We need a new language for business, Panmure House audience to hear
Businesses are facing “outmoded Marxist rhetoric” from critics and a “crisis of legitimacy,” according to distinguished British economist Professor Sir John Kay.
At an event in Edinburgh on 29 April, Sir John will argue that the traditional model of the corporation is under scrutiny and will present insights from his latest book, The Corporation in the Twenty-First Century: Why (almost) everything we are told about business is wrong.
The event is being hosted at Panmure House, the former home of Adam Smith, the 18th century philosopher considered the father of modern economics.
We need to change this language and get a better understanding of the purpose of businesses, how they actually work – and how they can – and do – add value to society.
“As a society, we are consuming more than ever before,” Sir John said. “But big businesses are facing a crisis of legitimacy. The pharmaceutical industry, for example, creates life-saving vaccines, but has lost the trust of the public. The widening pay gap between executives and employees is destabilising our societies. And Facebook and Google have more customers than any companies in history – but are widely reviled.”
This is far removed from the reverence corporations enjoyed in past centuries when they were run by a “capitalist elite” who used its accumulated wealth to own the means of production – factories and equipment – and exercise economic power, Sir John said.
Now physical goods have been replaced by invisible products, people have replaced factories as the main centres of production – and industrial plant that typically took shape as big, fixed, machines, is now small and increasingly taken home by workers at the end of the day.
“Products and production have dematerialised,” Sir John said. “In the 21st century, our most desired goods and services aren't stacked in warehouses or on container ships: they appear on your screen, fit in your pocket or occupy your head. Value is created in intangible things like digital services, intellectual property and brand reputation.”
But modern definitions and perceptions of business have not kept pace with this corporate revolution – and the language of business is still often framed in terms set out by 19th century German philosopher Karl Marx. These include the theory that capitalism is fundamentally about a conflict between the ‘ruling classes’ and ‘working classes.’
“Outmoded Marxist rhetoric continues to be the language of critics of business – and of business itself,” Sir John said. “We need to change this language and get a better understanding of the purpose of businesses, how they actually work – and how they can – and do – add value to society.”
In his lecture at Panmure House, Sir John will also explore how the “relentless pursuit of shareholder value” has led to the downfall of some of the most prominent companies of the last century.
Born and educated in Edinburgh, Sir John has held chairs at London Business School, the University of Oxford and the London School of Economics. He is a Fellow of the British Academy and the Royal Society of Edinburgh. He received a Knighthood for his services to economics, finance and business in Queen’s Birthday Honours 2021. He has held various roles in business and government and has authored numerous influential texts on economics and business.
Professor Adam Dixon, Adam Smith Chair in Sustainable Capitalism at Panmure House, said: “Capitalism has indeed changed and my own role was created to focus on a world of business that supports the flourishing of humanity and improves our well-being. As a forward-thinking pioneer who really understood and unpacked the science of wealth and power, Adam Smith would be very pleased that we are hosting this lecture in his former home.”
A limited number of places at the lecture are open to staff and students of Heriot-Watt University. Register by Wednesday 2 April by submitting the form on this page.
Places will then be allocated depending on availability on Thursday 3 April.
The Adam Smith Lecture on The Corporation in the Twenty-First Century: Why (almost) everything we are told about business is wrong, by Professor Sir John Kay, takes place on Tuesday 29 April 2024 at 17:45 for 18:00 in the Panmure House Lecture Room.
All Adam Smith Lectures are posted a few days later on the Panmure House website and YouTube channel.
Panmure house was originally built in 1691 and was the home of Scottish Enlightenment economist Adam Smith from 1778 to his death in 1790. It is now part of Edinburgh Business School, the business school of Heriot-Watt University in Edinburgh.
Edinburgh Business School and Heriot-Watt University rescued Panmure House from dereliction in 2008 and invested £5.6 million over 10 years restoring it. Panmure House now hosts a year-round programme of events, debates, research projects and education focused on urgent economic, political and philosophical questions in the 21st century.
Read more here on the Panmure House Adam Smith Lecture Series.