capitalism

◄	CAPITALISM

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Capitalism, which replaced feudalism in the early modern period at least in the western half of Europe, is an economic system based on private ownership of the means of production and the creation and manufacturing of goods and services by businesses and industry for profit. Central characteristics of capitalism include private property, capital accumulation, wage labour and competitive markets.

In a capitalist market economy, investments are determined by private decision and the parties to a transaction typically determine the prices at which they exchange assets, goods, and services.

Early human settlements were dependent on proximity to water and other natural resources. Because of opportunities, they gradually settled elsewhere, went into societies and communities, organized states and laws, created highest levels of thoughts and strived for justice, peace and happiness. But mankind faced also natural disasters and artificial disruptions, all effecting our moral attitude, ethical thought, emotions, values and capacities.

THE CASE
OF
MORAL CAPITALISM
(booklet)

Adam Smith was very aware of the benefits to businesses of fixing prices in order to extract more money from society. He wrote, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices."

10 Ways to Bring Stakeholder Capitalism into Practice

Give up some of our privileges
Develop the tools companies need to change their behavior
Change capital structures and governance to institutionalize a broader corporate purpose
Implement equitable work-from-home policies that enable employees to prosper over the long haul
Follow the leadership of people of color
Bring diverse perspectives to the boardroom
Evolve leadership practices amidst changing populations and expectations
Adopt consistent stakeholder reporting
Align investor and management expectations along time horizons
Answer the call of this once-in-a-generation opportunity for racial and economic justice

Will Capitalism Starve Humanity By 2050?

Unless It Changes, Capitalism Will Starve Humanity By 2050, Forbes / Leadership, Feb 9, 2016 Drew Hansen

Capitalism has generated massive wealth for some, but it’s devastated the planet and has failed to improve human well-being at scale: 1. species are going extinct at a rate 1,000 times faster than that of the natural rate over the previous 65 million years (see Center for Health and the Global Environment at Harvard Medical School), 2. since 2000, 6 million hectares of primary forest have been lost each year. That’s 14,826,322 acres, or just less than the entire state of West Virginia (see the 2010 assessment by the Food and Agricultural Organization of the UN), 3. even in the U.S., 15% of the population lives below the poverty line. For children under the age of 18, that number increases to 20% (see U.S. Census), and 4. the world’s population is expected to reach 10 billion by 2050 (see United Nations’ projections).

How do we expect to feed that many people while we exhaust the resources that remain? Human activities are behind the extinction crisis. Commercial agriculture, timber extraction, and infrastructure development are causing habitat loss and our reliance on fossil fuels is a major contributor to climate change. Public corporations are responding to consumer demand and pressure from Wall Street. Professors Christopher Wright and Daniel Nyberg published Climate Change, Capitalism and Corporations last fall, arguing that businesses are locked in a cycle of exploiting the world’s resources in ever more creative ways.

Corporate capitalism is committed to the relentless pursuit of growth, even if it ravages the planet and threatens human health. We need to build a new system: one that will balance economic growth with sustainability and human flourishing. A new generation of companies are showing the way forward. They’re infusing capitalism with fresh ideas, specifically in regards to employee ownership and agile leadership and management.

What's the Matter with Capitalism

"My title is a question"

On invitation of the NEXUS Institute, Angus Deaton gave the lecture

"What's the Matter with Capitalism".

"Society as a whole would benefit from the power of the free market: for decades, the West blindly believed in this economic fairy tale. It turns out we couldn’t be further from the truth. Social and economic inequality is greater than ever and the number of people living in poverty in the Western world is growing exponentially. Sir Angus Deaton was awarded the Nobel Prize in Economics for his research on poverty, and in his Nexus Lecture he addressed the problems in our current capitalist model and what needs to be done to distribute wealth more fairly and to fight poverty while having a thriving economy".

