Capitalism seen doing 'more harm than good' in global survey

LONDON (Reuters) - A majority of people around the world believe capitalism in its current form is doing more harm than good, a survey found ahead of this week’s Davos meeting of business and political leaders.

FILE PHOTO: The national flags of several countries and a flag with the logo of the World Economic Forum (WEF) fly at the roof of the congress center during preparations for the annual WEF meeting in the Swiss Alps resort of Davos, Switzerland January 19, 2020. REUTERS/Denis Balibouse

This year was the first time the “Edelman Trust Barometer”, which for two decades has polled tens of thousands of people on their trust in core institutions, sought to understand how capitalism itself was viewed.

The study’s authors said that earlier surveys showing a rising sense of inequality prompted them to ask whether citizens were now starting to have more fundamental doubts about the capitalist-based democracies of the West.

“The answer is yes,” David Bersoff, lead researcher on the study produced by U.S. communications company Edelman.

“People are questioning at that level whether what we have today, and the world we live in today, is optimized for their having a good future.”

The poll contacted over 34,000 people in 28 countries, from Western liberal democracies like the United States and France to those based on a different model such as China and Russia, with 56% agreeing that “capitalism as it exists today does more harm than good in the world”.

The survey was launched in 2000 to explore the theories of political scientist Francis Fukuyama, who after the collapse of communism declared that liberal capitalist democracy had seen off rival ideologies and so represented “the end of history”.

That conclusion has since been challenged by critics who point to everything from the rising influence of China to the spread of autocratic leaders, trade protectionism and worsening inequality in the wake of the 2007/08 global financial crisis.

On a national level, lack of trust in capitalism was highest in Thailand and India on 75% and 74% respectively, with France close behind on 69%. Majorities prevailed in other Asian, European, Gulf, African and Latin American states.

Only in Australia, Canada, the United States, South Korea, Hong Kong and Japan did majorities disagree with the assertion that capitalism currently did more harm than good.

The survey confirmed a by-now familiar set of concerns ranging from worries about the pace of technological progress and job insecurity, to distrust of the media and a sense that national governments were not up to the challenges of the day.

Within the data there were divergences, with Asians more optimistic about their economic prospects than others across the world. There was also a growing split in attitudes according to status, with the affluent and college-educated much more likely to have faith in how things were being run.

Of possible interest to corporate leaders gathering in Davos this week was the finding that trust in business outweighed that in governments and that 92% of employees said CEOs should speak out on the social and ethical issues of the day.

“Business has leapt into the void left by populist and partisan government,” said Edelman CEO Richard Edelman. “It can no longer be business as usual, with an exclusive focus on shareholder returns.”