Updated: Jul 27, 2022
Originally published in Times Of Malta
Joe Zammit-Lucia’s latest publication The New Political Capitalism has been described by Prof. Sir John Kay of the London School of Economics as “a major contribution to the emerging literature on the future of capitalism”.
Professor Emeritus Lynn Phillips of the Stanford Graduate School of Business suggests that it “should be required reading for all senior executives facing a new-game environment to understand why some companies are leaders, others laggards”.
Businesses and societies need to learn how to thrive in a deeply politicised world: this is the central theme of Zammit-Lucia’s book where the author revives the concept of political economy debunking the view that “business is business and politics is politics and never the twain shall meet”.
In this publication, he explores “how and why business and politics are not only related but are vital, inextricably linked and interdependent parts of our complex social systems”.
He cites many examples of this linkage not least the COVID-19 crisis which triggered “interventions on a scale previously unseen maybe even in wartime placed government action at the centre of commercial enterprise… and emboldened government intervention in the nature and shape of globalisation, broadening the definition of strategically important industries and opening further discussion the role of self-sufficiency…”
ADVERTISING Zammit-Lucia takes the argument further, outlining multiple issues of a political nature that today take up a huge amount of senior management time. To name a few: environmental, social and governance (ESG) questions; the relationship between data and privacy in a digitised world; the impact of AI; supply chain structures.
“All are driven by the prevailing political climate and the political way of thinking”, he argues. He quotes Jane Fraser on her first day as CEO of Citi, the world’s most global bank who emphasised that the ESG agenda is part of the day-to-day action of the bank: “Our commitment to closing the gender pay gap, to advancing racial equity and to pioneering the green agenda have demonstrated that this is good for business and not at odds with it”.
If Zammit-Lucia had written this book after the invasion of Ukraine by Russia, he would undoubtedly have referred to the political action of global brands leaving the Russian market in consequence of this new cataclysmic geopolitical chasm – responding to public and political pressure and protecting the integrity of their brand.
Even without this event, he clearly ‘predicts’ the business consequences of political action and vice versa (“when a company puts new technologies into the world, it has a responsibility to think about the consequences”) in the same way that in his earlier 2018 book with David Boyle Backlash: Saving Globalisation from Itself, he had anticipated the trend away from globalisation to protectionism and nationalistic thinking. Zammit-Lucia’s talent to discern and identify trends early on in their development is another reason why this book is essential reading for today’s business decision-makers.
His message is clear: the new political capitalism in a modern dynamic relationship between politics and business, with defined clear political objectives and considerations, lies at the heart of informed commercial decision-making. Businesses can embrace it and flourish, or they can ignore it and pay the price of falling behind.
Joe Zammit-Lucia will be launching the book at the Chamber of Commerce in Valletta on June 30 at 6pm. Michael Frendo is the current chairman of BNF Bank, speaker emeritus of the parliament of Malta and a former minister of foreign affairs.