I’m Rebecca Henderson, a Professor at the Harvard Business School and I’ve just published a book called “Reimagining Capitalism in a World on Fire”. We need to reimagine capitalism *now* if we’re to master this pandemic, stop global warming, keep ...

What do you mean by "we need to"? Who is we? More to the point, how do your ideas for what businesses or business people should do take account of the structures of power that brought us to this point and which will continue to shape capitalism? Is your book an argument about our norms and how great it would be if they changed, or do you talk at all about strategies for exercising agency over our political-economic system?

I'm all about the structures of power -- although I'd love to see a norm shift, too. I don't think it's possible to build a just and sustainable society without changing the rules -- of course the obvious way to do this would be through massive political and cultural change -- and I think that trying to drive that change is immensely important -- but I also think that business could play a role. I believe that problems like inequality and climate change are problems for business -- it's going to be much harder to make money on a planet where climate change is driving down food production, forcing hundreds of millions of people to head North, and an increasingly unequal society is bad for business both economically and publicly. So I believe that for its own good, business needs to strengthen the power of the institutions that can balance business and address these problems -- helping to build effective, transparent, democratically elected governments, a strong independent media, strong employee representation. I know, it sounds a little wild, but it has happened before...

How do you feel about Harvard taking 9 million dollars from the small business loan program?

Actually the $9m wasn't from the SBLP. Harvard was awarded $9m automatically as a result of some recent legislation sending money to colleges and universities -- but has refused to accept the award. Others need it more than we do.

How about instead of reimagining capitalism we just go back to the way it originally was? Get rid of the rules and regulations put in place by lobbyists at multi-million, and billion dollar companies, and allow start-up’s to compete again.

I'm completely with you that making sure there's real competition is absolutely crucial -- and that getting money out of politics is the first step. I don't think it's enough -- but it's a critical part of the puzzle.

Seems we would be allies then, as it would likely take a lifetime just to finish the first step.

It's not an easy lift, to be sure. But it's an idea with widespread bipartisan support -- my understanding is that sizeable majorities of both Republicans and Democrats support it - and historically some countries have decided to change the law -- if there's overwhelming popular support for doing so.

What are your thoughts on future automation and AI that is capable of eliminating large numbers of jobs. If our population counties to grow, yet we continue to become more efficient, what do we do to support people caught up in the mix?

This is such an important question -- thanks! I think there's a way to manage the impact of automation and AI such that it's a blessing to all of us - technically, if we can make the new technologies a complement to live humans, so that it makes people more productive and more innovative, rather than a substitute. I think that's going to take both leadership by visionary companies -- companies who can demonstrate that this is the way to go, and that it makes the firm stronger as a result -- and political action by governments looking out for those who are likely to be affected. It will be critically important to invest significantly in education, of course, but it will also be important to make sure that the benefits of the new technology are widely shared.

1. What are the high level bullet points for your ideas, for those of us unfamiliar with your areas of study?
2. How do you see technology fitting in to the evolution of our economic systems? Do you have any thoughts on advanced AGI, the technological singularity, methuselarity, nanotechnology, and how they might change our notions of human nature, money and scarcity?

I'm focused on systemic change -- how do we think about rebuilding capitalism so that it works for regular people, and doesn't destroy the planet. I suggest that purpose driven businesses -- firms that are authentically committed to doing the right thing -- can play an enormous role in driving positive change. I don't think firms acting along can change the world -- but I suggest that these kinds of firms can drive the innovation that changes industry, can be catalysts for cooperative efforts that bring everyone along to solve pubic problems and -- perhaps -- be partners in the political process in ways that can lead to a fundamental rebalancing of capitalism.

No offense... but that sounds like a lot of buzz words without substance. You've spent ten years thinking about this and all you seem to have to show for it is "we need to come up with ideas to fix it."

To be fair, I just published at 300+ page book on the subject building on a 28 session course that I developed and taught. Anything summarized in a paragraph tends to look like buzz words! My book lays out a systematic road map as to how business might help to drive real change -- beginning with actions that every firm can take, showing how that creates incentives for cooperative action -- and that that in turn creates a need for "enforcers" -- I then discuss whether and how finance is being rewired to drive collective action, and the ways in which the business community might now -- and has historically -- driven inclusive political change. My apologies if that's more buzz words -- the book gives me space to combine research and stories into something you might find more satisfactory...

Hello, what's your ballpark time estimate for the point of no return w.r.t. climate damage? And, realistically, what's your estimate for the chance of capitalism actually reforming before that? (given that a very significant proportion of the general population and politicians refuse to even accept basic climate science)

We're very close -- I'm not a scientist, but those of my colleagues who study this stuff tell me we need to cut green house gas emissions by 50% by 2030 (!) and to zero by 2050 if we are to avoid dangerous climate change. What are the odds that we will do that? Not great -- but that doesn't mean that we should stop trying. The consequences of unchecked climate change are catastrophic

Not great -- but that doesn't mean that we should stop trying.

