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jerryking : capitalism   49

Opinion | Dealing With China Isn’t Worth the Moral Cost
Oct. 9, 2019 | The New York Times | By Farhad Manjoo.

We thought economic growth and technology would liberate China. Instead, it corrupted us.

The People’s Republic of China is the largest, most powerful and arguably most brutal totalitarian state in the world. It denies basic human rights to all of its nearly 1.4 billion citizens. There is no freedom of speech, thought, assembly, religion, movement or any semblance of political liberty in China. Under Xi Jinping, “president for life,” the CCP has built the most technologically sophisticated repression machine the world has ever seen. In Xinjiang, in Western China, the government is using technology to mount a cultural genocide against the Muslim Uighur minority that is even more total than the one it carried out in Tibet. Human rights experts say that more than a million people are being held in detention camps in Xinjiang, two million more are in forced “re-education,” and everyone else is invasively surveilled via ubiquitous cameras, artificial intelligence and other high-tech means.

None of this is a secret. Under Xi, China has grown markedly more Orwellian;......Why do we give China a pass? In a word: capitalism. Because for 40 years, the West’s relationship with China has been governed by a strategic error the dimensions of which are only now coming into horrific view.......A parade of American presidents on the left and the right argued that by cultivating China as a market — hastening its economic growth and technological sophistication while bringing our own companies a billion new workers and customers — we would inevitably loosen the regime’s hold on its people....the West’s entire political theory about China has been spectacularly wrong. China has engineered ferocious economic growth in the past half century, lifting hundreds of millions of its citizens out of miserable poverty. But China’s growth did not come at any cost to the regime’s political chokehold....It is also now routinely corrupting the rest of us outside of China......the N.B.A.’s hasty and embarrassing apology this week after Daryl Morey, the Houston Rockets’ general manager, tweeted — and quickly deleted — a message in support of Hong Kong’s protesters......The N.B.A. is far from the first American institution to accede to China’s limits on liberty. Hollywood, large tech companies and a variety of consumer brands — from Delta to Zara — have been more than willing to play ball. The submission is spreading: .....This sort of corporate capitulation is hardly surprising. For Western companies, China is simply too big and too rich a market to ignore, let alone to pressure or to police. .....it will only get worse from here, and we are fools to play this game. There is a school of thought that says America should not think of China as an enemy. With its far larger population, China’s economy will inevitably come to eclipse ours, but that is hardly a mortal threat. In climate change, the world faces a huge collective-action problem that will require global cooperation. According to this view, treating China like an adversary will only frustrate our own long-term goals......this perspective leaves out the threat that greater economic and technological integration with China poses to everyone outside of China. It ignores the ever-steeper capitulation that China requires of its partners. And it overlooks the most important new factor in the Chinese regime’s longevity: the seductive efficiency that technology offers to effect a breathtaking new level of control over its population......Through online surveillance, facial recognition, artificial intelligence and the propagandistic gold mine of social media, China has mobilized a set of tools that allow it to invisibly, routinely repress its citizens and shape political opinion by manipulating their feelings and grievances on just about any controversy.....Chinese-style tech-abetted surveillance authoritarianism could become a template for how much of the world works.
adversaries  artificial_intelligence  authoritarianism  brands  capitalism  capitulation  China  China_rising  Chinese_Communist_Party  climate_change  collective_action  cultural_genocide  decoupling  despots  errors  facial_recognition  Farhad_Manjoo  freedom  Hollywood  Hong_Kong  human_rights  influence  NBA  op-ed  Orwell  propaganda  repression  self-corruption  surveillance  surveillance_state  technology  threats  Tibet  totalitarianism  tyranny  Uyghurs  unintended_consequences  values  Xi_Jinping 
october 2019 by jerryking
Mellody Hobson of Ariel Investments: ‘Capitalism Needs to Work for Everyone’
July 18, 2019 | The New York Times | By David Gelles.

Mellody Hobson was raised by a single mother and endured economic hardship as a child. The phone was shut off. The car was repossessed. Her family was evicted.

Today, Ms. Hobson is one of the most senior black women in finance. She serves on the boards of JPMorgan Chase and Starbucks, and this month was named co-chief executive of Ariel Investments, the largest minority-owned investment firm.......I was in the Woodrow Wilson School of international relations and public policy at Princeton. You have to apply to get in, and I did not originally get in. I lobbied really hard and called many people. I just would not take no for an answer.

I spent a lot of my years in the Woodrow Wilson School studying systems that really oppress people. I wrote my senior thesis on South Africa, and specifically on how children ultimately led to the end of apartheid because of their uprisings.........What do you tell people who are starting on their financial journey, wherever they might be?

I start off by explaining to them that it’s never too late, literally never. I also think the most important thing you can learn about money, and Warren Buffett talks about this, is compound interest. It’s the eighth wonder of the world. If you understand compound interest, you understand money working for or against you.

We talk about long-term patient investing, and that idea that slow and steady does win the race, that time can be your best friend when it comes to investing. That’s why we have a turtle as a logo at Ariel........ I believe in capitalism. It is the best system that has existed in the world. Show me a better one. I can’t find it. But I also believe that capitalism needs to work for everyone, and so I don’t begrudge those people who’ve done extraordinarily well in our society as long as it’s a fair fight.

It isn’t always a fair fight, though, and that’s what we need to fix. That could be anything from our tax bases and how that works, our tax rates, to other issues that occur in our society around fair opportunities for education.

