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The New Co-op Capitalism
The first full crisis of globalization means the start of a kinder, more selfless economic system.
There are some who say this current global financial recession, this recession/depression that is being felt in London and New York, in Shanghai and Sao Paolo, will not have an impact on the nature of capitalism. That five years from now, well, capitalism will basically look like it did six months ago.
I understand this caution about predicting anything new, a reluctance to call the past era one of capitalism’s demise. But I do not agree with it. I believe the conditions are in place for a markedly different economic model to emerge from the carnage this economic crisis has wrought.
Under Gucci Capitalism, mandating corporations to do things for a greater public good was rare. Under Co-op Capitalism, mandates rather than voluntary measures will increasingly be the norm.
For what we are seeing today is not just a variant of the Russian crisis, the dot-com crisis, the Japanese crisis. This first full crisis of globalization, this first collective lose-lose, this first blue- and white- and multicolor-collared recession is so profound, is going to negatively affect so many people all over the world, is so obviously a manifestation of what happens when private institutions are allowed to put their profits before all else, and is so obviously linked to the flawed doctrine of the past 30 years, that to navigate it successfully will, I believe, demand a different operating environment.
I have named the past era of capitalism, Gucci Capitalism. It was an ideology 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. An era whose fundamental assumptions were markets should be left to self-regulate, governments should be laissez-faire, and human beings are nothing more than rational utility maximizers. A time when a conspiracy of marketers, credit-card companies, banks, and advertisers fueled a particular narrative—that it was less shameful to be in debt than not to have the latest pair of Nike sneakers or Gucci handbag.
No wonder, with this its underlying ethos, regulators were too weak, bankers too powerful, checks and balances were not in place, whistleblowers ignored. No wonder, with this the driving force in society, it wasn’t a matter of 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 both left and right. Even one of its most prominent cheerleaders, Alan Greenspan, claims to have been blinded by its ideology. But attacks of self-awareness can be short-lived. Is there enough evidence to point to the emergence of a significantly different alternative economic model?
I believe there is, that the conditions are in place for a new form of capitalism to arise from the debris of the past: Co-op Capitalism, with values of cooperation, collaboration, and collective interest at its core.
John Talks Joe
Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.
The Right Dumps Carrie
Jacob Bernstein is a senior reporter at The Daily Beast. Previously, he was a features writer at WWD and W Magazine. He has also written for New York magazine, Paper, and The Huffington Post.
"Capitalism" should be a bad word that people are embarrassed to use at all. Sorry if I sound like a (gasp) Marxist but the word is just plain ugly now. It reeks. I like "Co-op" though.
you. excellent piece. fresh thinking like this is exactly what we need. of course, the greed meisters will say co-op capitalism is unrealistic. when they do, just look around and see where their sense of realism has taken us.
that's supposed to open with 'thank you'
Perhaps the author should leave the capitalism label behind and consider this the beginning of free market mutualism.
That is we all share the risk and reap the rewards.
EXACTLY!!!!
Brilliant take on a very clear and present problem facing down the entire planet. I applaud and appreciate your insight on this issue.
Groundbreaking piece that amidst all this comment on where we are at, actually helps us understand where we could go - if we have the ambition to follow Hertz' position
visionary, spot on, clear as a bell.
thank you, noreena.
I'm not sure what it is but ... lectures about the failing of gucci capitalism from a skinny blonde with perfect hair?
Or the vague, aspirational arguments offering no detail, other than feel-good points and cherry-picked anecdotes?
Something in there just suggests this vision will prove just as accurate as all the other leftist visions of recent times - bad on economics, poor on incentives, big on wishy-washy aspirations that underplays how the world works.
Great post. Right ideas and well written. I just wish I was as optimist as her. The bankers I know all feel they are biding their time and fully expect to return to previous practices as soon as possible -- they definitely have not accepted any fundamental shift. They believe they are just being persecuted by an ignorant public and hypocritical Washington and never did anything wrong. So if left to their own devices count on them not to do the right thing...
While I was genuinely inspired by this piece, I attribute my ease-to-be-swayed to my young age and undeveloped opinion. There's too many salivating comments for me to trust this proposal as level-headed, however, the only criticizing comment was from someone named"cashandburn." Considering their point of view, I can't decide if the alias is humorously ironic or sadly predictable.