MORAL CAPITALISM

Moral Capitalism is a field theory that integrates intangible moral considerations with traditional micro and macro economic postulates. In sum, Moral Capitalism asserts that interest and virtue are not necessarily in conflict; that virtue is an extension of interest rightly understood. From the perspective of contemporary academic philosophy, the framework of Jurgen Habermas most closely supports this approach to private property and free markets as preferable institutions for human civilization. Habermas points out that human actors engage a variety of realities in the course of performing their individual and collective discourses while alive in this Red Dust world.

One reality is what Habermas calls “Normativity” – the perceptional realities of the mind, the heart and the conscience. From dreams to ordinary thought in conventional languages, from mystical insight to scientific formulae, the realm of the mind and the spirit powerfully attracts the human being.
Another realm, equally compelling and controlling, is what Habermas calls “Facticity” – the material realities of hard and soft, night and day, steel and cotton. Habermas’s important suggestion is that human beings live in both realms and in the various dynamic interpenetrations between them. Ideas can be imposed on material conditions by human actions; material facts can change and so shape human ideas.

Moral Capitalism holds that business must partake of Normativity as well as of Facticity.

The Catholic Church’s social teachings about capitalism were the topic of Bishop Barron’s keynote address. “Every single pope in the church has affirmed the most central element of the market economy: private property,” he said. “Private property is grounded in the dignity and freedom of the individual. Private property allows the diffusion of power, not concentration in the hands of a few. The Church likes the entrepreneurial spirit.” Yet the popes have noted that because God made the world for everyone, the common good must be uppermost in the minds of capitalist Christians.

December 2019 issue of Pegasus brings a report summarizing the discussions at the 2019 Global Dialogue “Three Paradigms for the Global Economy: Nationalized Socialism, Brute Capitalism or Moral Capitalism?”.

Last year, participants at our 2018 Global Dialogue 'Tribalism or Humanism: Will Humanity Ever Resolve the Tensions?' gathered at a time of uncertainty and discontent in our global order. The various modes and instances of dissension and divergence were many.

The Dialogue advanced a statement of ethical principles which should guide reciprocally those who seek new homelands as refugees and migrants and those who open their nations to them.

In 2017, the CRT convened its Global Dialogue in Wittenberg, Germany. Five hundred years earlier, that small German city was host to a revolution in vision and spirit responding to humanity’s deepest needs for clarity of purpose. This is not to say that Martin Luther solved our problems in ﬁnding happiness and well-being, but to note that principles enunciated there in 1517 shaped humanity’s evolution into today’s global civilization. In terms of fair and principled politics and governments, necessary for the rule of law and a moral capitalism, our current moment, again, gives cause for concern.

Inclusive capitalism is fundamentally about creating long-term value for all stakeholders – businesses, investors, employees, customers, governments and communities – guided by an approach that provides:

Equality of opportunity
Equitable outcomes
Fairness across generations
Fairness in society

<--- Midyear Call June 2021

The noble vocation:

products that generates value
community and the merchant (CEO)
from fossile to green energy
steering capital to business that is making the transition

What capitalism is seems to be clear to many, but within the entire chain from raw material extraction to consumer benefit there are many ideas and opinions about how profits (and burdens) are distributed:

The economic system of capitalism: Time to change functioning?

The purpose of a company and tools:
- social and religious teachings
- ESG factors and integrated reporting

Davos Manifesto

What kind of capitalism do we want? That may be the defining question of our era. If we want to sustain our economic system for future generations, we must answer it correctly.

Generally speaking, we have three models to choose from. The first is “shareholder capitalism,” embraced by most Western corporations, which holds that a corporation’s primary goal should be to maximize its profits. The second model is “state capitalism,” which entrusts the government with setting the direction of the economy, and has risen to prominence in many emerging markets, not least China. But, compared to these two options, the third has the most to recommend it: “Stakeholder capitalism".

