The Economics of Mutuality – Part II

Western Lens

For one, thinkers and commentators from the West (or wealthier economies) have a disproportionate platform to propagate ideologies that may not be well-suited to other jurisdictions. For example, most ideas now about the rights of employees and businesses come from industrialized countries where governments, businesses and workers have accumulated collective surpluses over several centuries. It is not clear if the distributive challenges of post-affluent affluent societies apply to most companies or individuals in countries such as Kenya that is just crossing a per capita income of US$1,000.

Second, there is a problem of scope. Very large businesses – especially global multinationals – dominate the public’s view of what a business is. Due to increased scrutiny, they continually raise an already high standard that may be unattainable for smaller businesses. The companies praised for successful mutuality practices include Google, Apple, Sony and Ikea. Some of these companies and their peers, Mars, Walmart, Unilever and Shell for example, are larger than Kenya with its US$40 billion economy. For these companies, outsized employee benefits, creative subsidies for suppliers and self-financed environmental clean-up are realistic. But can average small or mid-sized businesses, let alone start-ups, be lumped together with these under the general rubric of “business” or “capitalism”?

Conversely, some phrases, like “mutuality is about sharing the benefits of business” seem to explicitly overlook the burdens that come with starting and scaling a business. Small businesses worldwide face some challenges in common. But in countries with an undeveloped investment climate and little corporate welfare, like Kenya, the entrepreneur must bear treacherous risk alone. The ideas promoted here assume that a business is already profitable and conveniently ignore the vast majority of real businesses whose owners typically make less than they would as employees without a safety net.

Leave a Reply