Source: Financial Times
Today’s must read column comes from Martin Wolfe of the Financial Times: How to reform today’s rigged capitalism.
Highlights:
• US and UK have succumbed to demagogy. These long-stable democracies are also the most unequal of the western high-income countries. This is no coincidence;
• Rentier capitalism, weakened competition, feeble productivity growth, high inequality and, not coincidentally, an increasingly degraded democracy is is an unstable.
• US markets have become less competitive: concentration is high, leaders are entrenched and profit rates are excessive.
• Unit cost of financial intermediation has not fallen in the US over 140 years, despite technological advances
• The narrow focus on maximizing shareholder value has exacerbated the bad side-effects;
• Money in politics has damaged the idea of one person one vote. Money buys politicians, turns nations into plutocracies, not democracies. Our democracies need refurbishing.
• Finally, Inequality is corrosive.
Strong words. To fix Rigged Capitalism, Wolfe believes we need a dynamic capitalist economy that gives everybody a justified belief that they can share in the benefits
We must recognize the existential threat that exists to fragile democracies, and Wolfe proposes returning to our roots as a free market democratic state. It is radical in its simplicity.
Source: Financial Times
