Capitalists are not all nice but…

I’ve given up on “Capitalism can cure climate change”
on Brussels Blog. This post includes some bits from that piece.

I know the gist of what I want to say: We must control capitalism and use its power to save the world from climate disaster. For those that care about people, that means giving everybody a share of the rewards from capital assets. I have written about this in Stop growth, redistribute wealth and try to save the planet and Amartya Sen on growth and climate.

Are capitalist psychopaths? Are big companies dangerous?

Interviewed by Forbes Magazine about his book, “The Psychopath Test: A Journey Through the Madness Industry”, Jon Ronson said

I think my book offers really good evidence that the way that capitalism is structured really is a physical manifestation of the brain anomaly known as psychopathy. However, I wouldn’t say every Fortune 500 chief is a psychopath. That would turn me into an ideologue and I abhor ideologues.

The minor capitalist and academic sitting next to me has just said “The bigger the capitalist, the worse they are”. Well, capitalist guru, Adam Smith, agreed.  His ideas may have been captured by apologists for crony capitalism but he disliked the power and influence of large international companies.

Such companies, in Smith’s view, had corrupted and captured many European and non-European governments and undermined their societies’ ability to engage in peaceful transnational affairs and equitable self-rule.


Is capitalism innovative?

The New York Times have an interesting article,  Why Can’t America Be Sweden?, on the work of Acemoglu, Robinson and Verdier.  This says

Asked for examples of America’s leading role in innovative enterprise, Acemoglu listed: “Software (Google and Amazon), hardware and design (Apple), social networking (Facebook and Twitter), biotech, pharmaceuticals, robotics, nanotechnology, entertainment and retail (Wal-Mart).”

Like many others, I’m not very impressed – particularly on innovation in software. Many of the best known like Facebook, Skype and Visicalc (the first spreadsheet) were written by one or two people as a challenge – because they could do it. Innovative software rarely starts with big teams.

The success of America’s “innovative enterprise” is pushed along by the lawyers building war chests of patents and other intellectual property for corporations. It also helps to be in a large market with good access to capital and have corporations with marketing muscle and be in a country that can change the law on intellectual property to tax the whole world.

Big corporations must be put to work

Large scale capitalism may be run by psychopaths. Corporations may corrupt and capture governments as Adam Smith described. They may not be as good at innovation as they claim but now is not the time to  destroy them – even if we could.  Given the current climate crisis, governments may need root out corruption and undue influence but the top priority is to set the conditions for a transition to a low-carbon existence.

That means prototyping low-carbon lifestyles that the people of the world can accept.  See A market in prototype neighbourhoods.

Big corporations have the power  and scope, which would enable them to do this.

The obvious mechanism to incentivise these corporations is a very large carbon tax.

And if they require some innovation, they can give me a call.

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