Macroscope | How the climate crisis generation can usher in an era of responsible capitalism

The longest market boom in history saw the rise of all-powerful tech billionaires but did virtually nothing to serve socio-economic needs or mitigate climate change

Now, with the world on the brink of an economic slowdown, a new generation of investors want less speculation and more sustainability

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Wind turbines rise above a field of sunflowers in China’s Gansu province. More and more young people want to invest in climate change mitigation. Photo: Xinhua

Published: 12:30pm, 29 May 2022

Japan has recently introduced lessons on finance and investing into its high school curriculum, an idea which only a few others (in Asia at least) have experimented with. It is a laudable initiative, but what are young people to make of yet another stock market boom that is now going bust?

If they are not to conclude (as economist John Maynard Keynes did) that stock markets are basically “casinos” and that what they are being taught is how to gamble on the market, then potential young investors need to be given a grounding in the alternative forms of capitalism that exist.

Japanese Prime Minister Fumio Kishida has proposed (though not yet detailed) a New Capitalism regimen, one that is fairer in nature than Western market capitalism and favours the rich less and the poorer more. But financial systems need to be more effective and not just more “distributive”.

This kind of broad approach is more important than ever when the capital needed to finance the fight against climate change is estimated to be around US$100 trillion, with tens of trillions more needed for infrastructure and other forms of long-term investment.

The most recent bull market in stocks, which began in 2009 and has now tipped into bear territory, was the longest in history and saw the value of the S&P 500 share index rise threefold. It came and went without providing evidence that market capitalism can cater to huge socio-economic needs.

Pedestrians walk past the New York Stock Exchange on May 5. Photo: AP

Yet, according to asset managers (including those in Japan who are riding a growing wave of enthusiasm by millennials and other younger investors), climate change alleviation and mitigation is precisely where younger people want their investments directed.

.css-1m2rp1p{color:#34b8b5;}Macroscope | How the climate crisis generation can usher in an era of responsible capitalism

Macroscope | How the climate crisis generation can usher in an era of responsible capitalism