I would just like to highlight a prescient post of mine on this website, two years ago to the day!!

In “Stakeholder Capitalism and the Mutualisation of PLCs” I commented on a number of trends which taken together meant that raw capitalism, where the only measure that mattered was profit, was in the process of evolving into stakeholder capitalism, where other stakeholder demands (e.g. no child labour, reduced emissions, fairtrade) are almost as important.

In the post I only mentioned the financial services industry in the context of de-mutualisation, however recent events, particularly the re-capitalisation of the banks, re-enforces my view.  When push came to shove it was decided (correctly in my view) that allowing any large bank to fail was not an option as our economic system would collapse with potentially apocalyptic results.

My key point, both two years ago and now is that capitalism in its “raw” form is probably finished.  It is not profit, per see, that is important, it is more how and why that profit is generated that is critical.

The broader sustainability agenda plays in here as well.  From my discussions with contacts, it is clear to some global companies that they can no longer rely on being able to grab hold of the resources to be able to continue to grow.  This poses some fundamental challenges both for companies and for the global economy, specifically that the issue hat we can see that the global economy cannot expand infinitely and we can start to see the limits!

John Maynard Keynes is seen as the key economist in these times because of his work analysing and dealing with the 1929 crash and subsequent depression.  However John Nash in the Times highlights another aspect of Keynes work. This is an essay where he imagined a world where we had moved beyond crass materialism…

“I see us free to return to some of the most sure and certain principles of religion and traditional virtue – that avarice is a vice, that the exaction of usury is a misdemeanour and the love of money is detestable…We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well.”

I have a couple of Keynes’ books on the shelf already.  Might be time to find a copy of this essay as well!