His opinion of capitalism is a little like his opinion on food, says Tom Glocer, CEO of the news organization Thomson Reuters. He likes it. The world may have a case of food poisoning, but nobody's going to stop eating, said Glocer at the second day of the 2009 President's Conference.
Glocer participated in the panel "How much capital is left in capitalism?" It was hosted by Guy Rolnik, founder and editor-in-chief of TheMarker. Other participants included the deputy finance minister of Macedonia, Zoran Stavrevski; Jean-Paul Fitoussi, professor of economics at the Institut d'Etudes Politiques de Paris; Eugene Kandel, also an economics professor and today head of Israel's National Economic Council; and Obiageli "Oby" Ezekwesili, vice president for Africa at the World Bank.
Stavrevski started the ball rolling by noting that the context in which the global economic crisis took place is crucial to understanding its results. A great deal of effort and time have been devoted to discussing the moral flaws of capitalism, the materialism and greed of the bankers, but the crisis crosses the boundaries, he said. "The capitalist system works if the capitalists make money." The only way it does them any good is if there are profits, he said.
Was massive government intervention in world markets necessary? The answer, a la Stavrevski, is that there are no alternatives to capitalism at this time. Therefore, the capitalist system had to be rescued. Q.E.D.
The case for government intervention
Ezekwesili concurred: Obviously markets cannot be left to themselves, she said. Government regulation over the markets is in again.
Fitoussi, not only an economics professor but also a director on Telecom Italia's board, went into more depth. "We live in a system that calls itself capitalist, but it is ruled by two conflicting organizational principles," he analyzed. One is the principle of the market, in which a single shekel is equal to a single vote. The second principle is democracy: one man is equal to one vote.
"As long as these two principles are balanced, the system functions," Fitoussi said. What happened in the last year and a half is a result of the balance being lost.
The massive capital injections into the world's markets by governments, to save tottering financial systems and whole economies and producing gargantuan deficits, seems to have plenty of proponents at the 2009 President's Conference.
"Capitalism is the right of people to own assets and trade them," Kandel interjected. That very statement demands tremendous work by the government, because ownership means that somebody has to protect your property rights, he explained.
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