The result is that stakeholder capitalism is quickly gaining ground, attendees at the Forum’s Annual Meeting signed the “Davos Manifesto,” which describes a firm’s principal responsibilities toward its stakeholders. Now, others are finally coming to the “stakeholder” table. The US Business Roundtable, America’s most influential business lobby group, announced this year that it would formally embrace stakeholder capitalism.

Countering 'Maximizing Shareholder Value

During the 4th global Drucker Forum 2012 on Capitalism 2.0 and through a presentation it was wondered whether we are really building a movement to counter 'Maximizing Shareholder Value'. Peter Drucker Society Europe is a practitioner-led, multi-stakeholder group that builds on Peter Drucker’s fundamental ideas and ideals with the aim of contributing to the evolution of management as a vital function of a modern society. Could the ESG factors fulfill the need to an integrated approach to measure the sustainability and societal impact of an investment in a corporation or business?

The mission of PDSE is “to give a new voice to management in Europe – aimed at effective management, ethical leadership, meaning and purpose for the individual - in all sectors of society”. This mission reflects a need for an integrated approach to harmonizing the business agenda with responsibility and accountability of the individual and our beliefs:

Management as a key role in our “society of institutions” has an impact on the life of people – is a concern for society;
View of management as a discipline and practice that combines economic performance with a concern for the common good;
Management to be based on values, underlying the cohesion in society

In order to make progress, Caux Round Table brings the “idea” of sustainable development as it has been defined and agreed upon by the governments of the world through the Sustainable Development Goals (officially ‘Transforming our world: the 2030 Agenda for Sustainable Development’):

"The challenge of moral capitalism is to tip the balance of wealth creation toward humanity’s more noble possibilities and away from the dynamics of more brutish behavior."

Caux Round Table (CRT), an international network of experienced business leaders, who work with business and political leaders to design the intellectual strategies, management tools and practices to strengthen private enterprise and public governance to improve our global community, has been at the forefront of efforts to promote international business ethics and work and supports new trends in corporate social responsibility.

There is growing momentum to advance moral capitalism on a global scale. On this, 2 presentations are made which require attention:

CAUX Roundtable connects Lutheran ideas to the functioning of the current economic system of capitalism. Luther proposed a priesthood of all believers to promote individual moral responsibility as the foundation for a just civilization. His emphasis on the rights and duties of the individual led to capitalism and constitutional democracy, in short, to the basic institutions of our modern world as enshrined in the Charter of the United Nations, and the Universal Declaration of Human Rights.

Since last time, our world is experiencing dysfunctions in its economic systems and the rise of nativist populism, parochial trade protectionism, terror in the name of God and loss of faith in law. Systemic forces are shrinking middle classes; finance is aggrandizing nominal values of upper-class assets; income aliented from work is proposed to help the poor. Events seem to be in the saddle and ride humankind. Anxiety and loss of trust in politics are turning people to more autoritarian leaderships.

A new vision is needed for our global community of responsible citizenship. What can we learn from Luther in creating this new vision? CAUX Round Table 2017 Global Dialogue searched for leadership judgements on the proposed design of an ethical compass to be used by companies and individuals in seeking in how best to achieve sustainable development, linked to the goals as established by 193 member states of the UN. Overcoming power of strong lobbies, a shift towards long term investments, reducing influence of crony capitalism (Occupy took heart from the influence their movement appears to be having on mainstream politics, citing David Cameron’s recent broadside against it) and plutocracy, as well compliance to moral principles let us direction.

UN consultant Prof. Jeffrey Sachs presented his ideas for a sustainable understanding of leadership at the "Freedom-Order-Leadership" conference at the Wittenberg Center for Global Ethics. Around 80 participants from politics, business, science and civil society followed the invitation to the conference "Freedom - Order - Leadership: Orientations for Responsible Business" to the Leucorea in Wittenberg on 6 November. The organizers of the dialogue were the WZGE and the Caux Round Table, an international corporate network for responsible business practices.
The world-renowned economist and UN Special Adviser, Prof. Jeffrey Sachs, bridged from Reformation to the global 2030 agenda in his keynote speech. Referring to Luther, he emphasized the power of ideas: "Global sustainability goals are merely words. But for the shared challenges, the world must first find a common language. "Only then could governments agree on solutions. In his dedicated statement, Sachs campaigned for "moral capitalism" and sharply criticized the American president.

