There is little doubt that our society and those abroad are under enormous pressure given the growing disparity between social classes and a strong sense that many of “the games ongoing within our markets are rigged.â€
We certainly hear plenty of political pandering on these topics, but regrettably few of our supposed leaders are willing to aggressively address the systemic and structural nature of these problems. Sufficiently upsetting the status quo is not an accepted practice in our nation so leave it to a Canadian, Mark Carney, to display the real leadership sorely lacking in America.
Carney just so happens to be the Governor for the Bank of England. He recently spoke at the Conference on Inclusive Capitalism. His remarks, Creating a Sense of the Systemic, qualify as a Sense on Cents Instant Classic:
Social capital refers to the links, shared values and beliefs in a society which encourage individuals not only to take responsibility for themselves and their families but also to trust each other and work collaboratively to support each other.
So what values and beliefs are the foundations of inclusive capitalism? Clearly to succeed in the global economy, dynamism is essential. To align incentives across generations, a long-term perspective is required. For markets to sustain their legitimacy, they need to be not only effective but also fair. Nowhere is that need more acute than in financial markets; finance has to be trusted. And to value others demands engaged citizens who recognise their obligations to each other. In short, there needs to be a sense of society.
These beliefs and values are not necessarily fixed; they need to be nurtured. My core point is that, just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself. To counteract this tendency, individuals and their firms must have a sense of their responsibilities for the broader system.
