Subj: MONEY MATTERS: Two Gems on the Future of Capitalism by C. Handy and R. Gibson
Date: 8/22/2001 5:18:55 AM Pacific Daylight Time
From: bw@jak.se (Boudewijn Wegerif)
To: Undisclosed-Recipient:;;

MONEY MATTERS --22 August 2001
Two Gems on the Future of Capitalism by Charles Handy and Rowan Gibson

________________________
Dear list members,

Charles Handy has been described as “without doubt Britain’s foremost
business philosopher”. Item 1 below is from what he said in an interview on

the future of capitalism, for the book Rethinking the Future (Nicholas
Brealey, London, 1998). List members in South Africa will resonate to: “We
might eventually have to surround ourselves with high fences and armed
guards, rather like the rich suburbs of northern Johannesburg, in order to
survive in this land we have created.”

Item 2 is another gem on the future of capitalism, taken from the
introductory chapter by Rowan Gibson, the founder and chairman of Rethinking
Group and the editor of Rethinking the Future.

In friendship,

Boudewijn Wegerif
Monetary Studies Programme
Folkhogskola Vardingeby **

__________________________
1
Charles Handy is asked by the editor of Rethinking the Future (Nicholas
Brealey, London, 1998), “Do you have worries about the future of
capitalism?” Handy, whose books on business management have sold over one
million copies around the world, replies:

Yes, I do. Capitalism depends on people working terribly hard to make other
people rich, in the hope, often misplaced, that they will get rich
themselves. Under capitalism, growth depends on making people envious of
other people so that they want what the others have. I find this a rather
distasteful view of the world. On the other hand, if we don’t create wealth
then everybody will be as uncomfortable as they were before the Industrial
Revolution. It was Adam Smith who said that economic growth did actually
remove property, make people more comfortable and help them to live really
healthier lives. Therefore, he said, no right-thinking person can be against
it.

But he also said that unrestricted growth can lead to an economy of ‘useless
things’. So I think we’ll find ourselves going down a dead-end road if we
pursue economic growth as if it’s the only thing that counts. Success
sometimes carries a very high price.

The growth rate of the tiger economies of South-East Asia were the envy of
many in the West. But in their pursuit of untrameled economic growth they
have stumbled over themselves, ruining the lives of many in the subsequent
recession.

They will recover in time. Maybe they will have learnt that growth carries
costs, that economic growth does not automatically guarantee a better
society. Maybe they will have time, now, to look around them at the
destruction their growth has already caused in the environment. In
Guangdong, in South China, the red earth is razed, everywhere, to a uniform
base for new buildings and highways. The pollution is horrible. People fall
off buildings and get killed every day, because there are no laws or rules
of industrial safety. There are few effective laws at all, in fact. It is
truly like the old gold rush.

Yet you wonder why they are doing this, because they seem to be creating a
horrible society. After all, in the long run, who would want to be rich in
that social desert, or to grow old in a wasteland like that?

The same applies to capitalist societies everywhere. Who would want to be
successful in the kind of social desert that we’re in danger of creating in
our own countries? We might eventually have to surround ourselves with high
fences and armed guards, rather like the rich suburbs of northern
Johannesburg, in order to survive in this land we have created.

So we have to ask ourselves what we are doing this for. In the process,
people are working so hard that they’re in danger of losing their humanity.
Life is for living, and of course part of living is working, but there is
always more to it than that.

This is one lesson I’ve learnt from Italy, where I spend a lot of my time:
that the process of living is actually quite a full-time occupation. In
Italy, just living – the talking, the shopping, the cooking, the eating, the
family and all that goes with it – actually consumes a whole day. It’s a
miracle that the Italians ever get any other work done. But it does make
life rich; there’s a texture to it, and more of a point.

Elsewhere, we see people scurrying off every day to an office and coming
back with their briefcases full, so that they can sit and read the documents
all night and then go back to the office the next day and empty the
briefcase again. You have to believe that this must be the cause of some
magnificent religion or crusade, or it’s just a colossal waste of time. Why
do it all just to make the shareholders rich? So we still have a lot of
fundamental rethinking to do if we don’t want to miss the road to the future
that we thought capitalism had won.

Communism had a cause – which was, ideally, a sense of equality and
prosperity for all, that all people were and could be equal – but it didn’t
have an appropriate mechanism to deliver that cause. Whereas capitalism is a
mechanism, but it seems to me that it lacks a cause.

_______________________
2.
Excerpt from the introduction to Rethinking the Future, by the editor Rowan
Gibson, who has been described as the “guru amongst the gurus” in the sphere
of trend analysts. He is a bestselling business writer and founder and
chairman of Rethinking Group, which helps organisations “rethink core
strategies” – http:/www.rethinkinggroup.com :

And what about capitalism itself? That great road to progress and
prosperity – or so we thought back then. Many voices are now asking where
capitalism is actually leading us. Or why we are racing to get there. And
what the race is doing to our lives, to our communities and to our
environment. These are uncomfortable questions. These are uncomfortable
times.

Today, as we look to the future, there is no certainty at all about where we
are going or how to get there. We no longer see a long, straight freeway
stretching into the horizon. Instead, we find ourselves staring at the end
of the road! For the close of the twentieth century might be said to
represent the end of a whole order of things. The end of the industrial
paradigm. The end of the post-war world. The end of management. The end of
the welfare state. The end of Communism and of post-war capitalism. Perhaps
even the end of history (according to Francis Fukuyama).

What lies beyond the end of the road? In his book Powershift, Alvin Toffler
describes it as ‘terra incognita’ – the uncharted landscape of tomorrow. Up
ahead we see a world of chaos and uncertainty. A world of accelerating
change. A world where economics will be based not on land, money or raw
materials but on intellectual capital. Where competition will be fierce and
where markets will be merciless. Where small companies will outsmart giant
corporations on a global scale. Where customers will have infinite access
too products, services and information. Where networks will be more
important than nations. And where you’ll either be doing business in real
time, or you’ll be dead.

In place of certainty, there is a sense that our industrial societies are in
deep trouble, as we drive collectively towards what scientists call the edge
of chaos – a period of violent transition when the old order of things
finally gives way to the new. Yet, at the same time, there is also a sense
of tremendous adventure and of opportunity for all.

______________________
NOTE: It can be said that Communism died in the streets of Moscow ten years
ago, this August. Within the next ten years we will witness the death of
capitalism, I believe. The death could come anytime, in fact; from an
overdose of derivatives trading, for example. Right now, Citybank and J.P.
Morgan, I have read at www.lemetropolecafe.com, have derivative contracts
between them about equal in value to the total world product – which is the
sum of all GDPs, and about 38 million times a million dollars. The happening
downturn in the economy could kill them off, and with that the whole of Wall
Street could be brought down, like the Berlin Wall in 1989.

--
** Boudewijn Wegerif
Monetary Studies Programme
c/o Folkhogskola Vardingeby
150 21 Molnbo, Sweden
Tel: +46.552.10327, till end September;
thereafter +46.552.21112

The Monetary Studies Programme prepares commentaries and study material on
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