About two years ago I said to a colleague, “The credit crisis is really over now. All the great stories about a renewal of the financial sector and of our market economy have been silenced.” But times can change! In the meantime, a wave of books has appeared with titles such as “Post Capitalism”, “The Future of Capitalism”, “The Renewal of Capitalism”, “Progressive Capitalism”, and so on. It is almost impossible to keep up. New ideas keep bubbling up, about a different role for financial institutions, about a new mix of market and government, about building new security for the common man and woman in uncertain times (basic income, basic job), about a much more intelligent globalization, fairer prices (why is flying so ridiculously cheap?), and so on.
Of course economists can write book after book like “lonely wolves” in their attic rooms, it doesn’t change the world. But supporting pillars of the current capitalist system quickly take over the new ideas. In the US, despite Trump, there are surprising signs of change. Last year, CEOs, board chairmen, of 181 largest companies drew up a joint statement, neatly on 1 A4 page as usual with CEOs. Instead of short-term profit-oriented shareholder capitalism, the aim is now to take into account the long term and all involved, all stakeholders, employees, customers, and the neighborhoods, cities and regions in which they are located. General Motors, Exxon, IBM, Microsoft, Walmart, they were all there, even Jeff Bezos from Amazon and Tim Cook from Apple.
Earlier, Larry Fink, CEO of Blackrock, the world’s largest investment company, had also written a letter to all the companies he invests in. He stated frankly that for him the long-term effects of a company will now play a much greater role in investment decisions. He explicitly mentioned climate effects and the Paris climate treaty.
And not to mention more, the Financial Times also announced a project “Capitalism, time for a reset” last year.
Major signs of a new era! At the same time, the question remains how strong this wave of innovation is. And where can a different kind of economy really take shape? In the US, the strong but wing-limp country beyond the ocean for many years? In China, where individual freedom is the key to every budget?
This is where Europe comes into play, next to the US the largest economy in the world. Here there exists a long tradition of a social market economy. In recent decades, economists have barely noticed this, blinded by the tinsel of Wall Street. We still imbue our economics and business students at European universities with the now outdated American economic thinking – feel free to call it indoctrination (instead of academic-critical education). But Europe has the happiest people in the world, the healthiest people, and inequality is far less dire than anywhere else.
That is why we have started a consultation on the future of the – European – market economy with support from various universities and institutions. Can we in Europe, with a new self-awareness, organize a different type of market economy?
To help us on our way, a series of online dialogues has been started with Visionary Economists, including two Nobel Prize winners (actually three, if we include European politician Herman van Rompuy, who received the Nobel Peace Prize on behalf of the EU). Everyone can experience the live stream, or watch it later, and join the conversation, Monday evenings at 6.30 pm CEST, broadcast from Pakhuis de Zwijger in Amsterdam. Welcome, participate, participate – the future of capitalism is the future of us all!