I am a person of color who happens to be a woman as well, and I have firsthand dealt with inequality, despite having shown up with all of the credentials. I do not sit here believing that if you’ve just gone to a great school and this, that and the other, it’s all going to be fine. It just doesn’t work like that in our society. I think about those people who were like me and are like me. That goes into the boardrooms that I’m in. I also think about the people of color who are inside of those companies, making sure they get the same opportunity as those who are in the majority population....
African-Americans  alumni  Ariel  capitalism  CEOs  finance  inequality  investing  Mellody_Hobson  money_management  Princeton  women 
july 2019 by jerryking
The Man With the $13 Billion Checkbook
July 12, 2019 | The New York Times | By John Leland [John Leland, a Metro reporter, joined The Times in 2000. His most recent book is “Happiness Is a Choice You Make: Lessons From a Year Among the Oldest Old,” based on a Times series. @johnleland]

In the neglected Harlem of the late 1990s, one dynamic player was the Abyssinian Development Corporation, a nonprofit offshoot of the powerful Abyssinian Baptist Church. Harlem then was littered with abandoned buildings that had been repossessed by the city. The development corporation, led by the Rev. Dr. Calvin O. Butts III, leveraged city and private money to restore these shells, then used the profits to acquire and rehab more buildings. Mr. Walker became the organization’s chief operating officer, working out of a basement office to help bring a Pathmark supermarket to 125th Street, the anchor for what would become a thriving commercial corridor in a neighborhood that had been given up for dead.

“Working for Calvin Butts, you saw the power of the black church, the shrewd political instincts of a power player, and the dynamic at the intersection of race, power, geography and culture,” Mr. Walker said. “It gave me tremendous insight into how power at that intersection plays out, and who benefits and who doesn’t benefit.”

Mr. Walker’s time at Abyssinian also taught him what it was like to rely on foundation grants, begging the mighty patron for favors. When he left to join the Rockefeller Foundation and then Ford — and as Abyssinian boomed and busted in a new Harlem — he vowed to change this relationship.
African-Americans  capitalism  Communicating_&_Connecting  contradictions  cultural_institutions  Darren_Walker  Ford_Foundation  Harlem  inequality  museums  patronage  power_brokers  New_York_City  personal_connections  political_power  relationships  tokenism 
july 2019 by jerryking
Get Ready to Defend the Free Market
06.02.97 | Forbes | Rich Karlgaard

LET'S CLONE GEORGE GILDER. One is just not enough. The original I'd keep in his current job as a technology writer and forecaster of the first rank. Nobody rea...
Rich_Karlgaard  free_markets  George_Soros  warp_speed  George_Gilder  income_inequality  tempo  operational_tempo  '90s  capitalism  digital_economy 
august 2017 by jerryking
Does Steve Bannon Have Something to Offer? - WSJ
By Peggy Noonan
April 13, 2017

Capitalists, he said, now must ask: “What is the purpose of whatever I’m doing with this wealth? What is the purpose of what I’m doing with the ability that God has given us . . . to actually be a creator of jobs and a creator of wealth?”

With both these strands, he says, the middle class loses ground. This has contributed to the “global revolt” of populism and nationalism. That revolt was fueled, too, by the financial crisis of 2008. None of those responsible on Wall Street were called to account: “No bonuses and none of their equity was taken.” The taxes of the middle class were used to bail them out.
Peggy_Noonan  Stephen_Bannon  capitalism 
april 2017 by jerryking
Book Pins Corporate Greed on a Lust Bred at Harvard - The New York Times
Andrew Ross Sorkin
DEALBOOK APRIL 10, 2017

the Harvard Business School in Cambridge, Mass... produces a disproportionate number of the nation’s business leaders.

“The Golden Passport,” by the veteran business journalist Duff McDonald, is a richly reported indictment of the school as a leading reason that corporate America is disdained by much of the country.

“The Harvard Business School became (and remains) so intoxicated with its own importance that it blithely assumed away one of the most important questions it could ask, which was whether the capitalist system it was uniquely positioned to help improve was designed properly for the long term,”
HBS  capitalism  greed  Andrew_Sorkin  books  mission-driven  leaders  leadership_development 
april 2017 by jerryking
Hyena capitalism receives a swift kick from the Unilever giraffe
25 February/26 February 2017 | FT| Robert Armstrong.

the rise in hyena capitalism — broadly, the emphasis on squeezing the maximum present return out of assets — is an effect of low economic growth. When the number of US workers was increasing and innovation was delivering faster productivity growth, there were lots of reasons to invest. Today it just makes more sense to focus on cost.....More generally, it may be that, since the financial crisis, spooked managements and, in the case of public companies, investors have become increasingly risk averse — more so than the state of the economy would justify. So money piles up on balance sheets, is paid as dividends, or goes to repurchase shares. Investment falls, despite the availability of cheap credit to fund new projects.
It also looks increasingly likely that the change in management incentive structures, in particular the increase in share-based incentives and shortening tenures for top executives, have made company leaders less inclined to invest. there is a risk that it could become self-reinforcing. Lack of investment affects not just future productivity, but also demand. At the extreme, if no one invests, no one earns and there is no growth. If companies are forgoing opportunities to invest, they are depriving the economy of customers with money to spend.
More insidiously, it could be that hyena capitalism undermines trust in the institutions and mores that makes corporate capitalism possible in the first place. If workers know they are regarded as dispensable cost centres, why should they commit to learning company-specific skills and procedures? Why not shirk instead? If the gains from corporate transformations go overwhelmingly to investors and financiers, why should voters support free market policies?
Capitalism needs both giraffes and hyenas. But in a time of modest growth, low productivity growth and rising inequality, one must keep an especially close eye on the hyenas.
CPG  Unilever  3G_Capital  private_equity  public_companies  consumer_goods  Kraft_Heinz  inefficiencies  capitalism  sweating_the_assets  undermining_of_trust  deprivations 
march 2017 by jerryking
Talent Loves English - NYTimes.com
MAY 26, 2015
Advertisement

Continue reading the main story

David Brooks
Magna_Carta  immigration  David_Brooks  Anglo-Saxon  free_markets  capitalism  social_democracy 
may 2015 by jerryking
Strong intellectual property rights are key to prosperity - The Globe and Mail
BRIAN LEE CROWLEY
Strong intellectual property rights are key to prosperity
SUBSCRIBERS ONLY
Special to The Globe and Mail
Published Tuesday, Feb. 10 2015,

The stability of property and its transference by consent were thus rightly deemed by the great Scottish philosopher David Hume as two of the three rules that underpinned truly civilized societies (the third was the keeping of promises). Strong, reliable and consistent property rights unlock prosperity because they reduce conflict, promote stewardship and reward investment..... A strong IP regime therefore unlocks creativity, surely one of the keys to prosperity in a society increasingly dependent on intangible services for its wealth creation. Ultimately, all wealth is created by human knowledge, and increasingly the wealth of societies such as Canada takes the form of the fruits of our fertile minds, in software, design, film, fashion, engineering, disease control and more.
capitalism  intellectual_property  rule_of_law  Congo  Zaire  property_rights  abuses  impunity  intangibles  patents  wealth_creation  think_tanks  counterfeits  creativity  digital_economy  protocols  David_Hume  knowledge_economy  prosperity 
february 2015 by jerryking
How to Leave a Mark - NYTimes.com
JAN. 27, 2015 | NYT |David Brooks.

