Politics are influencing our lives to an ever-greater extent

In the wake of the financial and economic crises that unfolded more than 15 years ago, politics have—unavoidably and understandably—again taken precedence over economics. The pandemic, rising geopolitical tensions, the war in Ukraine and, finally, the latest upheavals in the global financial system mean that the political world has gained even greater power over the last three years. The largest global and national banks can evidently no longer be left to the mercy of the markets and are being subsumed as political institutions, becoming de facto utilities. In the west, the deregulation and globalization pendulum of the Reagan and Thatcher era is now swinging back—but is it going too far?

Political convictions—which, on the fringes, are no different to ideologies—risk becoming more important than the battle of ideas and arguments in market-based or social competition. Opinions, or even feelings, now have the upper hand over advances in knowledge driven by science and debate. The continued improvements through competition—once passionately captured in words by Deirdre McCloskey[1] —are being threatened by ideological one-way streets or stagnation. But who is now driving these politics? Who is defining the parameters within which we, as citizens, must function? How can today’s politics imitate the merits of the (no doubt historically embellished) Greek city-state (the “Polis”) and reconcile and consider the interests of all individuals within the public “agora”?

Parliaments have a decisive role to play in this context, both as an updated form of public assembly and as the legislative body enshrined in constitutions. In recent decades, we have seen an interesting change in the composition of parliaments—as a reflection of society—with this transformation being borne out by statistical data. The western electorate is increasingly delegating decision-making powers to professional politicians and administrators. In the 118th US Congress, for example, 80 percent of the House of Representatives have served as public servants or elected officials at a local, state or federal level. A total of 136 members of the House of Representatives (31 percent of the House) indicate in their CVs that they were owners, founders, or executives of businesses or companies before arriving in Congress. In the 113th Congress—i.e., less than a decade ago—the number of members of the House of Representatives who were active in the economy before arriving in Congress was as high as 187. In the German Bundestag, which currently has 735 members, making it the second-largest parliament in the world after the National People’s Congress of China, the proportion of entrepreneurs is also in decline. While around 11 percent of parliamentarians in the old Bundestag were entrepreneurs or self-employed tradesmen, the figure today stands at only around 8 percent. In contrast, the number of members who joined the youth wing of a political party after finishing school or completing their studies and then, possibly after taking a job in politics, went directly to parliament is growing.

In Switzerland, the figures are of a different magnitude, but the underlying trend is the same. Following the elections of 2019, the proportion of professional politicians in the National Council increased from around 25?percent to around 28 percent. The practice whereby electoral citizens assume responsibility within society forms part of Switzerland’s DNA. Alongside direct democracy at the ballot box, democracy is, in particular, also practiced in councils at all levels of the political hierarchy. The Swiss “militia” system—where free citizens devote part of their time to performing public offices or functions on a non-remunerated basis—is a participatory system. It symbolizes stability because it creates a sense of identity and solidarity. This system is an important driving force when it comes to maintaining a high level of trust, national cohesion and stability—despite the country’s high level of diversity, the different languages spoken and the high proportion of foreigners within the population.

As a corporate citizen, Vontobel recognizes and understands that ultimately, our license to operate is not granted to us by the authorities but ultimately by society and by you, our clients. If anyone in our industry doubted this fact, they have learnt otherwise in the last few weeks. We therefore also recognize the need for political solutions to be found to many social questions—meaning that stakeholders from society should also play a role in the political decision-making process; that includes individuals who work for and manage companies.

I don’t say this to encourage lobbying, i.e., attempts to influence the political formation of opinion from the outside, but because I believe in being involved—especially when this is desirable, permissible and feasible from an institutional perspective. Politics are so important that they cannot be delegated by the business community. Questions about how to tackle climate change, international cooperation, the management of demographic change, long-term energy security or social justice through education are too important to be answered without business or economic knowhow. Solutions to complex problems can best be found by diverse teams that bring together a range of expertise and different perspectives. The principles of good corporate governance that apply to companies should therefore also apply to the world of politics.

That is one of the reasons why, at Vontobel, social engagement is one of the six pillars of our Sustainability Commitments[2] . We have encouraged employees at all levels of management to discuss with their teams how best to assume responsibility within their local communities—aligning their actions with their own convictions, the needs of their communities and the expectations of our clients. And this is also the reason why I announced last week that I will personally become more actively involved in Swiss civil society.

We know that combining all of these responsibilities won’t be easy—even just in terms of timing—for a company that competes in the global marketplace. In view of the importance of politics for our everyday life, however, it is worth making this effort.

As always, I look forward to your comments, whether you agree or disagree with the ideas presented here.

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My name's Zeno Staub. I'm the Chief Executive Officer at?Vontobel ?– a globally operating investment manager. Professionally and privately, I'm a passionate reader, keeping a close eye on trends and debates in economics, politics, and society.

Why is investing the new saving? What's the historical and future impact of globalization? And how can we use the power of freedom and knowledge to actively shape the future? Such questions inspire my activities on LinkedIn. Follow my profile to stay in touch.

[1] “The Bourgeois Era” Trilogy by Deirdre McCloskey: “The Bourgeois Virtues: Ethics for an Age of Commerce”, “Bourgeois Dignity: Why Economics Can't Explain the Modern World”, “Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World”

[2] Vontobel Sustainability Commitments: www.vontobel.com/commitments