Financial Times: Let fairness triumph over corporate profit

[marmar]

Let fairness triumph over corporate profit
By Trevor Manuel

Published: March 16 2009 23:30 | Last updated: March 16 2009 23:30


Can Ulysses bind himself again to the deck, having succumbed for so long to the sirens’ allure?

Global growth has slumped and its financing is in disarray. Once again the limits to institutional rationality are self-evident. It is not that we were not warned. The historical record repeats itself: confidence gives way to exuberance, panic is followed by decline, retrenchment precedes reconstruction. From Adam Smith’s defence of moral sentiment before economic self-interest to Debreu’s algebraic articulation of the informational requirements for a welfare-maximising equilibrium, economists have been clear that markets are incomplete and cannot be left to themselves.

Political economists since Thomas Hobbes and Adam Smith have understood that capitalism relies on state power to impose instrumental checks on greed and abuse of influence.

Concern about the sustainability of global macroeconomic trends has been a persistent theme in intelligent comment since the mid-1990s. There have been all-too-frequent reminders of the frailty of human rationality and vulnerability of financial institutions.

Yet for too long we have allowed an unexamined faith in market incentives to drive social regulatory imperatives into the shadows. The calculus of financial gain has overwhelmed the discipline of public purpose and accountability. Pursuit of corporate advantage has dominated promotion of competitive fairness.

The enormity of this hubris is staggering. We have grown accustomed to the idea that savings generated in the industrious poorest quarter of the world should continue to finance the excess consumption of the richest nations. We have grown accustomed to the fact that collective global action is hamstrung by institutional and diplomatic rigor mortis. We have grown accustomed to widening inequality in an era of unprecedented prosperity. ........(more)

The complete piece is at: http://www.ft.com/cms/s/0/511509fc-1274-11de-b816-0000779fd2ac.html

[bemildred]

1. Excellent! nt