Monday, March 19, 2012

No more economics - and especially finance - please, we are humans!

I am paraphrasing the title of a well know British theatre play of decades ago to reflect the following.

Muhammad Yunus, the inventor of micro-finance has given a most interesting video interview to the Guardian today: 'Economists have misunderstood human beings' is the title and he proposes that humans are multi-dimensional, not one dimensional money making robots!

He also proposes that social enterprises can offer solutions in a world where the profit making ones and the social ones co-exist.

Meanwhile, the Merkozy fiscal pact is having adoption issues not only in Germany (see recent posts of mine) but the Netherlands as well! My POV is not that good fiscal "housekeeping" should not be an element of national and Eurozone policy but that this must not turn into the sclerotic and rather rigid thing that the Merkozian fiscal pact has become! So much that not only a Spanish convervative PM (Rajoy) is having trouble abiding to, but also the Netherlands. Yes the NL which is the closest "ideological" ally Merkozy has to its philosophy,

Via Twitter, I continue to ask my German followers/friends if indeed "Ordocapitalism" is the philosophy that drives the policy thinking of Merkel and her advisers (many of them of CB and/or banking mindset). I continue to get very mixed replies. Too early to write a post on that.

So capitalism and its problems, which was the topic of thus year's WEF at Davos, the Euro crisis, the vendetta between Financial Agorocracy and Democracy, and many other such issues continue to be the core of European, EU, US and world affairs and policy.

Now, back to Yunus. I have many economists friends but as an MBA I agree with Yunus on this argument taht economists have misunderstood human beings.

As per the profit vs social entrepreneurship, I think that there is also a "third kind". The for profit but not profit (shareholder value) maximising one, the one that my father practiced, ie for profit business that does not operate with a single directive: "Maximise Profit, Maximise Profit" (flashes of The Terminator, The Walking Dead and other zombie and vampire movies and series, parade inside my mind for a few seconds). What I call "noble capitalism" (mind you: my father was not a "royal", he was a product of the middle class, the good old middle class that credit capitalism has destroyed in recent decades, IMO).

After all there is such thing as "Socially Responsible Investment" where investors can participate in funds that choose their portfolio based not solely on performance but environmental, social and other non direct profit parameters!

But is it economist who have misunderstood human beings or is Max Weber's 1905 book "The Protestant Ethic and the Spirit of Capitalism" that is more relevant in understanding a) the faults of capitalism and b) Merkel's philosophy?

Food for thought, mes amis!

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