Sunday, February 15, 2015

Cultural values and inclusive capitalism

Cultural values have always been within the main core of capitalism. Of course, what kind of cultural values, make the difference between inclusive capitalism, or any other form of savage capitalism. Savage capitalism, deals with profit maximization, selfishness behavior, but also with rules, in particular the rule of law. These values, do not solve inequality, but they are the drivers of innovation, wealth creation, and economic growth. However, when there are flaws in the legal system, its laws or the regulatory procedures, the outcome become quite harmful.- On the other side, the Society as a whole, also has its own values. Most of the time, they do not fit with those of capitalism. Society cares about the common welfare, which means to support values such as solidarity, dignity ,respect to basic rights, no matter the backgrounds of any individual are.The recent experience of a South Korea Air Lines executive, who was punished with one yeas in jail because of breaking the rule of safety flights, show how strong certain values (prudence) are for a society. Sure, values are not away from ethics standards.In the South Korean case, everyone face the law no matter their economic or social position.- The financial crisis of 2008, was a tough example, of the risks concerning capitalism behavior , with no clear sense of where the limits are. It became clear that capitalism also have its limitations, In fact, limitations so risky ,that many of the most prominent leaders and economist around the world ,asked for more regulations and prudential economic policies, such as to "guide" the markets , instead of leaving them to solve on its own and by itself, the difficulties of uncertainty.- Aside from its values, capitalism, also has the advantage of adapt itself to new conditions. Let mention the case of State capitalism, or Mixed market economy, which works on the basis of the State and the market, working together in a complementary fashion. In some cases, this mix is more political than others and the level of state intervention becomes higher. This is the case, of Chinese model, the opposite of the Spain, German or the USA Model.- So, inclusive capitalism seems to be the reaction to the collapse of 2008.What is the meaning of inclusiveness?. Basically, to care about others. This means to take into account people´s preferences beyond those related exclusively to profit maximization on its own. Thus, firms apply social responsibility, they engage with local governments to solve community needs, they improve the ethical standard of management practices, they become involved in seeking international goals, related to poverty, health diseases, nutrition deficiencies and the like. Government and firms, working closely are at the core of inclusive capitalism. The world, need this more flexible approach to create wealth .- .