Prof. Peter Schallenberg from the Catholic Faculty of Paderborn, who had been short-listed as a substitute by Peter Cardinal Turkson, emphasized in his opening statement the connection between "stop, attitude and trust" as a prerequisite for a humanitarian economy. Irene Plank, Head of Unit "Business and Human Rights" at the Federal Foreign Office, provided an insight into the "National Action Plan for Implementing the UN Principles for Business and Human Rights." Prof. Klaus Leisinger, President of the Global Values Alliance and Chairman of Novartis for many years, outlined this Foundation, the role of global companies as "change agents" for a sustainable global society. In the ensuing discussion, moderated by WZGE Chairman Dr. Ing. Martin von Broock, it was about the question of how the ideas presented can be translated into concrete action, and which conflicts are to be overcome.
The afternoon was devoted to practical orientation. Prof. Andreas Suchanek, board member of WZGE, presented the concept for the "Ethical Compass for Good Leadership", whose basic principle "Do no harm" is concretized with the elements freedom, embedding, respect and self-limitation.
Catherine Young from Think Tank Oxford Analytica presented the "Corporate Stewardship Compass". Finally, Steven Young, chair of the Caux Round Table, spoke on Effective Stakeholder Engagement and Effective Personal Leadership. In the subsequent discussion, the focus was on the successful use of management tools in practice.

On the eve of the conference, Prime Minister Dr. Reiner Haseloff, the Lower Saxony Regional Bishop of the Evangelical Lutheran Church Ralf Meister as well as Wittenberg's Lord Mayor Torsten Zugehör, attuned the participants in the Old Town Hall to the topic.
The conference formed the conclusion of the program "Freedom, Order, Leadership", which the WZGE has carried out with financial support of the Federal Government Commissioner for Culture and the Media following a decision of the German Bundestag in the year of the Reformation: In numerous conferences, workshops and summer schools with more than 250 decision-makers and junior staff were brought together ideas for an "Ethical Compass for Good Leadership". The initiators include, among others, the deputy IG BCE Chairman Edeltraud Glänzer, the BASF Supervisory Board Chairman Dr. Ing. Jürgen Hambrecht and the former EKD Council President Prof. Wolfgang Huber.

Here you can find the Wittenberg Statement on the Internet and here the document.

NARRATIVE 'TAKE CARE OF IT'

In 1987, the so-called Brundtland (1) report mentioned sustainable development for the first time. The main conclusion of the report was that the major global environmental problems were the result of poverty in one part of the world, and the unsustainable consumption and production of the rest of the world. Now, 30 years later, the concept of sustainability receives stronger awareness and wider support.

In order to secure a more prosperous, equitable, and healthy planet, such demands not only the use of already available knowledge, policy thinking and adjustment, but also commitment and implementation of sustainable goals. 'TAKE CARE OF IT' brings several developments from history that can serve the plan of action for people, planet and prosperity and what we should (not) do to improve the lives of people everywhere. To achieve a state of flourishing, thriving, good fortune and/or successful social status, we have to focus on our existence, consequences of transformations, what we already see and know from the past, on negative aspects of trade and free markets and to reassess economic systems and political governance in order to be able to reach the global sustainable development goals.

