Corporate Social Responsibility
Why Corporations Need To Invest In Buying “Political Capital”?
Atul Bharadwaj
For Long President Bush’s first press conference after re-elections in 2005, will be remembered for giving a fresh connotation to the phrase “political capital” (PC). During the conference the President had remarked-"I earned capital in the campaign, political capital, and now I intend to spend it. It is my style." Quantifying the value of people’s political choice will go a long way in understanding the behaviour of the masses in economic terms.
In the hey days of Nation States, the term “political Capital” stood for defining the capital city of the modern nation-states. Bush’s postmodern twist to the phrase has resulted in it being commonly used to denote the intangible asset possessed by the people- when invested in a political party or a politician, it confers on her power and authority to govern. In a democracy politicians, who spend the PC judiciously during their tenure continue to receive popularity cheques from the people. Mismanagement of governance often results in people re-investing in another political party or politician. Authoritarian leaders try to snatch the PC from people through coercion. However, this means of acquiring PC is never long lasting and often leads to bloodshed and violence.
The advent of republics and democracy saw business shying away from managing or acquiring the PC. The management of masses and assigning value to their political capital became the sole preserve of the political class. This led to clear demarcation between economics and politics. The great depression of 1930s and Marx inspired hike in value of PC, led politics to exercise regulatory powers on economics. Keynes, who was quick to read the writing on the wall, acceded to business being subordinate to politics. During this entire phase business distanced itself from the masses. 1960s saw people coming out on the streets against big business, mainly because corporations failed to acknowledge the value of PC. For capitalism, political capital had almost zilch value. Corporations tried to substitute PC with finance capital, by involving a small proportion of the people as shareholders. The system could not absorb the entire mass of people. The result was that a vast majority was left out of the process. This vast majority with substantial political capital in its possession was and continues to be the Achilles’ heal for globalization of business.
The fag end of 20th century has witnessed the equation between politics and economics undergoing a paradigm change. This time globalization induced changes have led governments to willingly forfeit their right to manage the natural resources within the area under their jurisdiction in favour of transnational actors. Certain affluent sections of the society in various nation-states are in full agreement with their governments for making this shift. But a vast majority left out of the process of globalization forms the core of anti-globalization protest movement, which threatens to de-rail the process and cause damage to its sustainability. This fact is even acknowledged by die-hard globalizers.
In the era where the state is reconfiguring itself to be a larger part of transnational networks, the people organized within a delineated national territory are losing faith in investing their political capital with the politicians. The political class, which sees the future in multiplying the global finance capital, is inadvertently undervaluing the importance of PC. The people are also feeling the slide in the value of PC, resulting from lower demand. This is leading people to disintegrate and form smaller groups to reassert the value of their PC, either through protests, strikes or violence. History tells us that people, who are not slaves, will always revolt and make the value of the assets known to the world.
Footloose people not organized under the rubric of a strong nation-state or a transnational supra state can never be conducive to the growth of business and sustainability of capitalism. Perhaps, it is this reason, which has led the corporations to care not only for their shareholders but also various stakeholders through numerous corporate social responsibility measures (CSR).
Corporations will have to move beyond the run-of-the mill CSR initiatives and look at the larger picture to ensure the longevity of the whole process of globalization. Business will find it hard to remain disinterested in the political capital. With people finding politicians as bad investment destinations for their PC, a vacuum is being created. If business too neglects the PC, then people will come out in worst violent forms to prove that their PC has a higher value than what is being ascribed by international political economy. This risk has to be mitigated through concerted investments in PC.
21st century offers capitalism an opportunity to come closer to the people and be appreciated and respected as an honest custodian of their political capital. It may be a sound investment to create a demand for PC among the corporates and assure higher rate of returns on PC than what the politicians could ever offer to the people. This can be achieved by making sincere efforts towards inculcating in the corporate world a genuine respect and care for the people, who are not their shareholders.
