Archive for February, 2009

Hertz – From Gucci to Co-op Capitalism

February 23rd, 2009 by admin

The Daily Beast: ‘The New Co-op Capitalism’

The first full crisis of globalization means the start of a kinder, more selfless economic system.

By Noreena Hertz
Published: 23rd February 2009

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.

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.

Read the rest of the article on the Daily Beast website

Noreena on Cooperation in ‘Nature’

February 19th, 2009 by admin

Nature 457, 962-963 : ‘Recession Watch: Cooperation Must Rule’

Published: 19th February 2009

Navigating an unpredictable world will need different research disciplines to work together as equals, says Noreena Hertz.

We are witnessing the coming home to roost of the era of ‘Gucci capitalism’. An era, born of the mid-1980s, that failed to question the market’s ability to self-regulate and tilted the balance of power between corporations and society firmly in the favour of businesses. An era that deified self-interest and greed. It precipitated a global recession that will last until at least mid-2010, and triggered a new socio-political environment that presents a very different playing field for business. We are now in the era of ‘co-op capitalism’, where cooperation rather than selfish behaviour will rule.

To understand co-op capitalism requires an understanding of socioeconomic, political, psychological, historical and legal trends. And so it will bring work of often-sidelined researchers into the mainstream. Traditional business forecasts have usually ignored such ‘soft’ knowledge. But with the entire political and economic system in a state of flux, companies would be well-minded to monitor Internet campaigns, track media concerns, and search for historical parallels. When an economic trajectory is constant, such data might be considered incidental. When we don’t even know what trajectory we are on it becomes essential…

To read the rest of the interview, view the PDF in Nature: Recession Watch: Cooperation Must Rule.