(1) written by the World Commission on Environment and Development and named after the chairman of the commission, the then Norwegian Prime Minister Gro Harlem Brundtland

Caux Round Table for Moral Capitalism 2017 Global Dialogue
November 5th-8th, Wittenberg Center for Global Ethics

The transformations of capitalism

Global capitalism has entered a new phase: tertiarisation and internationalisation of economies, weakening of the state’s regulatory role, deregulation and privatisation, increased role of financial actors, corporate concentration, intensified competition, acceleration of technical progress, growing importance of information and knowledge as factors of production, upheavals associated with the development of the digital economy, increased separation between labour and capital ownership, between execution and design.

The Increasing Importance Of Distributed Ownership And Governance

Fund managers at global financial institutions own the majority (70%) of the public stock exchange. These absent owners have no stake in the communities in which the companies operate. Furthermore, management-controlled equity is concentrated in the hands of a select few: the CEO and other senior executives. On the other hand, startups have been willing to distribute equity to employees. Sometimes such equity distribution is done to make up for less than competitive salaries, but more often it’s offered as a financial incentive to motivate employees toward building a successful company. According to The Economist, today’s startups are keen to incentivize via shared ownership:

The central difference lies in ownership: whereas nobody is sure who owns public companies, startups go to great lengths to define who owns what. Early in a company’s life, the founders and first recruits own a majority stake—and they incentivise people with ownership stakes or performance-related rewards. That has always been true for startups, but today the rights and responsibilities are meticulously defined in contracts drawn up by lawyers. This aligns interests and creates a culture of hard work and camaraderie. Because they are private rather than public, they measure how they are doing using performance indicators (such as how many products they have produced) rather than elaborate accounting standards.

This trend hearkens back to cooperatives where employees collectively owned the enterprise and participated in management decisions through their voting rights. Mondragon is the oft-cited example of a successful, modern worker cooperative. Mondragon’s broad-based employee ownership is not the same as an Employee Stock Ownership Plan. With ownership comes a say – control – over the business. Their workers elect management, and management is responsible to the employees.

REI is a consumer cooperative that drew attention this past year when it opted out of Black Friday sales, encouraging its employees and customers to spend the day outside instead of shopping. I suspect that the most successful companies under this emerging form of capitalism will have less concentrated, more egalitarian ownership structures. They will benefit not only financially but also communally.

Joint Ownership Will Lead To Collaborative Management

The hierarchical organization of modern corporations will give way to networks or communities that make collaboration paramount. Many options for more fluid, agile management structures could take hold. For instance, newer companies are experimenting with alternative management models that seek to empower employees more than a traditional hierarchy typically does. Of these newer approaches, holacracy is the most widely known. It promises to bring structure and discipline to a peer-to-peer workplace.

Holacracy “is a new way of running an organization that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously, without a micromanaging boss.” Companies like Zappos and Medium are in varying stages of implementing the management system. Valve Software in Seattle goes even further, allowing employees to select which projects they want to work on. Employees then move their desks to the most conducive office area for collaborating with the project team. These are small steps toward a system that values the employee more than what the employee can produce. By giving employees a greater say in decision-making, corporations will make choices that ensure the future of the planet and its inhabitants.

Rethinking Capitalism

On a conference 27 September 2013, in a terrific atmosphere, participants were truly engaged in roundtable dialogues on 'Rethinking Capitalism', inspired by introductions from Kishore Mahbubani, Ruth Cairnie and Joris Luyendijk.

The Dutch Financial Newspaper wrote the following comment on the conference: 'We looked at the overture of Melancholia, the latest film from Lars of Trier. Eight minutes slow motion, with birds falling from the sky, colliding planets and a mysterious woman who was not born for happiness it seems.

The music from Wagner's Tristan and Isolde reinforced the oppression that spoke from the images. It is a somewhat unusual beginning of the annual conference of the European Leadership Platform (ELP), an organization that gives executives the opportunity to share in confidence experiences and inspiration. Through the film, the 75 participants were invited to leave behind the every day hustle and bustle to make the head clear for the larger questions about the system of capitalism. That worked wonderfully. From the dialogue held to one of the round tables, a major commitment was present to the subject.

Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy in Singapore, recounts the unstoppable rise in Asia. Ruth Cairnie, strategist at Shell, talks about competition and innovation and journalist Joris Luyendijk talks about his conversations with money hungry bankers in the City of London.

Especially the story of Mahbubani released much to one of the tables. The former diplomat warned that Europe is sailing in the direction of a "dark night" with his 'welfare capitalism', where money is given away to the peasants and the poor and the Americans are addicted to their "financial capitalism". But the main mistake that Europeans and Americans make is that they do not want to see that Asia is becoming the dominant force. Thanks to the free market and rugged meritocracy, and thanks to a fascination with modern technology and hard science.

"If you're in Beijing someone asks if there is reason to rethink capitalism, he says you were crazy," says Mahbubani.

To one of the tables was a discussion about flat materialism and state capitalism, and on how we Europeans can survive in the global competition. Radical cuts in the welfare state, as Mahbubani suggests? Collaborating with the Chinese, or should we keep them just away? Mahbubani calls later that at least one European leader should emerge who tells the population that the golden age is over, that our prosperity is priceless and that the high public debts necks us. He concluded with good news. Asians like to work with us and want to buy our products. Europeans therefore have no reason to surrender to melancholy, but they have move quickly.

Capitalism is alive, but needs others angles of approach.	I’m positive about a better world, a world that’s sustainable for next generations.	When am I finally going to reflect on it?	When East meets West!	In the future competition will come from capitalist Asia, and we will have to struggle to keep up.	Great to share our fears and hopes.	Change by evolution and strong and confident inclusive leadership.	capitalism means striving for the highest profit = not good.	History has turned a corner.	Welfare capitalism: do we understand enough why/where it does not work?
Rethinking capitalism is an eternal circle.	The system is broken and we know it.	The banality of capitalism: we are OK, our neighbors are OK, so how could we as a whole be not OK?	On the spot for the big topics of today	Invest in Indonesia but forget about more stuff.	We are all cavemen (and only deal with what is in front of us).	The world is changing in a rapid pace, but most of it is not here, it is in Asia and we are ignoring it.	Start voicing your own truth, change starts with taking a stand.	‘	It starts with me: will I always be an effective, genuine, values-based leader?
Less stuff, more happiness!	Banks have too much of a grip on the economy.	“You are a banker, don’t you hate yourself?”	Keep the faith despite all challenges.	In every trade there is a fool. If you don’t know who, it’s you	Brains in Asia have underperformed for 200 years. They will come	Without a goal every direction is the right direction.	Het tij keren zal veel meer opoffering van ons allemaal vragen en out of the box leadership.	The current system of capitalism needs correction, not abolition.	Problemen op wereldniveau zijn moeilijk oplosbaar.
Dialogue 4 evolution.	Wie heeft het lef om op te staan? Ik?	Capitalism is alive, but the reign of the West is over.		Banks, organizations, leaders, people, we: they all need a kind of correction to keep the balance.	Finish your studies, otherwise the children in developing countries will take your job.	Als mens zijn we blind voor veel dingen die niet in onze straat liggen: Azië, langetermijndenken en de kracht uit het financiële systeem te stappen zijn wéér voorbeelden.	Focusing on money will ultimately lead to disaster.	De mens is in wezen slecht en onveranderlijk, maar dat is geen reden voor pessimisme.	World leadership is the answer to new capitalism but where does it come from?
Van bruto nationaal product naar bruto nationaal geluk?·	Stop changing systems, start changing values.		What can we do to contribute as an individual?	Brilliant. Enjoy life and accept risks becoming reality from time to time.	I am still optimistic	How to reach global sensible allocation of resources? Global governance Utopia?		It’s all about morale.· The next generation will be wiser.	Having a clear and elaborate vision is very helpful.
Who will initiate change?	Soms blikverruimend, soms bevestigend	There are no enemies… The only enemy is ourselves.	Offers brengen	Capitalism needs transparency and competition, otherwise things run out of (the invisible) hand	Optimisme over de wil om het aan te gaan, pessimisme over het leiderschap om dat dichtbij ‘te doen’	How can we strive for real economic value?·	The banking crisis is a result of the lack of free market focus.	It’s not just the bank(er)s, it’s ‘la condition humaine’	Don’t rethink capitalism, there is no capitalism.

