Can Capitalism Save Itself? Capitalism’s Looming Threats to Democracy and Practical Strategies to Step Back from the Brink

Christine Mahoney, Sidney Milkis, and Scott Miller.

This article provides an overview of the ways in which capitalism and corporate money in politics through campaigns and lobbying are undermining American democratic institutions. It highlights the limits on regulating both of those threats. The article then goes on to discuss the positive trends coming from a new generation of capitalists who argue for a shift away from winner-take-all shareholder capitalism, toward stakeholder capitalism, where corporate behavior is guided by the needs of all stakeholders including employees/citizens, customer/citizens, supply chain partners/citizens, and the towns and communities hosting their activities. An entire industry has built up to support the growth, success, and expansion of these types of “conscious companies” – including the corporate social responsibility profession, certification schemes, impact investing, and socially responsible investing each of which are discussed in turn.

Investing for Inclusion: How Refugee Lens Investing can facilitate the inclusion of the forcibly displaced into local host communities

John Kluge and Christine Mahoney.

Professor Mahoney shared her 15 years of experience thinking about how we can more effectively advocate for the lives of the displaced. At every level in her fieldwork, it was incredibly difficult to advocate for the right to work, the right to start a business, the right to open a bank account, the right to take a microloan for people held in the limbo of displacement – often for decades. From this experience, she argued for a new strategy, where concerned global citizens could directly improve the lives of the displaced by microfinance funds, and impact investing funds. This was a response to what was observed: that migrants are entrepreneurial and that despite all that many had lost they retained their desire to run the businesses and create the livelihoods of their former homes. The Refugee Investment Network (RIN) set up by Professor Mahoney and her husband John Kluge makes these businesses possible. The range of investment relationships from Refugee Owned to HostWeighted schemes was outlined. Unlocking capital in the service of the displaced allows for the scaling up of programs that are beyond the reach of the charity sector.

Current work in Mexico is a strong model for this where south-to-north migration is being managed to improve access to residency and economic engagement with the host community. The impact investing scene in Mexico is alive and growing and Professor Mahoney detailed some of the businesses involved. This approach is still at the developmental stage but is already seeing real benefits for all concerned – including investors.

Agricultural Productivity & Deforestation: Evidence from Brazil

Juliano Assunção, Molly Lipscomb, Ahmed Mushfiq Mobarak, and Dimitri Szerman.

When agricultural productivity improves, farmers may react by expanding farming and further encroach on forest lands, or they may choose to intensify and produce more output with less land. We specify the conditions under which agricultural productivity can have such ambiguous effects on deforestation. We then examine the predictions of that model using county-level data from five waves of the Brazilian Census of Agriculture and satellite-based measures of land use. We identify productivity shocks using exogenous variation in rural electrification in Brazil during 1960-2000. We show that locations suitable for hydropower generation experienced improvements in crop yields, and that credit-constrained farmers subsequently shifted away from land-intensive cattle-grazing and into cropping. As a result, agricultural land use declines, more native vegetation is protected, and these effects persist 25 years later in both census and satellite data. Brazil’s deforestation rate would have been almost twice as large between 1970 and 2000 without that increase in agricultural productivity. That makes the conservation benefits of productivity improvements comparable to the most prominent conservation packages ever implemented in Brazil.