From Enriching the Shareholders to Serving the Stakeholders

The economic systems in our world, where the gap between the extremely poor and the super-rich grows wider by the minute, leave billions of fellow human beings struggling to survive. This is unjust.

Many ideas and discussions have been advanced about how to solve these problems, and different economic systems have been passionately analyzed in detail and tried by various nations — with no solution in sight. The problem of the growing gap between the wealthy and the poor has not subsided. Instead, it has gotten worse.

As is my habit, I try to simplify the problem to grasp it better and not get lost in the ocean of data and details. I have realized that in almost all cases, the goal of most for-profit companies or firms is to please the shareholders, and not the people they eventually affect.

To clarify this concept, let’s first define the two terms.

Shareholder: A person or institution that has invested money in a corporation in exchange for a “share” of the ownership.

Stakeholder: A person or a group with a vested interest or stake in the decision-making and activities of a business, organization, or project. Based on these criteria, stakeholders often include customers, employees, investors, and suppliers — and ultimately, all of society.

RELATED: Beyond Capitalism and Communism to a New Spiritual System

For simplicity, let’s use the term “shareholders” to represent the self-interest that has been the driving force or the engine of the predominant capitalist systems in the world. That term, after all, was suggested by Adam Smith, who has been called by many the father of capitalism. 

Let’s use the term “stakeholders” to symbolize the welfare of the public — the ordinary members of a community or country who the economic system tries to serve. An equitable and just economic system should target and strive to achieve the welfare, happiness, and financial security of all, rather than increase share prices or higher profits for the sole benefit of the few.

One of the primary principles of the Baha’i teachings — a spiritual solution to the world’s economic problems — asks humanity to achieve unity and justice by eliminating the great disparities between the wealthy and the poor: 

The government of the countries should conform to the Divine Law which gives equal justice to all. This is the only way in which the deplorable superfluity of great wealth and miserable, demoralizing, degrading poverty can be abolished. Not until this is done will the Law of God be obeyed.

To accomplish those lofty goals, there must be a fundamental shift in our thinking process and vision. The different institutions of the world must change their direction to a new one motivated by human and spiritual values.

This shift in the world’s mindset implies seeing the bigger picture and the whole of humanity, rather than a small portion of society who have accumulated a vast majority of the financial resources. We must also revisit and revise the wasteful expenditures on war industries and military might, redirecting them to humanitarian purposes and the advancement of sciences that promote the well-being of all humanity.

In his book, The World Order of Baha’u’llah, the Guardian of the Baha’i Faith, Shoghi Effendi, outlined the hopeful, positive Baha’i vision of a unified, demilitarized, and economically equitable world, saying that the Baha’i teachings will help bring it about:

The economic resources of the world will be organized, its sources of raw materials will be tapped and fully utilized, its markets will be coordinated and developed, and the distribution of its products will be equitably regulated.

… The enormous energy dissipated and wasted on war, whether economic or political, will be consecrated to such ends as will extend the range of human inventions and technical development, to the increase of the productivity of mankind, to the extermination of disease, to the extension of scientific research, to the raising of the standard of physical health, to the sharpening and refinement of the human brain, to the exploitation of the unused and unsuspected resources of the planet, to the prolongation of human life, and to the furtherance of any other agency that can stimulate the intellectual, the moral, and spiritual life of the entire human race.

As the economic problems of the world increase and the intensity of our multiple crises increases with it, humanity has to face the reality that the scope of the world’s problems has reached a level beyond the ability of our current system of national sovereignty to resolve. A new, world-unifying approach and a new way of looking for a solution is needed — a realization that spiritual and moral values must be included in the formulation and application of the system that can remedy the diseases of our ailing human society. 

RELATED: Why Can’t We Combine the Best of Socialism and Capitalism?

The Baha’i teachings understand that two kinds of human civilization exist — material and spiritual — and achieving a balance between the two comprises the solution. Abdu’l-Baha explained this concept beautifully:

… among the teachings of Baha’u’llah is that although material civilization is one of the means for the progress of the world of mankind, yet until it becomes combined with Divine civilization, the desired result, which is the felicity of mankind, will not be attained. Consider! … all these weapons of war are the malignant fruits of material civilization. Had material civilization been combined with Divine civilization, these fiery weapons would never have been invented. Nay, rather, human energy would have been wholly devoted to useful inventions and would have been concentrated on praiseworthy discoveries. Material civilization is like a lamp-glass. Divine civilization is the lamp itself and the glass without the light is dark. Material civilization is like the body. No matter how infinitely graceful, elegant and beautiful it may be, it is dead. Divine civilization is like the spirit, and the body gets its life from the spirit, otherwise it becomes a corpse. It has thus been made evident that the world of mankind is in need of the breaths of the Holy Spirit. Without the spirit the world of mankind is lifeless, and without this light the world of mankind is in utter darkness. For the world of nature is an animal world. Until man is born again from the world of nature, that is to say, becomes detached from the world of nature, he is essentially an animal, and it is the teachings of God which convert this animal into a human soul. 

The history of purely capitalist economics, with its focus on profit at any cost and with little attention paid to the plight of the poor, has created this extreme disparity between the “haves” and “have nots” that threatens to destabilize our entire world. It is time to rethink our assumptions about our economic systems, emphasize the needs of the stakeholders over the shareholders, and start building a more just and equitable global system by introducing human, moral, and spiritual values.