Impact investors seek out companies that are intentionally designed both to make a profit and provide a measurable and accountable social good. Impact funds are frequently willing to accept lower financial returns for the sake of doing good — say a 7 percent annual return compared with an 11 percent return. But some impact investors are seeking to deliver market-rate returns....It’s hard to find a reliable way to measure the social impact of these dual-purpose companies. Impact investors have also had trouble finding scalable deals to invest in. It costs as much to do due diligence on a $250 million deal as on a $25 million deal, so many firms would rather skip the small stuff... impact investing is now entering the mainstream. An older generation used their (rigorous) business mind in one setting and then their (often sloppy) charity mind in another. Today more people want to blend these minds. Typically a big client, or a young heir, will go to his or her investments adviser and say, “I want some socially useful investments in my portfolio.”...Impact investing is not going to replace government or be a panacea, but it’s one of a number of new tools to address social problems. If you want to leave a mark on the world but are unsure of how to do it, I’d say take a look. If you’re a high-net-worth individual (a rich person), ask your adviser to get you involved. If you’re young and searching, get some finance and operational skills and then find a way to get involved in a socially useful investment proposition. If you’ve got a business mind, there are huge opportunities to build the infrastructure (creating measuring systems, connecting investors with deals).
David_Brooks  capitalism  impact_investing  hard_to_find  Michael_McDerment  high_net_worth  new_graduates  skills  passions  passion_investing  TBL  social_impact  measurements  high-impact  heirs 
january 2015 by jerryking
If enough African-Guyanese return to their capitalist roots Guyana’s economic future will see improvement Georgetown, Guyana
JANUARY 8, 2010 |- Stabroek News | Michael Maxwell.

The question is whether the state or the individual/community bears primary responsibility for wealth creation with focus on the African-Guyanese populace. Unquestionably, both the state and the individual are responsible for facilitating the creation and pursuit of legitimate wealth. ...Orientation to wealth creation in the African-Guyanese community is presently stymied by several factors, most notably a poor personal saving rate, low investment rate, business risk aversion, low communal wealth generation endeavours and high public sector and service sector participation rate. ...A bigger problem for African-Guyanese capitalism and entrepreneurism is its lack of support from its own group. African-Guyanese businessmen and the community must lead the charge in educating African-Guyanese about the benefits of personal and commercial wealth generation......The greatest form of empowerment is economic empowerment, and dramatically so for a poor people in a poor nation. That is the true measure of freedom. Without a strong African-Guyanese capitalist class in Guyana alongside the Indian-Guyanese capitalist class the nation cannot achieve a decent path of economic progress. Wealth creation is not an alien concept to African-Guyanese who were the first independent producers in Guyana after slavery before becoming a mostly entrenched consumer and service providing class to the primary capitalists.
Afro-Guyanese  wealth_creation  capitalism  letters_to_the_editor  economic_development  Guyana  self-determination  self-discipline  self-employment  self-help  support_systems  generational_wealth  individual_initiative  economic_empowerment  risk-aversion  public_sector  distrust  disunity 
september 2014 by jerryking
Don’t Confuse Capitalism With an Absence of Regulations - The Experts - WSJ
Nov 26, 2013 | WSJ | Kim Campbell.

Adam Smith did not recommend unregulated markets. If people insist on equating capitalism with an absence of rules and regulation, we run the risk of discrediting capitalism as the basis of an economy that can coexist with tackling the major issues of our time–i.e. climate change, political stability and upward mobility.
capitalism  regulations  Adam_Smith  leadership 
november 2013 by jerryking
The future of the Firm
September 21st 2013 | The Economist | Schumpeter.

Life is getting tougher for professional-services firms. Midsized consultancies are already suffering: Monitor Group went bankrupt last year—Deloitte later bought it for $120m—and Booz & Co and Roland Berger are agonising about their futures. If the legal profession is anything to go by, worse is to come: Dewey & LeBoeuf collapsed last year after borrowing heavily in a dash for growth, and other elite law firms are struggling to win business....Are McKinsey’s best days behind it? Two new publications offer some interesting answers. “The Firm”, by Duff McDonald, is a generally admiring book that nevertheless asks hard questions about the organisation’s future. “Consulting on the Cusp of Disruption”, by Clayton Christensen and two colleagues, is a penetrating article in the October Harvard Business Review, arguing that the comfortable world of the strategy consultancies is about to be turned upside down....Eden McCallum cuts costs by deploying freelancers, most of whom once worked for the big three. BeyondCore replaces overpriced junior analysts with Big Data, crunching vast amounts of information to identify trends.
McKinsey  capitalism  professional_service_firms  barbell_effect  HBR  Clayton_Christensen  books  BCG  Bain  alumni  management_consulting  mid-sized  law_firms  hard_questions 
november 2013 by jerryking
The Self-Destruction of the 1 Percent -
October 13, 2012 | NYTimes.com | By CHRYSTIA FREELAND.

IN the early 14th century, Venice was one of the richest cities in Europe. At the heart of its economy was the colleganza, a basic form of joint-stock company created to finance a single trade expedition. The brilliance of the colleganza was that it opened the economy to new entrants, allowing risk-taking entrepreneurs to share in the financial upside with the established businessmen who financed their merchant voyages.

