The Idea in Brief
The past 50 years have seen unprecedented economic growth, attributable largely to the spread of market capitalism across the globe. Business leaders asked to identify the issues of deepest concern to them pointed to forces that could disrupt the global market system in the coming decades: inequality in income within countries and across regions, migration, deterioration in the environment, a fragile financial system, and the inability of local, national, and international institutions to mitigate the problems.
For market capitalism to prosper, business must lead—as an innovator, developing strategies that turn systemic problems into opportunities for sustainable growth, and as an activist, mobilizing coalitions of companies and governments to develop institutions that can support and strengthen the system.
Market capitalism has proven to be a remarkable engine of wealth creation, but if it continues to function in the next 25 years as it has in the past 25, we are in for a violent ride or, worse, a serious breakdown in the system itself. That sounds dire, and it is. The threats to market capitalism are diverse. When the gap between the rich and the poor continues to widen, when millions of have-nots migrate from poor countries to rich ones and wealthy nations respond with increasingly strident protectionism, when global financial systems are fragile and less than transparent, and when society’s traditional protectors—business, industry, government, and international institutions—are unable to address these and other first-order problems, we have a recipe for disaster. The failure of the financial market system in 2008 is an example of what can happen, as is the recession that ensued in the developed world.