An employee of Toyota company works on an assembly line on April 21, 2020 in Onnaing, northern France, during the partial resume of the production at the automotive site, amid the spread of epidemic COVID-19. (Photo by FRANCOIS LO PRESTI / AFP) (Photo by FRANCOIS LO PRESTI/AFP via Getty Images)
A Toyota factory in Onnaing, northern France, partially resumes production during the coronavirus lockdown, April 21, 2020 © Francois Lo Presti/AFP via Getty Images

The proof copy of Reimagining Capitalism was one of the few items I grabbed from my in-box in mid-March before heading home for what I thought would be a limited precautionary stint of remote working.

Since then, the spreading pandemic and lockdown has transformed the expectations, and the destinies, of individuals, companies, economies and governments. It has also changed how books will be received and read.

Rebecca Henderson, a Harvard professor, company director and author of Reimagining Capitalism, and John Elkington, elder statesman of corporate responsibility and sustainable development, could have wished for better timing. Their books were written before news of the first Chinese coronavirus sufferers had emerged. They focus largely on the climate emergency and how to tackle it. The risk of pandemic merits a glancing reference, if that.

But Covid-19 has not rendered their views irrelevant. Rather, as we career towards a global recession, and quite possibly depression, the pandemic has given new weight to their analysis of the tough choices that were already facing society — how to tackle systemic threats such as climate change and inequality — and the tools that we have at hand to choose correctly. The sheer scale and scope of the virus could open an opportunity to accelerate a reset of capitalism.

“I am a qualified optimist,” writes Elkington in the introduction to Green Swans. “Dark clouds, silver linings. Our species often does its best work after being backed — or backing itself — into a corner.”

Henderson offers some examples that support Elkington’s qualified optimism, notably the rebuilding of the German economy after the second world war when industrial output and agricultural production had dropped to about a third of prewar levels. The need for self-preservation obliged leading employers to collaborate with trade unions, reviving interwar traditions of employer-labour relations. Those traditions persist today and have already helped some German factories keep running during the pandemic.

Two books that call for a reset

Reimagining capitalism

Harvard professor Rebecca Henderson stresses the importance of purpose-driven companies and how they can be ‘catalysts for uncovering new ways of working’

Green Swans

The ‘qualified optimist’ John Elkington looks at how profound market shifts can ‘deliver exponential progress in the form of economic, social, and environmental wealth creation’

Henderson is adamant that purpose-driven companies are at the heart of systemic rethinking of capitalism. (She has worked with Blueprint for Better Business, a UK charity I chair, which challenges and encourages companies to be a force for good in society.) Such faith in well-run, purpose-led, self-regulating businesses will invite some scepticism. To many, purpose seems like motherhood and apple pie — literally, in the case of one of her examples, King Arthur Flour of the US, which is “building community through baking”. But she is clear-eyed enough to acknowledge where and why well-meaning efforts, such as a Unilever-led drive to make palm oil a sustainable ingredient, have fallen short.

She also points to the hard core of purpose-driven companies. They can be “catalysts for uncovering new ways of working”, as in the postwar German example. But, according to Henderson’s research, they are also more resilient than their conventional counterparts when faced with brutally competitive conditions.

One of her examples is Toyota, which revived its postwar fortunes by developing a new way of working, based on a shared mission and workers’ mutual respect. The full title of the US edition of Henderson’s book is Reimagining Capitalism in a World on Fire, a nod to the devastating wildfires in Australia and California. It still works as a metaphor for the unimaginably grave consequences of the Covid-19 crisis, which should encourage a new era of co-operation and collaboration between government, business, and communities of individuals.

Henderson, discussing the pre-Covid global challenges for free-market democracies, frames it this way: “Business must become an active partner in shoring up the inclusive institutions that we have and in building the new ones that we need.

“This is not a question of supporting specific policies or of pushing a particular set of political values. This is about supporting the foundations of our society.” The question, she adds, should not be: “‘Would this particular policy benefit me?’ but, ‘How do we protect the institutions that have made us rich and free?’” To that question, she might now add: “and ensured our survival”.

The scale of government intervention is likely to rebalance the forces of capitalism for the better, offsetting corporate self-interest with what Henderson calls a “shared sense of the right thing” and an inevitably larger role for the state.

That is a future Elkington would welcome. His book, a fountain of energy, ideas, and mixed metaphors, nods to Nassim Nicholas Taleb’s “black swan” events. It describes green swans as “profound market shifts” that “deliver exponential progress in the form of economic, social, and environmental wealth creation”; such as the discovery of the “wonder drug” penicillin in 1928.

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Inspired in part by economist Mariana Mazzucato, he sees hope in a combination of private, public and citizen sectors to solve “wicked” problems.

His list of those problems — plastics, obesity, antibiotic resistance, climate change and space junk — now looks out of date. Indeed, some climate activists are already worrying that the need to ensure short-term survival of the global economy will set back action to secure the long-term survival of the planet.

Still, the idea that “green swans” might “rise phoenix-like” from the ashes of crisis, with the help of purpose-driven leaders, is worth clinging to. The current outlook is at best uncertain, at worst chaotic, but, as Elkington writes: “Once there is enough chaos the opportunity for new, future-fit leaders to break through can grow significantly.” If they do, they may have the greatest opportunity since the war to regenerate, reimagine and reshape capitalism for the better.

Reimagining Capitalism: How Business Can Save the World, by Rebecca Henderson, Penguin Business, RRP£20/Public Affairs, RRP$28, 336 pages

Green Swans: The Coming Boom In Regenerative Capitalism, by John Elkington, Fast Company Press, RRP$24.95, 296 pages

Andrew Hill is the FT’s management editor

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