Venice’s elites were the chief beneficiaries. Like all open economies, theirs was turbulent. Today, we think of social mobility as a good thing. But if you are on top, mobility also means competition. In 1315, when the Venetian city-state was at the height of its economic powers, the upper class acted to lock in its privileges, putting a formal stop to social mobility with the publication of the Libro d’Oro, or Book of Gold, an official register of the nobility. If you weren’t on it, you couldn’t join the ruling oligarchy.

The political shift, which had begun nearly two decades earlier, was so striking a change that the Venetians gave it a name: La Serrata, or the closure. It wasn’t long before the political Serrata became an economic one, too. Under the control of the oligarchs, Venice gradually cut off commercial opportunities for new entrants. Eventually, the colleganza was banned. The reigning elites were acting in their immediate self-interest, but in the longer term, La Serrata was the beginning of the end for them, and for Venetian prosperity more generally. By 1500, Venice’s population was smaller than it had been in 1330. In the 17th and 18th centuries, as the rest of Europe grew, the city continued to shrink....several recent studies have shown that in America today it is harder to escape the social class of your birth than it is in Europe. The Canadian economist Miles Corak has found that as income inequality increases, social mobility falls...Businessmen like to style themselves as the defenders of the free market economy, but as Luigi Zingales, an economist at the University of Chicago Booth School of Business, argued, “Most lobbying is pro-business, in the sense that it promotes the interests of existing businesses, not pro-market in the sense of fostering truly free and open competition.”
business_interests  capitalism  Chrystia_Freeland  city-states  cronyism  crony_capitalism  depopulation  elitism  entrenched_interests  history  income_distribution  income_inequality  lobbying  locked_in  moguls  new_entrants  oligarchs  pro-business  pro-market  Renaissance  self-destructive  self-interest  social_classes  social_mobility  The_One_Percent  Venice  winner-take-all 
september 2013 by jerryking
Why Innovation Is Still Capitalism’s Star - NYTimes.com
By ROBERT J. SHILLER
Published: August 17, 2013

Edmund S. Phelps, a professor of economics at Columbia University and a Nobel laureate, has written an interesting new book on the subject. It’s called “Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change” (Princeton University Press), and it contains a complex new analysis of the importance of an entrepreneurial culture.

Professor Phelps discerns a troubling trend in many countries, however, even the United States. He is worried about corporatism, a political philosophy in which economic activity is controlled by large interest groups or the government. Once corporatism takes hold in a society, he says, people don’t adequately appreciate the contributions and the travails of individuals who create and innovate. An economy with a corporatist culture can copy and even outgrow others for a while, he says, but, in the end, it will always be left behind. Only an entrepreneurial culture can lead. ... In 1991, I started a business with Karl Case, an economics professor at Wellesley College, and Allan Weiss, a former student of mine at Yale. We called it Case Shiller Weiss, Inc., and it was devoted to an innovation we dreamed up. The idea was a new “repeat sale” home price index — which would track the changes in the value of the same houses over time.

At the time, this was an entirely new line of business. And, at first, that posed a problem: we were spectacularly unsuccessful in raising money.
Robert_Shiller  innovation  Colleges_&_Universities  Nobel_Prizes  capitalism  entrepreneurship  Obama  3-D  economists  books  corporatism  job_creation  crony_capitalism  indices 
august 2013 by jerryking
Book Review: Why Philanthropy Matters - WSJ.com
March 27, 2013 | WSJ | By LESLIE LENKOWSKY

A Buffett Rule Worth Following
WHY PHILANTHROPY MATTERS
By Zoltan J. Acs
(Princeton, 249 pages, $29.95).

entrepreneurs were as philanthropic as those born into wealth, if not more.

This surprising fact propels "Why Philanthropy Matters," by Zoltan J. Acs, a professor at George Mason University. Mr. Acs has spent his career studying how entrepreneurs operate and what role their business ventures play in the economy. In his new book, he focuses on another kind of contribution they make, one that, he argues, is as essential for prosperity as the products and services they create.

Successful entrepreneurship, he writes, requires a steady stream of innovations. The best places to develop them are privately funded research universities, medical centers and other kinds of institutions—like libraries and laboratories—that are insulated from competitive and political pressure. He cites, among other examples of nurtured innovation, the agricultural advances developed in land-grant universities during the 19th and 20th centuries and the contributions made to the information age by the students and faculty of Stanford University. As important as industrial research may be, the university has become, since the 1980s, "the source of new knowledge to be transferred to the private sector."

But there is more to the logic of entrepreneurial charity than hatching innovative ideas. As Mr. Acs notes, the success that certain entrepreneurs achieve when they disrupt old industries and establish new ones can bring big rewards, resulting in disparities of income and wealth. Without the philanthropy that would underwrite scholarships or other sources of opportunity, the public might not long tolerate such differences.

In "The Gospel of Wealth" (1889), Andrew Carnegie urged his prosperous contemporaries to avoid "hoarding great sums" and to give their "surplus" wealth away during their lifetimes, to strengthen an economic system that might thereby produce some riches for all. In the more measured tones of an economist, Mr. Acs is making much the same point: A capitalist economy not only enables but requires philanthropy. Through it, entrepreneurs can support the kinds of institutions that generate discoveries and that provide pathways for other people to make their own fortunes.

Mr. Acs buttresses his argument with a variety of examples, including those of billionaires—among them, Michael Milken and David Rubenstein —who have followed Bill Gates and Warren Buffett by committing themselves to giving at least half of their wealth to charity and whose charitable enterprises are aimed at creating opportunity for others. (Eli Broad, for instance, subsidizes charter schools and management reforms to improve urban education.) In Mr. Acs's view, America's ability to combine entrepreneurial capitalism and philanthropic uplift is rare among developed nations.
Andrew_Carnegie  billgates  book_reviews  books  capitalism  Colleges_&_Universities  creating_opportunities  David_Rubenstein  disequilibriums  disruption  Eli_Broad  entrepreneurship  innovation  knowledge_economy  moguls  Michael_Milken  philanthropy  society  Stanford  symbiosis  technology_transfers  Warren_Buffett 
march 2013 by jerryking
Clayton Christensen Wants to Transform Capitalism | Wired Business | Wired.com
By Jeff Howe
02.12.13

Howe: You’re working on a new book now, right? The Capitalist’s Dilemma. How is that related to the Innovator’s Dilemma?