Hertz shares with Marx/Engels a greater descriptive ability (of problems) than analytical/prescriptive ability. The problems she describes are real, and are to a major extent the problems of a warped theology - I'll give her 'Gucci Capitalism. But plenty of gov't regulation initiatives, whether at national or international level, will attempt to dispose of the bathwater, and will float the baby away as well. While some increased regulation on the financial markets/mechanisms is way overdue (a return to Glass Steagal, protection for pension funds, ratings entities stripped of (most, since all is impossible) conflict of interest, Maria Bartiromo forced to intone 'AAA' repeatedly as a junk bond is used to spank her, etc.), the better hope is for local/private/digital responses to the new world order.
Cashnburn, just FYI,
The author has her PhD in economics from Cambridge. She is a leading authority on globalism. She wrote the well received book "The Silent Takeover: Global Capitalism and the Death of Democracy ". Agree or not agree with her position, her credibility is undisputable, blonde or not.
Your credibility, on the other hand... well at least we can be sure you're a sexist. What's *your* PhD in?
Cashnburn, just FYI,
The author has her PhD in economics from Cambridge. She is a leading authority on globalism. She wrote the well received book "The Silent Takeover: Global Capitalism and the Death of Democracy ". Agree or not agree with her position, her credibility is undisputable, blonde or not.
Your credibility, on the other hand... well at least we can be sure you're a sexist. What's *your* PhD in?
Resting arguments on authority, PhDs and the like, is a logical fallacy, meaning that my qualifications and the validity of my criticisms are not linked. For the record, I have two politics degrees, as well as 10 years more experience of the financial markets than the esteemed Ms Hertz.
My name, referring to the post above, is that of my blog - cashandburn.com, in which I try to move the debate on from tired, cliched screeds such as the above.
Also, responding to the claim that I am 'sexist', my point was that there is an irony in someone with perfect hair and beautiful dresses (easy to find the pics) complaining about the evils of 'gucci capitalism'. There is a curious link between radicalism and the wealthy.
I do not know your site etiquette, but.....
Frankly, I found the read contents of Daily Beast article on The New Co-Op Capitalism, [above]
published under Noreen Hertz's name, were waffley bilge, home-spun, simplistic, hogwash. Comments were invited.
[I know nothing of its authoress and of her background only that thumb-nailed above, presumably by a fan, or by a mirror,or by herself.]
I have always distrusted academic theorists soap-boxing. Especially in financial, business and economics territory.They are by definition out of the front line, or never been in it. Their words of wisdom are all hindsight. Or made up.
The mingled, Cassandra-Mystic Meg, mark my words, sooth-sayer approach of Hertz: tendentious, would-be rent-a-quotes, formulated with drama-queen populist lingo lubricants, make this piece of casual big-words prattle, worse.
Behold, within the piece' the truisms, linked with exhortative naivet�. Almost like a party political broadcast, or just self-marketing in any sphere.
Examples of loose logic: [Assemble, my children]:
"I have named the past era of capitalism, Gucci Capitalism. It was an ideology 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." And
...
"I believe there is, that the conditions are in place for a new form of capitalism to arise
from the debris of the past: Co-op Capitalism, with values of cooperation, collaboration,
and collective interest at its core."
-----------------
Comment:
Like it or lump it, a mature & in every sense responsible platformer, [UK 'first lord of the treasury', G Brown, ex UK chancellor of the exchequer], has, nowadays, uniquely, 12 uninterrupted years at the finance ministerial helm, in domestic UK, _and _ more-than-tokenly throughout on the international circuit, including US and US-sponsored agencies and forums.
G Brown, in my opinion is ergo, ex-officio well positioned, competently to analyse, assess, and seek to mitigate what has gone wrong and why, within his/her competence.
Commentating air-heads and their offshore Cambridge MBA supplicands, admirers and alumni/ae, may differ, not-withstanding, or, because of, their mentrix's stated credentials: PHD & 'leading authority on globalism' or 'best-seller' status; and the visiting Cambridge/Erasmus univs CV/PR, hardly pro bonos?
Note that such academic epaulettes are well saftey-pin detached, from the load-bearing shoulders of reality.
Serious issues deserve more than yee-ha charity-leaflet pseudo-professorial blog rhetoric - easier to deliver than to convince. Ms Hertz does not satisfy my criteria.
Personal bias:
I speak from a financial journalist newsdesk background, where any academic's unsought thoughts, and unvolunteered positings, were put straight in that round-file, under the desk. Emptied nightly by the cleaners. Professor Positings/Postings = Trash. Reader decides.
IMO Ms Hertz writes bin-stiff, on this 'global' occasion. Would that she could improve.
Yours etc.
Michael Duggan
Amersham, UK
April 2009
Personal bias:
I came to your site via Google News. Sending this evening your [US] time.
Thank you.
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