Posts Tagged ‘New Thinking’

Noreena rethinks Economics in Der Spiegel

March 24th, 2010 by admin

Spiegel Online: ‘Even war is good for economic growth’

Economist and globalization guru Noreena Hertz was already warning about overpowerful banks, unfettered greed and unregulated markets way back in 2001. Speaking to SPIEGEL ONLINE, she explains the limits of focusing on GDP and why capitalism is at a turning point.

SPIEGEL ONLINE: Dr. Hertz, one is constantly reading about how much a country’s economy has grown or shrunk. Why is gross domestic product (GDP) taken so seriously?

Noreena Hertz: It’s easy to measure and shows how one nation performs in comparison to another. Every country, therefore, measures its economic success by its GDP. Only Bhutan is an exception.

SPIEGEL ONLINE: According to the constitution of Bhutan, the people should not become richer every year, but happier. The little Asian kingdom wants to achieve this with a socially equitable society and better protection of the environment. Is this a better approach?

Hertz: Definitely. GDP only measures a small part of economic success. Some really important aspects are ignored. Take sustainability, for example. It’s absurd that a country can have high growth rates because it has a lot of polluting industry. The quality of the air, health, progress made by women, child care and social cohesion — these are all important economic factors. GDP does not show how innovative an economy is. Nor does it show if the products being produced will be successful in the long run or will be out of fashion tomorrow. But, up to now, there has not been a substitute for GDP…

Read the rest of this interview on the Spiegel Online website

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

Hertz challenges what it is we Value

December 1st, 2008 by admin

The Guardian: ‘Unhealthy incomes’

Astonishment at a nurse being paid more than £100,000 points up an outdated idea of value

By Noreena Hertz
Published: 1st December 2008

Shock horror. An NHS nurse has earned £100,000 in a year. Well, it was enough of a shock for it to make it on to the front page of yesterday’s Sunday Times. This would have been fair enough if the tone of the piece had been positive – that finally, at last, nurses are being highly valued for their work.

But it wasn’t. Instead the piece was all about “generous incentive schemes” and big bonuses. The implicit message was clear: it’s bizarre and wrong for nurses to be paid a lot of money.

How anachronistic. At a time during which we as a society are collectively suffering from the greed and misdeeds of tens of thousands of bankers – almost all of whom would have taken home at least £100,000 and many more than 10 times that – shouldn’t we be rejoicing that perhaps at least a few of those people who choose to care for the most vulnerable as a profession might not be going to struggle this Christmas?

The nurse in question seems to have earned £100,000 by, in effect, taking on two jobs – half her income was earned in overtime – and having reached the pinnacle of her profession. So she saves, lives and works incredibly hard. Good for her. But as far as nurses in general are concerned, the majority still earn so little that many have to take on third jobs, and most cannot afford to buy their own home. This is no nurses’ pay bonanza. And it prompts a bigger question: how should we determine what is valuable in society today?

Read the rest of the article on The Guardian website