Politics has been “corrupted” by money and governments have “abdicated” their responsibility to tackle society’s problems, according to a top economist.
Dambisa Moyo, who until last year sat on the board of Barclays, said at Davos on Thursday there had been a “contamination” of democratic systems in the West.
“Government is abdicating its responsibility,” Moyo said on a panel. “It’s clearly abdicated its responsibility around public goods, I don’t have to go into details around infrastructure failures even in very developed economies. It’s clearly abdicating its responsibility around areas of regulation. We are now seeing many industries that are becoming much more monopolistic.”
One of the major themes of this year’s Davos conference has been the idea of ‘stakeholder capitalism’, which argues that companies should play a role in making society a better place rather than simply maximising profits.
Moyo, a best-selling author and economist, said companies were being “wrongly” asked to pick up the slack left by “short-term” governments who were failing to address “long-term problems that require long-term solutions.”
“In a nutshell, it means that corporations are wrongly being put under the spotlight to address some of the fundamental challenges that the global economy is trying to address today,” she said.
“I will end up drawing on my experience having being born and raised in Africa, that is what happens when you have a failure of government. You end up with corporates and NGOs essentially designing social policy as well as the business environment.”
Moyo said businesses couldn’t be relied on to address problems such as widespread immigration, inequality, climate change, and technological changes impacting society.
“I’m reminded of a dinner a couple of nights ago, one CEO said: ‘listen it’s called capitalism, it’s not called labour-ism or productivity-ism’, which means like it or not capital has been put at the heart of the global economic system,” Moyo said.
“What does that mean? It means in many respects regardless of the business roundtable, regardless of this momentum to say: well, corporations need to do more, need to be at the tip of the spear in addressing these social ills, it is governments responsibility first and foremost to create an environment, whether it’s regulatory or in terms of policy, to create the environment in which corporations will believe.
“Until you see government stepping up, until you see politicians taking the mantel and saying we absolutely will not stand for certain behaviours and we actually stand for certain values in terms of trying to address these many issues, I don’t think we’re going to make much headway.”
She added: “One of the things we absolutely do need to do is tackle the corruption of the political system by money.”