Christensen: I wrote a piece for The New York Times just before the election. I was wrestling with a paradox. If you look at the financial measures of prosperity in the economy, things seem to be going just great, especially company balance sheets. They haven’t been so strong in decades.

Howe: High market caps all around.

Christensen: It looks like the economy is emerging from the recession in an exciting way, but we’re not creating more jobs or income for the average person. And in all humility, I think I articulated a simple model that explains why. The bad actors are business school professors like me who have been teaching people what I call the Doctrine of New Finance. We’ve encouraged managers to measure profitability based on a return on net assets, or return on capital employed. That encourages companies to liberate their capital, so they invest in efficiency innovations, which means they can make more money with fewer resources. But what the economy ultimately needs are empowering innovations—like the Model T, the transistor radio. Empowering innovations require long-term investments, which tie up capital for years and years. So companies are using capital to create more capital, and consequently the world is awash in capital but the innovations we need to advance aren’t there.

Howe: What’s the solution?

Christensen: I don’t know the solution, but I believe solutions exist. The government can’t dictate, “Oh, that’s an empowering innovation and that’s not.” But what government can do is create tax rates that transform what I call migratory capital into productive capital. Migratory capital flows to investments that will maximize the speed with which it can then be withdrawn, which plays to the doctrine of new finance. Productive capital wants to stay on the job and not go truant after 366 days.

Howe: Can we structure a tax code that encourages that?

Christensen: Absolutely. The idea would be to peg a tax rate to the length of time the capital is deployed. The longer the capital is invested, the lower rate it’s taxed at, until it gradually approaches zero and maybe goes negative
disruption  Clayton_Christensen  capitalism  innovation  books  ROCE  management  capital_flows  sweating_the_assets  moonshots  breakthroughs  tax_codes 
february 2013 by jerryking
A Capitalist’s Dilemma, Whoever Wins the Election - NYTimes.com
November 3, 2012 | NYT| By CLAYTON M. CHRISTENSEN.

cash hoards in the billions are sitting unused on the pristine balance sheets of Fortune 500 corporations. Billions in capital is also sitting inert and uninvested at private equity funds.

Capitalists seem almost uninterested in capitalism, even as entrepreneurs eager to start companies find that they can’t get financing. Businesses and investors sound like the Ancient Mariner, who complained of “Water, water everywhere — nor any drop to drink.”

It’s a paradox, and at its nexus is what I’ll call the Doctrine of New Finance, which is taught with increasingly religious zeal by economists, and at times even by business professors like me who have failed to challenge it. This doctrine embraces measures of profitability that guide capitalists away from investments that can create real economic growth.

Executives and investors might finance three types of innovations with their capital.
(1)“empowering” innovations. These transform complicated and costly products available to a few into simpler, cheaper products available to the many.

The Ford Model T was an empowering innovation, as was the Sony transistor radio. So were the personal computers of I.B.M. and Compaq and online trading at Schwab. A more recent example is cloud computing....Empowering innovations create jobs, because they require more and more people who can build, distribute, sell and service these products. Empowering investments also use capital — to expand capacity and to finance receivables and inventory.
(2) “sustaining” innovations. These replace old products with new models. For example, the Toyota Prius hybrid is a marvelous product. But it’s not as if every time Toyota sells a Prius, the same customer also buys a Camry. There is a zero-sum aspect to sustaining innovations: They replace yesterday’s products with today’s products and create few jobs. They keep our economy vibrant — and, in dollars, they account for the most innovation. But they have a neutral effect on economic activity and on capital.
(3) “efficiency” innovations. These reduce the cost of making and distributing existing products and services. Examples are minimills in steel and Geico in online insurance underwriting. Taken together in an industry, such innovations almost always reduce the net number of jobs, because they streamline processes. But they also preserve many of the remaining jobs — because without them entire companies and industries would disappear in competition against companies abroad that have innovated more efficiently.

Efficiency innovations also emancipate capital. Without them, much of an economy’s capital is held captive on balance sheets, with no way to redeploy it as fuel for new, empowering innovations....The economic machine is out of balance and losing its horsepower. But why?

The answer is that efficiency innovations are liberating capital, and in the United States this capital is being reinvested into still more efficiency innovations. In contrast, America is generating many fewer empowering innovations than in the past. We need to reset the balance between empowering and efficiency innovations.

The Doctrine of New Finance helped create this situation.. The Republican intellectual George F. Gilder taught us that we should husband resources that are scarce and costly, but can waste resources that are abundant and cheap. ...in the 1930s and the ‘50s, capital was relatively scarce in our economy. So we taught our students how to magnify every dollar put into a company, to get the most revenue and profit per dollar of capital deployed. To measure the efficiency of doing this, we redefined profit not as dollars, yen or renminbi, but as ratios like RONA (return on net assets), ROCE (return on capital employed) and I.R.R. (internal rate of return). ...

Three ideas to seed a productive discussion:
(A) CHANGE THE METRICS. We can use capital with abandon now, because it’s abundant and cheap. But we can no longer waste education, subsidizing it in fields that offer few jobs. Optimizing return on capital will generate less growth than optimizing return on education.
(B) CHANGE CAPITAL-GAINS TAX RATES
(C) CHANGE THE POLITICS
Clayton_Christensen  capitalism  metrics  George_Gilder  Gilder's_Law  taxation  tax_reform  innovation  idle_funds  taxonomy  Fortune_500  cash_reserves  abundance  ratios  ROCE 
november 2012 by jerryking
The emergence of a new global citizen - The Globe and Mail
CHRYSTIA FREELAND

Special to The Globe and Mail

Published Thursday, Aug. 16 2012
Chrystia_Freeland  Hong_Kong  capitalism  films  globalization 
august 2012 by jerryking
Graduates, Take Heed - WSJ.com
June 11, 2004 | WSJ | By DANIEL AKST.

if you are dreaming of making the world a better place...just go out and make the most money you can. Then, if you still want to do more, give it away....Economics, remember, is not a zero-sum game. Capital is the lifeblood of the economy, fueling the productivity gains that in turn fuel expanding affluence and social progress. As if none of this were sufficient, Alex's earnings required him to pay enough income taxes over the years for the government to employ a small army of social workers. He never shirked these obligations through dubious tax-shelter schemes, either. And don't forget the foundation!

