Capitalism and Crises: How to Fix Them

by Colin Mayer

Overview

bThe world is encountering multiple crises - climate, droughts, floods, energy, food, and pandemics, to name a few. We have a problem, this is the solution./b

Capitalism and Crises is about how capitalism can fix them - how it can solve not cause them. The reason why it has caused them is that we have misconceived the nature of our capitalist system. We have failed to understand the key institution at the heart of it - business - and as a result we have allowed it to cause as well as solve problems. This book describes why this has happened and what needs to change to address it: it will take you through how the capitalist system operates, where it fails and why, and it will demonstrate that at the core of the problem is the key driver of capitalism and that is profit - the way in which we resource and reward those who run the system.

Currently, profit comes from causing as well as solving problems. It must not, if we are to prevent the problems. Drawing on history, philosophy, psychology, and biology as well economics, law, and finance, Mayer describes what has gone wrong, what needs to change, and how to fix it. He sets out the big challenges that capitalism must address and how it should set about doing that, and discusses how financial institutions should be at the heart of this, and how the public sector can work with the private on a common purpose of solving problems and creating shared prosperity. Capitalism and Crises provides an inspiring and motivational roadmap of how we as practitioners, policymakers, consumers, employees, communities, students, and citizens of the world can together tackle the challenges of the 21st century - to flourish and survive.

Product Details

ISBN-13:	9780198887942
Publisher:	Oxford University Press
Publication date:	01/11/2024
Pages:	336
Product dimensions:	8.10(w) x 5.80(h) x 1.50(d)

About the Author

Colin Mayer

Colin Mayer CBE FBA is Emeritus Professor of Management Studies and Visiting Professor at the University of Oxford. He is a Fellow of the British Academy, the Centre for Economic Policy Research and the European Corporate Governance Institute, an Emeritus Fellow of Wadham College, Oxford, an Honorary Fellow of Oriel College and St Anne's College, Oxford, and he has an Honorary Doctorate from Copenhagen Business School. He is a member of the Board of Trustees of the Oxford Playhouse, and was co-chair of the Scottish Government Business Purpose Commission, a member of the UK Government Natural Capital Committee, and the UK Competition Appeal Tribunal.

Table of Contents

The Problem1. The System2. The ChallengeThe Duty3. The Moral Law4. The Role of LawThe Method5. Owning the Problem6. Leading SolutionsThe Prize7. Valuing the Invaluable8. Just ProfitThe Commitment9. Financing Equity10. Our Common PurposeThe EndAcknowledgementsFurther Readings

Editorial Reviews

"Colin Mayer has been an influential voice in the debate about corporate purpose for many years. In this new book, he tackles the problem of how to rethink the entire capitalist system. His core argument - that we should seek to solve the problems of people and planet in a profitable way - is simple and profound. There are no easy fixes, but this important and carefully-argued book provides individuals, businesses and policymakers a practical route to progress." — Julian Birkinshaw, Vice Dean and Professor of Strategy and Entrepreneurship, London Business School

"The refrain throughout this remarkable book is solving problems for others and not causing problems for others. That is a theme that will resonate with entrepreneurs in early-stage companies who in my observation are passionate about solving problems. Drawing on rich wisdom from a career of helping firms to define and realise their purpose, Colin Mayer moves the agenda from companies simply maximising shareholder value to companies promoting wider prosperity. Everyone who wants to understand this transition and participate in it should read this." — Andrew Briggs, Emeritus Professor of Nanomaterials, University of Oxford

"In this ambitious and insightful book, Colin Mayer untangles some of capitalism's intrinsic problems and offers some detailed proposals to tackle them. Moreover, he introduces the relevance of moral principles back into economics and business and develops the organizational architecture for corporate purpose. The outcome is a very compelling framework on how companies can be governed and managed, how investors should broaden their responsibilities, and how governments can contribute to more prosperous societies. Colin Mayer's book makes a very unique and relevant contribution to the discussion on reinventing capitalism." — Jordi Canals, IESE Foundation Professor of Corporate Governance, IESE Business School

"Reviving Adam Smith's real legacy, this book is a tour de force of one of the most astute thinkers of our time. Colin Mayer's sophisticated and fascinating multi-disciplinary study harshly criticizes contemporary capitalism and develops the notion of problem-solving capitalism as an inspiring alternative. Combining learning and experience, integrity and courage, Mayer urges us to reform the way we conceptualize and regulate the financial system and, most fundamentally, the ownership and governance of firms. While his bold vision is radical, this insightful book shows that this ideal is also practical: firms can and should incur the full costs of the problems they create and profit only from the solutions they produce." — Hanoch Dagan, Professor of Law and Director, Berkeley Center for Private Law Theory, University of California Berkeley Law School

"This is a remarkable and profoundly insightful book on both the huge strengths of capitalism as a means of delivering what we want, but also its current massive failures. Based on a wealth of experience, the book is crystal clear in proposing how to transform the capitalist system so as to avoid such crises by a combination of systems thinking and a radical program of values-based action. This will promote human well-being and justice through a reformulated Golden Rule embodied in corporate law and governance. This important book is highly recommended." — George Ellis, Emeritus Professor of Complex Systems in the Department of Mathematics and Applied Mathematics at the University of Cape Town

