by Tim Ambler
One of yesterday’s headlines, “Davos elite confronts capitalism crisis”, reflects the widespread view that the financial crisis shows that capitalism has failed and “we need another economic model”.
The anti-capitalists see making money from other people’s needs as wicked. Business should be there to help people, they say. Of course, communism was seen as good because profiteering was illegal, but that was a main reason for its collapse: it removed the profit incentive.
The middle, Davos, ground is that making profits in moderation is acceptable provided it takes place within the “stakeholder” context. In other words, business should not be preoccupied by making money for its shareholders but should also take care of suppliers, customers, employees and society as a whole. A corporation should only be given a licence to trade if it meets these wider responsibilities. Profit is still basically reprehensible but is accepted as necessary to meet these social goals. The hysteria generated by NHS reform suggests this view is widespread…