The conclusion is unavoidable: If you have a good education, you shouldn't just consider getting rich. Creating and amassing wealth is an outright moral obligation. Do so and you can take comfort not just in financing public services but in knowing that you are giving people what they need or want, generating jobs and underwriting the affluence that makes art, justice, environmental protection and other social goods possible.

Of course, making yourself a pile of money is good for you too. You'll live in a better neighborhood, drive a safer car, get to be more selective in choosing a spouse and enjoy a longer, healthier life. Your kids will get a better education, which in turn will mean more of the same for them, too -- and will better equip them to improve the world still more.
commencement  advice  Wall_Street  capitalism  new_graduates  personal_enrichment  career_paths  finance  wealth_creation  philanthropy  tithing  geographic_sorting  compounded  self-perpetuation  super_ZIPs  zero-sum_games 
august 2012 by jerryking
Irrational Act
02.14.05 | Forbes | Rich Karlgaard.

Few can can explain why capitalism works. Economists, trapped in the closed loop of supply and demand, can only make a dismal pseudo-scientific hash of it. Out in the real world people are inspired by ideas. Some are even willing to suffer irrational odds in an effort to turn their ideas into innovations. Most fail, but even the failures add to our knowledge. The pursuit of innovation by entrepreneurs willing to give before they get creates discontinuities that shatter the predictable loop of supply and demand. Entropy and monopoly alike are defeated by innovation. That is how capitalism works. It starts with an irrational act of giving.

Why does tithing work? Nobody knows. Only that it does for many.
in_the_real_world  Rich_Karlgaard  capitalism  tithing  discontinuities  innovation  irrationality  leaps_of_faith  ideas  economic_dynamism  economists  ideaviruses 
august 2012 by jerryking
Real-World Advice for the Young
04.11.05 | Forbes | Rich Karlgaard.

We owe our young people ...a set of "road rules" for the real world.

Purpose. Every young person needs to know that he was created for a purpose. ...I would, however, argue that there is also an economic purpose to our lives. It is to discover our gifts, make them productive and find outlets for their best contribution.

Priorities. The best single piece of advice from Peter Drucker: Stop thinking about what you can achieve; think about what you can contribute (to your company, your customers, your marriage, your community). This is how you will achieve. Enron had an achievement-first culture; it just achieved the wrong things...how many schools teach young people to think in terms of contribution?

Preparation. Lest you think I'm urging young people down a Mother Teresa-like path of self-sacrifice, I'm not. The task is to fit purpose and contribution into a capitalistic world. There is a crying need for prepared young people who can thrive in a realm of free-market capitalism. This great system works magnificently, but it doesn't work anything like the way it's taught in most universities. In the real world, the pie of resources and wealth is not fixed; it is growing all the time. In the real world, the game is not rigged and static; rather, money and talent move at the speed of light in the direction of freedom and opportunity. In the real world, greed is bad (because it takes your eye off customers), but profits are very good. Profits allow you to invest in the future. In the real world, rising living standards do not create pollution. Instead, they create an informed middle class that wants and works to reduce pollution.

Pan-global view. The economy is global.... There is no going back.

Partner. Many of the great startups of the last 30 years began as teams of two...Behind this phenomenon is a principle: Build on your strengths. To mitigate your weaknesses--and we all have them--partner up! Find your complement.
Perseverance. Young people are smarter and more sophisticated today. It's not even close. My own generation's SAT scores look like they came out of baseball's dead-ball era. But apart from the blue-collar kids who are fighting in Iraq, most American kids today are soft. That's a harsh statement, isn't it? But cultural anecdotes back it up. Kids weigh too much. Fitness is dropping. Three American high schoolers ran the mile in under four minutes in the 1960s. It's been done by one person since. Parents sue coaches when Johnny is cut from the team. Students sue for time extensions on tests. New college dorms resemble luxury hotels. College grads, unable to face the world, move back in with their parents and stay for years.

Does this sound like a work force you'd send into combat against the Chinese?
in_the_real_world  Rich_Karlgaard  advice  Peter_Drucker  youth  students  entrepreneurship  partnerships  rules_of_the_game  purpose  globalization  Junior_Achievement  perseverance  millennials  serving_others  priorities  preparation  profits  greed  fitness  talent_flows  capital_flows  static  risk-mitigation  complacency  blue-collar  Chinese  capitalism  self-sacrifice  young_people  anecdotal 
august 2012 by jerryking
Risky Business - WSJ.com
April 24, 2003 | WSJ |By STAN O'NEAL.

Historically, investors' trust in the markets has been well founded because enterprising people have been willing to take risks. Backed by venture capital, entrepreneurs create value, employment, wealth, and opportunities. Without risk, there would be no electricity, no personal computers, no vaccines. No GE, no IBM, no Pfizer.

Of course, in any system predicated on risk-taking, there are failures, sometimes spectacular failures. But for every failure to be viewed as fraudulent or even criminal bodes ill for our economic system. The message to CEOs, to entrepreneurs and to venture capitalists right now is that you cannot afford to be wrong.

In the aftermath of history's greatest market bubble, this backlash against risk is understandable. Excesses in the system were taken to incredible levels. And while our industry did not create the bubble, it also did not bathe itself in glory recognizing or resisting those excesses.

But if we attempt to eliminate risk -- to legislate, regulate, or litigate it out of existence -- the ultimate result will be economic stagnation, perhaps even economic failure. To teach investors that they should be insulated from these forces, that if they lose money in the market they're automatically entitled to be compensated for it does both them and the economy a disservice.