"Mayer provides a compelling journey that documents the baleful consequences when business pursues profit as an end to itself rather than as a means to address societal and ecological problems. He goes on to offer a roadmap to escape from this trap, including a welcome emphasis on the responsibility of the educational system to help shape a socially productive rather than destructive business system." — Geoffrey Jones, Isidor Straus Professor of Business History, Harvard Business School

"As Adam Smith was the Father of Capitalism in the 18th Century, Colin Mayer is the Grandfather in the 21st Century, restoring Capitalism to its central and essential role in society today and in the future. Capitalism and Crises is the third book in the trilogy that is the foundation for the future study of Capitalism and for the adoption of laws and approved practices. It provides a clear, actionable, and timely roadmap for management teams and boards of directors to take into account their impacts on employees, the environment, customers, suppliers, and local and national communities. Meticulously researched, Capitalism and Crises is essential reading for business leaders and investment stewards seeking creative solutions for confronting the pressing corporate and societal questions of our time." — Martin Lipton, Founding Partner, Wachtell, Lipton, Rosen & Katz

"In Capitalism and Crises: How to Fix Them, Colin Mayer completes a triptych of books - along with Firm Commitment and Prosperity - which exposes a central problem at the heart of contemporary business civilization: an unhealthy obsession with profits über alles. His proposed "fixes" ring convincingly in the tones and traditions of our greatest moralists who are also economists, such as Adam Smith." — Eric W. Orts, Guardsmark Professor of Legal Studies & Business Ethics, The Wharton School, University of Pennsylvania

"Professor Mayer has provided a master class in why we must, and how we can, reform our capitalist system. By suggesting a reformulation of the 'Golden Rule', he guides the reader to a new framework for the role of business in society. He provides provocative, inspiring, and motivational ideas. This book is for anyone interested in true system change." — Lynn Forester de Rothschild, Chief Executive of E.L. Rothschild LLC

"This book is the culmination of thinking over a brilliant career, and it comes just in time. It provides profound but practical ideas for addressing the underlying issues that are creating an ongoing set of crises. The most pressing and overarching one in the U.S. is a culture war based on extreme political polarization. Professor Mayer's book explains why this polarization exists and the transformation in capitalism he calls for should resonate on both the left and the right." — Robert Eccles, Visiting Professor of Management Practice, Said Business School, University of Oxford and Retired Professor of Management Practice, Harvard Business School

"We are failing to address the now existential problems of people and planet - our economies and our businesses are not currently designed to address these problems. Colin Mayer's book is an important contribution to the debate about how to ensure that this design problem is addressed. It should also be a salutary reminder to all of us of the urgency to do so." — Colm Kelly, Global Leader Corporate Sustainability, PwC International Ltd

"In this passionately argued and deeply intriguing book, Professor Colin Mayer argues that one key to addressing our current crises is to redefine 'profit' to include the costs that firms routinely impose on the natural world on those around them. Drawing on organizational theory, law, finance and politics, and ranging across a wide range of concrete examples, Mayer suggests that such a change would profoundly reorient our economic system to the benefit of the many rather than the few." — Rebecca Henderson, John and Natty McArthur University Professor, Harvard Business School

"Both in his books and in his career, Mayer has always sought ways to put his wisdom into practice, provoking complacent businesspeople and policymakers to think again... This is a book of philosophy as much as it is an analysis of how economics, accounting measures and corporate governance might bend to this overarching law. Mayer writes, as ever, with clarity, but he does not dumb his argument down." — Andrew Hill, Financial Times

"A work that is not just thought-provoking but also includes clear recommendations for change... Mayer might not have all the answers - who does? - but his latest addition to a well-argued examination of the cause of our ills and how we might yet escape them deserves to play a part in forming some future leader's manifesto." — Roger Trapp, Forbes

"[A] hard-hitting analysis." — Andrew Robinson, Nature

"A stimulating read." — Dame Kate Barker, Society of Professional Economists

"Brilliant... The book's extremely well written." — Dieter Helm, Five Books

"Mayer's multidisciplinary approach and his ability to synthesize insights from diverse fields make Capitalism and Crises a rich and thought-provoking read. The book challenges conventional wisdom and offers a compelling vision for a more sustainable and equitable form of capitalism that prioritizes problem-solving and shared prosperity." — Sungsoo An, LinkedIn

"Anyone hoping to preserve both capitalism and liberalism will find [this] work as inspiring as it is foundational... an essential contribution to the debate about contemporary capitalism and its descent into dysfunction... Mayer's core principles will serve us well as we try to save our current form of capitalism from itself." — Jean-Baptiste Wautier, Project Syndicate

"Anyone hoping to preserve both capitalism and liberalism will find [this] work as inspiring as it is foundational... an essential contribution to the debate about contemporary capitalism and its descent into dysfunction... Mayer's core principles will serve us well as we try to save our current form of capitalism from itself." — Jean-Baptiste Wautier, Project Syndicate

"Capitalism is a paradox. It has spurred unprecedented economic growth, lifted millions from poverty, and fostered remarkable innovation. However, its relentless focus on profits inevitably leads to social and environmental costs, financial instability, worsening inequality, ecological degradation, and labor's declining power. The pursuit of self-interest and profits drives capitalism's virtues and vices. How can this paradox be reconciled? Mayer , a widely admired and influential professor, calls for a fundamental shift...Recommended." — Choice

"Capitalism and crises is the product of remarkable scholarship and perspicacity, sweeping in its scope and impressive in its detail and depth of analysis." — Nicholas Dungan, International Affairs

"Excellent." — Paul Seabright, Society

From the Publisher