What would shareholders do?

An interesting profile of how shareholder driven capitalism plays out in China.

I have to think there are many parallels in Japan as well. I wonder whether Asian leaders have had a chance to sit down with the new Jack Welch.

(Photo from World Business Forum)

Future of capitalism

This week, the FT is having a debate on the Future of Capitalism. Here's a sobering excerpt from Martin Wolf's opening salvo, titled "Seeds of its own destruction:"

"These changes will endanger the ability of the world not just to manage the global economy but also to cope with strategic challenges: fragile states, terrorism, climate change and the rise of new great powers. At the extreme, the integration of the global economy on which almost everybody now depends might be reversed. Globalisation is a choice. The integrated economy of the decades before the first world war collapsed. It could do so again."

Creating an evolution?

For anyone who's been paying attention there's a fascinating dialogue going on. Creative Capitalism was spurred by a charge Bill Gates gave during a recent speech in Davos.

While the exact meaning of the term and his exact aims are somewhat unclear, the exchange between preeminent economists has bridged topics from morality and ethics to politics and development. The forum dedicates a lot of time to ideas that seem to fall between philanthropy, charity, and Corporate Social Responsibility. Depending on who is piping up, corporations have a variety of obligations that range from saving the world to simply maximizing profits.

Personally I think that Paul Ormerod (a la Hayek) comes closest to pinning down what is really at stake here. There is no such thing as a completely free market. Whether it is some type of government intervention (which exists on at least some small level in every transaction) or a cultural preference, capitalism (or any political or economic system for that matter) advances not by analysis and planning but evolution and experiment.

At a time when everyone seems to be clamoring about inequality and global development, this is a most welcome experiment.