Tag Archives | Noreena Hertz

Noreena Hertz, dubbed one of the world’s leading thinkers and one of the top 10 most followed professors on Twitter, says that a post-luxe era needs co-op capitalism, writing in Wired:

The world desperately needs a new form of capitalism. One that would trump the version we’re living with, which I’ve named “Gucci capitalism” because it overvalues status and undervalues equity. We’re more ashamed not to have a new Gucci handbag (or any luxe brand, come to that) than to get in debt. The ideal replacement, “co-op capitalism”, prioritises collective destiny. It would value the network and see connectivity as a social, political and economic goal. It would recognise the import of relationships — and understand that how an exchange takes place impacts upon its outcome. It would prioritise social cohesion.

Whereas Gucci capitalism was about beggar thy neighbour, co-op capitalism recognises that collaboration can trump competition. Where Gucci capitalism was about individual success, co-op capitalism is about our collective future and interdependencies.

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My good friend, Cambridge University economics professor and celebrity Noreena Hertz, has given an interesting interview to German news service Spiegel Online in which she says capitalism is about to change:

Hertz: I am convinced that we are at a turning point in capitalism. The financial crisis could only come about because people were too focused on growth without asking where this growth comes from and at what cost. The crisis was a wake-up call for many people who accepted the rules of the old system. And many people — from policymakers to academics to economists to politicians, but also the man on the street — are starting to question whether the old rules were actually fair, just or right.

SPIEGEL ONLINE: You call it the switch from Gucci capitalism to cooperative capitalism.

Hertz: In Gucci capitalism, people believed that the markets were absolutely rational and reliable. Economists created models with cartoon-like assumptions about people as super-rational profit maximizers.

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