In my view, the great, historical contribution of American capitalism is its ability to create value. Even when the system works imperfectly, value is created. If our financial system is to retain this particular genius, we need to be willing to continue to innovate. If we fail to rebalance the forces of risk and reward, the greatest danger may be deflation. Not probable, but not impossible either.
capitalism  Merrill_Lynch  CEOs  risks  Stanley_O'Neal  economic_stagnation  financial_system  overregulation  imperfections  value_creation  risk-taking  moral_hazards  backlash  innovation  deflation 
june 2012 by jerryking
Corporate leaders suffer under the capitalist gun
Jun. 12 2012| The Globe and Mail |HARVEY SCHACHTER.

In A Capitalism of Owners, Yvan Allaire, (a former senior executive at Bombardier Inc. and now chair of the Institute for Governance of Private and Public Organizations), and Mihaela Firsirotu,) a professor of strategy at the University of Quebec,) say the judgment against Ms. Nooyi, by the analysts and stock market, was that she “has too much of a social conscience. That may be good for the company in the long run but not for today’s and tomorrow’s stock price. If she persists, she should be replaced by someone who does not have these qualms.”

In an era where companies must be flexible and strive for change, the authors say corporate leaders face a stressful paradox. The more competitive the markets for goods and services, the more businesses need time to adapt, innovating and putting in place new strategies (as Ms. Nooyi was attempting) without speculators breathing down their necks

Also...High-tech entrepreneur Michael Saylor believes mobile technology is the tipping point for a new industrial revolution and prepares you for that future in The Mobile Wave. (Vanguard Press, 281 pages, $29).
Harvey_Schachter  Indra_Nooyi  Pepsi  books  book_reviews  capitalism  short-term_thinking 
june 2012 by jerryking
Karma Capitalism
OCTOBER 30, 2006 | BusinessWeek | Pete Engardio.

The swami's whirlwind East Coast tour was just one small manifestation of a significant but sometimes quirky new trend: Big Business is embracing Indian philosophy. Suddenly, phrases from ancient Hindu texts such as the Bhagavad Gita are popping up in management tomes and on Web sites of consultants. Top business schools have introduced "self-mastery" classes that use Indian methods to help managers boost their leadership skills and find inner peace in lives dominated by work.

More important, Indian-born strategists also are helping transform corporations. Academics and consultants such as C. K. Prahalad, Ram Charan, and Vijay Govindrajan are among the world's hottest business gurus. About 10% of the professors at places such as Harvard Business School, Northwestern's Kellogg School of Business, and the University of Michigan's Ross School of Business are of Indian descent--a far higher percentage than other ethnic groups. "When senior executives come to Kellogg, Wharton, Harvard, or [Dartmouth's] Tuck, they are exposed to Indian values that are reflected in the way we think and articulate," says Dipak C. Jain, dean of the Kellogg School.
capitalism  China  C.K._Prahalad  emotional_mastery  India  Indian-Americans  inner_peace  philosophy  Ram_Charan  self-mastery  Vijay_Govindarajan 
april 2012 by jerryking
Al Gore and David Blood: A Manifesto for Sustainable Capitalism - WSJ.com
DECEMBER 14, 2011 | WSJ | By AL GORE AND DAVID BLOOD.

A Manifesto for Sustainable Capitalism
How businesses can embrace environmental, social and governance metrics.
capitalism  business  economy  future 
february 2012 by jerryking
A letter to capitalists from Adam Smith - FT.com
January 9, 2012 7:03 pm
A letter to capitalists from Adam Smith

By David Rubenstein
David_Rubenstein  Carlyle_Group  private_equity  Adam_Smith  capitalism 
january 2012 by jerryking
Turning the Dialogue From Wealth to Values - NYTimes.com
By TYLER COWEN
Published: November 12, 2011

Why do so many Americans have respected the wealthy in the first place?

The U.S. has always had a culture with a high regard for those able to rise from poverty to riches. It has had a strong work ethic and entrepreneurial spirit and has attracted ambitious immigrants, many of whom were drawn here by the possibility of acquiring wealth. Furthermore, the best approach for fighting poverty is often precisely not to make fighting poverty the highest priority. Instead, it’s better to stress achievement and the pursuit of excellence, like a hero from an Ayn Rand novel. These are still at least the ideals of many conservatives and libertarians.

The egalitarian ideals of the left, which were manifest in a wide variety of 20th-century movements, have been wonderful for driving social and civil rights advances, and in these areas liberals have often made much greater contributions than conservatives have. Still, the left-wing vision does not sufficiently appreciate the power — both as reality and useful mythology — of the meritocratic, virtuous production of wealth through business.
high_net_worth  capitalism  values  conservatism  libertarians  wealth_creation  entrepreneurship  Tyler_Cowen  work_ethic  Ayn_Rand  personal_accomplishments 
november 2011 by jerryking
A new lexicon to celebrate capitalism
Oct. 26, 2011 | The Financial Times pg.8 | Luke Johnson
capitalism  Luke_Johnson  words 
november 2011 by jerryking
Building Wealth - 99.06
J U N E 1 9 9 9 |The Atlantic | by Lester C. Thurow. The new rules for individuals, companies, and nations.

Rule 1 No one ever becomes very rich by saving money.
Rule 2 Sometimes successful businesses have to cannibalize themselves to save themselves.
Rule 3 Two routes other than radical technological change can lead to high-growth, high-rate-of-return opportunities: sociological disequilibriums and developmental disequilibriums.
Rule 4 Making capitalism work in a deflationary environment is much harder than making it work in an inflationary environment.
Rule 5 There are no institutional substitutes for individual entrepreneurial change agents.
Rule 6 No society that values order above all else will be creative; but without some degree of order (institutional integrity??), creativity disappears.
Rule 7 A successful knowledge-based economy requires large public investments in education, infrastructure, and research and development.
Rule 8 The biggest unknown for the individual in a knowledge-based economy is how to have a career in a system where there are no careers.
Lester_Thurow  wealth_creation  entrepreneurship  rules_of_the_game  deflation  career_paths  Managing_Your_Career  cannibalization  disequilibriums  anomalies  JCK  unknowns  high-growth  change_agents  individual_initiative  technological_change  digital_economy  messiness  constraints  knowledge_economy  public_education  new_rules  capitalism  personal_enrichment  ROI  institutional_integrity 
november 2011 by jerryking
The Wealth That Came From Wrong - WSJ.com
MARCH 24, 2006 | WSJ | FERGUS M. BORDEWICH. Reviews INHUMAN BONDAGE:
THE RISE AND FALL OF SLAVERY IN THE NEW WORLD
By David Brion Davis
(Oxford University Press, 440 pages, $30)