*Atul Bharadwaj is Graduate of King’s College London. He is currently working as Associate Editor, Business & Economy
Atul Bharadwaj
For Long President Bush’s first press conference after re-elections in 2005, will be remembered for giving a fresh connotation to the phrase “political capital” (PC). During the conference the President had remarked-"I earned capital in the campaign, political capital, and now I intend to spend it. It is my style." Quantifying the value of people’s political choice will go a long way in understanding the behaviour of the masses in economic terms.
In the hey days of Nation States, the term “political Capital” stood for defining the capital city of the modern nation-states. Bush’s postmodern twist to the phrase has resulted in it being commonly used to denote the intangible asset possessed by the people- when invested in a political party or a politician, it confers on her power and authority to govern. In a democracy politicians, who spend the PC judiciously during their tenure continue to receive popularity cheques from the people. Mismanagement of governance often results in people re-investing in another political party or politician. Authoritarian leaders try to snatch the PC from people through coercion. However, this means of acquiring PC is never long lasting and often leads to bloodshed and violence.
The advent of republics and democracy saw business shying away from managing or acquiring the PC. The management of masses and assigning value to their political capital became the sole preserve of the political class. This led to clear demarcation between economics and politics. The great depression of 1930s and Marx inspired hike in value of PC, led politics to exercise regulatory powers on economics. Keynes, who was quick to read the writing on the wall, acceded to business being subordinate to politics. During this entire phase business distanced itself from the masses. 1960s saw people coming out on the streets against big business, mainly because corporations failed to acknowledge the value of PC. For capitalism, political capital had almost zilch value. Corporations tried to substitute PC with finance capital, by involving a small proportion of the people as shareholders. The system could not absorb the entire mass of people. The result was that a vast majority was left out of the process. This vast majority with substantial political capital in its possession was and continues to be the Achilles’ heal for globalization of business.
The fag end of 20th century has witnessed the equation between politics and economics undergoing a paradigm change. This time globalization induced changes have led governments to willingly forfeit their right to manage the natural resources within the area under their jurisdiction in favour of transnational actors. Certain affluent sections of the society in various nation-states are in full agreement with their governments for making this shift. But a vast majority left out of the process of globalization forms the core of anti-globalization protest movement, which threatens to de-rail the process and cause damage to its sustainability. This fact is even acknowledged by die-hard globalizers.
In the era where the state is reconfiguring itself to be a larger part of transnational networks, the people organized within a delineated national territory are losing faith in investing their political capital with the politicians. The political class, which sees the future in multiplying the global finance capital, is inadvertently undervaluing the importance of PC. The people are also feeling the slide in the value of PC, resulting from lower demand. This is leading people to disintegrate and form smaller groups to reassert the value of their PC, either through protests, strikes or violence. History tells us that people, who are not slaves, will always revolt and make the value of the assets known to the world.
Footloose people not organized under the rubric of a strong nation-state or a transnational supra state can never be conducive to the growth of business and sustainability of capitalism. Perhaps, it is this reason, which has led the corporations to care not only for their shareholders but also various stakeholders through numerous corporate social responsibility measures (CSR).
Corporations will have to move beyond the run-of-the mill CSR initiatives and look at the larger picture to ensure the longevity of the whole process of globalization. Business will find it hard to remain disinterested in the political capital. With people finding politicians as bad investment destinations for their PC, a vacuum is being created. If business too neglects the PC, then people will come out in worst violent forms to prove that their PC has a higher value than what is being ascribed by international political economy. This risk has to be mitigated through concerted investments in PC.
21st century offers capitalism an opportunity to come closer to the people and be appreciated and respected as an honest custodian of their political capital. It may be a sound investment to create a demand for PC among the corporates and assure higher rate of returns on PC than what the politicians could ever offer to the people. This can be achieved by making sincere efforts towards inculcating in the corporate world a genuine respect and care for the people, who are not their shareholders.
*Atul Bharadwaj is Graduate of King’s College London. He is currently working as Associate Editor, Business & Economy
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