Sure, we shouldn't. But to be blunt: what's plan B? Are we looking at megadeaths or gigadeaths?

Nobody knows. But it's precisely because there isn't a Plan B that we need to do everything we can right now. The good news is that this isn't a technical problem per se -- or even a resource problem. The technologies are moving really fast and as we've seen in the case of Covid, when we want to spend real resources to address a problem, we can. It's all about the cultural and political will. And climate change hasn't gone away -- we're going to have more fires and floods and droughts -- sooner or later we're going to move..

Hello, I took your HBX class and it changed my life. What do you recommend to your students like me as a further course of study?

Thanks! That's wonderful to hear. Send me an email at HBS and I'll send you the list of books I recommend if you want to dive deeper into these questions. And -- of course -- think about buying my new book,

Did you give the PPP back?

I believe so.

Do you believe the US will learn environmental and societal lessons from the pandemic or will things creep back to the way they were?

I'm very hopeful that we will learn from the pandemic -- it's made inequality so visible -- and its consequences for all of us -- so stark, that I think as the dust settles we'll begin to have a serious conversation about building a real safety net and doing all we can to ensure that all jobs are "good jobs".

Hello professor Henderson, thank you for doing this AmA. I have a few questions concerning your work :

1) What, according to your research, has lead capitalism to its current, unsustainable form? Is it perhaps, as is often argued, the spreak of neoliberal ideology and economic policy since the 1970s? Where did capitalism go wrong?

2) Could you tell us some of the main obstacles we deal with today in trying to make a new capitalism possible?

3) What role do you believe governments have today not only in reimagining but also in reestablishing capitalism? Also, are nation states generally still be able to act as a counter-powers to multinational companies today, or would an international authority need to be established (to dismantle tax havens for instance)?

4) How can a business executive / CEO convince their investors or shareholders of the urgent need for social and environnmental accountability, even at the risk of losing profits?

Thank you for these great questions! They are exactly the questions I go after in my book -- and it's 300+ (highly readable) pages - so I'm only going to be able to skim the surface here. So -- on 1) Yes. We took government for granted -- or actively attacked it -- together with all the other institutions that keep business in balance -- and our system got radically out of balance as a result. The major obstacle to change is the fact that the system is working very well for a small group of people who have become very rich and are pumping a good chunk of their money into ensuring that things don't change. Plus the fact that many people have become persuaded that the problems we faced are actually caused by immigrants and non white people -- aided by the fact that addressing our problems requires that we all act together -- technically, something like climate change is a massive public goods problem that requires us to act collectively if we are to solve it -- and sustaining collective action is always hard. Good government has traditionally been the best solution to this kind of problem - but as you suggest we need collective action at a global scale, and that won't be easy. If you're a business executive or a CEO there are two arguments you can make for focusing on the need to become more sustainable. The first is that there's often a great deal of money to be made from doing so. The third chapter of my book is all about this -- I lay out the business models firms are using today and give a range of examples at billion dollar scale. The second path is to argue that unless we all act collectively we will all hang separately -- and to explain how acting collectively can indeed be a source of financial returns. The moral case is incredibly important -- it provides the motivation and the credibility and the trust required for effective action -- but it is not, alone, enough.

seeing how deeply our culture is rooted in capitalism today, do you think we can change the mindset of people about climate change? honestly, i think we have come so ahead, there is no return now.

I don't think we have to change people's minds about capitalism in order to change their minds about climate change. Indeed I don't think we're going to fix climate change without capitalism -- we need all the innovation that we can get, and we're also going to need to roll out new technologies like electric vehicles or plant based meat incredibly quickly. But we do need to make sure that firms can't skew the political process in a way that prevents us making progress -- the fossil fuel industry, for example, has spent hundreds of millions of dollars trying to deny the reality of climate change -- and yet more money funding politicians who take their side. If we're going to solve climate change we need to get money out of politics, put in place the taxes and regulations we need to phase out fossil fuels, and invest in things like the Green New Deal -- all things we could do without having to get rid of capitalism.

Thank you for this AMA! So excited to read your book when it arrives in the mail. One question about the feedback loops: if most consumers agree this is an issue, most pension funds, many companies, what is the most feasible way we can get investors and other corporates to change their behavior with regard to emissions and paying workers fairly? What I see as greed from “the markets” and some corporates will be so hard to overcome.

