Confronting Capitalism by Philip Kotler, AMA COM, New York, 2015
Democracy in Decline: Rebuilding Its Future by Philip Kotler, Sage, London, 2016
Philip Kotler, author of Confronting Capitalism and Democracy in Decline, is a globally recognized marketing guru, developer of cause-related marketing and author of 50 other books. Hundreds of corporations have adopted his strategies of aligning with philanthropic causes and socially responsible policies favored by the growing movements of investors in ethical, "green" and "impact" branded equities.
In Confronting Capitalism, Kotler departs from his Chicago economist teacher Milton Friedman who famously claimed that the only responsibility of business was to maximize financial returns to shareholders. Kotler traces how he shifted to MIT's Paul Samuelson and Robert Solow for his PhD in economics. Forsaking theory as he encountered the real globalized economy and the issues facing his corporate clients, Kotler saw how capitalism had evolved from the world Adam Smith saw in 1776 in his famous Wealth of Nations. Kotler describes today's capitalism and its 14 shortcomings - while still seeing its future as continuing to dominate the global economy:
- Proposes little or no solution to persisting poverty
- Generates a growing level of income and wealth inequality
- Fails to pay a living wage to billions of workers
- May not provide enough human jobs in the face of growing automation
- Doesn't charge businesses with the full social costs of their activities
- Exploits the environment and natural resources in the absence of regulation
- Creates business cycles and economic instability
- Emphasizes individualism and self-interest at the expense of community and the commons
- Encourages high consumer debt and leads to a growing financially driven rather than producer-driven economy
- Lets politicians and business interests collaborate to subvert the economic interests of the majority of citizens
- Favors short-run profit planning over long-run investment planning
- Should have regulations regarding product quality, safety, truth in advertising, and anticompetitive behavior
- Tends to focus narrowly on GDP growth
- Needs to bring social values and happiness into the market equation
This list of shortcomings, with which I agree, has clearly driven Kotler's success with his marketing and branding practice with so many major corporations, including General Electric (NYSE:GE), IBM (NYSE:IBM), Merck (NYSE:MRK), AT&T (NYSE:T), Sony (NYSE:SNE), Bank of America (NYSE:BAC), Motorola (NYSE:MSI), Ford (NYSE:F) and others around the world. Kotler was an early exponent of behavioral economics, since psychology and brain science drive so much of today's advertising, branding and marketing using big data. Kotler cites the broader social wisdom in Adam Smith's earlier, overlooked, Theory of Moral Sentiments (1759) as complementing his later Wealth of Nations.
As an aspiring young futurist, I was amazed that Philip Kotler reached out to compliment my early articles in The Futurist on the market psychology of "keeping up with the Jones" and my review of Limits to Growth, the Donella Meadows-led report to the Club of Rome in 1972. Since then, for full disclosure, I sought his advice on our EthicMark® Awards for Advertising that Uplifts the Human Spirit and Society which I founded and funded in 2004.
Unsurprisingly, author Kotler's Democracy in Decline (2016) weighs in on all the current issues of democratic governance: uprisings of those left out of today's market-based capitalism and globalization, privatization, deregulation and financialization kicked off by Britain's Margaret Thatcher and US President Ronald Reagan in the 1980s. Following his analysis in Confronting Capitalism, Kotler identifies 14 shortcomings of US democracy:
- Low voter literacy, turnout, and engagement.
- Shortage of highly qualified and visionary candidates.
- Blind belief in American exceptionalism.
- Growing public antipathy toward government.
- Two-party gridlock preventing needed legislation.
- Growing role of money in politics.
- Gerrymandering empowering incumbents to get re-elected forever.
- Caucuses and primaries leading candidates to adopt more extreme positions.
- Continuous conflict between the President and Congress.
- Continuous conflict between the federal and state governments.
- The Supreme Court's readiness to revise legislative actions.
- The difficulty of passing new amendments.
- The difficulty of developing a sound foreign policy.
- Making government agencies more accountable.
Here, again, I agree, as do many of our citizens in the 2016 elections, with both sets of critiques of capitalism and democracy. Kotler also offers a balanced, sensible menu of reforms. While I and Ethical Markets promulgate and propagate our higher ethical standards for markets, media and advertising, Kotler works within corporate management and in academia to promote our similar goals. These two books are succinct guidelines to the future of both capitalism and democracy.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.