By Noreena Hertz, The Times, 25 February 2009.
I have named the past era of capitalism Gucci capitalism. It was born in the mid 1980s – the love child of Ronald Reagan and Margaret Thatcher, with Milton Friedman its fairy godfather and Bernard Madoff its poster boy.
It was an era in which the fundamental assumptions were that markets could self-regulate, governments should be laissez faire and human beings are nothing more than rational utility maximisers; a time when it was less shameful to be in debt than not to have the latest Nike sneakers or Gucci handbag.
No wonder regulators were too weak, bankers too powerful, checks and balances not in place. No wonder that it wasn’t if – but when – the whole pack of cards would come tumbling down. Gucci capitalism was as lacking in real values as its name suggests. Unsurprisingly it is now under attack from Left and Right. Even one of its most prominent cheerleaders, Alan Greenspan, claims to have been blinded by it.
But attacks of self-awareness can be short-lived. Five years hence, will capitalism look as it did six months ago? Or is a new economic model emerging?
I believe that the conditions are in place for a new form of capitalism to arise from the debris – co-op capitalism, with co-operation, collaboration and collective interest at its core.
There are five reasons for this…
For the full article in today’s Times Online click here.