If you read enough articles these days about the economic meltdown, and What Comes After, you get the sense, I think, that we are in the crucible of some pretty fundamental and global changes.
What’s next is not likely to resemble what came before. China is clearly ascendant; the U.S. and other western countries, perhaps not so much. The free reign of unbridled capitalism, unfettered by regulation for a couple of decades, is giving way to a pendulum swing to the other side that demands, for better or worse, greater oversight and governmental regulation. In meltdowns, both political and economic, like war it seems, we are often fighting the last one.
Which brings us to Noreena Hertz. Hertz is a Cambridge economist who wrote “The Debt Threat” a tale of the global dive into debt, and the global consequences that would follow. She helped singer/activist Bono a few years ago encourage the G8 nations to wipe out hundreds of millions in third world debt.
Hertz’s larger point, as explained in another book, “The Silent Takeover” is that collectively our economic/debt/planetary systems are on an unsustainable path – environmentally, socially and economically. But beyond talking about the requirements of corporate responsibility, she moves the conversation to talking about “the boundaries of corporate and public behavior and where they have failed.”
This is dangerous stuff.
Hertz argues for placing economics and business back into the human social context — that it’s not about satisfying just the shareholders. Hertz has many believers, as she was among the first to predict the recent global debt explosion. While former Fed Chairman Alan Greenspan notoriously confessed his “shocked disbelief” when he claimed he had no idea the meltdown was coming, Hertz argued in her 2004 book noted earlier that there would be dire consequences if unregulated markets were rewarded for success but not penalized for failure.
Said Hertz, “I have problems with this very extreme form of capitalism where the pendulum has swung so far in one direction, where the focus is completely on the short term, and no one is thinking about the consequences.”
Hertz espouses a new, more adaptive business model between government and business that helps companies be financially motivated to behave in ways that benefit everyone. It’s a tall order requiring flexibility and creativity in equal and large measures.
You can read more about Hertz’s new thinking in an article in the November issue of Fast Company. New times require new thinking. Hertz’s thinking is a good place to start.