- Oxford University economists set out a world where ‘greed is dead’.
- They say: “Markets can function effectively only when embedded in a network of social relations.”
- Book targets ‘market fundamentalism’ and ‘extreme individualism’.
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“Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit […] greed, for lack of a better word, is good.”
With those words, Michael Douglas summed up the spirit of Thatcherite/Reaganist economics, in the 1987 movie Wall Street where he played Gordon Gekko, a corporate raider who expounded the virtues of profit at all cost.
The speech was a distillation of the orthodoxy of US economist Milton Friedman who said the only social responsibility of companies was to increase their profit, for the benefit of shareholders.
The World Economic Forum has long espoused a different vision of capitalism, with ‘stakeholders‘ rather than just shareholders at its heart. With the global shock of the coronavirus pandemic dwarfing even that of the financial crisis of 2007/8, the Forum is advocating a Great Reset to finally make that vision a reality.
In this week’s Great Reset podcast, we hear from Oxford University economist John Kay, co-author of a book that also sets out a new version of society: Greed is Dead.
“Of course this is not saying greed is actually dead, any more than in the 1980s it was true that greed is good. But what we are trying to talk about is that it’s time for a turning of the intellectual tide,” John Kay says.
The last major shift of this kind in the Western world was in the 1980s, Kay and Collier argue, when there was a shift to “market fundamentalism” and what they term “expressive identity” where individuals’ demands outweigh those of their community.
“What we argue strongly in the book is that the distinguishing characteristic of humans among other mammals is that we’re extremely social. We work with each other. We communicate with each other. We talk to each other, we do things together and we talk particularly about communities at work and communities of place.
“And what we suggest is that a lot of these communities have been destroyed or eroded in the last 30 years, to our great cost, both socially and economically. And we need to turn that round.”
The authors call for an end to predatory practices and price gouging, citing the example of certain pharmaceutical companies, and rail against “the current corrosive rhetoric and dysfunctional bonus culture of market fundamentalism”.
But they also criticize people who engage in “activism in which intensity of feeling [is] more important than actual knowledge”.
Check out our sister podcast, World Vs Virus:
Robin Pomeroy, Digital Editor, World Economic Forum
This article was first published in World Economic Forum
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