From Joris: 'And Tony gained access to the superclass’. Question is: what is the morale of the superclass? The future lies in unlearning our default future.· We have to change perspective, face reality and deal ...with it. Change and shift in paradigm will change current expectations for the better. The solution to Europe’s problems – whatever they may be- is to be found here rather than in China'.

VEDANTA

Vedanta, also known as Uttara Mīmāṃsā, is a Hindu philosophical tradition that is one of the six orthodox schools of Hindu philosophy. Avula Parthasarathy, popularly known as Swamiji (born 8 June 1927), is an Indian philosopher and exponent of Vedanta, one of the ancient philosophies of India. He translates the subtle philosophical themes into a practical technique of living. He has multiple degrees in literature, science and law, and completed a postgraduate degree in international law from London University. Renouncing a shipping business early in life, he has dedicated his life to study, research and propagation of Vedanta. His writings, discourses and seminars have featured in international press and television media. Business, sport and film celebrities regularly seek his counsel.

Applying Swami Parthasarathy's Vedanta to Boardrooms

A BRIEF COMMENT

Calculating individuals will bring about the best social-economic organization:
the homo economicus

In the early modern era, there was a period of conflict between kings and parliament, overseas trade and of materialism, utilitarianism, revolution, and homo economicus, who is out to satisfy needs in an efficient, rational or logical manner. This era was characterized by rapidly accelerating scientific discovery and invention, wars and revolutions, capitalism and economic liberalism, theories that assume that the satisfaction of needs by calculating individuals will bring about the best social-economic organization.

It was also in this era where Adam Smith, moral philosopher / political economist, examined the nature and causes of wealth.

It was a period of social change; slavery was abolished, and the Second Industrial Revolution led to massive urbanization and much higher levels of productivity, profit and prosperity. European imperialism brought much of Asia and almost all of Africa under colonial rule. During at the end of this era, Stuart Mill (philosopher economist) focused on empiricism, utilitarianism, classical liberalism: each and every single person or society should be his own leader.

Human happiness (happy planet index) and liberty is served when we as individuals have sovereignty.

The time of the rise of neoliberalism

The 20th century was a strange and confusing century of wars, technological changes, youth cultures, individualism and postmodernism. In 1920, Keynes described in “The Economic Consequences of the Peace” the era of the first globalization with the words:

“What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914. … The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon
his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper.”

Keynes became known through the book ‘The General Theory of Employment, Interest and Money’, published in 1936. It was the time of the rise of neoliberalism, a theory of politico-economic action, according to which human welfare is best served by the liberation of private freedom and skill of enterprise, within an institutional framework of highly private property, free markets and free trade and with a role of the government to create and maintain such a framework. The economic theory behind neoliberalism initially stems from the monetarism that the Chicago economists adhered to in the 1970s, which has two key points:

valuation by supply and demand. This also applies to labor, so that its market value is the real value;
the efficiency of the free market. The expectation was that a market without government intervention would automatically come into equilibrium and come to full employment, because the market does not tolerate waste. Inflation was only expected from government intervention.

Capitalist values lived on through the dissemination of libertarian ideas, in particular through the highly popular novel of Ayn Rand’s bestseller Atlas Shrugged, “a capitalist manifesto” that depicts a utopian picture of capitalist, transforming society as a whole and reduce all interpersonal relations to money trade in contrast to human capital, the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value (World Bank, World Development Report 2019: The Changing Nature of Work).