With many countries now seeing a decline in COVID-19 cases, governments around the world are beginning to work towards “going back to normal.” Some commentators, however, argue that ignoring the economic anxiety that has been brewing for over a decade now could lead to more unrest, which could further ruin the chances of an economic recovery.
Recent protests against racial inequality in the US and other parts of the world have made it clear that simply going back to the way things were isn’t enough. There is a clear need for a shift towards an inclusive and equitable world order. Business schools, where many of the world’s economic managers and key decision-makers are trained, would be a good place to start.
The COVID-19 pandemic has highlighted issues such as poor labor practices and the lack of paid sick leave, which further contribute to inequality. Though many business schools have added courses on sustainability, social impact, and ethics in the wake of the 2008 global financial crisis, there is still a need to add discussions on topics that cut across class lines, such as minimum wage and labor unions, and acknowledge the flaws of shareholder capitalism.
For decades, business schools around the world have promoted shareholder primacy, which places great emphasis on financial results and maximizing stock value. However, the COVID-19 pandemic has led to growing calls for a shift towards stakeholder capitalism, which focuses on serving the needs of all constituents, and not just shareholders.
This pivot towards inclusivity and fairness would require business schools to integrate the principles of stakeholder capitalism into their curriculum. It would also require them to openly discuss power, a topic which they have traditionally stayed away from.
In the years leading up to the 2008 crisis, the banking and financial sector lobbied the government to weaken safeguards that would limit the impact of risky financial bets. This eventually caused millions to lose their pensions and pushed more people into homelessness, with barely anyone being held accountable. Many people simply fail to realize the extent of the private sector’s hold on government and how everyone else is affected by it.
To create change, business schools should highlight success metrics other than profits and stock prices, which divert attention away from the harmful effects of tax evasion, government subsidies, and other efforts that lead to favorable stock prices but cause greater economic inequity. Instead, business schools should promote metrics that account for workers’ rights, that identify abuse of power in corporations, and that emphasize the relationship between government, business, and society.
The 2008 crisis forced governments around the world to introduce measures that would decrease the likelihood of another crisis. Many of these measures have since been relaxed, leaving the global economy susceptible to another major crash. Now, the world is facing yet another economic crisis, and anger towards the financial and political elite is reaching new heights. More and more people are taking to the streets, demanding greater action against oppressive structures that have negatively affected people for decades.
More than ever, business schools must rethink the lessons they are imparting to their students. Future leaders must understand the impacts their business decisions have on society, and they must be able to present measures capable of protecting democracies from the threats of growing economic populism.