Slavery was once the cornerstone of America's future. In 1860, as investment capital, the value of the nation's slaves far exceeded the cash value of all the farms in the South and represented three times the cost of constructing all the railroads that then existed in the U.S. At the time, the South grew more than 60% of the world's cotton, supplying mills and markets from Manchester to Moscow and making not only Southern planters but also Yankee bankers, insurers, commission agents and shipowners very rich....the collapse of slavery in Brazil and its abolition there in 1888.
abolition  book_reviews  Brazil  capitalism  Civil_War  economic_clout  economic_history  emancipation  Quakers  slavery  the_South  wealth_creation 
november 2011 by jerryking
Remember Microsoft? - NYTimes.com
June 10, 2011Technology upends companies in different
ways. It allows new firms to deliver better products and services in a
more efficient way; it also creates new goods and services for consumers
to want. Eastman Kodak, the fifth-biggest company in the S.& P. 500
in 1975, was almost destroyed by digital cameras and is no longer in
the index. General Motors, fifth biggest in 1985, was hobbled by rivals
that could make more fuel efficient cars. Microsoft still rules the PC
desktop. But that will matter less and less as users migrate to tablets
and more computing takes place in “the cloud.”
There is another lesson in Microsoft’s long slide. It is about how far
corporate behemoths will go to stop technology that threatens their
dominance
Microsoft  David_Einhorn  capitalism  creative_destruction  technology  Kodak  cloud_computing  GM  digital_cameras 
june 2011 by jerryking
Daniel Henninger: Capitalism Saved the Miners - WSJ.com
OCTOBER 14, 2010 | WSJ | By DANIEL HENNINGER. Capitalism
Saved the Miners
The profit = innovation dynamic was everywhere at the mine rescue site.
In an open economy, you will never know what is out there on the
leading developmental edge of this or that industry. But the reality
behind the miracles is the same: Someone innovates something useful,
makes money from it, and re-innovates, or someone else trumps their
innovation. Most of the time, no one notices. All it does is create
jobs, wealth and well-being. But without this system running in the
background, without the year-over-year progress embedded in these
capitalist innovations, those trapped miners would be dead. ...What's
needed now is a new American economic model that lets our innovators
rescue the rest of us.
innovation  Chile  mining  Daniel_Henninger  capitalism  dynamism 
october 2010 by jerryking
The Unwisdom of Crowds
12/22/2008 | The Weekly Standard Vol. 014, Issue 14 | by
Christopher Caldwell. Financial panics still require what Walter
Bagehot prescribed--that practical men violate their own principles.
Common sense is often not much use in a financial panic. This was the
great discovery of Walter Bagehot, the prolific 19th-century essayist
and journalist, who was editor of the Economist from 1860 to 1877. (His
name rhymes with gadget.) in the so-called Anglo-Saxon world, Bagehot's
book still provides the bedrock of policy thinking during financial
emergencies, including our present one.
bailouts  banking  banks  capitalism  economics  economy  finance  financial_crises  financial_history  financial_journalism  panics  policymaking  politicaleconomy  prolificacy  Walter_Bagehot 
october 2009 by jerryking
'A Failure of Capitalism - The Crisis of ’08 and the Descent Into Depression,' by Richard A. Posner - Review - NYTimes.com
May 14, 2009 | New York Times | by JONATHAN RAUCH who reviews A
FAILURE OF CAPITALISM: The Crisis of ’08 and the Descent Into
Depression, by Richard A. Posner, In this compact and bracingly lucid
volume, he offers a simple, but not simplistic, primer: “a concise,
constructive, jargon- and ­acronym-free, nontechnical, unsen­sational,
light-on-anecdote, analytical examination of the major facets of the
biggest U.S. economic disaster in my lifetime and that of most people
living today.” See also In “Catastrophe: Risk and Response” (2004), in
which Posner took up the problem of low-probability, high-impact events.

346 pp. Harvard University Press. $23.95
book_reviews  recessions  Richard_A._Posner  capitalism  politicaleconomy  economic_downturn  low_probability  catastrophic_risk  primers  high-impact 
may 2009 by jerryking
Capitalism and Friedman - WSJ.com
Friday, November 17, 2006 | Wall Street Journal | Editorial
The man who made free markets popular again.
economics  Milton_Friedman  capitalism  ideas  free_markets  editorials  economists 
april 2009 by jerryking
globeandmail.com: Long live the new capitalists!
March 18, 2009 | Globe and Mail | by TODD HIRSCH

What will the collapse of the 20th century model of banking and credit bring?
future  capitalism  economic_downturn  trends  opportunities  microcredit 
march 2009 by jerryking
A brief history of capitalism
June 27, 2008 G&M column by Steve Brearton providing bullet
points of the development of key financial instruments AND a
corresponding assessment of the level of risk associated with each new
instrument.
capitalism  History  risks  risk-taking  financial_history  financial_instruments 
january 2009 by jerryking
Giving Till It Works - WSJ.com
Oct. 10, 2008 book review by Richard J. Riordan which looks at
the rise of billionaires who increasingly, are attempting to apply the
lessons of business success--monitoring investments, measuring
results--to their charitable efforts.
books  moguls  book_reviews  charities  entrepreneurship  capitalism  nonprofit  philanthropy  Eli_Broad  billgates  benefactors  passions  impact_investing  social_impact 
january 2009 by jerryking
Mad Max and the Meltdown - WSJ.com
Daniel Henniger piece on the dangers that can arise in
financial markets as society pulls back on religious-inspired, moral
codes of personal behaviour. The erosion of responsibility, restraint
and remorse.
religion  capitalism  christmas  crisis  Daniel_Henninger  moral_codes  personal_responsibility  economics  financial_markets  values  personal_behaviour  shame  remorse  self-restraint 
january 2009 by jerryking

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