Getting New Guardrails
By Amy Willis
What’s wrong with the way capitalism is now? What problems should we try to fix, and how? In this episode of EconTalk, Rebecca Henderson joins host Russ Roberts to discuss her book, Reimagining Capitalism. Henderson argues that the current incarnation of capitalism has become imbalanced.
How should we re-imagine capitalism? Henderson sees no conflict with the free market; it’s just a matter of sensibly getting the rules right. So what are the rules we need? Share your thoughts with us based on the prompts below.
1- Henderson and Roberts each identify what they see as three main problems with capitalism today. How do their lists compare to one another’s? To yours?
2- What’s wrong with corporations’ emphasis on shareholder value, according to Henderson? Are her worries more a consequence of capitalism or crony capitalism? Explain.
3- Think about the examples of Papua New Guinea and Nike. What role SHOULD corporations play in developing or poorly developed countries? Did Nike make the world a better place through their actions? Why does Roberts reference “the seen and the unseen” in this context?
4- Henderson calls herself an advocate of “managing with purpose.” What does she mean by this? Roberts asks her, “If managing with purpose is not only possible, but potentially such a powerful source of competitive advantage, then why doesn’t everyone manage this way?” To what extent are you persuaded by her response?
5- Henderson says her “end state is all about a stronger government in partnership with the private sector.” Should society as a whole set guardrails which constrain what firms can do, as Henderson advocates? If so, what should they be? What do you think of the role Henderson suggests for “purpose-driven firms” in leading this process?