Capitalism is at a 'crucial' turning point and President-elect Biden could make it more fair, according to a leading expert on the economy

Martin WhittakerJUST Capital CEO Martin Whittaker.
  • President-elect Joe Biden could accelerate stakeholder capitalism, the belief that companies are responsible not only to their shareholders, but to all stakeholders, like their workers and customers.
  • That’s according to Martin Whittaker, the CEO of JUST Capital, an independent, nonpartisan research firm established by the billionaire Paul Tudor Jones.
  • Business leaders have indicated that they want to help reduce economic and racial inequality and combat climate change, meaning new partnerships could exist between the public and private sectors to enact real change.
  • “There’s a massive opportunity here,” Jones told Business Insider.
  • Visit Business Insider’s homepage for more stories.

Joe Biden’s presidency could fundamentally change the course of capitalism. That’s according to Martin Whittaker, the CEO of JUST Capital, an independent, nonpartisan research firm established by the billionaire philanthropist Paul Tudor Jones. “There’s a massive opportunity here,” Jones told Business Insider. He added that capitalism is at a “critical” and “opportune” turning point because of one main reason: the private sector and the public sector’s goals seem to be in line.

Whittaker cited Biden’s policies on investing more in American workers and creating more jobs, addressing climate change, and reducing racial inequality as all “amenable” to stakeholder capitalism.

GettyImages-joe biden

He also pointed out the incredible amount of money being poured into ESG (environmental, social, and governance) investing, signalling that investors want to back companies that are accountable to all stakeholders. The President Trump’s labour department has discouraged ESG investing in retirement plans, and walked back efforts to produce standardised measurements in the space, despite much objection. Biden’s presidency will likely boost ESG investing, firms have noted.

The president-elect also finds himself at a particularly interesting time when it comes to what top CEOs want.

In August 2019, some 180 top business leaders, members of the organisation called the Business Roundtable, came together and declared that businesses should serve all their stakeholders: including workers, customers, and the environment in which they operate.

Stakeholder capitalism was a departure from the previously reigning ideology, shareholder primacy, which stated that the sole purpose of a company was to maximise profits for its shareholders.

“Joe Biden will come into office with a private sector that has said that its purpose is to create value for all stakeholders, that wants to do that,” Whittaker said. “Whether you’re sceptical of the Business Roundtable or you’re sceptical of corporations, they have said that is what they want to do, that that is their purpose.”

Recent events have only cemented stakeholder capitalism in the minds of the business elite. The coronavirus exposed massive racial inequality, and social upheaval following the killings of George Floyd and Breonna Taylor made business leaders even more aware that they can help solve society’s problems.

The CEO added, “Markets have never been in this situation. He can really change the course of capitalism for the better. I really believe that. And I hope to hell that he does.”

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