerating economic and technological change; nor have they made the necessary adjustments to ensure that enough people benefit from the system to which they all belong. All leaders should keep these two thoughts firmly in mind as they respond to 2016’s populist backlash – manifested in Brexit, Donald Trump’s election victory in the United States, Italy’s failed constitutional-reform referendum, and so forth.

We capitalists can no longer simply celebrate the fact that open markets and technological innovation have lifted more than one billion people out of extreme poverty since 1990, including hundreds of millions in China alone. We must acknowledge our postwar global order’s failures, such as rising inequality, decades of stagnant wages in many developed markets, and sustained unemployment at or above 20% – and over 40% for young people – in several European countries. Most of all, we cannot simply assume that the system will somehow “self-adjust.” Instead, we need to act.

Of course, meeting the challenge of populism is not a task for business alone. Political leaders have a critical role to play, by shoring up and extending the social safety net to cover those who have been, and will be, “left behind,” and by providing – through smart infrastructure investment and policy reforms – a stronger foundation for inclusive growth. But, beyond creating good jobs and higher-quality products and services at lower prices, private-sector executives must lead in several key areas.

To continue reading, please subscribe to On Point.

To access On Point, log in or register now now and read two On Point articles for free. For unlimited access to the unrivaled analysis of On Point, subscribe now.

required

Log in

http://prosyn.org/RczSOG4;
  1. Trump visits China Thomas Peter-Pool/Getty Images

    China’s New World Order?

    • Now that Chinese President Xi Jinping has solidified his position as China’s most powerful leader since Mao Zedong, he will be able to pursue his vision of a China-led international order.

    • But if China wants to enjoy the benefits of regional or even global hegemony in the twenty-first century, it will have to prove itself ready to accept the responsibilities of leadership.
  2. Paul Manafort Alex Wong/Getty Images

    The Fall of the President’s Men

    • There can no longer be any doubt that Donald Trump is the ultimate target of Special Counsel Robert Mueller’s sweeping investigation of alleged Russian interference in the 2016 presidential election. 

    • But even if Mueller doesn’t catch Donald Trump in a crime, the president will leave much human and political wreckage behind.
  3. Painted portraits of Chinese President Xi Jinping and late communist leader Mao Zedong Greg Baker/Getty Images

    When China Leads

    For the last 40 years, China has implemented a national strategy that, despite its many twists and turns, has produced the economic and political juggernaut we see today. It would be reckless to assume, as many still do in the US, Europe, and elsewhere, that China’s transition to global preeminence will somehow simply implode, under the weight of the political and economic contradictions they believe to be inherent to the Chinese model.