MIT financial economist Simon Johnson rethinks capitalism with better key market incentives.

Daisy Harvey

2019-11-23 08:33:00 Sat ET

MIT financial economist Simon Johnson rethinks capitalism with better key market incentives. Johnson refers to the recent Business Roundtable CEO statement that focuses on better stakeholder value maximization for employees, customers, and suppliers. Johnson proposes 3 primary issues when we reconsider capitalism in response to the neoliberal consensus. First, market incentives are often positive in some contexts. It is not enough for entrepreneurs to raise capital to promote good social causes. Entrepreneurs often need to come up with a sustainable business model that promises steady future profits. Only profitable ventures survive the test of time, so founders and most senior executive managers often tend to fixate on near-term profitability.

Second, powerful policymakers and interest groups can distort sensible economic analysis to bolster the consensus view of business sustainability. It would be better for all parties to strike a delicate balance between public efforts and private motives. However, ulterior motives cannot align well with good causes.

Third, the private sector typically cannot take into account negative externalities.  In this light, the public sector may need to play an important role in advancing basic science for better health care, infrastructure, technology, and so on. On balance, this consideration helps enhance macro policy outcomes in light of climate change and economic inequality.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

China allows its renminbi currency to slide below the psychologically important threshold of 7-yuan per U.S. dollar.

Charlene Vos

2019-09-13 10:37:00 Friday ET

China allows its renminbi currency to slide below the psychologically important threshold of 7-yuan per U.S. dollar.

China allows its renminbi currency to slide below the key psychologically important threshold of 7-yuan per U.S. dollar. A currency dispute between the U.S.

+See More

The May administration needs to seek a fresh fallback option for Halloween Brexit.

Peter Prince

2019-05-15 12:32:00 Wednesday ET

The May administration needs to seek a fresh fallback option for Halloween Brexit.

The May administration needs to seek a fresh fallback option for Halloween Brexit. After the House of Commons rejects Brexit proposals from the May administ

+See More

Most major economies grow with great synchronicity several years after the global financial crisis.

John Fourier

2018-01-19 11:32:00 Friday ET

Most major economies grow with great synchronicity several years after the global financial crisis.

Most major economies grow with great synchronicity several years after the global financial crisis. These economies experience high stock market valuation,

+See More

President Trump refreshes American fiscal fears and sovereign debt concerns through the One Big Beautiful Bill Act.

Jacob Miramar

2025-06-21 05:25:00 Saturday ET

President Trump refreshes American fiscal fears and sovereign debt concerns through the One Big Beautiful Bill Act.

President Trump refreshes American fiscal fears, worries, and concerns through the One Big Beautiful Bill Act. The Congressional Budget Office (CBO) estimat

+See More

Due to U.S. tariffs, Apple, Nintendo, and Samsung start to consider making tech products in Vietnam instead of China.

Jonah Whanau

2019-09-03 14:29:00 Tuesday ET

Due to U.S. tariffs, Apple, Nintendo, and Samsung start to consider making tech products in Vietnam instead of China.

Due to U.S. tariffs and other cloudy causes of economic policy uncertainty, Apple, Nintendo, and Samsung start to consider making tech products in Vietnam i

+See More

U.S. regulatory agencies may consider broader economic issues in their antitrust probe into Amazon, Apple, Facebook, and Google.

Joseph Corr

2019-07-03 11:35:00 Wednesday ET

U.S. regulatory agencies may consider broader economic issues in their antitrust probe into Amazon, Apple, Facebook, and Google.

U.S. regulatory agencies may consider broader economic issues in their antitrust probe into tech titans such as Amazon, Apple, Facebook, and Google etc. Hou

+See More