Brexit and Trump: A Wake-up Call for American Capitalism

When Paul Krugman of the New York Times and Brett Stevens from the Wall Street Journal both agree that Trump is a bad idea for America and Brexit is a bad idea for Britain, you’d think we’d have a clean sweep majority on what’s best for the world.  Not the case.  Why?  Because the votes are not about left and right.  The votes are about winners and losers in the global economy.  I was shocked when Trump secured one win after the other.  I thought he would fade quickly.  I was dismayed by the Brexit vote and thought in the end, Britain would vote to remain in the EU.  What this teaches me is that I’m out of touch with a segment of America and the world that is feeling angry, disenfranchised, and tired of shibboleths by both conservative and liberal politicians.  People are hoping for a new world that involves trade barriers, bashing bankers, and blocking immigrants.  

The message is a wake-up call for capitalism in America and the world.  We all know globalization is creating winners and losers - many of us were just not aware of how bad it is.  Anyone reading this blog is probably on the winning side of globalization.  The losers in the massive economic shift are hungry for solutions.  American companies must get involved in the business of providing hope.  

So what specifically should they do?  As Edmund Burke said, change is often best accomplished through “little platoons,” not massive interventions.  CEOs and other leaders can take actions in their own communities to bridge the economic divide.  For example, in Western Michigan, Fred Keller (Founder and Chair of Cascade Engineering) and a group of 100 CEOs have formed a coalition to address workforce development, improvements in early education, and improvements in child care for dual income families.  The work is led by the business community, and local governments have come on board to support the change.  Business leaders are the drivers of change.  Government leaders are their partners. 

Why does business need to step up and make a shift?  If we don’t, we will leave it up to government bureaucrats or populist demagogues to provide a solution.  We’ve got to get involved in shaping the narrative that business leaders do care about the future of their communities and will invest the dollars, leadership, and volunteer hours of their employees to make a difference.  If we want to make America great again, it starts with local action.  

Minneapolis is another example of business taking the lead.  There, the CEOs of major companies meet regularly and use McKinsey and Company as a resource to identity the biggest problems in their community.  They prioritize what needs to be done - meeting monthly in sub-committees.  The results are impressive.  Schools are improving, neighborhoods are being rebuilt, and needed infrastructure is being secured by the business leaders in cooperation with their local government.    

The days of saying, “The responsibility of business is only to our customers,” are over.  The foundations of American capitalism rest on a vision of a strong community based on vibrant and connected opportunities.  When a portion of the base feels so left behind that they see an untested major disruptor as their only hope, then we are all in trouble.  

Boards and CEOs can respond with a clear call to step up and say, “We have a role to play here and we intend to help fill the gap. What is good for our community is good for business.”   

*  If you want to learn more about what you can do to get involved, please reach out to me.  I promise to connect you with like-minded leaders who not only know how to build great companies but also possess the moral imagination to build a better world.