More than half of the population now believes capitalism is actively hurting the world, according to the Edelman Trust Barometer. Are they right?
The Edelman Trust Barometer has been measuring public trust in institutions – government, business, NGOs and media – for over 20 years. While trust in institutions has historically grown in line with the economy, this year’s survey found that 56 per cent of respondents believe that “capitalism as it exists today does more harm than good” – something that Richard Edelman, CEO of Edelman, calls a “trust paradox”.
“Since we began measuring trust 20 years ago, economic growth has fostered rising trust,” Mr Edelman said.
“This continues in Asia and the Middle East but not in developed markets, where national income inequality is now the more important factor. Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid.”
So why are people so down on a system that, it’s generally agreed, has enriched the lives of billions?
The survey found that 78 per cent of respondents agreed that “elites are getting richer while regular people struggle to pay their bills” and that a majority of respondents believed they would not be financially better off in five years’ time than they are today. Respondents were also afraid that they would lose their job due to automation, flexibilisation, immigration, or recession.
With all that in mind, it’s not hard to see why people are worried. And given that Edelman surveyed more than 2 million people across the world, it’s safe to say they’ve got a representative sample.
But Edelman is confident that the situation will improve. With everybody at Davos now talking about “stakeholder capitalism”, and BlackRock divesting from coal (sort of), it could be that a reforming capitalist system could take the lead in fixing the planet up.
“Business has leapt into the void left by populist and partisan government,” Mr Edelman said.
“It can no longer be business as usual, with an exclusive focus on shareholder returns. With 73 percent of employees saying they want the opportunity to change society, and nearly two-thirds of consumers identifying themselves as belief-driven buyers, CEOs understand that their mandate has changed.
“The time for talk is over. 2020 must be the year of action.”