The article below from the FT’s series on the future of capitalism highlights the failure of western democracies to take a holistic, systems view, and our failure to educate ourselves to understand the risks and possible costs resulting from the failure to do so.
It remains to be seen, however, it the asian economies realise the implications of the the ‘First Law of Sustainability’ as we move into a resource constrained future.
From the performance of our economies it is clear that our leaders do not understand how we got here, or how we enable change to keep ahead of the oil curve.
Lessons for the west from Asian capitalism
By Kishore Mahbubani
Published: March 18 2009 20:14 | Last updated: March 18 2009 20:14
………………And when this storm is over, we should not be surprised to discover that the greatest global believers in capitalism will be in Asia. But it will be an Asian mix of capitalism, not the western formula, that will become the dominant form of global capitalism, where the “invisible hand” of free markets will be balanced by the “visible hand” of good governance.
The Asian mix may have its own weaknesses. Asia is still underperforming in creativity and innovation. Corruption will remain a serious problem.
The Asian emphasis on the family unit may also be a mixed blessing. Many of Asia’s most successful entrepreneurs are keen to retain family control of the business. This enables them to take a long-term view. But the downside is nepotism and the lack of a deep culture of meritocracy.
On balance, the strengths of Asian capitalism are greater than the weaknesses. Within a decade Asians will have some of the largest free trade areas, including those between China and the Association of South East Asian Nations, the Japan-Asean FTA, and the Indian-Asean FTA that is likely to be set up. Recent history has taught Asians a valuable lesson: more trade leads to greater prosperity. In the Asian way – two steps forward, one step back – trade barriers will gradually come down. By the middle of the 21st century, intra-Asian trade will far surpass that of any other region.
Despite this, there will be no ideological trumpeting of the virtues of Asian capitalism. After their experiences of the past 100 years, Asians are wary of ideology. They prefer the simple, commonsense approach of learning from experience and they will heed the advice of Adam Smith, who said that prudence is “of all virtues that which is most useful to the individual”. It may also be helpful to nations………………
Complete article from ‘the future of capitalism at