Thank you for ordering the book! To your question -- it's all about supporting firms in acting together to address these problems so that no single firm is disadvantaged by doing the right thing. Sometimes firms can get together and decide to do this -- nearly every member of the consumer goods forum, for example, has agreed to use only sustainable palm oil, beef and soy -- and why this isn't a final solution it has proved to be a major step forward. The next is to persuade investors that they would be better off if the firms they are investing in started to behave differently. There's a lot of exciting research just coming out suggesting that there's good reason to believe that firms that do better on "ESG" metrics -- "Environmental, Social and Governance" - outperform their competition -- and that result appears to be holding during the pandemic, too. Many investors have decided that climate change is a huge risk to their long term returns, for example, and they have joined together in an effort called "Climate Action 100+" -- to pressure firms to make progress against the problem. Last but by no means least, we need to strengthen government so that it can set the rules so that we can solve the problems that it faces. Check out chapter 7 for my ideas as to how this might happen -- and how it has happened before.

Congratulations on the publication of your book!

My business teacher at school says that when I come out of uni, I will begin to see a technological revolution with 5G (I am born in 2002). My question to you is how do you think 5G technology will affect large business such as amazon and do you think it will get rid of niche businesses?

Thanks! I'm not an expert on 5G, but Amazon is surely immensely powerful, but I think it's possible 5G could help support niche businesses -- it's not the technology I'm worried about, it's the regulation. We need to be sure that big businesses cannot abuse their power.

I think the main issue is it getting so advanced that it gets rid of jobs, cause then so much people will be out of income!

That's a hugely important issue. Beyond 5G I'm worried about the potential of robotics and AI to throw millions of people out of work. It's why I think strengthening our political system so that the government really represents the will of "the people" is so important. The good news is that I know many business leaders who agree.

How do we make helping the people profitable for businesses? I know there are some tax incentives to operate in ways beneficial to the environment, but what more needs to be done?

"Regulation" often gets a bad name, but when it comes to protecting the environment and employees it's often essential. If every company in an industry can legally pump its pollution into the local river, deny its employees health care and sick leave and pay the absolute minimum, it can be very tough for any individual company to do the right thing. Regulations level the playing field so that firms can't get ahead by polluting or pushing their employees to the edge. Which is all by way of saying that I'm a huge fan of putting in place some kind of tax or price on fossil fuels -- a tax that would go into a fund that then sent checks to everyone in the US. It would mean that it was cheaper to use clean energy than to continue to use dirty energy, so that everyone would have an incentive to invest in renewable energy. We could raise the minimum wage, or insist that every firm gave its employee sick leave. I would strongly recommend checking out "Economists for Inclusive Prosperity" if you'd like to see some other ideas.

What are some historical events that led to the world being on fire? In your opinion

I think we lost sight of the fact that the free market needs to be balanced by government and the rest of the institutions of a free society if it is not to generate really quite significant side effects -- like climate change, and like accelerating inequality. Starting in the 1980s there was a huge push to "drown government in the bathtub" and many people -- including many business men -- came to believe that government was nothing but a bad thing and should be cut back as much as possible. But as the current pandemic is showing us, there are problems business can't solve alone -- like making sure every hospital in the country has the PPE it needs. Climate change is like that. Business can't solve it alone. Inequality, ditto. So I don't think there was a single event -- more a slow cascade of change that brought us to where are today.

For recent MBAs, what are some areas where you see an opportunity to develop a career focused on climate? How does one gain experience and eventually become a leader in ESG/sustainability when it is still a fairly young and underdeveloped portion of companies' business models and organizational structures?

Depending on your skills and interests, I would focus on those industries where climate change is already central to business strategy -- industries like energy, construction, transportation and food. Within the industry you choose I'd look hard for the leading firms -- those that are clearly authentically committed to putting dealing with climate change at the center of their strategies. Then I'd take a "regular" job -- whether it's in finance or marketing or sales -- something that will help you build credibility within the organization. Once you have the experience and the credibility you'll be able to help support the firm in addressing climate change. An alternative is to go to work for a a company that supports firms in becoming more climate friendly -- many of the consulting and accounting firms, for example, have groups that focus particularly on this question. Good luck!

I'm interested in reading your book. Where is the best place for me to get it from that most directly supports your work?

Thank you for asking. If you check out the book's website: https://reimaginingcapitalism.org/ you'll see some great choices.

NB: I'm told that at the moment you'll get the book faster if you buy it from an independent book store.

Is there a place for Unions in your vision? What can be done to protect and educate the workers in this country who are taken advantage of most? Thank you!

My reading of the academic research is that until and unless we find a way for workers to be able to act collectively it will be very difficult to reduce inequality. I don't think it's a coincidence that inequality grew in the U.S. as unions membership declined. Unions with too much power can be just as problematic as firms with too much power, of course, but I have a hard time seeing how we're going to protect the workers who earn the least without some form of union/labor representation.

Don’t you think it’s too late? You can’t stop Hunan greed?

It's never too late. Things can always get worse -- and in the case of climate change, much worse. I think we'll wise up sooner or later -- I'm just trying to make sure it's sooner.