Everyone accepts that the age of deregulated capitalism is over; that we must never again allow pure greed to drive the world economy. There is no choice but to start managing capitalism and setting it tasks that are morally and socially sustainable. The age of plutocracy is over. We don't need huge wealth to make an economy work - in fact, we have discovered that the bonus culture is a hugely destructive force. It is a self-serving fallacy that individuals need to be given multi-million-dollar incentives to be productive. A much smaller form of managed capitalism, based around socially responsible enterprise is the way forward.
Consider The Great Iceland Meltdown from Thomas Friedman of The New York Times:
Globalization giveth — it was this democratization of finance that helped to power the global growth that lifted so many in India, China and Brazil out of poverty in recent decades. Globalization now taketh away — it was this democratization of finance that enabled the U.S. to infect the rest of the world with its toxic mortgages. And now, we have to hope, that globalization will saveth.
The real and sustained bailout from the crisis will happen when the strong companies buy the weak ones — on a global basis. It’s starting. Last week, Credit Suisse declined a Swiss government bailout and instead raised fresh capital from Qatar, the Olayan family of Saudi Arabia and Israel’s Koor Industries. Japan’s Mitsubishi bank bought a stake in Morgan Stanley, possibly rescuing it from bankruptcy and preventing an even steeper decline in the Dow. And Spain’s Banco Santander, which was spared from the worst of this credit crisis by Spain’s conservative banking regulations, is purchasing America’s Sovereign Bankcorp.
I suspect we will soon see the same happening in industry. And, once the smoke clears, I suspect we will find ourselves living in a world of globalization on steroids — a world in which key global economies are more intimately tied together than ever before.
It will be a world in which America will not be able to scratch its ear, let alone roll over in bed, without thinking about the impact on other countries and economies. And it will be a world in which multilateral diplomacy and regulation will no longer be a choice. It will be a reality and a necessity. We are all partners now.